(c) Executive further agrees to serve without additional compensation as an officer anddirector of any of the Company’s subsidiaries or affiliates, as the same may exist from time totime, and agrees that any amounts received from any such subsidiary or affiliate may be offsetagainst the amounts due hereunder. In addition, it is agreed that the Company may assign Executiveto one of its subsidiaries or affiliates for payroll purposes providing this does not changeExecutive’s role as the Chief Technology Officer of the Company.2. Employment Term.     Executive’s term of employment under this Agreement (such term of employment, as it may beextended or terminated, is herein referred to as the “Employment Term”) shall be for a termcommencing on the Effective Date and, unless terminated earlier as provided in Section 7 hereof,ending on April 1, 2010 (the “Original Employment Term”); provided that the Employment Termshall be automatically extended, subject to earlier termination as provided in Section 7 hereof,for successive additional one (1) year periods (the “Additional Terms”), unless, at leastthirty (30) days prior to the end of the Original Employment Term or the then current AdditionalTerm, the Company or Executive has notified the other in writing that the Employment Term shallterminate at the end of the then current term.3. Base Salary.     The Company agrees to pay Executive a base salary (the “Base Salary”) at an annualrate of Three Hundred Thousand Dollars ($300,000), payable in accordance with the regular payrollpractices of the Company, but not less frequently than monthly. Executive’s Base Salary shall bereviewed and may be increased, but not decreased, from time to time by the Board (or a committeethereof). The base salary as determined herein from time to time shall constitute “Base Salary”for purposes of this Agreement.4. Incentive Bonus.     During the Employment Term, Executive shall be eligible to participate in the Company’s bonusand other incentive compensation plans and programs for the Company’s senior executives at a levelcommensurate with Executive’s position. Without limiting the foregoing, Executive shall have theopportunity to earn an annual target bonus (the “Annual Bonus”) of not less than fiftypercent (50%) of Executive’s Base Salary, or such greater amount as may be provided in an annualbonus plan approved by the Board (or a committee thereof), contingent upon the Company’sachievement of financial and operating metrics to be annually determined by the Board (or acommittee thereof), and upon the Executive’s achievement of individual performance goalsrecommended by the Chief Executive Officer and approved by the Board (or a committee thereof).Such annual incentive bonuses shall be paid to Executive within the sixty (60) day period followingthe close of the Company’s fiscal year.5. Equity Incentives.     (a) Discretionary Grants. At the sole discretion of the Board or any committee of theBoard (the “Committee”) appointed to administer the Company’s Equity Incentive Plan, as maybe amended from time to time, or any successor plan (any “Stock Plan”), Executive shall be
2

 
eligible for grants of stock options and other equity awards of a level commensurate withExecutive’s position and similar to other executives of the Company.     (b) Change of Control. Notwithstanding any other provision of this Agreement, anyStock Plan or any equity award agreement, in the event of a Change in Control, all equity awards(including, but not limited to, any options and restricted stock grants made prior or subsequent tothe date of this Agreement) shall fully vest and be immediately exercisable. For purposes of thisAgreement, a “Change in Control” shall mean the first of the following events to occur:     (i) the sale, lease, exchange or other transfer, directly or indirectly, ofsubstantially all of the assets of the Company (in one transaction or in a series of relatedtransactions) to a person or entity that is not controlled by the Company;     (ii) the approval by the shareholders of the Company of any plan or proposal for theliquidation or dissolution of the Company;     (iii) a merger or consolidation to which the Company is a party if the shareholders ofthe Company immediately prior to effective date of such merger or consolidation have“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), immediatelyfollowing the effective date of such merger or consolidation, of securities of the survivingcorporation representing (A) more than 50%, but not more than 70%, of the combined votingpower of the surviving corporation’s then outstanding securities ordinarily having the rightto vote at elections of directors, unless such merger or consolidation has been approved inadvance by the Incumbent Directors (as defined below), or (B) 50% or less of the combinedvoting power of the surviving corporation’s then outstanding securities ordinarily havingthe right to vote at elections of directors (regardless of any approval by the IncumbentDirectors);     (iv) any person becomes the “beneficial owner” (as defined in Rule 13d-3 under theExchange Act), directly or indirectly, of (A) 30% or more, but not 50% or more, of thecombined voting power of the Company’s outstanding securities ordinarily having the right tovote at elections of directors, unless the transaction resulting in such ownership has beenapproved in advance by the Incumbent Directors, or (B) 50% or more of the combined votingpower of the Company’s outstanding securities ordinarily having the right to vote atelections of directors (regardless of any approval by the Incumbent Directors);     (v) the Incumbent Directors cease for any reason to constitute at least a majority ofthe Board; or     (vi) any other change in control of the Company of a nature that would be required tobe reported pursuant to Section 13 or 15(d) of the Exchange Act, whether or not the Companyis then subject to such reporting requirements.     For purposes of this definition, “Incumbent Directors” of the Company will mean anyindividuals who are members of the Board on the date of this Agreement and any individualwho subsequently becomes a member of the Board whose election, or nomination for election bythe Company’s shareholders, was approved by a vote of at
3

 
least a majority of the Incumbent Directors (either by specific vote or by approval ofthe Company’s proxy statement in which such individual is named as a nominee for directorwithout objection to such nomination).6. Employee Benefits.     (a) Benefit Plans. Executive shall be entitled to participate in all employee benefitplans of the Company including, but not limited to, equity, pension, thrift, profit sharing,medical coverage, education, or other retirement or welfare benefits that the Company has adoptedor may adopt, maintain or contribute to for the benefit of its senior executives at a levelcommensurate with Executive’s position, subject to satisfying any applicable eligibilityrequirements.     (b) Paid Time Off. Executive shall be entitled to paid time off in accordance withthe Company’s policies applicable to its senior executives, but in no event less than twenty (20)days (as prorated for partial years).     (c) Perquisites. The Company shall provide to Executive all perquisites which othersenior executives of the Company are generally entitled to receive.     (d) Business and Entertainment Expenses. Upon presentation of appropriatedocumentation, Executive shall be reimbursed in accordance with the Company’s expense reimbursementpolicy for all reasonable and necessary business and entertainment expenses incurred in connectionwith the performance of Executive’s duties hereunder.7. Termination.     Executive’s employment and the Employment Term shall terminate on the first of the followingto occur:     (a) Disability. Upon written notice by the Company to Executive of termination due toDisability. For purposes of this Agreement, “Disability” shall be defined as the inabilityof Executive to have performed each and every material duty of Executive’s employment under thisAgreement due to a physical or mental injury, infirmity or incapacity for a period of 6 consecutivemonths in any 12-month period. The existence or nonexistence of a Disability shall be determinedby the Board, acting reasonably and in good faith, taking into consideration the opinion of anindependent physician selected by the Company and reasonably acceptable to Executive.     (b) Death. Automatically on the date of death of Executive.     (c) Cause. Immediately upon written notice by the Company to Executive of atermination for Cause. For purposes of this Agreement, “Cause” shall mean:     (i) Executive shall have been indicted for a felony;     (ii) Executive shall have been convicted of (or plead “guilty” or “nolo contendre” toor been found guilty and not convicted of) any misdemeanor or summary
4

