Document:

exv10w9

Exhibit 10.9

Virtual Radiologic Corporation

Equity Incentive Plan

(amended and restated as of February 3, 2009)

 

 

VIRTUAL RADIOLOGIC CORPORATION

EQUITY INCENTIVE PLAN

(amended and restated as of February 3, 2009)

ARTICLE 1.

ESTABLISHMENT, PURPOSE, AND DURATION

     1.1) Establishment of the Plan. This plan, known as the “Virtual Radiologic
Corporation Equity Incentive Plan,” (formerly, the Virtual Radiologic Consultants, Inc. Equity
Incentive Plan”) was adopted by the Board on September 4, 2007, was effective as of November 14,
2007 (the “Effective Date”), and is amended and restated as of February 3, 2009. The Plan provides
for for the grant of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights
and/or Restricted Stock to selected officers, employees and Contractors of the Company and its
Subsidiaries, Affiliated Companies, officers and employees of Affiliated Companies, and Contractors
of Affiliated Companies. Additionally, the Plan authorizes the sale of Shares to selected officers,
employees and Contractors of the Company, its Subsidiaries and Affiliated Companies.

     1.2) Purpose of the Plan. The purpose of the Plan is to promote the success of the
Company and its Subsidiaries and Affiliated Companies by providing incentives to the officers,
employees and Contractors of the Company and its Subsidiaries and Affiliated Companies, by linking
their interests to the long-term financial success of the Company and its Subsidiaries and
Affiliated Companies, and to growth in shareholder value.

     1.3) Duration of the Plan. The Plan will commence on the Effective Date, and shall
remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time,
until all Shares subject to it have been purchased or acquired according to the provisions herein.
No Awards may be granted under the Plan after the tenth anniversary of the Effective Date of the
Plan.

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

     2.1) Definitions. Whenever used in the Plan, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter of the word is
capitalized:

     (a) “Affiliated Company” means a business entity with which the Company has a contractual
relationship for the mutual provision of goods or services, and which the Board has designated as
an Affiliated Company for purposes of the Plan. As of the effective date of the Plan, Virtual
Radiologic Professionals, PLC is designated as an Affiliated Company.

     (b) “Award” means, individually or collectively, a grant under this Plan of Incentive Stock
Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, or a stock
purchase award pursuant to Section 9 herein.

     (c) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act.

     (d) “Board” or “Board of Directors” means the Board of Directors of the Company.

     (e) “Cause” shall include but not be limited to: (i) material breach of any agreement
entered into between the Participant and the Company, a Subsidiary or an Affiliated Company; (ii)
misappropriation of the Company’s, Subsidiary’s or Affiliated Company’s property, fraud,
embezzlement, breach of fiduciary duty, other acts of dishonesty against the Company, a
Subsidiary or an Affiliated Company; (iii) conviction of or plea of nolo contendere to any felony
or crime involving moral turpitude; or (iv) in the case of a Participant who is a Physician
Contractor, the Participant’s failure to fully and strictly abide by the restrictions on
competition and the obligations of confidentiality set forth in Article 14 hereof.

     (f) “Change in Control” shall occur upon: (i) any person (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) first becoming, after the effective date of the Plan, the
“beneficial owner” (as defined in Rule 13(d) under the Exchange Act) directly or indirectly, of
securities of the Company representing 40% or more of the combined voting power of the Company’s
outstanding securities, or (ii) any other event which the Committee determines in its discretion,
on an event-by-event basis, shall constitute a Change in Control for purposes of the Plan.

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     (g) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
rules or regulations promulgated thereunder.

     (h) “Committee” means a committee consisting of not less than two members of the Board of
Directors of the Company. The term “Committee” shall refer to the Board of Directors of the
Company during such times as no committee is appointed by the Board of Directors and during such
times as the Board of Directors is acting in lieu of the Committee.

     (i) “Company” means Virtual Radiologic Corporation, a Delaware corporation, or any successor
thereto as provided in Article 16.

     (j) “Confidential Information” means any trade secret or secrets, as defined by United
States Code, Section 1839, and includes all information that has been designated by the Company
or an Affiliated Company as confidential information.

     (k) “Contractor” means an individual who is an agent of the Company or a Subsidiary, a
member of the Board of Directors, or is retained as an independent contractor to provide
consulting or other services to the Company or a Subsidiary, and who is not an employee of the
Company or any Subsidiary. “Contractor” shall include Physician Contractors. Unless otherwise
specified by an agreement in writing, a Contractor’s status as a Contractor shall for purposes of
the Plan be deemed to have terminated at such time as the Committee shall determine.

     (l) “Contractor of an Affiliated Company” means an individual who is an agent of an
Affiliated Company or is retained as an independent contractor to provide services to or on
behalf of an Affiliated Company, and who is not an employee of the Affiliated Company.
“Contractor of an Affiliated Company” shall include Physician Contractors of the Affiliated
Company. Unless otherwise specified by an agreement in writing, the status of a Contractor of an
Affiliated Company as a contractor shall for purposes of the Plan be deemed to have terminated at
such time as the Affiliated Company shall determine.

     (m) “Disability” means a physical or mental impairment which prevents a Participant who is
an individual from performing regularly-scheduled duties and which is expected to be of long
duration or result in death. All determinations as to a Participant’s disability status shall be
made by the Committee in its discretion and on the basis of such evidence as it shall deem
appropriate.

     (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

     (o) “Fair Market Value” means the price per Share of the common Stock of the Company
determined as follows: (i) if the security is listed for trading on one or more national
securities exchanges or is quoted on the Nasdaq National Market System (“Nasdaq NMS”), the
reported last sales price on such principal exchange or system on the date in question (if such
security shall not have been traded on such principal exchange or on the Nasdaq NMS on such date,
the reported last sales price on such principal exchange or on Nasdaq NMS on the first day prior
thereto on which such security was so traded); or (ii) if the security is not listed for trading
on a national securities exchange and is not quoted on Nasdaq NMS but is quoted on the Nasdaq
Small Cap System or is otherwise traded in the over-the-counter market, the mean of the highest
and lowest bid prices for such security on the date in question (if there are no such bid prices
for such security on such date, the mean of the highest and lowest bid prices on the most recent
day prior thereto (not to exceed ten (10) days prior to the date in question) on which such
prices existed); or (iii) if neither (i) nor (ii) is applicable, by any means deemed fair and
reasonable by the Committee, which determination shall be final and binding on all parties.

     (p) “Family Member” includes any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the employee’s household (other than a tenant or employee), a trust in which
these persons have more than fifty percent of the beneficial interest, a foundation in which
these persons (or the participant) control the management of assets, and any other entity in
which these persons (or the participant) own more than fifty percent of the voting interests.

     (q) “Incentive Stock Option” means any stock option granted pursuant to this Plan as an
“incentive stock option” within the meaning of Section 422 of the Code.

     (r) “Nonqualified Stock Option” means any stock option granted pursuant to this Plan other
than as an Incentive Stock Option.

     (s) “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

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     (t) “Participant” means an officer, employee or Contractor of the Company or a Subsidiary,
an Affiliated Company, an officer or employee of an Affiliated Company or a Contractor (including
a Physician Contractor) of an Affiliated Company that has been granted an Award under the Plan.

     (u) “Period of Restriction” means the period during which the transfer or sale of Shares of
Restricted Stock by the Participant is restricted.

     (v) “Physician Contractor” means a physician who is a Contractor or a Contractor of an
Affiliated Company, and who provides radiology or radiology related services to or on behalf of
the Company or an Affiliated Company.

     (w) “Plan” means this Virtual Radiologic Corporation Equity Incentive Plan.

     (x) “Qualified Member” means a member of the Committee who is a “Non-Employee Director”
within the meaning of Rule 16b-3 and an “outside director” within the meaning of Regulation
1.162-27(c) under Code Section 162(m).

     (y) “Restricted Stock” means an Award of Stock granted to a Participant pursuant to Article
8.

     (z) “Securities Act” means the Securities Act of 1933, as amended from time to time.

     (aa) “Subsidiary” means any company in an unbroken chain of companies beginning with the
Company, if, at the time of granting the Award, each of the companies other than the last company
in the chain owns stock and/or other securities possessing more than fifty percent (50%) of the
total combined voting power of all classes of stock and/or other securities in one of the other
companies in such chain. The term shall include any Subsidiaries which become such after adoption
of this Plan.

     (bb) “Stock” or “Shares” means the common stock of the Company.

     (cc) “Stock Appreciation Right” or “SAR” means an Award designated as a Stock Appreciation
Right, granted to a Participant pursuant to Article 7.

     (dd) “Stock Purchase Agreement” means, in accordance with Section 9.3, a legally binding
written agreement between the Company and a Participant under which the Company agrees to sell,
and the Participant agrees to buy, a specified number of Shares of the Company at the Fair Market
Value of such Shares on the date of sale, in accordance with the terms and conditions stated in
the agreement.

     2.2) Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall include the singular,
and the singular shall include the plural.

     2.3) Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not
been included.

ARTICLE 3.

ADMINISTRATION

     3.1) Authority of the Committee. Except as otherwise provided below, the Plan shall
be administered by the Committee. The Committee shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to (i) select eligible persons to become
Participants; provided, however, that Incentive Stock Options may only be granted to employees of
the Company or a Subsidiary; (ii) grant Awards; (iii) determine the type, number of shares of Stock
subject to, and other terms and conditions of, and all other matters relating to, Awards; (iv)
prescribe Award Agreements (which need not be identical for each Participant) and rules and
regulations for the administration of the Plan; (v) construe and interpret the Plan and Award
Agreements and correct defects, supply omissions, or reconcile inconsistencies therein; and (vi)
make all other decisions and determinations as the Committee may deem necessary or advisable for
the administration of the Plan.

     3.2) Manner of Exercise of Committee Authority. At any time that a member of the
Committee is not a Qualified Member, (i) any action of the Committee relating to an Award intended
by the Committee to qualify as “performance-based compensation” within the meaning of Section
162(m) of the Code and regulations thereunder may be taken by a subcommittee, designated by the
Committee or

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the Board, composed solely of two or more Qualified Members and (ii) any action relating to an
Award granted or to be granted to a Participant who is then subject to Section 16 of the Exchange
Act in respect of the Company may be taken either by such a subcommittee or by the Committee but
with each such member who is not a Qualified Member abstaining or recusing himself or herself from
such action; provided, that upon such abstention or recusal, the Committee remains composed of two
or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon
the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for
purposes of the Plan. The express grant of any specific power to the Committee, and the taking of
any action by the Committee, shall not be construed as limiting any power or authority of the
Committee.

