Exhibit 10.21


 


May 19, 2003


 


PERSONAL AND CONFIDENTIAL


 


Thomas
V. Croal


18742
Monte Vista Circle


Villa
Park, CA 92861


 


Re:                               Resignation Agreement


 


Dear
Tom:


 


This Letter Agreement
(“Agreement”) sets forth the terms and conditions of your resignation from InSight
Health Services Corp. (“InSight” or “Company”).  Your resignation from InSight is effective today, May 19,
2003.  Accordingly, as of 5:00 p.m.
today, you will be relieved of any and all duties as an employee of the
Company.  InSight appreciates your service
to the Company and sincerely wishes you the very best in your future
endeavors.  InSight will pay you earned
wages, thirty (30) days wages in lieu of notice and any unused accrued vacation
through today, regardless of whether you sign this Agreement.


 


In consideration of the mutual covenants and promises made in this
Agreement, you and InSight agree as follows:


 


Resignation.  Your
resignation from InSight is effective as of 5:00 p.m. on May 19, 2003. A press
release identical to Exhibit A attached hereto will be released by the Company
on or about Tuesday, May 20, 2003.


 


Separation
Payments.  In addition to your final paycheck and any
unused accrued vacation, and in consideration for your signing this Agreement,
InSight agrees that, beginning on the Company’s first regular payday that is
more than eight (8) days after you sign this Agreement without revocation, it
will pay you separation payments equal to your annual salary at the time
of resignation for a period of twelve (12) months (“Separation Payments”).
These Separation Payments will be made in approximately equal payments on the
Company’s regular paydays for the payment period.  All applicable state and federal tax withholding and other lawful
deductions will be taken from the gross amount of said checks.


 

















 


The Separation Payments
will be sent to your home address as set forth above on this Agreement.


 


InSight 401(K) Plan Match.
As further consideration for signing this Agreement, if the Company makes the
discretionary match to the InSight 401(K) Plan for the fiscal year ending
June 30, 2003 and if permitted by the plan, InSight agrees that it will
contribute eleven- twelfths (11/12) of an applicable match to your account.


 


Bonus.
As additional consideration for signing this Agreement, InSight agrees that it
will pay you eleven-twelfths (11/12) of any bonus for the fiscal year ending
June 30, 2003 in accordance with InSight’s executive bonus policy, a copy
of which is attached hereto as Exhibit B.


 


Compliance with Stock
Option Agreements.  In
accordance with the Stock Option Agreement (i) executed by you and InSight
Health Services Holdings Corp., (“IHSHC”) on June 29, 2001 (the
“June 29th Stock Option Agreement”), and (ii) between you and
IHSHC, but unexecuted by you, dated October 17, 2001 (the “October 17th
Stock Option Agreement” and together with the June 29th Stock
Option Agreement, the “Stock Option Agreements”), you agree to comply in full
with their terms. Additionally, you are party to the Third Amended and Restated
Stockholders Agreement, dated October 10, 2002, by and among IHSHC and the
stockholders of IHSHC signatory thereto (the “Stockholders Agreement” and
collectively with the Stock Option Agreements, the “Stock Agreements”).


 


Call on Vested Options.
You hereby agree and acknowledge that IHSHC has elected to exercise its option
to purchase all of the Subject Securities (as defined in the Stockholders
Agreement) owned by you in accordance with Section 2.5 of the Stockholders
Agreement. Your Subject Securities consists of Vested Options (as defined in
the Stockholders Agreement) to purchase 52,500 shares of IHSHC common stock
pursuant to the June 29th Stock Option Agreement (the “Rollover
Options”) and Vested Options to purchase 3,500 shares of IHSHC common stock
pursuant to the October 17th Stock Option Agreement (the
“Performance Options”). You hereby agree and acknowledge that the Call Price
(as defined in the Stockholders Agreement) for the Rollover Options shall be
$19.07 per share and the Call Price for the Performance Options shall be $19.07
per share. Accordingly, pursuant to Section 2.5 of the Stockholders
Agreement, upon receipt by you of the aggregate Call Price for your Subject
Securities of $565,495.00, less applicable state and federal withholdings and
other lawful deductions, the Stock Option Agreements shall terminate and be of
no further force and effect, your rights in


 


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and to the Subject
Securities shall cease and you shall surrender your Stock Option Agreements and
any other documents evidencing ownership in Subject Securities to IHSHC for
cancellation.


