Document:

2004 Stock Plan

 Exhibit 10.2 
  
 NIGHTHAWK RADIOLOGY HOLDINGS, INC. 
  
 2004 STOCK PLAN 
  
 (As Amended March 22, 2005) 
  
 1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s business. Options granted under the Plan shall be Nonstatutory Stock Options. Stock Purchase Rights may also be
granted under the Plan. 
  
 2. Definitions. As used herein,
the following definitions shall apply: 
  
 (a)
“Administrator” means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof. 
  
 (b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state
corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Options or Stock Purchase
Rights are granted under the Plan. 
  
 (c)
“Board” means the Board of Directors of the Company. 
  
 (d) “Change in Control” means the occurrence of any of the following events: 
  
 (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities, except that
any change in the beneficial ownership of the securities of the Company as a result of an equity financing of the Company that is approved by the Board, shall not be deemed to be a Change in Control; or 
  
 (ii) The consummation of the sale or disposition by the
Company of all or substantially all of the Company’s assets; or 
  
 (iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. 
  
 (e) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a
reference to any successor or amended section of the Code. 
  
 (f) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof. 
  
 (g) “Common Stock” means the Common Stock
of the Company. 
  

 (h) “Company” means NightHawk Radiology Holdings, Inc., a Delaware
corporation. 
  
 (i)
“Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity. 
  
 (j) “Director” means a member of the Board. 
  
 (k) “Disability” means total and permanent
disability as defined in Section 22(e)(3) of the Code. 
  
 (l) “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall
be sufficient to constitute “employment” by the Company. 
  
 (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (n) “Exchange Program” means a program under which (a) outstanding Options are surrendered or cancelled in exchange for
Options of the same type (which may have lower exercise prices and different terms), Options of a different type, and/or cash, and/or (b) the exercise price of an outstanding Option is reduced. The terms and conditions of any Exchange Program will
be determined by the Administrator in its sole discretion. 
  
 (o) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of
determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or 
  
 (iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator. 
  
 (p) “Incentive Stock
Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. 
  
 (q) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 (r) “Option” means a stock option granted
pursuant to the Plan. 
  
 (s) “Option
Agreement” means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 

 

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 (t) “Optioned Stock” means the Common Stock subject to an Option or a
Stock Purchase Right. 
  
 (u)
“Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan. 
  
 (v) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code. 
  
 (w) “Plan” means
this 2004 Stock Plan. 
  
 (x) “Restricted
Stock” means Shares issued pursuant to a Stock Purchase Right or Shares of restricted stock issued pursuant to an Option. 
  
 (y) “Restricted Stock Purchase Agreement” means a written or electronic agreement between the Company and the Optionee
evidencing the terms and restrictions applying to Shares purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the notice of grant. 
  
 (z) “Securities Act” means the Securities
Act of 1933, as amended. 
  
 (aa)
“Service Provider” means an Employee, Director or Consultant. 
  
 (bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 below. 
  
 (cc) “Stock Purchase Right” means a right
to purchase Common Stock pursuant to Section 11 below. 
  
 (dd) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code or a limited liability company. 
  
 3. Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares that may be subject to Options or Stock Purchase Rights and sold under the Plan is 1,927,256 Shares. The Shares may be authorized but unissued, or reacquired Common Stock. 
  
 If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant to an Exchange Program, the unpurchased Shares that were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated).
However, Shares that have actually been issued under the Plan, upon exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if
unvested Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. 
  

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 4. Administration of the Plan. 
  
 (a) Administrator. The Plan shall be administered by the Board or a Committee appointed by the Board,
which Committee shall be constituted to comply with Applicable Laws. 
  