     3.3) Decisions Binding. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders or resolutions of the Board of
Directors shall be final, conclusive and binding on all persons, including the Company and its
Subsidiaries and Affiliated Companies, its stockholders, employees, and Participants and their
estates and beneficiaries, and such determinations and decisions shall not be reviewable.

     3.4) Procedures of the Committee. All determinations of the Committee shall be made
by not less than a majority of its members present at the meeting (in person or otherwise) at which
a quorum is present. A majority of the entire Committee shall constitute a quorum for the
transaction of business. Any action required or permitted to be taken at a meeting of the Committee
may be taken without a meeting if a unanimous written consent, which sets forth the action, is
signed by each member of the Committee and filed with the minutes for proceedings of the Committee.
Service on the Committee shall constitute service as a director of the Company so that members of
the Committee shall be entitled to indemnification, limitation of liability and reimbursement of
expenses with respect to their services as members of the Committee to the same extent that they
are entitled under the Company’s Articles of Incorporation and Minnesota law for their services as
directors of the Company.

     3.5) Award Agreements. Awards under the Plan shall be evidenced by an Award agreement
(e.g., an Option agreement, a SAR agreement, a Restricted Stock agreement, or a Stock Purchase
Agreement), which shall be signed by an officer of the Company and by the Participant, and shall
contain such terms and conditions as are approved by the Committee. Such terms and conditions need
not be the same in all cases.

     3.6) Conditions on Awards. Notwithstanding any other provision of the Plan, the Board
or the Committee may impose such conditions on any Award (including, without limitation,
impositions on the time of exercise of Options and SARs to specified periods) as it deems
appropriate.

     3.7) Compliance with Law. The Committee shall take into account compliance with
Section 409A of the Code and all applicable securities laws and regulations in connection with any
grant of an Award under the Plan, to the extent applicable.

     3.8) Saturdays, Sundays and Holidays. When a date referenced in an Award agreement
falls on a Saturday, Sunday or other day when the Company’s general office is closed, the date
referenced will revert back to the day prior to such date.

ARTICLE 4.

STOCK SUBJECT TO THE PLAN

     4.1) Number of Shares. Subject to adjustment as provided in Section 4.3, the
aggregate number of Shares that may be delivered under the Plan shall not exceed 5,975,000 Shares.

     4.2) Share Counting Rules. The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or
substitute awards) and make adjustments if the number of shares of Stock actually delivered differs
from the number of shares previously counted in connection with an Award. To the extent that an
Award expires or is canceled, forfeited, settled in cash or otherwise terminated without a delivery
to the Participant of the full number of shares to which the Award related, the undelivered shares
will again be available for grant. Shares withheld in payment of the exercise price or taxes
relating to an Award and shares equal to the number surrendered in payment of any exercise price or
taxes relating to an Award shall be deemed to constitute shares not delivered to the Participant
and shall be deemed to again be available for Awards under the Plan; provided, however, that, where
shares are withheld or surrendered more than ten years after the date of the most recent
stockholder approval of the Plan or any other transaction occurs that would result in shares
becoming available under this Section 4.2, such shares shall not become available if and to the
extent that it would constitute a material revision of the Plan subject to stockholder approval
under then applicable rules of the national securities exchange on which the Stock is listed or the
Nasdaq National Market System, as applicable.

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     4.3) Adjustments in Authorized Shares.

     (a) Capitalization Adjustments. In the event that the outstanding Shares of the
Company are changed into or exchanged for a different number or kind of shares or other securities
of the Company or of another company by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, stock split, reverse stock split, combination of shares or
dividends payable in capital stock, an appropriate adjustment shall be made by the Committee in the
number and kind of Shares as to which Awards may be granted under the Plan and as to which
outstanding Options and SARs or portions thereof then unexercised shall be exercisable, to the end
that the proportionate interest of each Participant shall be maintained as before the occurrence of
such event; such adjustment in outstanding Options and SARs shall be made without change in the
total price applicable to the unexercised portion of such Awards and with a corresponding
adjustment in the exercise price per Share. No such adjustment shall be made hereunder which shall,
within the meaning of any applicable sections of the Code, constitute a modification, extension or
renewal of an Award or a grant of additional benefits to a participant.

     (b) Corporate Events. Notwithstanding the foregoing, except as may otherwise be
provided in an Award agreement, in the event of (i) a merger or consolidation involving the Company
in which the Company is not the surviving corporation; (ii) a merger or consolidation involving the
Company in which the Company is the surviving corporation but the holders of shares of Stock
receive securities of another corporation and/or other property, including cash; (iii) a Change in
Control; or (iv) the reorganization or liquidation of the Company (each, a “Corporate
Event”), in lieu of providing the adjustment set forth in subsection (a) above, the Committee
may, in its discretion, “cash-out” vested and/or unvested Awards by providing that such vested
and/or unvested Awards shall be cancelled as of the consummation of such Corporate Event, and that
holders of Awards will receive a payment in respect of cancellation of their Awards based on the
amount of the per share consideration being paid for the Stock in connection with such Corporate
Event, less, in the case of Options and other Awards subject to exercise, the applicable exercise
price; provided, however, that holders of “performance vested” Awards shall only be entitled to
consideration in respect of cancellation of such Awards to the extent that applicable performance
criteria are achieved prior to or as a result of such Corporate Event, and shall not otherwise be
entitled to payment in consideration of cancelled unvested Awards. Payments to holders pursuant to
the preceding sentence shall be made in cash, or, in the sole discretion of the Committee, in such
other consideration necessary for a holder of an Award to receive property, cash or securities as
such holder would have been entitled to receive upon the occurrence of the transaction if the
holder had been, immediately prior to such transaction, the holder of the number of shares of Stock
covered by the Award at such time.

ARTICLE 5.

ELIGIBILITY AND PARTICIPATION

     Eligibility. Awards may be granted to a any officer, employee or Contractor of the
Company or Subsidiary, to an Affiliated Company, or to any officer or employee of an Affiliated
Company, and to any Contractor of an Affiliated Company; provided, however, that only employees of
the Company or a Subsidiary shall be eligible for a grant of Incentive Stock Options. No person or
entity shall have any right to be granted an Award under this Plan even if previously granted an
Award. Without amending the Plan, the Committee may grant Awards to eligible individuals who are
foreign nationals on such terms and conditions different from those specified in this Plan as may,
in the judgment of the Committee, be necessary or desirable to foster and promote achievement of
the purposes of the Plan, and in furtherance of such purposes, the Committee may make such
modification, amendments, procedures, subplans, and the like as may be necessary or advisable to
comply with provisions of laws in other countries in which the Company operates or has employees.

     5.1) Actual Participation. Awards shall be granted as follows:

     (a) The Committee may grant such type(s) of Awards to such officers, employees and
Contractors of the Company or a Subsidiary, to such Affiliated Company, or to such officers,
employees, and Contractors of Affiliated Companies at such times as the Committee shall
determine; provided, however, that Incentive Stock Options shall be granted only to employees of
the Company or a Subsidiary. Awards granted under this subsection shall contain such terms and
conditions may be as determined by the Committee at the time of grant.

     (b) 162(m) Limitation. Subject to the provisions of Section 4, no Employee shall be
eligible to be granted Options or Stock Appreciation Rights covering more than the maximum number
of Shares available for issue hereunder, as such number may change from time to time, during any
calendar year. This subsection (b) shall not apply until the earliest date required by Section
162(m) of the Code and the rules and regulations promulgated thereunder.

     (c) Any grant of Awards to an Affiliated Company shall be in connection with and in
consideration of services of such Affiliated Company to or for the Company, whether pursuant to a
written agreement for such services or otherwise.

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ARTICLE 6.

STOCK OPTIONS

     Grant of Options. Subject to the terms and provisions of the Plan, Options may be
granted to Participants at any time and from time to time as shall be determined by the Committee.
The Committee shall have the sole discretion, subject to the requirements of the Plan, to determine
the actual number of Shares subject to Options granted to any Participant, to determine whether an
Option shall be granted as an Incentive Stock Option or a Nonqualified Stock Option, and to impose
terms and conditions on the receipt and exercise of Options. The Committee may specify the period
of time over which vesting shall occur, and may in its discretion further provide for the
acceleration of vesting upon the attainment of such goals as the Committee may determine in its
discretion. The previous provisions of this Section 6.1 notwithstanding, the aggregate Fair Market
Value (determined at the time the Option is granted) of the Stock with respect to which an
Incentive Stock Option under this Plan or any other plan of the Company or its Subsidiaries is
exercisable for the first time by a Participant during any calendar year shall not exceed $100,000.
To the extent that the aggregate Fair Market Value (determined as of the date an Incentive Stock
Option is granted) of the Shares with respect to which the Incentive Stock Options are exercisable
for the first time by a Participant during any calendar year (under the Plan and any other
incentive stock option plans of the Company or any Subsidiary) exceeds $100,000 (or such other
amount as may be prescribed by the Code from time to time), such excess Options will be treated as
Nonqualified Stock Options. The determination will be made by taking Incentive Stock Options into
account in the order in which they were granted. If such excess only applies to a portion of an
Incentive Stock Option, the Committee, in its discretion, will designate which Shares will be
treated as Shares to be acquired upon exercise of an Incentive Stock Option.

     6.1) Option Agreement. Each Option grant shall be evidenced by an Option agreement
that shall specify the Participant, the Option exercise price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions, including vesting, as the
Committee shall determine.

     6.2) Option Exercise Price. The Option exercise price per share of Stock covered by
the Option shall be determined by the Committee, but may not be less than the Fair Market Value of
the Stock on the date the Option is granted; provided, however, that the exercise price of any
Incentive Stock Option granted to an employee of the Company or a Subsidiary who, on the date of
execution of the Option agreement owns more than ten percent (10%) of the total combined voting
power of all series of Stock then outstanding, shall be at least one hundred ten percent (110%) of
the Fair Market Value of a Share on the date of execution of the Option agreement.

