**Exhibit 10.37**

 

**Alliance Imaging**

**2006 Executive Incentive Plan**

 

**A. Purpose**

 

Thepurpose of the Executive Incentive Plan (“Plan”) is to reward Executives ofAlliance Imaging, Inc. (“Company”) for enhancing the value of the Company byrewarding the Executive for actions taken to achieve the Company’s value added targetsand by prudent fixed-site investments in imaging centers and radiation oncologycenters.

 

**B. Eligible Participants**

 

Theeligible participants of the Plan are the Company’s Chairman of the Board and ChiefExecutive Officer, the President and Chief Operating Officer, and the ExecutiveVice President and Chief Financial Officer. The Compensation Committee of theCompany’s Board of Directors (“Compensation Committee”) has sole discretion ofdefining the eligible participants of this Plan.

 

Under this Plan, the Executive is eligible toreceive the bonus payment earned for the full year of 2006 provided that theExecutive is employed by the Company for the entirety of 2006. The Executivemust be an employee of the Company on December 31, 2006 to be to be eligible toreceive a bonus payment under the Plan.

 

An Executive who is employed by the Companysubsequent to January 1, 2006 will be eligible for a pro-rated portion of theValue Added component of the Target Bonus and the Fixed-Site Return on Capitalcomponent of the Target Bonus, as long as the Executive is employed by theCompany on or before June 30, 2006 and is employed by the Company on December31, 2006.

 

**C. Term of the Plan**

 

This Plan is effectiveJanuary 1, 2006, and governs bonus payments to the Executive for the 2006calendar year.

 

**D. Target Bonus**

 

TheTarget Bonus is the product of the Executive’s base salary multiplied by apercentage of the Executive’s base salary, as agreed to by the CompensationCommittee. The 2006 Target Bonus as a percentage of base salary is 85% for theChairman of the Board and Chief Executive Officer, and 75% for the Presidentand Chief Operating Officer, and 75% for Executive Vice President, ChiefFinancial Officer.

 

**CERTAIN CONFIDENTIAL INFORMATIONCONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED AND FILED SEPARATELYWITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THESECURITIES EXCHANGE ACT OF 1934, AS AMENDED.**

 

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TheTarget Bonus has two (2) components:  (i)Value Added Bonus (75% of Target Bonus); and (ii) Fixed-Site Return on Capital(25% of Target Bonus).

 

**E. Bonus Calculation – Value Added Component**

 

The Value Added componentof the Bonus constitutes 75% of the Target Bonus. The Bonus % targets under theValue Added component of the Bonus range from 50% to 175% of the Executives TargetBonus.

 

The minimum threshold forthe Executive to earn the Value Added component of the Bonus is to achieve [***]%of the 2006 [***] budget ($[***]). If this achievement is met, the Target Bonus% achievement will be based on the Value Added calculation. The attachedExhibit A entitled “Value Added” sets forth the Target Bonus % earned by theExecutive.

 

The calculation of theValue Added component of the Bonus is [***] less [***] and [***].

 

[***] is defined as [***]up to a maximum of $[***]. Any adjustments to the Value Added calculation for [***]or [***] will be approved by the Compensation Committee of the Board ofDirectors.

 

The [***] is defined asthe Company’s [***] as of December 31, 2005, March 31, 2006, June 30, 2006,September 30, 2006, and December 31, 2006, multiplied by [***]%. [***] isdefined as [***], less [***], less [***].

 

**F. Bonus Calculation –**[***]**Return on Capital Component**

 

The [***] Return onCapital component of the bonus constitutes 25% of the Target Bonus. The [***]Return on Capital component of the Bonus is based on the return on capital % ofthe [***] and [***]. The bonus % targets under the [***] Return on Capitalcomponent of the Target Bonus range from 20% to 175% of the Executive’s TargetBonus. See attached Exhibit B entitled “[***] Return on Capital” for the TargetBonus % range.

 

The calculation of returnon capital is defined as [***] of [***] divided by [***]. The return on capitalfor [***] will be measured after 2008, when 50% of this portion of the bonuswill be paid based on the return at that time. The return on capital will bemeasured again after 2009, and the total payout for this portion of the bonuswill be determined. Any amount paid the previous year would be deducted fromthe final payment. If the calculation of the total payout is less than theamount paid in the previous year, no additional payment will be made, but noamount will be owed back to the Company by the Executive.

 

**CERTAINCONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEENOMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSIONPURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.**

 

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**G. Payment Schedule**

 

The Company will calculatethe Value Added component of the bonus based on full year 2006 results. Thepayment of the Value Added component of the bonus will be made upon thecompletion of the annual audit of the Company’s financial statements by itsindependent auditors.

 

The Return on Capital componentof the bonus will be calculated based on the 2008 results of the [***], andcalculated a second time based on the 2009 results of the [***]. The paymentsof the Return on Capital component of the bonus will be made once the annualaudits of the Company’s financial statements are completed by its independentauditors.

 

At its discretion, theCompensation Committee can authorize Bonus payments prior to the completion ofthe annual audits.

 

**H. Other Terms and Conditions**

 

1.               The Compensation Committee of the Company’s Board ofDirectors governs this Plan. If any disagreements arise regarding theinterpretation of the provisions of this Plan, the Compensation Committee hasthe sole discretion to interpret the Plan’s provisions.

 

2.               The Compensation Committee has the right to grantdiscretionary payments under the Plan at its sole discretion.