 
offense involving fraud, theft, misrepresentation or moral turpitude or any othermisdemeanor or summary offense that will, in the opinion of the Board, determined in goodfaith, adversely affect in any material respect the Company’s prospects or reputation orExecutive’s ability to perform Executive’s obligations or duties to the Company or any ofits subsidiaries; or     (iii) The termination is evidenced by a resolution adopted in good faith by the Boardconcluding that Executive:     (A) intentionally and continually failed substantially to perform Executive’sreasonably assigned duties with the Company (other than a failure resulting fromExecutive’s incapacity due to physical or mental illness or from the assignment toExecutive of duties that would constitute Good Reason), which failure has continuedfor a period of at least thirty (30) days after a written notice of demand forsubstantial performance, signed by a duly authorized member of the Board, has beendelivered to Executive;     (B) intentionally engaged in conduct which is demonstrably and materiallyinjurious to the Company; provided, however, that no termination of Executive’semployment shall be for Cause as set forth in this subsection (B) until (1) thereshall have been delivered to Executive a copy of a written notice, signed by a dulyauthorized member of the Board, stating that the Board has determined that Executivehas engaged in the conduct set forth in this subsection (B), and (2) Executive shallhave been provided an opportunity to be heard by the Board;     (C) willfully or repeatedly engaged in misconduct or gross negligence in theperformance of Executive’s duties to the Company or any of its subsidiaries that hasa material detrimental effect on the Company; or     (D) committed an act of fraud, theft or dishonesty against the Company or anyof its subsidiaries or any act or omission intended to result in the personalenrichment of Executive or Executive’s spouse, parents, siblings, or descendants(whether by blood or adoption and including stepchildren) or the spouses of suchindividuals in violation of law or of Executive’s duty of loyalty to the Company orits subsidiaries at the expense, directly or indirectly, of the Company or any ofits subsidiaries.     (iv) Notwithstanding anything in the foregoing to the contrary, if Executive has beenterminated ostensibly for Cause because Executive has been indicted for a felony, andExecutive is not convicted of, or does not plead guilty or nolo contendere to, such felonyor a lesser offense (based on the same operative facts), such termination shall be deemed tobe a termination without Cause as of the date of the termination; provided, however, that,any payments due hereunder shall be only paid after a final determination in such proceedingis reached.     (d) Without Cause. Upon thirty (30) days’ written notice by the Company to Executiveof an involuntary termination other than for Cause, death or Disability.
5

 
     (e) Good Reason. Upon written notice by Executive to the Company of a termination forGood Reason, unless such the events constituting the basis for Good Reason are corrected in allmaterial respects by the Company within thirty (30) days following written notification byExecutive to the Company that he intends to terminate his employment hereunder for Good Reason, andprovided that any such notice is given within ninety (90) days of the occurrence of such GoodReason and Executive actually terminates employment within twelve (12) months of the occurrence ofsuch Good Reason event. For purposes of this Agreement, “Good Reason” shall mean, withoutthe consent of Executive, the occurrence of any of the following events:     (i) any material reduction in Executive’s status, position(s), duties orresponsibilities as an executive of the Company;     (ii) any material reduction by the Company in Executive’s Base Salary, equityincentives, benefits or perquisites, or a material reduction by the Company in the bonusthat Executive may earn in a given year, provided, however, that inability of the Company orthe Executive to satisfy performance objectives under any bonus plan shall not constituteGood Reason;     (iii) any material failure by the Company to comply with any of the material provisionsregarding Executive’s Base Salary, bonus, equity incentive, benefits and perquisites andother benefits and amounts payable to Executive under this Agreement;     (iv) a material change in the geographic location at which Executive must performExecutive’s services; or     (v) any other material breach by the Company of its obligations hereunder.     Executive’s continued employment does not constitute consent to, or waiver of any rightsarising in connection with, any circumstances constituting Good Reason.     (f) Without Good Reason. Upon thirty (30) days’ prior written notice by Executive tothe Company of Executive’s voluntary termination of employment without Good Reason (which theCompany may, in its sole discretion, make effective earlier than any notice date).8. Consequences of Termination.     Subject to Section 9, the following amounts and benefits shall be due to Executive followingExecutive’s termination of employment; provided, however, that no termination payments shall bepayable hereunder if Executive has not returned to the Company all Company property used byExecutive including without limitation any automobile, computer or laptop, cell phone, Blackberryor similar device.     (a) Disability. Upon termination due to Disability, the Company shall pay or provideExecutive (i) any unpaid Base Salary through the date of termination; (ii) any unpaid bonus earnedwith respect to any fiscal year ending on or preceding the date of termination; (iii) reimbursementfor any unreimbursed expenses incurred through the date of termination; and (iv) all otherpayments, benefits or fringe benefits to which Executive may be entitled under the terms of anyapplicable compensation arrangement or benefit, equity or fringe benefit plan or
6