     6.3) Duration of Options. No Option may be exercised after ten (10) years from the
date on which the Option was granted. If an earlier expiration date is not specified by the
Committee at the time of grant, each Option shall expire at the close of business on the tenth
(10th) anniversary of the date of grant. The previous provisions of this Section 6.4
notwithstanding, each Incentive Stock Option shall expire no later than at the close of business on
the date preceding the tenth (10th) anniversary of the date of grant, and each Incentive Stock
Option granted to an employee of the Company or a Subsidiary who, on the date of execution of the
Option agreement owns more than ten percent (10%) of the total combined voting power of all series
of Stock then outstanding, shall expire no later than the close of business on the date preceding
the fifth (5th) anniversary of the date of grant.

     6.4) Exercise of Options. Options granted under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall in each instance
approve, which need not be the same for all Participants. All Options within a single grant need
not be exercised at one time.

     6.5) Manner of Exercise of Options. An Option may be exercised in whole or in part,
at such time or times, and with such rights with respect to such Shares of Stock, as provided in
the applicable Option agreement. An Option shall be exercisable only by: (i) written notice to the
Company of intent to exercise the Option with respect to a specified number of Shares of Stock;
(ii) tendering to the Company the original Option agreement (or a replacement Option agreement
satisfactory to the Committee); and (iii) payment to the Company of the exercise price for the
number of Shares of Stock with respect to which the Option is then exercised. Except as set forth
in the next sentence, payment of the exercise price may be made in any of the following manners:

     (a) cash, including certified check, bank draft or postal or express money order;

     (b) personal check (provided that if payment of the exercise price is made by personal check
and such personal check is not timely paid by the drawer’s bank, such payment shall be deemed not
to have been made and any Shares issued upon such exercise shall be deemed void and never
issued);

     (c) by surrender for cancellation of Shares of Stock which:

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     (1) were acquired by the Participant (or person exercising the Option) other than by
exercise of an Option;

     (2) were acquired by the Participant (or person exercising the Option) upon exercise of an
Option where the Option Shares being surrendered have been held by the Participant (or person
exercising the Option) for at least six months after such exercise; or

     (3) were acquired by the Participant (or person exercising the Option) upon exercise of an
Option where the Option Shares being surrendered have been held by the Participant (or person
exercising the Option) for six months or less after such exercise but only if the Participant
(or person exercising the Option) has obtained prior approval of the specific surrender (such
approval to specify at least the date of grant of the Option being exercised, the dates of
grant and exercise of the Option pursuant to which Shares to be surrendered were acquired, and
the number of Option Shares to be surrendered) by the Committee;

and which have a Fair Market Value equal to the exercise price of the Options being exercised
(if the Shares surrendered have a Fair Market Value in excess of the exercise price of the
Options being exercised, the Company shall promptly pay to the Participant or person exercising
the Option an amount equal to the excess of such Fair Market Value over the exercise price, not
to exceed the Fair Market Value of one Share); or

     (d) by delivery of a notice of “net exercise” to the Company, pursuant to which the
Participant shall receive the number of Shares underlying the Options so exercised reduced by the
number of Shares equal to the aggregate exercise price of the Options divided by the Fair Market
Value on the date of exercise

     (e) by any other method of payment which the Committee shall approve before, at, or after
the date of grant of such Options.

     An Option shall be deemed to have been exercised immediately prior to the close of business on
the date the Company is in receipt of the original Option agreement, written notice of intent to
exercise the Option, and payment for the number of Shares being acquired upon exercise of the
Option. The Participant shall be treated for all purposes as the holder of record of the Option
Stock as of the close of business on such date, except where Shares are held for unpaid withholding
taxes. As promptly as practicable on or after such date, the Company shall issue and deliver to the
Participant a certificate or certificates for the Option Stock issuable upon such exercise;
provided, however, that such delivery shall be deemed effected for all purposes when the Company,
or the stock transfer agent for the Company, shall have deposited such certificates in the United
States mail, postage prepaid, addressed to the Participant at the address specified in the written
notice of exercise.

     Notwithstanding the foregoing listing of permissible manners of payment of exercise price, the
Committee shall have the right from time to time to cancel, limit or suspend as to any one, some,
or all Option(s) and as to any one, some, or all Participants, the right to make payment under any
one or more manners of payment (other than the payment by cash, certified check, bank draft or
postal or express money order), including other methods of payment previously approved by the
Committee under the authority granted in subsection (d) of this Section 6.6.

     There shall be no exercise at any one time for fewer than one hundred (100) Shares (or such
lesser number of Shares as the Committee may from time to time determine in its discretion) or all
of the remaining Shares then purchasable by the Participant or person exercising the Option.

     When Shares of Stock are issued pursuant to the exercise of an Option, the fact of such
issuance shall be noted on the Option agreement by the Company before the Option agreement is
returned. When all Shares of Stock covered by the Option agreement have been issued, or the Option
shall expire, the Option agreement shall be canceled and retained by the Company.

     6.6) Restrictions on Stock Transferability. The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan as it may
deem advisable, including, without limitation, restrictions under applicable Federal securities
law, under the requirements of any stock exchange upon which such Shares are then listed and under
any blue sky or state securities laws applicable to such Shares.

     6.7) Termination Due to Death or Disability. Unless otherwise provided in the Option
agreement, if a Participant who is an individual ceases to be an employee or Contractor of the
Company, of a Subsidiary or of an Affiliated Company by reason of death, each of such Participant’s
outstanding Options shall vest and become exercisable for the greater of: (i) the number of Shares
for which the Option was otherwise, in accordance with the Option agreement, vested and exercisable
(or previously exercised) on the date of

8

 

death, or (ii) that percentage of the total number of Shares subject to the Option (including
any Shares for which the Option may have been previously exercised) which is determined by dividing
the Participant’s number of complete months of employment as an employee of the Company, a
Subsidiary or an Affiliated Company and/or complete months of service as a director or Contractor
of the Company, a Subsidiary or an Affiliated Company, by the total number of months of employment
and/or service which would otherwise be required for the Option to fully vest under the terms of
the Option agreement (to a maximum of 100%). All of the Participant’s outstanding Options, to the
extent vested and exercisable under the terms of the Option agreement or the provisions of this
Section 6.8, shall be exercisable at any time prior to the expiration date of the Options, but only
within twelve (12) months following the date of death, whichever period is shorter. Options may be
exercised by such person or persons as shall have acquired the Participant’s rights under the
Option pursuant to Article 11 or, in the absence of an effective beneficiary designation, by will
or by the laws of descent and distribution.

     Unless otherwise provided in the Option agreement, if a Participant who is an individual
ceases to be an employee or Contractor of the Company, of a Subsidiary Contractor or of an
Affiliated Company by reason of Disability, each of such Participant’s outstanding Options shall
vest and become exercisable for the greater of: (i) the number of Shares for which the Option was
otherwise, in accordance with the Option agreement, vested and exercisable (or previously
exercised) on the date that the Committee determines is the date of Disability, or (ii) that
percentage of the total number of Shares subject to Option (including any Shares for which the
Option may have been previously exercised) which is determined by dividing the Participant’s number
of complete months of employment as an employee of the Company, a Subsidiary or an Affiliated
Company and/or complete months of service as a director or Contractor of the Company, a Subsidiary
or an Affiliated Company, by the total number of months of employment and/or service which would
otherwise be required for the Option to fully vest under the terms of the Option agreement (to a
maximum of 100%). All of the Participant’s outstanding Options shall be exercisable, to the extent
vested and exercisable under the terms of the Option agreement or the provisions of this Section
6.8, at any time prior to the expiration date of the Options, but only within twelve (12) months
following the date of Disability as determined by the Committee, whichever period is shorter.

     Any Options, to the extent not vested and exercisable following such termination, shall be
forfeited back to the Company.

     6.8) Termination for Other Reasons. Unless otherwise provided in the Option
agreement, if a Participant who is an individual ceases to be an employee or Contractor of the
Company, of a Subsidiary, or of an Affiliated Company for any reason other than death, Disability
or for Cause:

     (a) If such Participant’s termination of employment or service occurs voluntarily at the
election of the Participant within one year after the Participant’s first day of employment or
service, any Option, to the extent not then exercised, shall be forfeited;

     (b) Any of such Participant’s remaining outstanding Nonqualified Stock Options which are
vested and exercisable shall be exercisable at any time prior to the expiration date of such
Options, but only within twelve (12) months following the date of his termination as an employee
or Contractor of the Company or a Subsidiary, an employee of an Affiliated Company or a
Contractor of an Affiliated Company, whichever period is shorter; and

     (c) Any of such Participant’s remaining outstanding Incentive Stock Options which are vested
and exercisable shall be exercisable at any time prior to the expiration date of such Options,
but only within three (3) months following the date of his termination as an employee or
Contractor, whichever period is shorter; provided, however, that in the event of the
Participant’s death during the three (3) month period following the date of his termination as an
employee or Contractor of the Company or a Subsidiary, an employee of an Affiliated Company or a
Contractor of an Affiliated Company, and prior to the expiration date of such Options, any such
Options then vested and unexercised may be exercised within twelve (12) months following the date
of termination by the person or persons who shall have acquired the Participant’s rights
thereunder pursuant to Article 11 or, in the absence of an effective beneficiary designation, by
will or the laws of descent and distribution.

Any Options, to the extent not vested and exercisable following such termination, shall be
forfeited back to the Company.

     If the Participant’s position as an employee or Contractor, including a Physician Contractor,
of the Company, of a Subsidiary, or of an Affiliated Company terminates for Cause, all of the
Participant’s outstanding Options, whether or not then vested, shall be immediately forfeited back
to the Company.

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     6.9) Nontransferability/Permitted Transfers of Options.

     (a) Except as permitted by subsections (b) and (c) below, each Option granted hereunder to a
Participant who is an individual shall, by its terms, not be transferable by such Participant and
shall be, during such Participant’s lifetime, exercisable only by the Participant or Participant’s
guardian or legal representative. Except as permitted by subsections (b) and (c) below, each Option
granted under the Plan to a Participant who is an individual and the rights and privileges thereby
conferred shall not be transferred, assigned or pledged in any way (whether by operation of law or
otherwise), and shall not be subject to execution, attachment or similar process. Upon any attempt
to so transfer, assign, pledge, or otherwise dispose of the Option, or of any right or privilege
conferred thereby, contrary to the provisions of the Option or the Plan, or upon levy of any
attachment or similar process upon such rights and privileges, the Option, and such rights and
privileges, shall immediately become null and void.