 


Benefits.  As
additional consideration for signing this Agreement, the Company agrees to
continue the employee benefits specified in this provision until the first of
the following occurs: (a) expiration of the twelve (12) month period following
the date of your resignation; or (b) until you are eligible for employment
benefits as the result of full-time employment with another employer.  The benefits you will receive during the
applicable period are life insurance, medical, health and accident, and
disability plans or programs covering you and any dependents under the same
terms and conditions as if you had not resigned, including any required
co-payments.  The Company’s agreement to
provide these benefits during the applicable period is contingent upon your
participation being permissible under the general terms and provisions of such
plans and programs and contingent upon the Company’s right to amend or
terminate any employee benefit plans which are applicable generally to the
Company’s employees.   In the event of
either of these contingencies, you will cease to receive these benefits
effective the date of the occurrence of the contingency.  However, in such an event, the Company
agrees to arrange to provide you with benefits substantially similar to those
you were receiving at the time of your resignation for the applicable period or
its remainder.


 


Outplacement
Services. As yet
additional consideration for signing this Agreement, the Company agrees to
provide you with outplacement counseling services through a firm selected by
the Company for a period of three (3) months. If you are not employed by the
end of the three (3) month period, the Company will provide you with a further
three (3) months of outplacement counseling services. Your outplacement
counseling benefits and limitations will be explained in a separate document.


 


Release.  You
hereby release and discharge InSight and its divisions, affiliates, parents (including
IHSHC), subsidiaries, predecessor and successor corporations, and the past and
present directors, officers, management committees, shareholders, agents,
servants, employees, representatives, administrators, partners, general
partners, managing partners, limited partners, benefit plan fiduciaries and
administrators, assigns, heirs, successors or predecessors in interest,
adjustors, and attorneys, from all rights, claims, causes of action, and
damages, both known and unknown, in law or in equity, concerning and/or arising
out of your employment with InSight prior to the date of this Agreement, the
Stock Agreements and any other agreement between you and IHSHC and/or any of
its subsidiaries, predecessor or successor corporations,


 


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affiliates
or shareholders (other than this Agreement) which you now have, or ever had,
including, but not limited to, any rights, claims, causes of action or damages
arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act of 1967, the Older Workers’ Benefit Protection Act, Employee
Retirement Income Security Act, the Americans with Disabilities Act, the
California Industrial Welfare Commission Wage Orders, the California Fair Employment
and Housing Act, and the California Labor Code.


 


You
hereby waive and relinquish all rights and benefits afforded by California
Civil Code section 1542.  You
understand and acknowledge the significance and consequences of this specific
waiver of section 1542.  California
Civil Code section 1542 states as follows:


 


A general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known to him must
have materially affected his settlement with the debtor.


 


Continuing
Obligations to Company.  You understand and agree that you have
continuing obligations to the Company under Section V of the Executive
Employment Agreement executed by you and effective on June 29, 2001 (“Section V”).  You further understand and agree that should
you breach any provisions thereunder, the Company has the right to terminate
any and all of its obligations under this Agreement effective immediately.  This right is in addition to any other rights
or remedies to which the Company is entitled for your breach of
Section V.  A copy of
Section V is attached hereto as Exhibit C for your ease of reference.


 


Return
of InSight Property; Expenses.  As set forth in Section V,
you agree to immediately return all Company property and equipment in your
possession or under your control.  You
must immediately submit to InSight all outstanding business expenses incurred
on or before May 19, 2003, for reconciliation and payment in accordance with
the Company’s policies.


 


Legal
Representation.  You and InSight each acknowledge that you
have had the opportunity to receive the advice of independent legal counsel
prior to the execution of this Agreement and the opportunity to receive an
explanation from legal counsel of the legal nature and effect of this
Agreement, and you have fully exercised that opportunity to the extent desired
and you understand the terms and provisions of this Agreement and its nature
and effect.  You further represent that


 


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you
are entering into this Agreement freely and voluntarily.


 


No
Admission of Liability.  Nothing contained in this Agreement or the
fact that InSight has signed this Agreement shall be considered as admission of
any liability whatsoever by InSight.