 
program or grant or this Agreement (items (i)-(iv) being the “Accrued Amounts”). TheAccrued Amounts shall be paid to Executive within fifteen (15) days of the termination date**.**     (b) Death. In the event the Employment Term ends on account of Executive’s death,Executive’s estate shall be entitled to any Accrued Amounts. The Accrued Amounts shall be paid toExecutive within fifteen (15) days of notice of Executive’s death.     (c) Termination for Cause or Without Good Reason. If Executive’s employment should beterminated (i) by the Company for Cause, or (ii) by Executive without Good Reason, the Companyshall pay to Executive any Accrued Amounts. The Accrued Amounts shall be paid to Executive withinfifteen (15) days of the termination date.     (d) Termination Without Cause or for Good Reason Other Than in Connection with a PotentialChange of Control or Actual Change of Control. If Executive’s employment by the Company isterminated (1) by the Company other than for Cause, death or Disability, or if the Company providesnotice of its intention not to renew pursuant to Section 2, or (2) by Executive for Good Reason,but excluding, in each case (1) and (2) any such termination in connection with a Potential Changeof Control (as defined in Section 8(e)) or an actual Change in Control, then the Company shall payor provide Executive with:     (i) Accrued Amounts;     (ii) The right to receive a pro-rata portion of Executive’s Annual Bonus for theperformance year in which Executive’s termination occurs at the time that annual bonuses arepaid to other senior executives, which pro-rata portion shall be determined by multiplyingthe amount Executive would have received had employment continued through the end of theperformance year by a fraction, the numerator of which is the number of days during theperformance year of termination that Executive is employed by the Company and thedenominator of which is 365. For purposes of the foregoing, the amount the Executive wouldhave received shall be determined pursuant to the Company’s bonus plan with respect toCompany performance against criteria for the full fiscal year, and with respect toindividual performance based upon the Board’s determination, in good faith, as to the extentof the Executive’s progress toward individual performance criteria through the time oftermination;     (iii) Continuation of the Executive’s then current Base Salary as if Executive’semployment continued for a period of twelve (12) months from the date of termination;     (iv) A lump sum payment equal to twelve (12) times the monthly premium amount that theCompany would have been required to pay for group life insurance and group long termdisability insurance coverage if Executive had continued as an active employee of theCompany, based on the premium amounts in effect at the Executive’s date of termination(including any known increase in such premiums); and     (v) Subject to Executive’s timely election of any applicable continuation or conversioncoverage and continued co-payment of premiums, continued participation for twelve (12)months in the Company’s group medical and/or dental plans which cover Executive (andeligible dependents) upon the same terms and conditions (except for the
7

 
requirements of Executive’s continued employment) in effect on the date of termination.To the extent such coverage cannot be provided under the Company’s group health and/ordental plans without jeopardizing the tax status of such plans, for underwriting reasons orbecause of the tax impact on Executive, the Company shall pay Executive not less frequentlythan monthly an amount equal to the amount the Company would have paid for such benefits onbehalf of Executive if the benefits were provided to him as an employee. The continuationof health benefits under this subsection shall reduce and count against Executive’s rightsunder the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended(“COBRA”).     All benefits provided under Sections 8(d)(i) and (iv) shall be paid to Executive withinfifteen (15) days of the termination date, subject to Section 9, as applicable.     (e) Termination Without Cause or for Good Reason in Connection with a Potential Change ofControl or Actual Change of Control. If Executive’s employment by the Company is terminated by(1) the Company other than for Cause, death or Disability, or if the Company provides notice of itsintention not to renew pursuant to Section 2, or (2) by Executive for Good Reason, in each case (1)and (2) in connection with a Potential Change of Control or an actual Change of Control, then theCompany shall pay or provide Executive with:     (i) Subject to Section 9, as applicable, a lump sum payment, within fifteen (15) daysof the termination date, equal to the sum of:     (A) all Accrued Amounts,     (B) twelve (12) months of Base Salary,     (C) as compensation for cancellation of Executive’s then-current Annual Bonusopportunity, an additional 50% of annual Base Salary, and     (D) twelve (12) times the monthly premium amount that the Company would havebeen required to pay for group life insurance and group long term disabilityinsurance coverage if Executive had continued as an active employee of the Company,based on the premium amounts in effect at the Executive’s date of termination(including any known increase in such premiums); and     (ii) Subject to Executive’s continued co-payment of premiums, continued participationfor twelve (12) months in the Company’s group medical and/or dental plans which coverExecutive (and eligible dependents) upon the same terms and conditions (except for therequirements of Executive’s continued employment) in effect on the date of termination. Tothe extent such coverage cannot be provided under the Company’s health or welfare planswithout jeopardizing the tax status of such plans, for underwriting reasons or because ofthe tax impact on Executive, the Company shall pay Executive not less frequently thanmonthly an amount equal to the amount the Company would have paid for such benefits onbehalf of Executive if the benefits were provided to him as an employee. The continuationof health benefits under this subsection shall reduce and count against Executive’s rightsunder COBRA.
8

 
     As used herein, a “Potential Change of Control” shall be deemed to have occurred if:(A) the Company enters into an agreement, the consummation of which would result in the occurrenceof a Change of Control; (B) the Company or any person or entity publicly announces an intention totake or to consider taking actions which, if consummated, would constitute a Change of Control; or(C) the Board adopts a resolution to the effect that, for purposes of this Agreement, a PotentialChange of Control has occurred.     (f) Code Section 409A. Payment of amounts under this Section 8 are intended to complywith an exception to or exclusion from the requirements of Code Section 409A and this Agreementshall in all respects be administered in accordance with such intention; provided, however, if anypayment is or becomes subject to the requirements of Code Section 409A, the Agreement as it relatesto such payment is intended to comply with the requirements of Code Section 409A. In no event mayExecutive, directly or indirectly, designate the calendar year of any payment to be made under thisAgreement. The payments to be made under Section 8 are intended to be exempt from the requirementsof Code Section 409A because they are (i) non-taxable benefits, (ii) welfare benefits within themeaning of Treas. Reg. Sec. 1.409A-1(a)(5), (iii) short-term deferrals under Treas. Reg. Sec.1.409A-1(b)(4), or (iv) payments under a separation pay plan within the meaning of Treas. Reg. Sec.1.409A-1(b)(9). For purposes of the limitations under Code Section 409A, each payment under thisAgreement shall be treated as a separate payment. All payments to be made upon a termination ofemployment under this Agreement may only be made upon a “separation from service” as defined underCode Section 409A. All reimbursements to be made under this Agreement that constitute deferredcompensation subject to Code Section 409A shall be made in accordance with the requirements ofTreas. Reg. Sec. 1.409A-3(i)(1)(iv). If, at the time of Executive’s termination of employment,Executive is a “specified employee” within the meaning of Code Section 409A, then any payment of anamount that is deferred compensation payable on account of a separation from service shall besuspended and not made until the first day of the calendar month following the end of the six (6)month period following Executive’s termination of employment.     (g) Parachute Payments; Potential Reduction in Payments.     (i) Any provision of any Stock Plan or any equity award agreement (including thelimitations of Section 10.2 of the Equity Incentive Plan) relating to “parachute payments”under Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the“Code”), shall not apply to any equity award granted, at any time, to the Executiveunless the parties agree in writing to the contrary, including their express intent tooverride the substance and effect of this Section 8(g)(i).     (ii) The following terms shall have the following meanings for purposes of this Section8(g).     (A) “Excise Tax” shall mean the excise tax imposed by Section 4999 ofthe Code, together with any interest or penalties imposed with respect to suchexcise tax.     (B) “Net After-Tax Receipt” shall mean the present value (as determinedin accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the
9