     (b) Each Incentive Stock Option granted hereunder to a Participant who is an individual shall,
by its terms, be transferable only by will or pursuant to the laws of descent and distribution, and
shall be, during the Participant’s lifetime, exercisable only by the Participant or his guardian or
legal representative.

     (c) Each Nonqualified Stock Option granted hereunder to a Participant who is an individual
shall, by its terms, be transferable:

     (1) by such Participant to a Family Member of the Participant (or to a trust in which the
Participant’s Family Member or Family Members have more than fifty percent (50%) of the
beneficial interest) by a bona fide gift or pursuant to a domestic relations order in settlement
of marital property rights;

     (2) by will or pursuant to the laws of descent and distribution; or

     (3) as otherwise permitted pursuant to the rules or regulations adopted by the Securities
and Exchange Commission (“SEC”) under the Securities Act or the interpretations of such rules and
regulations as announced by the SEC from time to time.

     Any permitted transfer shall be effective only when accepted by the Company subject to the
Company receiving documentation reasonably satisfactory to it of such gift, transfer pursuant to
domestic relations order, or transfer pursuant to will or pursuant to the laws descent and
distribution. Upon effectiveness of any permitted transfer, the rights under any Option shall be
exercisable only by the permitted transferee or such transferee’s guardian or legal representative.
Except as permitted by this subsection, each Option granted under the Plan and the rights and
privileges thereby conferred shall not be further transferred, assigned or pledged in any way
(whether by operation of law or otherwise), and shall not be subject to execution, attachment or
similar process. Upon any attempt to so further transfer, further assign, pledge, or otherwise
further dispose of the Option, or of any right or privilege conferred thereby, contrary to the
provisions of the Option or the Plan, or upon levy of any attachment or similar process upon such
rights and privileges, the Option, and such rights and privileges, shall immediately become null
and void. No permitted transfer shall cause any change in the terms of any Option except the
identity of the person(s) entitled to exercise such Option and to receive the common Stock issuable
upon exercise of the Option. Without limiting the generality of the foregoing, any Option granted
to a Participant who is an individual shall be subject to termination upon such Participant’s
termination as an employee or Contractor of the Company, a Subsidiary or Affiliated Company, or the
death or Disability of the Participant to whom the Option was originally granted without reference
to the employment, death or Disability of any permitted transferee. In the event of any transfer of
an Option, the obligations of the Company owed to the Participant shall be owed to the transferee
and references in this Plan or in any Option agreement to the Participant shall, unless the context
otherwise requires, refer to the transferee.

ARTICLE 7.

STOCK APPRECIATION RIGHTS

     7.1) Grant of Stock Appreciation Rights. Subject to the terms and provisions of the
Plan, Stock Appreciation Rights may be granted to officers, employees and Contractors of the
Company or a Subsidiary, an Affiliated Company, officers and employees of Affiliated Companies, and
Contractors of Affiliated Companies, at the discretion of the Committee, exercisable in any of the
following forms as designated by the Committee at the time of grant:

          (a) in lieu of Options;

          (b) in addition to Options;

          (c) independent of Options; or

          (d) in any combination of (a), (b), or (c).

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     The Committee shall have the sole discretion, subject to the requirements of the Plan, to
determine the actual number of Shares subject to SARs granted to any Participant. The Committee may
specify the period of time over which vesting shall occur, and may in its discretion further
provide for the acceleration of vesting upon the attainment of such goals as the Committee may
determine in its discretion. The exercise price of a SAR shall not, however, be less than the Fair
Market Value of a share of Stock on the date of grant.

     7.2) Stock Appreciation Rights Agreement. Each grant of a SAR, and the terms and
conditions governing the exercise of the SAR, shall be evidenced by a SAR agreement.

     Option Stock with respect to which a SAR shall have been exercised may not be subject again to
an Award under the Plan.

     7.3) Exercise of Stock Appreciation Rights. SARs granted in lieu of Options may be
exercised for all or part of the Shares subject to the related Option upon the surrender of the
related Options representing the right to purchase an equivalent number of Shares. The SAR may be
exercised only with respect to the Shares for which its related Option is then exercisable.

     SARs granted in addition to Options shall be deemed to be exercised upon the exercise of the
related Options.

     Subject to Section 7.1, SARs granted independently of Options may be exercised upon whatever
terms and conditions the Committee, in its sole discretion, imposes upon the SARs, including, but
not limited to, a corresponding proportional reduction in previously granted Options.

     7.4) Payment of Stock Appreciation Right Amount. Upon exercise of the SAR, the holder
shall be entitled to receive payment of an amount determined by multiplying:

     (a) The difference between: (i) the Fair Market Value of a Share on the date of exercise and
(ii) the exercise price established by the Committee on the date of grant; by

     (b) The number of Shares with respect to which the SAR is exercised.

     7.5) Form and Timing of Payment. Payment to a Participant, upon SAR exercise, will be
made in cash or stock, at the discretion of the Committee, as soon as administratively possible
after exercise.

     7.6) Term of Stock Appreciation Rights. The term of a SAR granted under the Plan
shall be determined by the Committee, but shall not exceed ten (10) years. If not specified by the
Committee at the time of grant, each SAR shall expire at the close of business on the date
preceding the tenth (10th) anniversary of the date of grant.

     7.7) Termination Due to Death or Disability. Unless otherwise provided in the SAR
agreement, if a Participant who is an individual ceases to be an employee or Contractor of the
Company, of a Subsidiary or of an Affiliated Company by reason of death, each of such Participant’s
outstanding SARs shall vest and become exercisable in relation to the greater of: (i) the number of
Shares in relation to which the SAR was otherwise, in accordance with the SAR agreement, vested and
exercisable (or previously exercised) on the date of death, or (ii) that percentage of the total
number of Shares to which the SAR relates (including any Shares in relation to which the SAR may
previously have been exercised) which is determined by dividing the Participant’s number of
complete months of employment as an employee of the Company, a Subsidiary or an Affiliated Company
and/or complete months of service as a director or Contractor of the Company, a Subsidiary or an
Affiliated Company, by the total number of months of employment and/or service which would
otherwise be required for the SAR to be fully vested under the terms of the SAR agreement (to the
maximum of 100%). All of the Participant’s outstanding SARs, to the extent vested under the terms
of the SAR agreement or the provisions of this Section 7.7, shall be exercisable at any time prior
to the expiration date of the SARs, but only within twelve (12) months following the date of death,
whichever period is shorter. SARs may be exercised by such person or persons as shall have acquired
the Participant’s rights under the SAR pursuant to Article 11 or, in the absence of an effective
beneficiary designation, by will or by the laws of descent and distribution.

     Unless otherwise provided in the SAR agreement, if a Participant who is an individual ceases
to be an employee or Contractor of the Company, of a Subsidiary or of an Affiliated Company by
reason of Disability, each of such Participant’s outstanding SARs, shall vest and become
exercisable in relation to the greater of: (i) the number of Shares in relation to which the SAR
was otherwise, in accordance with the SAR agreement, vested and exercisable (or previously
exercised) on the date that the Committee determines is the date of Disability, or (ii) that
percentage of the total number of Shares to which the SAR relates (including any Shares in relation
to which the SAR may previously have been exercised) which is determined by dividing the
Participant’s number of complete months of

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employment as an employee of the Company, a Subsidiary or an Affiliated Company and/or
complete months of service as a director or Contractor of the Company, a Subsidiary or an
Affiliated Company, by the total number of months of employment and/or service which would
otherwise be required for the SAR to be fully vested under the terms of the SAR agreement (to the
maximum of 100%). All of the Participant’s outstanding SARs, to the extent vested and exercisable
under the terms of the SAR agreement or the provisions of this Section 7.7, shall be exercisable at
any time prior to the expiration date of the SARs, but only within twelve (12) months following the
date of Disability as determined by the Committee, whichever period is shorter.

     Any SARs, to the extent not vested and exercisable following such termination, shall be
forfeited back to the Company.

     7.8) Termination for Other Reasons. Unless otherwise provided in the SAR agreement,
if a Participant who is an individual ceases to be an employee or Contractor of the Company, of a
Subsidiary or of an Affiliated Company for any reason other than death, Disability or for Cause:

     (a) If such Participant’s termination of employment or service occurs voluntarily at the
election of the Participant within one year after the Participant’s first day of employment or
service, any SAR, to the extent not then exercised, shall be forfeited. In addition, any amounts
which the Participant may have received upon the exercise of any SAR shall, at the election of
the Committee, be repaid by the Participant to the Company; and

     (b) Any of such Participant’s remaining outstanding SARs which are vested and exercisable
shall be exercisable at any time prior to the expiration date of such SARs, but only within
twelve (12) months following the date of his termination as an employee or Contractor of the
Company or a Subsidiary or an Affiliated Company, whichever period is shorter.

     Any SARs, to the extent not vested and exercisable following such termination, shall be
forfeited back to the Company.

     If the Participant’s position as an employee or Contractor of the Company or a Subsidiary or
an Affiliated Company shall terminate for Cause, all of the Participant’s outstanding SARs, whether
or not then vested, shall be immediately forfeited back to the Company. In addition, any amounts
which the Participant may have received upon the exercise of any SAR shall, at the election of the
Committee, be repaid by the Participant to the Company.

     7.9) Nontransferability of Stock Appreciation Rights. No SAR granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, and all SARs
granted to a Participant under the Plan shall be exercisable during his lifetime only by such
Participant.

ARTICLE 8.

RESTRICTED STOCK

     8.1) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant Shares of Restricted Stock under the Plan
to officers, employees, and Contractors of the Company or a Subsidiary, Affiliated Companies,
officers and employees of Affiliated Companies and Contractors of Affiliated Companies, in such
amounts, with such purchase price (if any) and under such other conditions as it shall determine.
The Committee shall specify the period of time over which the lapse of a Period of Restriction
established pursuant to Sections 8.2, 8.3, and 8.4 (i.e., the period of time over which such Shares
of Restricted Stock shall vest) shall occur, and may in its discretion further provide for the
acceleration of the lapse of a Period of Restriction upon the attainment of such goals as the
Committee may determine in its discretion. Restricted Stock shall at all times for purposes of the
Plan be valued at its Fair Market Value without regard to restrictions.

