***Exhibit 10.17***

OptionNumber «OptionNumber_»

**MERGETECHNOLOGIES INCORPORATED**

**DIRECTORNONQUALIFIED STOCK OPTION**

ThisNONQUALIFIED STOCK OPTION (hereinafter, “Stock Option” or “Stock OptionAgreement”) is granted _____, 20__, by MERGE TECHNOLOGIES INCORPORATED, aWisconsin corporation (hereinafter, the “Company”), to «FirstName» «LastName» (hereinafter, the “Eligible Participant”), pursuant to the 2005 Equity Incentive Plan ofMerge Technologies Incorporated adopted March 4, 2005 by the Board of Directorsof the Company and approved by the shareholders of the Company on May 24, 2005(hereinafter, the “Plan”), and resolutions adopted by the CompensationCommittee of the Board of Directors on ______, 20__, which authority wasgranted by the Board of Directors (hereinafter,the “Board”) at its meeting on May 24, 2005.

Inconsideration of the Eligible Participant’s covenants contained in the EligibleParticipant’s Acknowledgement and Receipt hereof, appearing below, theCompany hereby grants to the Eligible Participant the option to purchase fromtime to time, all or any part of a total of Fifteen Thousand (15,000) shares ofthe Company’s Common Stock, One Cent ($0.01) par value, at a price of ________Dollars and _________ Cents in the currency of the United States of America(U.S.$______) per share (hereinafter, the “Options”), upon the following termsand conditions:

1.             The term of the Stock Option shallbe for ten (10) years from the date hereof, and it shall expire on      _____________, 20__, unless sooner terminatedas hereinafter provided.

2.             (a)           At any time or times after the datehereof (but in no event after the above expiration date or, except as providedin Paragraph 3 hereof, the prior termination of this Stock Option), theEligible Participant may exercise this Stock Option, in whole or in part, as ofthe date hereof.  The Options grantedhereunder are nonqualified stock options and are not incentive stock options asdescribed in Section 422 of the Internal Revenue Code of 1986, as amended.

(b)           This Stock Option shall be exercisedonly by timely signed written notice delivered to the Company’s CorporateSecretary or his or her office, in terms of the prescribed *“Exercise of Option”* form attached heretoas **Exhibit A**, specifying thenumber of shares and accompanied by payment, in U. S.  Dollars, in immediately available fundsprovided by check, money order, certified check, or wire transfer, of the fullStock Option purchase price therefore and any amount required to be withheld bythe Company for Federal, state and/or local tax purposes (including anyapplicable Canadian tax requirements). The certificate or certificates for shares as to which the Option shallhave been so exercised shall be registered in the name of the person or personsexercising the Option.

(c)           The obligation of the Company to selland deliver shares upon the due exercise of this Stock Option shall be subjectto:  (i) all applica­ble laws, rules andregulations and to such approvals of any governmental agencies as may berequired, including, but not

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 by way of limitation, the effectiveness of anS-8 Registration Statement under The Securities Act of 1933, as amended (the “Act”),or the availability of an exemption from registration under said Act, whichevermay be deemed necessary or appropriate by counsel for the Company; and (ii) thesatisfaction of all stock exchange requirements, if any, necessary toaccomplish the listing or complete the listing of the shares upon the stockexchange upon which the shares of the Company may be listed.

3.             This Stock Option, to the extentnot then already exercised or otherwise terminated or lapsed or expired, shallterminate on the effective date of the Eligible Participant’s Termination ofParticipation; provided, however, that the Eligible Participant(or his personal representative of his estate) shall have the right to purchasesuch quantity of shares which the Eligible Participant could have purchasedpursuant to this Stock Option as of the effective date of the EligibleParticipant’s Termination of Participation, within six (6) months followingsuch Termination of Participation.

The foregoingnotwithstanding, in no event may this Stock Option be exercised by the EligibleParticipant or the Eligible Participant’s personal representative after the expirationdate specified in Paragraph 1 hereof.