 (b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant
authorities, the Administrator shall have the authority in its discretion: 
  
 (i) to determine the Fair Market Value; 
  
 (ii) to select the Service Providers to whom Options and Stock Purchase Rights may from time to time be granted hereunder; 
  
 (iii) to determine the number of Shares to be covered by each such award granted hereunder; 
  
 (iv) to approve forms of agreement for use under the Plan;

  
 (v) to determine the terms and conditions of
any Option or Stock Purchase Right granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the Common Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine; 
  
 (vi)
to institute an Exchange Program; 
  
 (vii) to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws; 
  
 (viii) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; and 
  
 (ix) to construe and interpret the terms of the Plan and Options granted pursuant to the Plan. 
  
 (c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final
and binding on all Optionees. 
  
 5. Eligibility.
Nonstatutory Stock Options and Stock Purchase Rights may be granted to Employees, Directors and Consultants. 
  
 6. At-Will Employment. Neither the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee any right with respect to continuing
the Optionee’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the 

  

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Company’s right to terminate such relationship at any time, with or without cause, and with or without notice. 
  
 7. Term of Plan. Subject to stockholder approval in accordance with
Section 19, the Plan shall become effective upon its adoption by the Board. Unless sooner terminated under Section 15, it shall continue in effect for a term of ten (10) years from the later of (i) the effective date of the Plan, or (ii) the earlier
of the most recent Board or stockholder approval of an increase in the number of Shares reserved for issuance under the Plan. 
  
 8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10)
years from the date of grant thereof. 
  
 9. Option Exercise
Price and Consideration. 
  
 (a) Exercise
Price. The per share exercise price for the Shares to be issued upon exercise of a Nonstatutory Stock Option shall be such price as is determined by the Administrator, subject to the following: 
  
 (i) if granted to a Service Provider who, at the time of
grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the
date of grant. 
  
 (ii) if granted to any other
Service Provider, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant. 
  
 (iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above in accordance
with and pursuant to a transaction described in Section 424 of the Code. 
  
 (b) Forms of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator. Such consideration may
consist of, without limitation, (1) cash, (2) check, (3) promissory note, (4) other Shares, provided Shares acquired directly from the Company (x) have been owned by the Optionee, and not subject to a substantial risk of forfeiture, for more than
six months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan, or (6) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the Company. 
  
 10. Exercise of Option. 
  
 (a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share. Except in the case of Options granted to officers, Directors and Consultants, Options shall become exercisable at a rate of no less than 20% per year
over five (5) years from the date the Options are granted. 
  
 An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise 

  

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the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or
her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan. 
  
 Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise
his or her Option within thirty (30) days of termination, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term
of the Option as set forth in the Option Agreement). Unless the Administrator provides otherwise, if on the date of termination the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (c) Disability of Optionee. If an Optionee ceases to
be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within six (6) months of termination, or such longer period of time as specified in the Option Agreement, to the extent the Option is
vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). Unless the Administrator provides otherwise, if on the date of termination the Optionee is not vested as
to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to the Plan. 
  
 (d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within six (6) months following Optionee’s death, or such longer period of time as specified in the Option
Agreement, to the extent that the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) by the Optionee’s designated beneficiary, provided such
beneficiary has been designated prior to Optionee’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the
Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution. If, at the time of death, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan. 
  
 (e) Leaves of
Absence. 
  
 (i) Unless the Administrator
provides otherwise, vesting of Options granted hereunder to officers and Directors shall be suspended during any unpaid leave of absence. 
  

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 (ii) A Service Provider shall not cease to be an Employee in the case of (A) any leave of
absence approved by the Company or (B) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. 
  
 11. Stock Purchase Rights. 
  
 (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically of the terms, conditions and
restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer. The terms of the offer shall comply in all respects
with Section 260.140.42 of Title 10 of the California Code of Regulations. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. 
  
 (b) Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable within 90 days of the voluntary or involuntary termination of the purchaser’s service with the Company for any reason
(including death or disability). Unless the Administrator provides otherwise, the purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine. Except with respect to Shares purchased by officers, Directors and Consultants, the repurchase
option shall in no case lapse at a rate of less than 20% per year over five (5) years from the date of purchase. 
  