     8.2) Restricted Stock Agreement. Each Restricted Stock grant shall be evidenced by a
Restricted Stock agreement that shall specify the Period(s) of Restriction, the number of Shares of
Restricted Stock granted, and such other provisions as the Committee shall determine.

     8.3) Transferability. Except as otherwise provided in this Article 8, the Shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the termination of the applicable Period of Restriction. Upon any
attempt to transfer, assign, pledge, or otherwise dispose of Shares of Restricted Stock, or any
right or privilege conferred thereby, contrary to the provisions of the Restricted Stock agreement
or the Plan, upon levy of an attachment or similar process upon such rights or privileges, the
Shares of Restricted Stock shall immediately become forfeited to the Company. All rights with
respect to the Restricted Stock granted to a Participant under the Plan shall be exercisable during
his lifetime only by such Participant.

12

 

     8.4) Other Restrictions. The Committee may impose such other restrictions on any
Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable, and the Committee
may legend certificates representing Restricted Stock to give appropriate notice of such
restrictions.

     8.5) Certificate Legend. In addition to any legends placed on certificates pursuant
to Section 8.4, each certificate representing Shares of Restricted Stock granted pursuant to the
Plan shall bear the following, or substantially similar, legend:

“The sale or other transfer of the shares of stock represented by this certificate, whether
voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer
set forth in the Virtual Radiologic Corporation Equity Incentive Plan, in the rules and
administrative procedures established pursuant to such Plan, and in a Restricted Stock
agreement dated                . A copy of the Plan, such rules and procedures, and such Restricted
Stock agreement may be obtained from the Secretary of Virtual Radiologic Corporation.”

     8.6) Removal of Restrictions. Except as otherwise provided in this Article 8, Shares
of Restricted Stock granted under the Plan shall become freely transferable by the Participant
after the last day of the Period of Restriction. Once the Shares are released from the
restrictions, the Participant shall be entitled to have the legend required by Section 8.5 removed
from his Stock certificate.

     8.7) Voting Rights; Shareholder Rights Plan. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.

     8.8) Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be entitled to receive all
dividends and other distributions paid with respect to those Shares while they are so held. If any
such dividends or distributions are paid in Shares, those Shares shall be subject to the same
restrictions on transferability as the Shares of Restricted Stock with respect to which they were
paid.

     8.9) Termination Due to Death or Disability. Unless otherwise provided in the
Restricted Stock agreement, if a Participant who is an individual ceases to be an employee or
Contractor of the Company, of a Subsidiary or of an Affiliated Company because of his death or his
Disability during a Period of Restriction, any remaining period of the Period of Restriction
applicable to the Restricted Stock shall terminate with respect to the greater of: (i) the number
of Shares of Restricted Stock with respect to which the Period of Restriction had, in accordance
with the Restricted Stock agreement, already lapsed and terminated on the date of death or the date
that the Committee determines is the date of Disability, or (ii) that percentage of the total
number of Shares of Restricted Stock (including Shares for which the Period of Restriction
previously terminated) which is determined by dividing the Participant’s number of complete months
of employment as an employee of the Company, a Subsidiary, or an Affiliated Company and/or complete
months of service as a director or Contractor of the Company, a Subsidiary or an Affiliated
Company, by the total number of months comprising the Period of Restriction (to a maximum of 100%).
Shares of Restricted Stock for which a Period of Restriction is terminated under the terms of the
Restricted Stock agreement or the provisions of this Section 8.10, shall, except as otherwise
provided in Section 8.4, be free of restrictions and fully transferable.

     All Shares of Restricted Stock still subject to Period of Restriction as of the date of
termination of employment or service shall automatically be forfeited and assigned and returned by
the Participant to the Company, and any amounts paid by the Participant to the Company for the
purchase of such Shares shall be returned to the Participant; provided, however, that the
Committee, in its sole discretion, may waive or modify the automatic forfeiture of any or all such
Shares of Restricted Stock as it deems appropriate.

     8.10) Termination for Other Reasons. Unless otherwise provided in the Restricted
Stock agreement, if a Participant who is an individual ceases to be an employee or Contractor of
the Company, of a Subsidiary or of an Affiliated Company for any reason other than for death or
Disability:

     (a) Shares of Restricted Stock for which a Period of Restriction is terminated under the
Restricted Stock agreement shall, except as provided in Sections 8.4 and 17.8, be free of
restrictions and fully transferable;

     (b) All Shares of Restricted Stock still subject to a Period of Restriction as of the date
of termination of employment or service shall automatically be forfeited and assigned and
returned by the Participant to the Company, and any amounts paid by the Participant to the
Company for the purchase of such Shares shall be returned to the Participant; provided, however,
that the Committee, in its sole discretion, may waive or modify the automatic forfeiture of any
or all such Shares of Restricted Stock as it deems appropriate; and

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     (c) The provisions of Section 8.11(a) above notwithstanding, if such Participant’s
termination of employment or service occurs voluntarily at the election of the Participant within
one year after the Participant’s first day of employment or service, or for Cause, any Shares for
which a Period of Restriction had previously lapsed shall, at the election of the Committee, be
assigned and returned by the Participant to the Company in exchange for the same amount, if any,
that the Participant paid for such Shares.

     8.11) Election Under Code Section 83(b). As a condition to the receipt of Restricted
Stock, the Participant shall be deemed to have agreed, and shall confirm such agreement in writing
as requested by the Committee, that the Participant will not exercise the election permitted under
Code Section 83(b) without informing the Company of his election within ten (10) days of such
election. If a Participant fails to give timely notification to the Company, the Committee may, in
its discretion, cause the forfeiture of some portion of the Shares of Restricted Stock with respect
to which the election was made.

ARTICLE 9.

STOCK PURCHASE AGREEMENTS

     9.1) Eligibility. The Committee may enter into one or more Stock Purchase Agreements
with any officer, employee or Contractor of the Company, a Subsidiary, or an Affiliated Company. No
person shall have any right to be eligible to enter into a Stock Purchase Agreement under this Plan
even if he or she was previously a Participant and a party to a Stock Purchase Agreement.

     9.2) Actual Participation.

     (a) An officer, employee or Contractor of the Company, a Subsidiary or an Affiliated Company
shall become a Participant under the Plan as of the effective date of the Stock Purchase Agreement
to which he or she is a party, and shall remain a Participant for the period that any provisions of
the Plan or Stock Purchase Agreement remain in effect with respect to such person.

     (b) Each Participant’s eligibility to enter into a Stock Purchase Agreement, and to purchase
Shares under the provisions of the Stock Purchase Agreement and the Plan, shall be in connection
with and in consideration of the provision of services by such Participant to or for the Company, a
Subsidiary or an Affiliated Company, whether pursuant to a written agreement for such services or
otherwise.

     (c) The termination of a Participant’s status as an officer, employee or Contractor of the
Company, a Subsidiary or an Affiliated Company for any reason at any time prior to the Company’s
receipt of full and timely payment of the purchase price for the shares as set forth in the Stock
Purchase Agreement shall be treated as, and deemed to be, a default in full and timely payment in
accordance with Section 9.3(b) of this Plan.

     9.3) Stock Purchase Agreements. Stock Purchase Agreements shall be in writing, be
signed by an officer of the Company and by the Participant, and be legally binding on the Company
and the Participant.

     (a) Terms and Conditions. Each Stock Purchase Agreement shall obligate the Company to
sell, and the Participant to purchase, the number of Shares specified in the Stock Purchase
Agreement at the Fair Market Value of such Shares on the date(s) stated in the Stock Purchase
Agreement.

     (b) Required Provisions. Each Stock Purchase Agreement shall set forth (a) the number
of shares being sold and purchased, (b) the total purchase price, (c) the purchase price per share,
(d) the duration of time over which the total purchase price must be paid, and (e) a payment
schedule showing the due dates of each installment to be paid. The Stock Purchase Agreement shall
provide that no Shares shall be issued until full and timely payment of the total purchase price
has been received by the Company. The Stock Purchase Agreement shall also provide that in the event
of (a) Participant’s termination of employment by the Company for any reason (other than death or
Disability) or (b) Participant’s default in full and timely payment of the purchase price, then the
Company shall have the election either to (i) terminate and rescind the Stock Purchase Agreement,
refund all payments theretofore made without interest and retain the shares or (ii) terminate the
Stock Purchase Agreement, retain all sums theretofore paid thereunder, and issue a number of shares
equal to the total amount received divided by the purchase price per share. In the event of
Participant’s termination of employment by the Company for death or Disability, then Participant or
Participant’s lawful heir or representative, as the case may be, elect be whether (y) to pay the
theretofore unpaid balance of the total purchase price in a single lump sum and receive the total
number of Shares provided in the Stock Purchase Agreement or (z) to not pay the theretofore unpaid
balance of the total purchase price and accept only the number of shares theretofore paid. Either
such election must be made and performed within six (6) months following the event of Disability or
death. In the absence of election, the Company may treat the termination as a termination for
reasons other than death or Disability. The Company shall not issue any partial shares, but shall
refund any excess payment received in an amount that is less than the price of one full share.

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     The Stock Purchase Agreement shall contain such other terms and conditions as to which the
Committee and the Participant may agree, and shall incorporate this Plan by reference into each
Stock Purchase Agreement. Terms and conditions may differ between Participants and between Stock
Purchase Agreements.

     (c) Transferability. Each Stock Purchase Agreement shall be transferable:

     (1) by a Participant to a Family Member of the Participant (or to a trust in which the
Participant’s Family Member or Family Members have more than fifty percent (50%) of the
beneficial interest) by a bona fide gift or pursuant to a domestic relations order in settlement
of marital property rights;

     (2) by will or pursuant to the laws of descent and distribution;

     (3) as otherwise permitted pursuant to the rules or regulations adopted by the Securities
and Exchange Commission (“SEC”) under the Securities Act or the interpretations of such rules and
regulations as announced by the SEC from time to time; or

     (4) as otherwise permitted by the Committee and provided in the Stock Purchase Agreement.