 


Confidentiality.  As a
material inducement to InSight to enter into this Agreement and as an
indivisible part of the consideration to be received for entering into this
Agreement and for the performance of obligations under this Agreement by each
party to this Agreement, you agree that you will not disclose, disseminate,
and/or publicize or cause or permit to be disclosed, disseminated, and/or
publicized, any of the specific terms of this Agreement, any claims or
allegations or the basis for any claims or allegations, which were or could
have been made against InSight and its divisions, affiliates, parents
(including IHSHC), subsidiaries, predecessor and successor corporations, and
the past and present directors, officers, management committees, shareholders,
agents, servants, employees, representatives, administrators, partners, general
partners, managing partners, limited partners, benefit plan fiduciaries and
administrators, assigns, heirs, successors or predecessors in interest,
adjustors, insurers, and attorneys, which concern and are within the scope of
this Agreement, directly or indirectly, specifically or generally, to any
person, corporation, association, governmental agency, or other entity except:
(a) to the extent necessary to report income to appropriate taxing authorities;
(b) in response to an order of a court of competent jurisdiction or a subpoena
issued under authority thereof; (c) in response to any subpoena issued by a
state or federal governmental agency; or (d) as otherwise required by law.


 


Non
Disparagement.  As a material inducement to InSight to enter
into this Agreement, you agree that you will not make any negative or
disparaging comments about InSight or IHSHC. 
Those familiar with this Agreement at InSight agree that they will not
make any negative or disparaging comments about you.


 


Other
Agreements.  Except for Section V (as defined
above), the Stock Agreements (as defined above), the InSight 401k Plan, and the
Amended and Restated Indemnification Agreement executed by you and the Company
effective October 17, 2001, this Agreement supercedes any and all other
agreements, understandings, negotiations, or discussions, either oral or in
writing, express or implied, among you and the Company and IHSHC.


 


Entire
Agreement.  This Agreement constitutes the full,
complete, and exclusive agreement between you and InSight with respect to the
subject matter


 


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discussed
herein.  This Agreement cannot be
changed unless in writing, signed by you, InSight, and IHSHC.


 


Waiver.  No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar.  No waiver shall constitute a continuing
waiver.  No waiver shall be binding
unless executed in writing by the party charged with the waiver.


 


Severability.  In the
event any provision of this Agreement shall be determined to be unlawful, such
provision shall be deemed to be severed from this Agreement and every other
provision of this Agreement shall remain in full force and effect.


 


Governing
Law.  This Agreement is made and entered into in
the State of California, and shall in all respects be interpreted, enforced,
and governed under the laws of said state.


 


Resolution
of Disputes. Any
controversy or claim arising out of or relating to this Agreement, or any
breach thereof, will be submitted to final and binding arbitration in Orange
County, California, before a mutually agreed upon arbitrator from Judicial
Arbitration and Mediation Services (JAMS), as the exclusive remedy for such
controversy or dispute. Judgment upon any award rendered by the arbitrator may
be entered in the Superior Court of the County of Orange, State of California,
which will have exclusive jurisdiction thereof. The prevailing party in any
proceeding brought to enforce the terms of this Agreement will be entitled to
recover from the other party all damages, costs and expenses, including without
limitation, attorneys’ and arbitrators’ fees, incurred as a result of such
action.  In agreeing to this
arbitration, you understand and agree that you are waiving  the  right
to  a  jury  trial as to any issue(s) subject to this
Agreement.  The decision of the
arbitrator will be bound by generally accepted legal principles, including but
not limited to all rules of law and legal principles concerning potential
liability, burdens of proof, and measure of damages found in all applicable
California statutes and administrative rules and codes, and all California case
law.  The parties agree that this
provision does not limit their right to seek injunctive relief in the threat of
imminent and irreparable harm as a result of breach of this Agreement.


 


Consideration Period.  You have until 5:00 p.m. on Monday,
June 19, 2003, or twenty-one (21) days from receipt of this amended
Agreement to consider it.  InSight
hereby advises you to consult with an attorney before signing this Agreement.


 


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Revocation Period.  For a period of seven (7) days following the
signing of this Agreement, you may revoke this Agreement.  This Agreement does not become effective or
enforceable until the revocation period has expired without you exercising your
option to revoke.


 


Please acknowledge your
understanding and acceptance of this Agreement by signing this Agreement below
and returning it to me no later than 5:00 p.m. on Thursday, June 19, 2003,
or on the twenty-first day from the date you receive this amended Agreement.  I have signed an extra copy of this
Agreement which is attached for your records.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Marilyn U. MacNiven-Young

  	
   

  
	
   

  	
  Marilyn
  U. MacNiven-Young

  
	
   

  	
  Executive
  Vice President & General Counsel

  
	
   

  	
  InSight
  Health Services Corp.

  
	
   

  	
   

  
	
   

  	
  Executive
  Vice President & General Counsel

  
	
   

  	
  InSight
  Health Services Holdings Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Enclosures

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED
  AND AGREED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:  June 2, 2003.

  	
  /s/
  Thomas V. Croal

  	
   

  
	
   

  	
  Thomas
  V. Croal

  
				



 


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