4.             This Stock Option is nottransferable other than by Will or the laws of descent and distribution, may beexercised during the life of the Eligible Participant only by the EligibleParticipant personally, and after the Eligible Participant’s death, only to theextent, if any, as provided in Paragraph 3 hereof.  Any attempted transfer by the EligibleParticipant (voluntarily or by operation of law) shall be null and void, andthis Stock Option shall then become null and void.

5.             This Stock Option is subject to theterms and conditions of the Plan as of the date hereof and the uniform rulesand regulations from time to time issued by the Board or any committee of theBoard pursuant thereto.

6.             The Company hereby represents andwarrants to the Eligible Participant, that it has reserved and will at alltimes while this Stock Option is in force, have available sufficient shares tofulfill this Stock Option.

7.             This Stock Option and theAcknowledgement and Receipt thereof have been executed in two (2) counterparts,each of which when so executed and delivered shall be deemed an original andall of which counterparts, taken together, shall constitute but one and thesame instrument.

MERGE TECHNOLOGIES INCORPORATED

By:      ___________________________________________

   ____________________________, President

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**ACKNOWLEDGEMENT AND RECEIPT**

I hereby acknowledge thereceipt of the foregoing Stock Option upon the terms and conditions thereinstated.

Inconsideration thereof, I hereby covenant and agree:

1.             That except as otherwise providedin the aforesaid Stock Option Agreement, my rights, interests and benefitsthere under are personal to me and may not be assigned, transferred or pledgedby me in any way, voluntarily or by operation of law.

2.             That this Stock Option Agreement shall be binding uponme, my heirs, legatees, executors and administrators, and shall inure to thebenefit of and be binding upon the Company, its successors and assigns.

3.             That upon exercise of all or any partof the aforesaid Stock Option, I will, as a condition to receiving such shares,execute and deliver to the Company such instruments and undertakings as may, inthe opinion of counsel to the Company, be required to comply with those mattersdescribed in Section 2(c) of the Stock Option.

Ihereby acknowledge receipt of a copy of the 2005 Equity Incentive Plan of MergeTechnologies Incorporated adopted March 4, 2005 by the Board of Directors ofthe Company and approved by the shareholders of the Company on May 24, 2005, asigned counterpart of the foregoing Stock Option and this Acknowledgement andReceipt.

Datedthis __________ day of ____________________, 20__.

__________________________________________________________

«FirstName» «LastName»

 

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Exhibit A

Exercise of Option

Corporate SecretaryMERGE TECHNOLOGIES INCORPORATED6737 West Washington StreetSuite 2250Milwaukee, Wisconsin  53214

RE:                              Stock OptionDated:        _____, 20__                                 Stock Option Number:        «OptionNumber_»

I hereby exercise theforegoing Stock Option to the extent of ___________________________ Shares ofthe Common Stock of Merge Technologies Incorporated, one cent ($.01) par value,at the option price of _______ Dollars and _____ Cents in the currency of theUnited States of America (U.S.$_____) per share, in accordance with the termsand conditions of the aforesaid 2005 Equity Inventive Plan of MergeTechnologies Incorporated adopted March 4, 2005 by the Board of Directors of the Company and approvedby the shareholders of the Company on May 24, 2005, under which it was issued.

Unlessa registration statement under the Securities Act of 1933 is in effect withrespect to the shares to be issued, I hereby certify that I intend by thisexercise of such Stock Option to acquire such shares for purposes of investmentand that I have no intention of reselling them after I have acquired them.

Ifurther agree that said shares when issued to me (and any additional or othershares acquired by me in relation to such number of shares whether as a stock dividendor otherwise) shall be subject to the Plan and that I will comply with saidprovi­sions and perform all of the covenants on my part required under thePlan, the Stock Option and my Acknowledgement and Receipt thereof.

Dated:___________________________________________

________________________________________________«FirstName» «LastName»

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