     Any permitted transfer shall be effective only when accepted by the Company subject to the
Company receiving documentation reasonably satisfactory to it of such gift, transfer pursuant to
domestic relations order, or transfer pursuant to will or pursuant to the laws descent and
distribution. Upon effectiveness of any permitted transfer, the rights and obligations the
Participant under the Stock Purchase Agreement shall accrue only by the permitted transferee or
such transferee’s guardian or legal representative. Except as permitted by this subsection, no
Stock Purchase Agreement shall be further transferred, assigned or pledged in any way (whether by
operation of law or otherwise), or be subject to execution, attachment or similar process. Upon any
attempt to so further transfer, further assign, pledge, or otherwise further dispose of an Stock
Purchase Agreement, or of any right or privilege conferred thereby, contrary to the provisions of
the Stock Purchase Agreement or the Plan, or upon levy of any attachment or similar process upon
such rights and privileges, the Stock Purchase Agreement, and such rights and privileges, shall
immediately become voidable at the election of the Committee. No permitted transfer shall cause any
change in the terms of any Stock Purchase Agreement except the identity of the person(s) entitled
to purchase Shares pursuant thereto. Without limiting the generality of the foregoing, the
Committee may provide under the terms of an Stock Purchase Agreement that the Stock Purchase
Agreement shall be subject to termination upon such Participant’s termination as an employee or
Contractor of the Company, a Subsidiary or Affiliated Company, or the death or Disability of the
Participant without reference to the employment, death or Disability of any permitted transferee.
In the event of any transfer, the rights and obligations of the Company with respect to the
Participant shall become rights and obligations of the Company with the transferee and references
to the Participant in this Plan or in a Stock Purchase Agreement shall, unless the context
otherwise requires, refer to the transferee.

     (d) The Committee may impose such restrictions on any Shares acquired pursuant to a Stock
Purchase Agreement as it may deem advisable, including, without limitation, restrictions under
applicable Federal securities law, under the requirements of any stock exchange upon which such
Shares are then listed and under any blue sky or state securities laws applicable to such Shares.

ARTICLE 10.

CHANGE IN CONTROL

     10.1) Acceleration of Vesting; Termination of Period of Restriction. The Committee
shall have discretion to provide in any Award agreement that such Award, to the extent not already
terminated, shall become vested and immediately exercisable, and any Period of Restriction shall
terminate, upon a Change in Control.

     10.2) Limitation on Payments. Notwithstanding anything in this Article 10 to the
contrary, if the Company is then subject to the provisions of Code Section 280G, and if the
acceleration of the vesting of an Option or SAR, the termination of a Period of Restriction or the
payment of cash in exchange for all or part of an Option or SAR (which acceleration or payment
could be deemed a “payment” within the meaning of Code Section 280G(b)(2)), together with any other
payments which the Participant has the right to receive from the Company or any company that is a
member of an “affiliated group” (as defined in Code Section 1504(a) without regard to Code Section
1504(b)) of which the Company is a member, would constitute a “parachute payment” (as defined in
Code Section 280G(b)(2)), then the payments to the Participant shall be reduced to the largest
amount as will result in no portion of such payments being subject to the excise tax imposed by
Code Section 4999; provided, however, that if such Participant is subject to a separate agreement
with the Company or a Subsidiary which specifically provides that payments attributable to one or
more forms of employee stock incentives or to payments made in lieu of employee stock incentives
will not reduce any other payments under such agreement, even if it would constitute an excess
parachute payment, then the limitations of this Section 10.2 will, to that extent, not apply.

15

 

ARTICLE 11.

BENEFICIARY DESIGNATION

     Each Participant who is an individual may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively and who may include a trustee under a
will or living trust) to whom any benefit under the Plan is to be paid in case of his death. Each
designation will revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the Participant in writing
with the Committee during his lifetime. In the absence of any such designation or if all designated
beneficiaries predecease the Participant, benefits remaining unpaid at the Participant’s death
shall be paid pursuant to the Participant’s will or by the laws of descent and distribution.

ARTICLE 12.

RIGHTS OF PARTICIPANTS

     12.1) Participation. No officer, employee or Contractor of the Company or a
Subsidiary, no Affiliated Company, and no employee, officer, or Contractor of an Affiliated Company
shall have a right to be selected as a Participant, or, having been so selected, to be selected
again as a Participant.

     12.2) No Implied Rights. Neither the establishment of the Plan nor any amendment
thereof shall be construed as giving any Participant, beneficiary, or any other person any legal or
equitable right unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Committee in accordance with the terms and provisions of the Plan. Except as
expressly provided in this Plan, neither the Company nor any of its Subsidiaries shall be required
or be liable to make any payment under the Plan.

     12.3) No Right to Company Assets. Neither the Participant nor any other person or
entity shall acquire, by reason of the Plan, any right in or title to any assets, funds or property
of the Company or any of its Subsidiaries or Affiliated Companies whatsoever including, without
limiting the generality of the foregoing, any specific funds, assets, or other property which the
Company or any of its Subsidiaries or Affiliated Companies, in their sole discretion, may set aside
in anticipation of a liability hereunder. Any benefits which become payable hereunder shall be paid
from the general assets of the Company or the applicable Subsidiary or Affiliated Company. Any
Participant shall have only a contractual right to the amounts, if any, payable hereunder unsecured
by any asset of the Company or any of its Subsidiaries or Affiliated Companies. Nothing contained
in the Plan constitutes a guarantee by the Company or any of its Subsidiaries or Affiliated
Companies that the assets of the Company or the applicable Subsidiary or Affiliated Company shall
be sufficient to pay any benefit to any person.

ARTICLE 13.

AMENDMENT, MODIFICATION, AND TERMINATION

     13.1) Amendment, Modification, and Termination. This Plan shall terminate at such
time as the Board of Directors may determine; provided, however, that no Award may be granted under
the Plan after the tenth anniversary of its effective date. Any termination shall not affect any
Awards then outstanding under the Plan. At any time and from time to time, the Board may amend or
modify the Plan. If the approval of the shareholders of the Company is required by the Code, by the
insider trading rules of Section 16 of the Exchange Act, by any national securities exchange or
system on which the Stock is then listed or reported (such as Nasdaq), or by any regulatory body
having jurisdiction with respect hereto, no amendment or modification which:

     (a) increases the total amount of Stock which may be issued under this Plan, except as
provided in Section 4.3; or

     (b) changes the class of persons eligible to participate in the Plan;

     (c) materially increases the cost of the Plan or materially increase the benefits to
Participants;

     (d) extends the maximum period after the date of grant during which Options or Stock
Appreciation Rights may be exercised; or

     (e) re-prices any previously granted Award by lowering the exercise price or canceling any
previously granted Award with a subsequent replacement or re-grant of that same Award with a
lower exercise price without prior approval of the shareholders of the Company, except as
provided in Section 4.3;

shall be effective prior to the date that such amendment or modification has been approved by both
the Board and the shareholders of the Company.

16

 

     13.2) Awards Previously Granted. No termination, amendment or modification of the
Plan shall, other than pursuant to Section 4.3 hereof, in any manner adversely affect any Award
theretofore granted under the Plan, without the written consent of the Participant. Except as
required pursuant to Section 4.3, no previously granted Option shall be re-priced by lowering the
exercise price thereof, nor shall a previously granted Option be cancelled with a subsequent
replacement or re-grant of that same Option with a lower exercise price, without prior approval of
the shareholders of the Company.

ARTICLE 14.

PHYSICIAN CONTRACTORS: NON-COMPETITION, CONFIDENTIALITY

     14.1) General. Notwithstanding any terms, provision or limitation in any other
contract or agreement between a Physician Contractor and the Company or an Affiliated Company, the
right of a Physician Contractor or former Physician Contractor to receive or benefit from an Award
granted directly under this Plan, or from a Share-based award granted under a plan of an Affiliated
Company, shall be subject to the limitations and provisions set forth in this Article 14.

     14.2) Prohibition on Competition. During the term of the contract or agreement
constituting any person to be a Physician Contractor, and for two years following the termination
or expiration of such term, whether voluntarily or involuntarily, a Physician Contractor or former
Physician Contractor who receives an Award granted directly under this Plan, or from a Share-based
award granted under a plan of an Affiliated Company, shall not, either directly or indirectly:

     (a) induce or attempt to induce any person who is employed by or otherwise engaged to
perform services for or on behalf of the Company or an Affiliated Company to cease performing
services for the Company or an Affiliated Company, or to perform services for another corporation
or business entity; or

     (b) induce or attempt to induce any customer, client, vendor, or supplier of the Company or
an Affiliated Company to cease doing business with the Company or an Affiliated Company; or

     (c) engage or participate, either individually or as an employee, contractor, consultant,
principal, owner, partner, agent, trustee, officer, director or shareholder of a corporation,
partnership or other business entity, in any business which either competes with the Company or
an Affiliated Company or engages in any line of business which the Company or an Affiliated
Company has entered or internally announced an intention to enter (including, without limitation
in either event, the provision of radiology services through the Internet to medical providers)
at any time that such person directly or beneficially owns any Shares in the Company; or

     (d) use or disclose to any person any Confidential Information for any purpose.

     14.3) Exceptions to Limitations. Notwithstanding the foregoing, nothing in this
Article 14 shall be deemed to preclude:

     (a) a Physician Contractor or former Physician Contractor from holding less than one half
percent (0.5%) of the outstanding capital stock of any corporation required to file periodic
reports with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, and the securities of which are listed on any national
securities exchange or quoted on the National Association of Securities Dealers Automated
Quotation System or traded on the over-the-counter market; or

     (b) a Physician Contractor or former Physician Contractor from practicing medicine in any
State of the United States in the practice of radiology, if the practice is (i) performed locally
within that State and (ii) less than 5% of the work load of the current or former Physician
Contractor, or of a practice of which he or she is a partner, employee or independent contractor,
consists of interstate teleradiology.

     14.4) Extension of Time. The period of time set forth is Section 14.2 during which a
Physician Contractor or former Physician Contractor is prohibited from engaging in certain
activities or obligated to undertake certain actions pursuant to the terms of this Agreement shall
be extended by the length of time during which such person is in breach of this Agreement.

     14.5) Notwithstanding anything contained in the Plan to the contrary, in the event that a
Participant engages in any activity prohibited by Section 14.2 herein, the Committee may determine,
in its sole discretion, to (a) require all Awards held by such Participant to be immediately
forfeited and returned to the Company without additional consideration, (b) require all shares of
Stock acquired upon the exercise or vesting of Awards within the twelve (12) month period prior to
the date of such violation of Section 14.2 herein to be immediately forfeited and returned to the
Company, and the amount, if any, paid by the Participant for such Stock shall be refunded to the
Participant, and (c) to the extent that such Participant received any profit from the sale of an
Award or the Stock underlying an Award, require that such Participant promptly repay to the Company
any profit received pursuant to such sale.