 
Code) of a Payment net of all taxes imposed on Executive with respect theretounder Sections 1 and 4999 of the Code and under applicable state and local laws,determined by applying the highest marginal rate under Section 1 of the Code andunder state and local laws which applied to Executive’s taxable income for theimmediately preceding taxable year, or such other rate(s) as Executive certifies, inExecutive’s sole discretion, as likely to apply to him in the relevant tax year(s).     (C) “Payment” shall mean any payment or distribution in the nature ofcompensation (within the meaning of Section 280G(b)(2) of the Code) to or for thebenefit of Executive, whether paid or payable pursuant to this Agreement orotherwise.     (D) “Reduced Amount” shall mean the greatest amount of AgreementPayments that can be paid that would not result in the imposition of the Excise Taxif the Accounting Firm determines to reduce Agreement Payments pursuant to Section8(g)(iii).     (iii) The Company’s current independent public accounting firm, or such othernationally recognized certified public accounting firm as may be designated by the Company(the “Accounting Firm”), shall determine whether any Payment would subject Executiveto the Excise Tax as a result of a “change in ownership or control” of the Company (withinthe meaning of Section 1.280G-1 of the Department of the Treasury Regulations). In theevent the Accounting Firm determines that any Payment would subject the Executive to theExcise Tax, then the Payments shall be reduced to the Reduced Amount if the Accounting Firmdetermines that Executive would have a greater Net After-Tax Receipt of aggregate Paymentsif the Payments paid or payable under this Agreement (the “Agreement Payments”) werereduced to the Reduced Amount. Any reduction of the Payments shall be made in the followingorder: (1) options with an exercise price above the fair market value of the stock, providedthe options give rise to a Payment; (2) pro rata among amounts that constitute deferredcompensation under Code Section 409A; and (3) reduction of any remaining payments in themanner determined by the Accounting Firm.     (iv) All determinations required to be made under Section 8(g)(iii) shall be madefifteen (15) business days of the receipt of notice from the Company that there has been aPayment, or such earlier time as is requested by the Company, and shall be accompanied bydetailed supporting calculations provided both to the Company and Executive. The notice ofPayment from the Company to the Accounting Firm shall occur no later than the date of thePayment. In the event that the Accounting Firm is serving as accountant or auditor for theindividual, entity or group effecting the Change of Control, or in the event that theAccounting Firm fails to make the determination required hereby for any reason (includingthe Company’s failure to provide the Accounting Firm of notice of the Payment as providedabove), Executive may appoint another nationally recognized accounting firm to make thedeterminations required hereunder (which accounting firm shall then be referred to as theAccounting Firm hereunder). All fees and expenses of the Accounting Firm shall be bornesolely by the Company. Any determination by the Accounting Firm shall be binding upon theCompany and Executive.
10

 
     (v) As a result of the uncertainty in the application of Section 4999 of the Code atthe time of the initial determination by the Accounting Firm hereunder, it is possible thatamounts will have been paid or distributed by the Company to or for the benefit of Executivepursuant to this Agreement which should not have been so paid or distributed(“Overpayment”) or that additional amounts which will have not been paid ordistributed by the Company to or for the benefit of Executive pursuant to this Agreementshould have been so paid or distributed (“Underpayment”). In the event that theAccounting Firm believes the Internal Revenue Service would have a 75% or greaterprobability of success based upon the assertion of a deficiency by the Internal RevenueService against either the Company or Executive for an Overpayment, Executive shall pay anysuch Overpayment to the Company together with interest at the applicable federal rateprovided for in Section 7872(f)(2) of the Code; provided, however, that no amountshall be payable by Executive to the Company if and to the extent such payment would noteither reduce the amount on which Executive is subject to tax under Section 1 and Section4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm,based upon controlling precedent or substantial authority, determines that an Underpaymenthas occurred, any such Underpayment shall be paid promptly (and in no event later than sixty(60) days following the date on which the Underpayment is determined) by the Company to orfor the benefit of Executive together with interest at the applicable federal rate providedfor in Section 7872(f)(2) of the Code.9. Release.     Any and all amounts payable and benefits or additional rights provided pursuant to thisAgreement beyond Accrued Amounts shall only be payable if Executive delivers to the Company ageneral release of all claims of Executive occurring up to the release date in the form ofExhibit A hereto (with such insertions or changes therein as may be necessary in thereasonable opinion of counsel for the Company to make it valid and encompassing under applicablelaw). The Company shall provide such release to Executive within five (5) days of Executive’stermination of employment and Executive must deliver such executed release to the Company withintwenty one (21) days of presentation thereof by the Company to Executive, or such other longer orshorter period as may be required by then applicable law.10. Restrictive Covenants.     (a) Confidentiality. Executive shall not, directly or indirectly, use, makeavailable, sell, disclose or otherwise communicate to any person, other than in the course ofExecutive’s assigned duties and for the benefit of the Company, either during the Employment Termor at any time thereafter, any nonpublic proprietary or confidential information, knowledge or datarelating to the Company or any of its subsidiaries or affiliates that has been obtained byExecutive during Executive’s employment by the Company or has been obtained pursuant to anyconsulting services provided by Executive to Company prior to Executive’s employment by theCompany. For purposes of this Agreement, non-public proprietary information means informationproprietary to the Company that is not generally known (including any “trade secret” within themeaning of the Economic Espionage Act of 1996, Title 18 U.S.C. §1839) about the Company’scustomers, products, services, personnel, pricing, sales strategy, technology, methods, processes,research, development, finances, systems, techniques, accounting,
11