 (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 
  
 (d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall have rights equivalent to those of a
stockholder and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment shall be made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan. 
  
 12. Limited Transferability of Options and Stock Purchase Rights. Unless determined otherwise by the Administrator, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only by the Optionee. 
  

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 13. Adjustments; Dissolution or Liquidation; Merger or Change in Control. 
  
 (a) Adjustments. In the event that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option or Stock Purchase Right;
provided, however, that the Administrator shall make such adjustments to the extent required by Section 25102(o) of the California Corporations Code. 
  
 (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation of such
proposed action. 
  
 (c) Merger or Change in
Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the successor corporation in a merger or Change in Control refuses to assume or substitute for the Option or Stock Purchase Right, then the Optionee shall fully vest in and have
the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or Change in Control, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be fully exercisable for a period of time as
determined by the Administrator, and the Option or Stock Purchase Right shall terminate upon expiration of such period. For the purposes of this paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger or
Change in Control, the option or right confers the right to purchase or receive, for each Share subject to the Option or Stock Purchase Right immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by
the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share subject to the Option or Stock Purchase Right, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share consideration received by holders of common stock in the merger or Change in Control. 
  
 14. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such later date as is determined by the Administrator. Notice of the determination shall be given to each Service Provider to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such grant. 
  
 15. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. 
  

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 (b) Stockholder Approval. The Board shall obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws. 
  
 (c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of
any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to
exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 
  
 16. Conditions Upon Issuance of Shares. 
  
 (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise
of such Option or Stock Purchase Right and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
  
 (b) Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Administrator may require the person exercising such Option or Stock Purchase Right to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
  
 17. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained. 
  
 18. Reservation of
Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 19. Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12)
months after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws. 
  
 20. Information to Optionees. The Company shall provide to each Optionee and to each individual who acquires Shares pursuant to the Plan, not less
frequently than annually during the period such Optionee has one or more Options or Stock Purchase Rights outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan, during the period such individual owns such Shares,
copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information. 
  

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 PLAN ADOPTION AND AMENDMENTS 
  

					
	 Date of Adoption/
Amendment

	  	Section

	  	 Effect of Amendment

	 October 27, 2004
	  	 	  	Aggregate number of Common Shares that may be subject to option or stock purchase rights under the Plan is 1,527,256.
			
	 March 22, 2005
	  	3	  	Increase the aggregate number of Common Shares that may be subject to option and sold under the Plan from 1,527,256 to 1,927,256.Form of Stock Option Agreement

 Exhibit 10.3 
  
 NIGHTHAWK RADIOLOGY HOLDINGS, INC. 
  
 2004 STOCK PLAN 
  
 STOCK OPTION AGREEMENT 
  
 Unless otherwise defined herein, the terms defined in the 2004 Stock Plan shall have the same defined meanings in this Stock Option Agreement. 

 

	I.	NOTICE OF STOCK OPTION GRANT 

  

	    	Name: 

  

	    	Address: 

  
 The undersigned Optionee has been granted a Nonstautory Stock Option to purchase Common Stock of the Company, subject to the terms and conditions of the
Plan and this Option Agreement, as follows: 
  

					
	 Date of Grant
	  	 	  	 
			
	 Vesting Commencement Date
	  	 	  	 
			
	 Exercise Price per Share
	  	$	  	 
			
	 Total Number of Shares Granted
	  	 	  	 
			
	 Total Exercise Price
	  	$	  	 
			
	 Term/Expiration Date:
	  	 	  	 

  
 Vesting
Schedule: 
  
 This Option shall be exercisable, in whole or in
part, according to the following vesting schedule: 
  
 One-third (1/3) of the Shares subject to the Option shall vest on the one (1) year anniversary of the Vesting Commencement Date, and 1/36 of the Shares subject to the Option shall vest each month thereafter on the same day of
the month as the Vesting Commencement Date, subject to Optionee continuing to be a Service Provider through each such date. 
  