17

 

ARTICLE 15.

GOVERNMENT REGULATION AND REGISTRATION OF SHARES

     15.1) General. The Plan, and the grant and exercise of Awards hereunder, and the
Company’s obligations under Awards, shall be subject to all applicable Federal and state laws,
rules and regulations and to the approvals of any regulatory or governmental agency as may be
required.

     15.2) Compliance as an SEC Registrant. The obligations of the Company with respect to
Awards shall be subject to all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including without limitation, the Securities and Exchange
Commission, and the rules and regulations of any securities exchange or association on which the
Company’s common stock may be listed or quoted. If and when the common stock of the Company is
registered under the Exchange Act, the Company shall use its reasonable efforts to comply with any
legal requirements (a) to maintain a registration statement in effect under the Securities Act with
respect to all Shares of the applicable class or series of Stock that may be issued to Participants
under the Plan and (b) to file in a timely manner all reports required to be filed by it under the
Exchange Act.

ARTICLE 16.

SUCCESSORS

     All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall
be binding on any successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all
of the business and/or assets of the Company.

ARTICLE 17.

RIGHTS AND OBLIGATIONS RESPECTING SHARES

     17.1) Rights as Shareholder. A Participant granted a SAR under the Plan shall not by
reason thereof have any rights of a shareholder of the Company, and a Participant granted an Option
under the Plan shall not by reason thereof have any rights of a shareholder of the Company with
respect to the shares covered by such Option until the exercise of such Option is effective.

     17.2) No Obligation to Exercise Option or SAR; Maintenance of Relationship. The
granting of an Option or SAR shall impose no obligation upon the Participant to exercise such
Option or SAR. Nothing in the Plan or in any Award agreement entered into pursuant hereto shall be
construed to confer upon a Participant any right to employment, service as a consultant, Contractor
or as a member of the Company’s Board of Directors or interfere in any way with the right of the
Company to terminate his or her relationship with the Company at any time.

     17.3) Withholding Taxes. Whenever, under the Plan, Shares are to be issued upon
exercise of the Options granted hereunder and prior to the delivery of any certificate or
certificates for said shares by the Company, and whenever a Period of Restriction lapses with
respect to Restricted Stock, the Company shall have the right to require the Participant to remit
to the Company an amount sufficient to satisfy any federal and state withholding or other taxes
resulting therefrom. In the event that withholding taxes are not paid by the date of exercise of an
Option or the lapse of a Period of Restriction, to the extent permitted by law, the Company shall
have the right, but not the obligation, to cause such withholding taxes to be satisfied by reducing
the number of Shares deliverable upon the exercise of the Option, by forfeiting Shares of
Restricted Stock, or by offsetting such withholding taxes against amounts otherwise due from the
Company to the Participant as compensation, fees or otherwise. If withholding taxes are paid by
reduction of the number of Shares deliverable to Participant or the forfeiture of Shares of
Restricted Stock, such Shares shall be valued at the Fair Market Value as of the business day
preceding the date of exercise of the Option or the lapse of the Period of Restriction.

     17.4) Purchase for Investment; Rights of Holder on Subsequent Registration. Unless
the Shares to be issued upon exercise of an Option or granted as Restricted Stock have been
effectively registered under the Securities Act, the Company shall be under no obligation to issue
any such Shares unless a Participant who is an individual shall give a written representation and
undertaking to the Company which is satisfactory in form and scope to counsel for the Company and
upon which, in the opinion of such counsel, the Company may reasonably rely, that he is acquiring
the Shares to be issued to him for his or her own account as an investment and not with a view to,
or for sale in connection with, the distribution of any such Shares, and that he or she will make
no transfer of the same except in compliance with any rules and regulations in force at the time of
such transfer under the Securities Act, or any other applicable law, and that if Shares are issued
without such registration a legend to this effect may be endorsed on the securities so issued and a
“stop transfer” restriction may be placed in the stock transfer records of the Company. In the
event that the Company shall, nevertheless, deem it necessary or desirable to register under the
Securities Act or other applicable statutes any such Shares, or

18

 

to qualify any such Shares for exemption from the Securities Act or other applicable statutes,
then the Company shall take such action at its own expense and may require from each participant
such information in writing for use in any registration statement, prospectus, preliminary
prospectus, or offering circular as is reasonably necessary for such purpose and may require
reasonable indemnity to the Company and its officers and directors from such holder against all
losses, claims, damages, and liabilities arising from such use of the information so furnished and
caused by any untrue statement of any material fact required to be stated therein or necessary to
make the statement therein not misleading in light of the circumstances under which they were made.

     17.5) Modification of Outstanding Awards. The Committee may accelerate the
exercisability of an outstanding Option or SAR or reduce the Period of Restriction of outstanding
Restricted Stock, and may authorize modification of any outstanding Award with the consent of the
Participant when and subject to such conditions as are deemed to be in the best interests of the
Company and in accordance with the purposes of the Plan; provided however, that except as provided
in Section 4.3 hereof, no previously granted Option will be repriced by lowering the exercise price
thereof, nor will a previously granted Option be cancelled with a subsequent replacement or regrant
of that same Option with a lower exercise price, without the prior approval of the shareholders of
the Company.

     17.6) Liquidation. Upon the complete liquidation of the Company, any unexercised
Options or SARs theretofore granted under this Plan shall be deemed canceled, except as otherwise
provided in Section 4.3 in connection with a merger, consolidation or reorganization of the
Company.

     17.7) Restrictions on Issuance of Shares. Notwithstanding provisions of this Plan to
the contrary, the Company may delay the issuance of Shares covered by the exercise of any Option
and the delivery of a certificate for such Shares until one of the following conditions shall be
satisfied:

     (a) The Shares with respect to which the Option has been exercised are at the time of the
issue of such Shares effectively registered under applicable Federal and state securities acts as
now in force or hereafter amended; or

     (b) A no-action letter in respect of the issuance of such Shares shall have been obtained by
the Company from the Securities and Exchange Commission and any applicable state securities
commissioner; or

     (c) Counsel for the Company shall have given an opinion, which opinion shall not be
unreasonably conditioned or withheld, that such Shares are exempt from registration under
applicable federal and state securities acts as now in force or hereafter amended. It is intended
that all exercise of Options shall be effective, and the Company shall use its best efforts to
bring about compliance with the above conditions within a reasonable time, except that the
Company shall be under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense solely for the purpose of
covering the issue of Shares in respect of which any Option may be exercised.

     17.8) Right of First Refusal. Subject to the provisions of this Section 17.8, the
Company shall have the right of first refusal, but not the obligation, to repurchase any Shares
acquired by a Participant as a result of any Award granted directly under this Plan or any
Share-related award granted under a plan of an Affiliated Company in the event of a voluntary
termination of employment without Cause. The price to be paid by the Company therefore, upon
exercise of such right of first refusal, shall be the Fair Market Value of the Shares on the last
day the Participant is employed by or a Contractor of the Company or an Affiliated Company. The
Company may exercise it’s right of first refusal by written notice to the Participant given no
later than thirty (30) days following the last day Participant is employed by or a Contractor of
the Company or an Affiliated Company. The Company shall deliver payment for the Shares to
Participant against the concurrent delivery of certificates, or other evidence satisfactory to the
Company, representing the Shares. The exchange shall occur at a time and place agreeable to the
Company and the Participant, or, failing such agreement at the Company’s offices at ten o’clock
(10:00) a.m. on the tenth (10th) day following the date of notice, the first business
day following if such tenth (10th) day fall on a weekend or holiday.

     The Company’s right of first refusal shall lapse and be of no further force and effect when
the Company first becomes required to file periodic reports with respect to a class of equity
securities in accordance with the requirements of Section 13(a) or 15(g) of the Securities Exchange
Act of 1934.

19

 

ARTICLE 18.

SECTION 409A

     18.1) Section 409A Compliance. To the extent that any payments or benefits provided
hereunder are considered deferred compensation subject to Section 409A of the Code, the Company
intends for all Awards to comply with the standards for nonqualified deferred compensation
established by Section 409A of the Code (the “409A Standards”). To the extent that any terms of the
Plan would subject Participants to gross income inclusion, interest or an additional tax pursuant
to Section 409A of the Code, those terms are to that extent superseded by the 409A Standards. The
Company reserves the right to amend any Awards granted hereunder to cause such Awards to comply
with or be exempt from Section 409A of the Code.

ARTICLE 19.

REQUIREMENTS OF LAW

     19.1) Requirements of Law. The granting of Awards and the issuance of Shares of Stock
under this Plan shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may be required.

     19.2) Governing Law. The Plan, and all agreements hereunder, to the extent not
covered by Federal law, shall be construed in accordance with and governed by the laws of the State
of Minnesota without giving effect to the principles of the conflicts of laws.

20exv10w10

Exhibit 10.10

VIRTUAL RADIOLOGIC CORPORATION

EQUITY INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

     THIS AGREEMENT (“Agreement”), made and entered into effective this                                          by and
between VIRTUAL RADIOLOGIC CORPORATION, a Delaware corporation (hereinafter referred to as the
“Corporation”) and                                         , an employee of the Corporation (“Employee”).

     WHEREAS, the Corporation considers it desirable and in its best interests that Employee be
given an inducement to acquire a proprietary interest in the Corporation and an added incentive to
advance the interests of the Corporation, by possessing an option to purchase common shares of the
Corporation, in accordance with the Virtual Radiologic Corporation Equity Incentive Plan (the
“Plan”).

     NOW THEREFORE, on the basis of the premises and of the mutual considerations provided herein,
the parties agree as follows:

	1.	 	Definitions. Words and phrases not otherwise defined herein shall have the meanings
ascribed to them, respectively, in the Plan.
	 
	2.	 	Grant of Option. The Corporation grants to Employee an Option (the “Option”) to
purchase all or any part of an aggregate of
                      shares of the Corporation’s common
stock, par value $0.001 per share (the “Shares”) at the exercise price of
$        per share, in
the manner and subject to the conditions provided herein and in the Plan. The Option hereby
granted shall be treated as an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”) and as provided in the Plan.
	 