 
purchasing and plans. All information disclosed to Executive or to which Executive obtainsaccess, whether originated by him or by others, during the period that Executive is an employee ofthe Company (such period being referred to as the “Employment Period”) (whether prior tothe Effective Date or thereafter), shall be presumed to be non-public proprietary information if itis so treated by the Company or if Executive has a reasonable basis to believe it to be such. Theforegoing shall not apply to information to the extent that it (i) was known to the public prior toits disclosure to Executive; (ii) becomes known to the public subsequent to disclosure to Executivethrough no wrongful act of Executive or any representative of Executive; or (iii) Executive isrequired to disclose by applicable law, regulation or legal process (provided that Executiveprovides the Company with prior notice of the contemplated disclosure and reasonably cooperateswith the Company at its expense in seeking a protective order or other appropriate protection ofsuch information). Notwithstanding clauses (i) and (ii) of the preceding sentence, Executive’sobligation to maintain such disclosed information in confidence shall not terminate where onlyportions of the information are in the public domain.     (b) Non-solicitation. During the Employment Term and for the two year periodthereafter, Executive shall not, directly or indirectly, individually or on behalf of any otherperson, firm, corporation or other entity, knowingly solicit, aid or induce (i) any employee of orconsultant to the Company or any of its subsidiaries or affiliates to leave such employment orengagement in order to accept employment with or render services to or with any other person, firm,corporation or other entity unaffiliated with the Company or knowingly take any action tomaterially assist or aid any other person, firm, corporation or other entity in identifying orhiring any such employee or (ii) any customer of the Company or any of its subsidiaries oraffiliates to purchase goods or services then sold by the Company or any of its subsidiaries oraffiliates from another person, firm, corporation or other entity or assist or aid any otherpersons or entity in identifying or soliciting any such customer.     (c) Noncompetition. Executive acknowledges that Executive performs services of aunique nature for the Company that are irreplaceable, and that Executive’s performance of suchservices to a competing business will result in irreparable harm to the Company. Accordingly,during the Employment Term and for the two year period thereafter, Executive shall not, directly orindirectly, own, manage, operate, control, be employed by (whether as an employee, consultant,independent contractor or otherwise, and whether or not for compensation) or render services to anyperson, firm, corporation or other entity, in whatever form, engaged in any business of the sametype as any business in which the Company or any of its subsidiaries or affiliates is engaged onthe date of termination or in which they have proposed, on or prior to such date, to be engaged inon or after such date, in any locale of any country in which the Company or its subsidiariesconducts business. This Section 10(c) shall not prevent Executive from owning not more than onepercent of the total shares of all classes of stock outstanding of any publicly held entity engagedin such business, nor will it restrict Executive from rendering services to charitableorganizations, as such term is defined in Section 501(c) of the Code.     (d) Non-disparagement. Neither Executive nor the Company (for purposes hereof, theCompany shall mean the Company together with its executive officers and directors and not any otheremployees) shall make any public statements that disparage the other party, or in the case of theCompany, its respective subsidiaries, affiliates, employees, officers, directors, products orservices. Notwithstanding the foregoing, statements made in the course of sworn
12

 
testimony in administrative, judicial or arbitral proceedings (including, without limitation,depositions in connection with such proceedings) shall not be subject to this Section 10(d).     (e) Equitable Relief and Other Remedies. Executive acknowledges and agrees that theCompany’s remedies at law for a breach or threatened breach of any of the provisions of thisSection 10 would be inadequate and, in recognition of this fact, Executive agrees that, in theevent of such a breach or threatened breach, in addition to any remedies at law, the Company,without posting any bond, shall be entitled to obtain equitable relief in the form of specificperformance, temporary restraining order, a temporary or permanent injunction or any otherequitable remedy which may then be available.     (f) Reformation. If it is determined by a court of competent jurisdiction in anystate or other jurisdiction that any restriction in this Section 10 is excessive in duration orscope or is unreasonable or unenforceable under the laws of that state or jurisdiction, it is theintention of the parties that such restriction may be modified or amended by the court to render itenforceable to the maximum extent permitted by the law of that state or jurisdiction.     (g) Survival of Provisions. The obligations contained in this Section 10 shallsurvive the termination or expiration of Executive’s employment with the Company and shall be fullyenforceable thereafter.11. Inventions and Other Intellectual Property.     (a) Assignment of Inventions and Works Limitation of Assignment in Certain Cases.Executive acknowledges that Executive will exercise Executive’s inventive and creative abilitiesfor the benefit of the Company. Executive therefore assigns and transfers to the CompanyExecutive’s entire right, title and interest in and to all Inventions. Executive agrees that allsuch Inventions are the sole property of the Company. For purposes of this Agreement,“Inventions” shall include but not be limited to all ideas, improvements, designs anddiscoveries whether or not patentable and whether or not reduced to practice, made or conceived byExecutive (whether made solely by Executive or jointly with others) which relate in any manner tothe business, work or research and development of the Company, its subsidiaries or affiliates, orresult from and are suggested by any task assigned to Executive or any work performed by Executivefor or on behalf of the Company, its predecessors in interest or any related entity. The foregoingdefinition does not however, include an Invention for which no equipment, supplies, facility, orconfidential information of the Company was used and that was developed entirely on Executive’s owntime and that (i) does not directly relate to the Company’s business, research or development, or(ii) does not result from any work performed by Executive for the Company.     Executive agrees that all Works are the sole property of the Company, and shall, to the extentpossible, be considered works made for hire for Company within the meaning of Title 17 of theUnited States Code; provided, however, that if Executive is domiciled in California or if any ofthe Work is created in California, then such Work shall not be a work made for hire. If for anyreason any Work is not deemed to be a work made for hire, then Executive assigns and transfers tothe Company Executive’s entire right, title and interest in and to such Work, and Executive furtherwaives all of Executive’s rights under the United States Copyright Act and under any othercountry’s copyright law, including any rights provided in 17 U.S.C. §§ 106 and
13