 

3.               This Plan sets forth the entire Executive IncentivePlan for the 2006 calendar year and supersedes all prior and contemporaneousoral and written agreements, understandings, and representations, if any, withrespect to the components of Executive bonus and/or the calculation and paymentof Executive bonus.

 

**CERTAIN CONFIDENTIAL INFORMATIONCONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED AND FILED SEPARATELYWITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THESECURITIES EXCHANGE ACT OF 1934, AS AMENDED.**

 

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**EXHIBIT A**

**Value Added**

 
| **[***]** | ** ** | **Bonus % Target** | ** ** | **[***]** | ** ** | **[***]** | ** ** | **[***]** | ** ** | **Value Added** | ** ** |
|-----------|------------|------------------------------|------------|-----------|------------|-----------|------------|-----------|------------|----------------------|------------|
| [***]     |       | 0.0                          | %          | [***]     |       | [***]     |       | [***]     |       |                 |       |
| [***]     |       | 50.0                         | %          | [***]     |       | [***]     |       | [***]     |       | $                    | (5.0       | ) |
| [***]     |       | 57.1                         | %          | [***]     |       | [***]     |       | [***]     |       | (3.6                 | )          |
| [***]     |       | 64.3                         | %          | [***]     |       | [***]     |       | [***]     |       | (2.3                 | )          |
| [***]     |       | 71.4                         | %          | [***]     |       | [***]     |       | [***]     |       | (0.9                 | )          |
| [***]     |       | 78.6                         | %          | [***]     |       | [***]     |       | [***]     |       | 0.5                  |       |
| [***]     |       | 85.7                         | %          | [***]     |       | [***]     |       | [***]     |       | 1.9                  |       |
| [***]     |       | 92.9                         | %          | [***]     |       | [***]     |       | [***]     |       | 3.3                  |       |
| [***]     |       | 100.0                        | %          | [***]     |       | [***]     |       | [***]     |       | 1.6                  |       |
| [***]     |       | 107.1                        | %          | [***]     |       | [***]     |       | [***]     |       | 3.0                  |       |
| [***]     |       | 114.3                        | %          | [***]     |       | [***]     |       | [***]     |       | 4.4                  |       |
| [***]     |       | 121.4                        | %          | [***]     |       | [***]     |       | [***]     |       | 5.9                  |       |
| [***]     |       | 128.6                        | %          | [***]     |       | [***]     |       | [***]     |       | 7.3                  |       |
| [***]     |       | 135.7                        | %          | [***]     |       | [***]     |       | [***]     |       | 8.7                  |       |
| [***]     |       | 142.9                        | %          | [***]     |       | [***]     |       | [***]     |       | 10.2                 |       |
| [***]     |       | 150.0                        | %          | [***]     |       | [***]     |       | [***]     |       | 11.6                 |       |
| [***]     |       | 155.0                        | %          | [***]     |       | [***]     |       | [***]     |       | 13.0                 |       |
| [***]     |       | 160.0                        | %          | [***]     |       | [***]     |       | [***]     |       | 14.5                 |       |
| [***]     |       | 165.0                        | %          | [***]     |       | [***]     |       | [***]     |       | 15.9                 |       |
| [***]     |       | 170.0                        | %          | [***]     |       | [***]     |       | [***]     |       | 17.3                 |       |
| [***]     |       | 175.0                        | %          | [***]     |       | [***]     |       | [***]     |       | 18.8                 |       |
|           |            |                              |            |           |            |           |            |           |            |                      |            |  |

 

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(1)          [***] is defined as[***] up to a maximum of $[***]. Any adjustments to the value added calculationfor [***] or [***] will be approved by the Compensation Committee of the Boardof Directors.

 

(2)          [***] is computed asfollows:

 

[***]

 

*Computationwill take the [***] at December 31, 2005, March 31, 2006, June 30, 2006,September 30, 2006, and December 31, 2006.

 

**CERTAIN CONFIDENTIAL INFORMATIONCONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED AND FILED SEPARATELYWITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THESECURITIES EXCHANGE ACT OF 1934, AS AMENDED.**

 

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**EXHIBIT B**

**[***] Return on Capital**

 

| **(1)  Return on Capital** | ** ** | **Bonus % Target** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| <11%                              |       | 0                            | %          |
| 11%                                  |       | 20                           | %          |
| 12%                                  |       | 40                           | %          |
| 13%                                  |       | 60                           | %          |
| 14%                                  |       | 80                           | %          |
| 15%                                  |       | 100                          | %          |
| 16%                                  |       | 110                          | %          |
| 17%                                  |       | 120                          | %          |
| 18%                                  |       | 130                          | %          |
| 19%                                  |       | 140                          | %          |
| 20%                                  |       | 150                          | %          |
| 21%                                  |       | 155                          | %          |
| 22%                                  |       | 160                          | %          |
| 23%                                  |       | 165                          | %          |
| 24%                                  |       | 170                          | %          |
| 25%                                  |       | 175                          | %          |

 

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(1)          Return on capital isdefined as [***] generated by [***] divided by [***]. Return on capital forthese [***] will be measured in 2008 and 2009.

 

Example:  16.2% return on capital = 110% +[(16.2%-16.0%)*(120%-110%)] = 112% of target bonus.

 

**CERTAIN CONFIDENTIAL INFORMATIONCONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED AND FILED SEPARATELYWITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THESECURITIES EXCHANGE ACT OF 1934, AS AMENDED.**

 

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