 Termination Period: 
  
 This Option shall be exercisable for thirty (30) days after Optionee ceases to be a Service Provider. Upon Optionee’s death or Disability, this
Option may be exercised for six (6) months after Optionee ceases to be a Service Provider. In no event may Optionee exercise this Option after the Term/Expiration Date as provided above. 

	II.	AGREEMENT 

  
 1. Grant of Option. The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant (the
“Optionee”), an option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), and
subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 15(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and
conditions of the Plan shall prevail. 
  
 2. Exercise of
Option. 
  
 (a) Right to Exercise. This
Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement. 
  
 (b) Method of Exercise. This Option shall be
exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being
exercised, and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price. 
  
 No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares. 
  
 3. Optionee’s Representations. In the event the Shares have not been registered under the Securities Act of
1933, as amended, at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the
form attached hereto as Exhibit B. 
  
 4. Lock-Up
Period. Optionee hereby agrees that Optionee shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of any Common Stock (or other securities) of the Company held by Optionee (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to
exceed one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act. 
  
 Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with
the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Optionee shall provide, within ten
(10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the
Securities Act. The obligations described in this Section shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a 

 registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in
the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred eighty (180) day period. Optionee agrees that
any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section. 
  
 5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the
Optionee: 
  
 (a) cash or check; 
  
 (b) consideration received by the Company under a formal
cashless exercise program adopted by the Company in connection with the Plan; or 
  
 (c) surrender of other Shares which, (i) in the case of Shares acquired from the Company, either directly or indirectly, have been
owned by the Optionee, and not subject to a substantial risk of forfeiture, for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares. 
  
 6. Restrictions on Exercise. This
Option may not be exercised until such time as the Plan has been approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation
of any Applicable Law. 
  
 7. Non-Transferability of
Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement
shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 8. Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. 
  
 9.
Tax Obligations. Optionee agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all Federal, state, local and foreign income and employment tax
withholding requirements applicable to the Option exercise. Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

  
 10. Entire Agreement; Governing Law. The Plan is
incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws but
not the choice of law rules of Idaho. 
  
 11. No Guarantee of
Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, 

 THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE
PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
  
 Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this
Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  

					
	 OPTIONEE
	    	 	  	NIGHTHAWK RADIOLOGY HOLDINGS, INC.
			
	 	    	 	  	 
	 Signature
	    	 	  	By
			
	 	    	 	  	 
	 Print Name
	    	 	  	Title
			
	 	    	 	  	 
			
	 	    	 	  	 
	 Residence Address
	    	 	  	 

 EXHIBIT A 
  
 2004 STOCK PLAN 
  
 EXERCISE NOTICE 
  
 NightHawk Radiology Holdings, Inc. 
 250 Northwest Blvd., Suite #202 
 Coeurd’Alene, Idaho 83814 
  
 Attention: Chief Financial Officer 
  
 1. Exercise of Option. Effective as of today,
                                ,
                            , the undersigned (“Optionee”) hereby elects to exercise
Optionee’s option to purchase          shares of the Common Stock (the “Shares”) of NightHawk Radiology Holdings, Inc. (the “Company”) under and pursuant to the 2004 Stock Plan
(the “Plan”) and the Stock Option Agreement dated
                                ,
                             (the “Option Agreement”). 
  
 2. Delivery of Payment. Optionee herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option. 
  
 3. Representations of Optionee. Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions. 
  
 4.
Rights as Shareholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares shall be issued to the Optionee as soon as practicable after the Option is exercised in accordance with the Option Agreement. No
adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 13 of the Plan. 
  
 5. Company’s Right of First Refusal. Before any Shares held by Optionee or any transferee (either being
sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and
conditions set forth in this Section (the “Right of First Refusal”). 
  
 (a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise
transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s). 
  