 
106A, for any and all purposes for which such Work and any derivative works thereof may beused, and any rights of attribution and integrity or any other “moral rights of authors” withrespect to such Work and any derivative works thereof and any uses thereof to the full extent nowor hereafter permitted by the laws of the United States of America or the laws of any othercountry. For purposes of this Agreement, “Works” shall include but not be limited to allcopyrightable works created by Executive (whether solely by Executive or jointly with others)during the Employment Period, or any time thereafter, which relate in any manner to the business,work or research and development of the Company, its subsidiaries or affiliates, or result from andare suggested by any task assigned to Executive or any work performed by Executive for or on behalfof the Company, its subsidiaries or affiliates.     If any such assignment is invalid or ineffective for any reason, then Executive hereby grantsCompany a perpetual, royalty-free, non-exclusive, worldwide license to fully exploit anyintellectual property or propriety rights in such Inventions and Works and any patents andcopyrights (or other intellectual property or propriety registrations or applications) resultingtherefrom.     (b) Disclosure of Inventions, Works and Patents. Executive agrees that in connectionwith any Invention or Work:     (i) Executive will disclose such Invention promptly in writing to the President, ChiefExecutive Officer or Board of the Company, in order to permit the Company to claim rights towhich it may be entitled under this Agreement.     (ii) Executive will, at the Company’s request, promptly execute a written assignment oftitle to the Company for any Invention required to be assigned by this Article(“Assignable Invention”), and Executive will preserve any such Assignable Inventionas confidential information of the Company.     (iii) Executive will give to the relevant contact person at the Company a copy of suchWork. Executive will, at the Company’s request, promptly execute a written assignment oftitle to the Company for any such Work.     (iv) Upon request, Executive agrees to assist the Company or its nominee (at itsexpense) during and at any time subsequent to the Employment Period in every reasonable wayto obtain for its own benefit patents and copyrights for such Assignable Inventions and suchWorks in any and all countries, which Inventions and Works shall be and remain the sole andexclusive property of the Company or its nominee whether or not patented or copyrighted.Executive agrees to execute such papers and perform such lawful acts as the Company deems tobe necessary to allow it to exercise all right, title and interest in such patents andcopyrights.     (c) Execution of Documents. In connection with this Section 11, Executive furtheragrees to execute, acknowledge and deliver to the Company or its nominee upon request (at itsexpense) all such documents, including applications for patents and copyrights and assignments ofinventions, patents and copyrights to be issued therefore, as the Company may determine necessaryor desirable to apply for and obtain letters, patents and copyrights on such Assignable
14

 
Inventions and such Works in any and all countries and/or to protect the interest of theCompany or its nominee in such inventions, such Works, patents and copyrights, and to vest titlethereto in the Company, or its nominee.     (d) Maintenance of Records. Executive agrees to keep and maintain adequate andcurrent written records of all Inventions and Works made or created by Executive (in the form ofnotes, sketches, drawings and other typical forms), which records shall be available to and remainthe sole property of the Company at all times.     (e) Prior Inventions. It is understood that all inventions, if any, patented orunpatented, which Executive made prior to Executive’s first day as an employee of or consultant orcontractor to the Company, its predecessors in interest or any related entity (and which have notbeen otherwise assigned or transferred to the Company) are excluded from the scope of thisAgreement.     To preclude any possible uncertainty, Executive has set forth on Exhibit B attachedhereto a complete list of all Executive’s prior inventions, if any, including numbers of allpatents and patent applications, and a brief description of all unpatented inventions that are notthe property of a previous employer or other person and which have not been otherwise assigned ortransferred to the Company. Executive represents and covenants that the list is complete and that,if no items are on the list, Executive has no such prior inventions. Executive agrees to notifythe Company in writing before Executive makes any disclosure or performs any work on behalf of theCompany which appears to threaten or conflict with proprietary rights Executive claims in anyinvention or idea. In the event of Executive’s failure to give such notice, Executive agrees thatExecutive will make no claim against the Company with respect to any such inventions or ideas.     (f) Trade Secrets and Intellectual Property of Others. Executive represents thatExecutive’s performance of all the terms of this Agreement does not and will not breach anynoncompetition or non-solicitation agreement, or any agreement to keep proprietary information,knowledge or data acquired by Executive in confidence or in trust prior to the Employment Period,and Executive will not disclose to the Company or induce the Company to use any confidential orproprietary information or material belonging to any previous employer or other person. Executiveagrees not to enter into any agreement either written or oral in conflict herewith.     (g) Non Infringement. Executive represents that the work product that Executiveprovides to the Company, including the Inventions and the Works, and Company’s use thereof in theirindented manner: (a) do not and will not infringe or violate the copyright or trade secret rightsof any other party; and (b) to the best of Executive’s knowledge, do not and will not infringe orviolate the actual or prospective patent or trademark rights of any other party. If at any timeduring or after the Employment Period, Executive has reason to believe that the foregoingrepresentation is no longer true, then Executive shall promptly inform Company of such belief andthe reasons therefor.     (h) Other Obligations. Executive acknowledges that the Company from time to time mayhave agreements with other persons or with the U.S. Government or governments of other
15

 
countries, or agencies thereof, which impose obligations or restrictions on the Companyregarding inventions made during the course of work thereunder or regarding the confidential natureof such work. Executive agrees to be bound by all such obligations and restrictions and to takeall action necessary to discharge the obligations of the Company thereunder.12. Assignments.     (a) This Agreement is personal to each of the parties hereto. Except as provided in Section12(b) below, no party may assign or delegate any rights or obligations hereunder without firstobtaining the written consent of the other party hereto.     (b) The Company will require that any successor (whether direct or indirect, by purchase,merger, consolidation or otherwise) to all or substantially all of the assets or business of theCompany to expressly assume and agree to perform this Agreement in the same manner and to the sameextent that the Company would be required to perform it if no such succession had taken place.13. Notice.     For the purpose of this Agreement, notices and all other communications provided for in thisAgreement shall be in writing and shall be deemed to have been duly given (i) on the date ofdelivery if delivered by hand, (ii) on the date of transmission, if delivered by confirmedfacsimile, (iii) on the first business day following the date of deposit if delivered by guaranteedovernight delivery service, or (iv) on the fourth business day following the date delivered ormailed by United States registered or certified mail, return receipt requested, postage prepaid,addressed as follows:     If to Executive:At the address (or to the facsimile number) shown on the records of the Company.     If to the Company:Virtual Radiologic Corporation11995 Singletree Lane, Suite 500Minneapolis, MN 55344Attention: Chief Executive OfficerFax: (952) 942-3361or to such other address as either party may have furnished to the other in writing in accordanceherewith, except that notices of change of address shall be effective only upon receipt.14. Section Headings; Inconsistency.     The section headings used in this Agreement are included solely for convenience and shall notaffect, or be used in connection with, the interpretation of this Agreement.
16