	3.	 	Time of Vesting and Exercise of Option.

	 	a.	 	This Option shall vest for, and Employee may first exercise the Option with
respect to [INSERT VESTING TERMS].
	 
	 	b.	 	In the event of Employee’s death or termination of employment due to
Disability, the Option shall vest and become exercisable as to the greater of:
(i) the number of Shares for which the Option was otherwise, in accordance with this
Option Agreement, vested and exercisable (or previously exercised) on the date of death
or Disability, or (ii) that percentage of the total number of Shares subject to the
Option (including any Shares for which the Option may have been previously exercised)
which is determined by dividing the Employee’s number of complete months of employment
as an employee of the Corporation, by the total number of months of employment which
would otherwise be required for the Option to fully vest under the terms of the Option
agreement (to a maximum of 100%)

 

 

	 	c.	 	To the extent that the aggregate Fair Market Value (determined as of the date
an Option is granted) of the Shares with respect to which Options are exercisable for
the first time by a Participant during any calendar year (under the Plan and any other
incentive stock option plans of the Company or any Subsidiary) exceeds $100,000 (or
such other amount as may be prescribed by the Code from time to time), such excess
Options will be treated as Nonqualified Stock Options.
	 
	 	d.	 	Notwithstanding any provision of this Agreement to the contrary, in no case may
the Option be exercised to any extent by anyone after                                         .

	4.	 	Method of Exercise. The Option may be exercised in whole or in part from
time to time by (i) written notice to the Corporation of intent to exercise the Option
with respect to a specified number of Shares; (ii) tendering to the Corporation this original
Option agreement (or a replacement Option agreement satisfactory to the Board of Directors or
the Compensation Committee thereof (the “Committee”)); and (iii) payment to the Corporation of
the exercise price for the number of Shares with respect to which the Option is then
exercised. Except as set forth in the next sentence, payment of the exercise price may be
made in any of the following manners:

	 	(1)	 	cash, including certified check, bank draft or postal or express money order;
	 
	 	(2)	 	personal check (provided that if payment of the exercise price is made by personal check
and such personal check is not timely paid by the drawer’s bank, such payment shall be
deemed not to have been made and any Shares issued upon such exercise shall be deemed void
and never issued);
	 
	 	(3)	 	by surrender for cancellation of Shares of Stock which:

	 	(a)	 	were acquired by the Employee (or person exercising the Option)
other than by exercise of an Option;
	 
	 	(b)	 	were acquired by the Employee (or person exercising the Option)
upon exercise of an Option where the Option Shares being surrendered have been
held by the Employee (or person exercising the Option) for at least six months
after such exercise; or
	 
	 	(c)	 	were acquired by the Employee (or person exercising the Option)
upon exercise of an Option where the Option Shares being surrendered have been
held by the Employee (or person exercising the Option) for six months or less
after such exercise but only if the Employee (or person exercising the Option)
has obtained prior approval of the specific surrender (such approval to specify
at least the date of grant of the Option being exercised, the dates of grant
and exercise of the Option pursuant to which Shares to be surrendered were
acquired, and the number of Option Shares to be surrendered) by the Committee;
and which have a Fair Market Value equal to the exercise price of the Options
being exercised (if the Shares surrendered have a Fair Market Value in excess
of the exercise price of the Options being exercised, the Corporation shall
promptly pay

2.

 

	 	 	 	to the Employee or person exercising the Option an amount equal to the
excess of such Fair Market Value over the exercise price, not to exceed the
Fair Market Value of one Share); or

(4) by delivery of a notice of “net exercise” to the Corporation, pursuant to which Employee
shall receive the number of Shares underlying the Options so exercised reduced by the number
of Shares equal to the aggregate exercise price of the Options divided by the Fair Market
Value on the date of exercise; or

(5) by any other method of payment which the Committee shall approve before, at, or after
the date of grant of such Options.

     An Option shall be deemed to have been exercised immediately prior to the close of business on
the date the Corporation is in receipt of the original Option agreement, written notice of intent
to exercise the Option, and payment for the number of Shares being acquired upon exercise of the
Option. Employee shall be treated for all purposes as the holder of record of the Option Stock as
of the close of business on such date, except where Shares are held for unpaid withholding taxes.
As promptly as practicable on or after such date, the Corporation shall issue and deliver to
Employee a certificate or certificates for the Option Stock issuable upon such exercise; provided,
however, that such delivery shall be deemed effected for all purposes when the Corporation, or the
stock transfer agent for the Corporation, shall have deposited such certificates in the United
States mail, postage prepaid, addressed to the Employee at the address specified in the written
notice of exercise.

     Notwithstanding the foregoing listing of permissible manners of payment of exercise price, the
Committee shall have the right from time to time to cancel, limit or suspend as to any one, some,
or all Option(s) and as to any one, some, or all Employees, the right to make payment under any one
or more manners of payment (other than the payment by cash, certified check, bank draft or postal
or express money order), including other methods of payment previously approved by the Committee.
There shall be no exercise at any one time for fewer than one hundred (100) Shares (or such lesser
number of Shares as the Committee may from time to time determine in its discretion) or all of the
remaining Shares then purchasable by Employee or person exercising the Option.

	5.	 	Termination of Option. Except as herein otherwise provided, the Option granted
under this Agreement, to the extent not heretofore exercised, shall terminate upon the first
to occur of the following events:

	 	a.	 	The expiration of three months from the date on which Employee ceases to be
employed by the Corporation for a reason other than death Disability or for Cause.
	 
	 	b.	 	The expiration of twelve months after the date on which the Employee ceases to
be an employee by reason of death or Disability.
	 
	 	c.	 	The date on which Employee ceases to be an employee for Cause; or
	 
	 	d.	 	Midnight on ________________.

3.

 

	6.	 	Reclassification, Consolidation or Merger.

	 	a.	 	If and to the extent that the number of issued common shares of the Corporation
shall be increased or reduced by change in par value, split up, reverse split,
reclassification, distribution of a dividend payable in stock, or the like, the number
of common shares subject to the Option and the option price per share shall be
proportionately adjusted in accordance with the Plan.
	 
	 	b.	 	If the Corporation is reorganized or consolidated or merged with another
Corporation, Employee shall be entitled to receive an option (the “New Option”)
covering common shares of such reorganized, consolidated or merged Corporation in the
same proportion, at an equivalent price, and subject to the same conditions as the
Option. For purposes of the preceding sentence, the excess of the fair market value of
the common shares subject to the Option immediately after the reorganization,
consolidation or merger over the aggregate option price of such common shares shall not
be more than the excess of the aggregate fair market value of all common shares subject
to the Option immediately before such reorganization, consolidation or merger over the
aggregate option price of such common shares, and the New Option or assumption of the
Option shall not give Employee additional benefits which he does not have under this
Option, or deprive him of benefits which he has under this Option. In the event of
such reorganization, consolidation or merger, the Committee may also elect to cash out
any awards as described in the Plan.

	7.	 	Rights Prior to Exercise of Option. This Option is non-transferable by Employee,
except in the event of his or her death, and during Employee’s lifetime is exercisable only by
Employee; provided, however, that this Option may be transferred by Employee for estate
planning purposes subject to prior or other written approval by the Corporation, in its sole
discretion or pursuant to any policy and requirements concerning such transfers as may then be
in effect. In the event of death, this Option may be exercised by Employee’s personal
representative or the party inheriting the Option. No person shall have any rights as a
stockholder with respect to any common shares purchasable hereunder until payment of the
option price and delivery to him of such common shares as herein provided.
	 
	8.	 	Restriction on Disposition.

	 	a.	 	All common shares acquired by Employee pursuant to this Agreement shall be
subject to the restrictions on sale, encumbrance and other disposition contained in the
Corporation’s Bylaws, or imposed by applicable laws or regulations of the State of
Delaware or the United States of America regarding the registration or qualification of
such acquisition of common shares. The Corporation may require a prior opinion of its
counsel, which the Corporation shall use its best efforts to obtain, that the transfer
or other disposition of common shares acquired pursuant to this Agreement will not
violate the Securities Act of 1933 or any applicable state law regulating the sale of
securities.
	 
	 	b.	 	Disposal or transfer or Shares acquired pursuant to this Agreement within two
(2) years from the date of grant of this Option or within on (1) year after the
exercise of the Option shall terminate the application of the provisions of Section 422
of the Code, and the federal tax advantages therefrom.

4.

 

	 	c.	 	All Shares acquired pursuant to this Agreement shall be subject to
reacquisition by the Corporation upon the terms and conditions set forth in the Plan.

9. Merger and Supersession. This Agreement merges and supersedes all prior negotiations or
agreements between the Corporation and the Employee with respect to the subject matter hereof, and
sets forth in their entirety all rights Employee has or may claim for any reason to receive
options, shares or other equity rights in the Corporation hereunder.

	10.	 	Binding Effect; Plan Governs; Survival.
	 
	10.1	 	This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and assigns.
	 
	10.2	 	This Agreement shall be construed in accordance with and shall be governed by the terms of
the Plan as adopted and approved by the Board of the Corporation within the meaning of the
Code, as the Plan may be amended from time to time by the Board and, if appropriate the
shareholders of the Corporation. Employee acknowledges receipt of a copy of the Plan prior
to the execution hereof and agrees to be bound by the terms of the Plan. If possible, this
Agreement shall be construed along with and in addition to any other agreement which the
Corporation and Employee may enter into, but any provision in this Agreement which contradicts
any provision of any other agreement shall take precedence and be binding over such other
provision. In order to provide the Corporation with the opportunity to claim the benefit of
any income tax deduction which may be available to it upon the exercise of the Option and in
order to comply with all applicable federal or state income tax laws or regulations, the
Corporation may take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state withholding, income or other taxes are withheld or collected from
Employee.
	 
	10.3	 	The provisions of this Agreement, the Plan or other documents incorporated therein, shall be
governed by, interpreted and enforced in accordance with the laws of the State of Delaware,
unless and to the extent they are pre-empted by the laws of the United States of America.
	 
	10.4	 	Sections 8, 9 and 10 of this Agreement shall survive the exercise or termination of the
Option, the delivery of any Option shares, or termination of this Agreement.

5.

 

This Agreement shall be effective as of the date first written above.

	 	 	 	 	 	 
	EMPLOYEE	 	CORPORATION
	 
	[Name]

	 		VIRTUAL RADIOLOGIC CORPORATION
 	 
	 

	 	By:  	 

	 
	Dated:

	 
	 	Dated: 	 

6.

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