 (b) Exercise of Right of First Refusal. At any time
within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase 

 all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c) below. 
  
 (c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s)
under this Section shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

  
 (d) Payment. Payment of the Purchase
Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the
assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice. 
  
 (e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee
are not purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the
Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred. 
  
 (f) Exception for Certain Family Transfers. Anything to the contrary contained in this Section notwithstanding, the transfer of any
or all of the Shares during the Optionee’s lifetime or on the Optionee’s death by will or intestacy to the Optionee’s immediate family or a trust for the benefit of the Optionee’s immediate family shall be exempt from the
provisions of this Section. “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so
transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section. 
  
 (g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any
Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded. 
  
 6. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee’s purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice. 
  
 7. Restrictive Legends and Stop-Transfer Orders. 
  
 (a) Legends. Optionee understands and agrees that the Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws: 

 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH. 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES. 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT THE CONSENT OF THE
COMPANY OR THE MANAGING UNDERWRITER. 
  
 (b)
Stop-Transfer Notices. Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 
  
 (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have
been so transferred. 
  
 8. Successors and Assigns. The
Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Exercise Notice shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns. 
  
 9. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Optionee or by the Company forthwith to
the Administrator which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on all parties. 
  
 10. Governing Law; Severability. This Exercise Notice is governed by the internal substantive laws but not the choice
of law rules, of Idaho. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice will continue in full force and effect. 
  
 11. Entire Agreement. The Plan and Option Agreement are incorporated
herein by reference. This Exercise Notice, the Plan, the Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, 

 and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and
Optionee. 
  

					
			
	 Submitted by:
	    	 	 	Accepted by:
	 OPTIONEE
	    	 	 	 NIGHTHAWK RADIOLOGY HOLDINGS, INC.

			
	 	    	 	 	 
			
	 Signature
	    	 	 	 By

			
	 	    	 	 	 
			
	 Print Name
	    	 	 	 Title

			
	 Address:
	    	 	 	 Address:

			
	 	    	 	 	 
			
	 	    	 	 	 
			
	 	    	 	 	 
			
	 	    	 	 	 
			
	 	    	 	 	 
			
	 	    	 	 	 Date Received

 EXHIBIT B 
  
 INVESTMENT REPRESENTATION STATEMENT 
  
 OPTIONEE: 
  

	 COMPANY: 
	 NIGHTHAWK RADIOLOGY HOLDINGS, INC. 

  

	 SECURITY: 
	 COMMON STOCK 

  
 AMOUNT: 
  
 DATE: 
  
 In connection with the purchase of the above-listed Securities, the undersigned Optionee represents to the Company the following: 
  
 (a) Optionee is aware of the Company’s business affairs
and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Optionee is acquiring these Securities for investment for Optionee’s own account only
and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). 
  
 (b) Optionee acknowledges and understands that the Securities
constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of
Optionee’s investment intent as expressed herein. In this connection, Optionee understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Optionee’s representation
was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a
period of one year or any other fixed period in the future. Optionee further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is
available. Optionee further acknowledges and understands that the Company is under no obligation to register the Securities. Optionee understands that the certificate evidencing the Securities will be imprinted with any legend required under
applicable state securities laws. 
  
 (c) Optionee
is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in
a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to the Optionee, the exercise will be exempt from registration under the
Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may
require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited “broker’s
transaction” or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of certain public information about 

 the Company, (3) the amount of Securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), and (4) the timely filing of a Form 144, if applicable. 
  
 In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than one year after the later of the date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company,
within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than two years, the satisfaction of the conditions set forth in sections (1), (2),
(3) and (4) of the paragraph immediately above. 
  
 (d) Optionee further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons
and their respective brokers who participate in such transactions do so at their own risk. Optionee understands that no assurances can be given that any such other registration exemption will be available in such event. 
  

			
	 Signature of Optionee:
	 	 
		
	 	 	 
	
	 Date:                                     
             ,

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