 
15. Severability.     The provisions of this Agreement shall be deemed severable and the invalidity ofunenforceability of any provision shall not affect the validity or enforceability of the otherprovisions hereof.16. Counterparts.     This Agreement may be executed in several counterparts, each of which shall be deemed to be anoriginal but all of which together will constitute one and the same instrument.17. Indemnification.     The Company hereby agrees to indemnify Executive and hold him harmless to the fullest extentpermitted by law and under the bylaws of the Company against and in respect to any and all actions,suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney’sfees), losses, and damages resulting from Executive’s good faith performance of Executive’s dutiesand obligations with the Company. The Company shall cover Executive under directors and officersliability insurance during the Term and thereafter in the same amount and to the same extent as theCompany covers its other officers and directors (if at all).18. Governing Law and Venue.     The validity, interpretation, construction and performance of this Agreement shall be governedby the laws of the State of Minnesota without regard to its conflicts of law principles. Subject toSection 19, each party to this Agreement consents to the jurisdiction over it of the courts of theState of Minnesota in the City of Minneapolis, and the United States Courts in the District ofMinnesota and agrees that any personal service of process may be made by registered or certifiedmail to the notice address as set forth in Section 13 hereof, and as the same may be changed fromtime to time as provided therein.19. Arbitration.     Any dispute or controversy arising under or in connection with this Agreement shall besubmitted to arbitration in accordance with the rules of the American Arbitration Association thenin effect in Minneapolis Minnesota before a panel of three (3) arbitrators who shall beknowledgeable in executive employment law, who shall be independent of, and have no ex partecommunications with, the parties or their representatives, and who shall render written findings offact, conclusions of law and order. In addition to any other inherent powers, arbitrators shallhave the express powers to order a party to comply with or desist from breaching any of the termsof this Agreement. The determination of the arbitrators shall be final and binding upon the partiesand may be entered as a final judgment in any court of competent jurisdiction. The parties shallequally share the costs of arbitration. Nothing herein, however, shall deprive a party of the rightto seek equitable relief from the courts to restrain or enjoin the other from a breach thisAgreement pending the empanelling of the arbitrators or their final determination.
17

 
20. Waiver and Modification.     No provision of this Agreement may be modified, waived or discharged unless such waiver,modification or discharge is agreed to in writing and signed by Executive and such officer ordirector as may be designated by the Board. No waiver by either party hereto at any time of anybreach by the other party hereto of, or compliance with, any condition or provision of thisAgreement to be performed by such other party shall be deemed a waiver of similar or dissimilarprovisions or conditions at the same or at any prior or subsequent time.21. Entire Agreement.     This Agreement together with all exhibits hereto merges all prior negotiations or agreementsand sets forth the entire agreement of the parties hereto in respect of the subject of the mattercontained herein. No agreements or representations, oral or otherwise, express or implied, withrespect to the subject matter hereof have been made by either party which are not expressly setforth in this Agreement.22. Withholding.     The Company may withhold from any and all amounts payable under this Agreement such foreign,federal, state and local taxes as may be required to be withheld pursuant to any applicable law orregulation.23. Survival.     The provisions of Sections 8, 9, 10, 11, 12, 13, 17, 18, 19, 22 and 23 shall survivetermination of this Agreement for whatever reason.
18

 
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date firstwritten above.         COMPANY           Virtual Radiologic Corporation           By: /s/ Robert C. Kill       Name:  Robert C. Kill      Its: President andChief Executive Officer         EXECUTIVE           By: /s/ Richard W. Jennings         
19

 
**EXHIBIT A****FORM OF RELEASE****AGREEMENT AND GENERAL RELEASE**     Virtual Radiologic Corporation, its affiliates, subsidiaries, divisions, successors andassigns and the current, future and former employees, officers, directors, trustees and agentsthereof (collectively referred to throughout this Agreement as the “Company”) and                                         Executive’s heirs, executors, administrators, successors and assigns (collectivelyreferred to throughout this Agreement and General Release as “Executive”) agree:     1. Last Day of Employment. Executive’s last day of employment with the Company is[INSERT TERMINATION DATE]. In addition, effective as of [INSERT TERMINATION DATE], Executiveresigns from Executive’s position as                                          of the Company and will not be eligible forany benefits or compensation after [INSERT TERMINATION DATE], other than as specifically providedin the employment agreement between the Company and Executive dated effective as of                                        , 20___ (the “Employment Agreement”), subject to Executive’s executing,delivering and not revoking Appendix 1 hereto. Executive further acknowledges and agrees that,after [INSERT TERMINATION DATE], Executive will not represent himself as being a director,employee, officer, trustee, agent or representative of the Company for any purpose and will notmake any public statements relating to the Company, other than general statements relating toExecutive’s position, title or experience with the Company, subject to the confidentialityprovision under Section 10(a) of the Employment Agreement and in no event will Executive make anystatements as an agent or representative of the Company. In addition, effective as of [INSERTTERMINATION DATE], Executive resigns from all offices, directorships, trusteeships, committeememberships and fiduciary capacities held with, or on behalf of, the Company or any benefit plansof the Company. These resignations will become irrevocable as set forth in Section 3 below.     2. Consideration. The parties acknowledge that this Agreement and General Release isbeing executed in accordance with Section 9 of the Employment Agreement.     3. Revocation. Executive may revoke this Agreement and General Release for a periodof calendar days following the day Executive executes this Agreement and General Release. Anyrevocation within this period must be submitted, in writing, to Virtual Radiologic Corporation andstate, “I hereby revoke my acceptance of our Agreement and General Release.” The revocation mustbe personally delivered or mailed to the attention of the Chief Executive Officer, VirtualRadiologic Corporation, 11995 Singletree Lane, Suite 500, Minneapolis, MN 55344, or the Company’sthen current regular business address, and postmarked within seven (7) calendar days of executionof this Agreement and General Release. This Agreement and General Release shall not becomeeffective or enforceable until the revocation period has expired. If the last day of therevocation period is a Saturday, Sunday, or legal holiday in the State of Minnesota, then therevocation period shall not expire until the next following day which is not a Saturday, Sunday, orlegal holiday.
 

 
     4. General Release of Claims. Executive knowingly and voluntarily releases andforever discharges the Company from any and all claims, causes of action, demands, fees andliabilities of any kind whatsoever, whether known and unknown, against the Company, Executive has,has ever had or may have as of the date of execution of this Agreement and General Release,including, but not limited to, any alleged violation of: **•** The National Labor Relations Act, as amended;  **•** Title VII of the Civil Rights Act of 1964, as amended;  **•** The Civil Rights Act of 1991;  **•** Sections 1981 through 1988 of Title 42 of the United States Code, as amended;  **•** The Employee Retirement Income Security Act of 1974, as amended;  **•** The Immigration Reform and Control Act, as amended;  **•** The Americans with Disabilities Act of 1990, as amended;  **•** The Age Discrimination in Employment Act of 1967, as amended;  **•** The Older Workers Benefit Protection Act of 1990;  **•** The Worker Adjustment and Retraining Notification Act, as amended;  **•** The Occupational Safety and Health Act, as amended;  **•** The Family and Medical Leave Act of 1993;  **•** The Minnesota Civil Rights Act, as amended;  **•** The Minnesota Minimum Wage Law, as amended;  **•** Equal Pay Law for Minnesota, as amended;  **•** Any other foreign, federal, state or local civil or human rights law or any otherlocal, state, federal or foreign law, regulation or ordinance;  **•** Any public policy, contract, tort, or common law; or  **•** Any allegation for costs, fees, or other expenses including attorneys’ fees incurredin these matters.Notwithstanding anything herein to the contrary, the sole matters to which this Agreement andGeneral Release do not apply are: (i) Executive’s rights of indemnification and directors andofficers liability insurance coverage, if any, to which Executive was entitled immediately prior to
2

 
[INSERT TERMINATION DATE] with regard to Executive’s service as an officer of the Company;(ii) Executive’s rights under any tax-qualified pension or claims for accrued vested benefits underany other employee benefit plan, policy or arrangement maintained by the Company or under COBRA;(iii) Executive’s rights under the provisions of the Employment Agreement which are intended tosurvive termination of employment; or (iv) Executive’s rights as a stockholder.     5. No Claims Permitted. Executive waives Executive’s right to file any charge orcomplaint against the Company arising out of Executive’s employment with or separation from theCompany before any foreign, federal, state or local court or any foreign, federal, state or localadministrative agency, except where such waivers are prohibited by law. This Agreement and GeneralRelease, however, does not prevent Executive from filing a charge with the Equal EmploymentOpportunity Commission, any other federal government agency, and/or any government agencyconcerning claims of discrimination, although Executive waives Executive’s right to recover anydamages or other relief in any claim or suit brought by or through the Equal Employment OpportunityCommission or any other state or local agency on behalf of Executive under the Age Discriminationin Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans withDisabilities Act, or any other federal or state discrimination law, except where such waivers areprohibited by law.     6. Affirmations. Executive affirms Executive has not filed, has not caused to befiled, and is not presently a party to, any claim, complaint, or action against the Company in anyforum or form. Executive further affirms that Executive has been paid and/or has received allcompensation, wages, bonuses, commissions, and/or benefits to which Executive may be entitled andno other compensation, wages, bonuses, commissions and/or benefits are due to him, except asprovided in the Employment Agreement. Executive also affirms Executive has no known workplaceinjuries.     7. Confidentiality; Cooperation; Return of Property. Executive agrees not to discloseany information regarding the circumstances surrounding the cessation of Executive’s employment, orthe existence, terms, or conditions of this Agreement and General Release, to any person or entitywhatsoever, including without limitation, any members of the media (including, but not limited to,print journalists, newspapers, radio, television, cable, satellite programs, or Internet media) orany Internet web page or “chat room,” or any other entity or person, with the exception ofExecutive’s spouse, accountant, tax advisor, and/or attorneys. Notwithstanding the aforementionedprovision, nothing herein shall preclude Executive from divulging any information to any agency ofthe federal, state, or local government pursuant to an official request by such government agencyor pursuant to court order (provided that Executive provides the Company with prior notice of thecontemplated disclosure and reasonably cooperates with the Company at its expense in seeking aprotective order or other appropriate protection of such information). Executive agrees toreasonably cooperate with the Company and its counsel in connection with any investigation,administrative proceeding or litigation relating to any matter that occurred during Executive’semployment in which Executive was involved or of which Executive has knowledge. The Company willreimburse Executive for any reasonable pre-approved out-of-pocket travel, delivery or similarexpenses incurred in providing such service to the Company. Executive represents that Executive hasreturned to the Company
3

 
all property belonging to the Company, including but not limited to any leased vehicle,laptop, cell phone, keys, access cards, phone cards and credit cards.     8. Governing Law and Interpretation. This Agreement and General Release shall begoverned and conformed in accordance with the laws of the State of Minnesota without regard to itsconflict of laws provision. In the event Executive or the Company breaches any provision of thisAgreement and General Release, Executive and the Company affirm either may institute an action tospecifically enforce any term or terms of this Agreement and General Release. Should any provisionof this Agreement and General Release be declared illegal or unenforceable by any court ofcompetent jurisdiction and should the provision be incapable of being modified to be enforceable,such provision shall immediately become null and void, leaving the remainder of this Agreement andGeneral Release in full force and effect. Nothing herein, however, shall operate to void ornullify any general release language contained in the Agreement and General Release.     9. Non-admission of Wrongdoing. Executive agrees neither this Agreement and GeneralRelease nor the furnishing of the consideration for this Release shall be deemed or construed atany time for any purpose as an admission by the Company of any liability or unlawful conduct of anykind.     10. Amendment. This Agreement and General Release may not be modified, altered orchanged except upon express written consent of both parties wherein specific reference is made tothis Agreement and General Release.     11. Entire Agreement. This Agreement and General Release sets forth the entireagreement between the parties hereto and fully supersedes any prior agreements or understandingsbetween the parties; provided, however, that notwithstanding anything in this Agreement and GeneralRelease, the provisions in the Employment Agreement which are intended to survive termination ofthe Employment Agreement, including but not limited to those contained in Section 10 thereof, shallsurvive and continue in full force and effect. Executive acknowledges Executive has not relied onany representations, promises, or agreements of any kind made to him in connection with Executive’sdecision to accept this Agreement and General Release.     EXECUTIVE HAS BEEN ADVISED THAT HE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW THISAGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TOEXECUTION OF THIS AGREEMENT AND GENERAL RELEASE.     EXECUTIVE AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERALRELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAYCONSIDERATION PERIOD.     HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES SETFORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS IN SET FORTH IN THE EMPLOYMENT AGREEMENT,
4

 
EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT ANDGENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST THECOMPANY.     IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement andGeneral Release as of the date set forth below:         Virtual Radiologic Corporation           By:             Its:                    By:            Re: Agreement and General ReleaseDear                     :This letter confirms that on [INSERT DATE], I personally sent to you the enclosed Agreement andGeneral Release. You have until [INSERT DATE] to consider this Agreement and General Release, inwhich you waive important rights, including those under the Age Discrimination in Employment Act of1967. To this end, we advise you to consult with an attorney of your choosing prior to executingthis Agreement and General Release.         Regards,             Name:             Title:           
5

 
**APPENDIX 1**Chief Executive Officer