Document:

Exhibit 10.3

 

	
   

  	
  Split Dollar Endorsement

  
	
  Policy Number:  52860001

  	
  Insured: 
  Peter  R. Chase 

  

 

The Company (hereafter called the Insurer) is directed to modify the
policy numbered above as follows.  The
Company shall be defined as the company that issued the policy.

 

It is John Hancock Variable Life Insurance Company.

 

POLICY ENDORSEMENT:                                                                                                               The
following Endorsement is hereby made a part of this policy to which a copy is
attached.

 

OWNER                                                  Chase
Corporation.

 

ASSIGNEE                                     Peter
R. Chase

 

ASSIGNEE’S BENEFICIARY                                       Peter
R. Chase Trust U/T/D 9/27/04.

 

1.                                       OWNERSHIP,
During the insured’s lifetime:

(a)          The
owner shall have all rights in the policy, subject to the limitations of this
Endorsement and to section (c),

(b)         The
assignee shall have the right to designate the beneficiary and to elect an
income settlement option with respect to that portion of the death proceeds
specified in 2(b) below.

(c)          The
owner retains the right to make loans against the policy and to receive the
cash values.  For any loans against the
policy or receipt of any amount, the signature of the owner shall be
sufficient.

2.                                       BENEFICIARY,
The death proceeds shall be paid as follows:

(a)          To
the owner, an amount equal to the greater of the Corporation’s Cumulative
Premiums as defined in the Split Dollar Agreement dated January 10, 2005, or
the cash surrender value at the date of the insured’s death, but reduced by any
indebtedness (along with any unpaid interest) incurred by the owner of this
policy,

(b)         To
the assignee’s beneficiary, any death proceeds in excess of the amount
specified in 2(a) above.

 

Payment by the Insurer of any or all surrender or death proceeds to the
owner in reliance upon an affidavit of the Treasurer of the Corporation as to
the share of death proceeds due it shall be a full discharge of the Insurer for
such share and shall be binding on all parties claiming any interest under this
policy,

The above constitutes the Split-Dollar Endorsement to this policy,

The interest of any beneficiary shall be subject to any assignment of
this policy as provided herein,

All options and designations in effect as of the date of this
Endorsement shall remain in effect unless specifically changed by this
Endorsement or by action taken thereafter consistent with this Endorsement,

The provisions set forth in this direction when endorsed on the policy
at the Home Office of the Insurer shall prevail over any contrary provisions
and shall be effective as of the date of execution of this direction, except
that any payment made or action taken by the Insurer in reliance upon the
provisions of the policy before this change is endorsed shall be binding upon
all parties having an interest in the policy.

 

 

	
  Signed at

  	
  Bridgewater, MA

  	
   

  	
  on

  	
  January 10, 2005

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chase Corporation:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Paula M Myers

  	
   

  	
  by

  	
  /s/ Everett Chadwick

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
  Title:

  	
  Treasurer and CFO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Paula M Myers

  	
   

  	
  by

  	
  /s/ Peter R. Chase

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
  Peter R. Chase, AssigneeExhibit 10.24

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

AGREEMENT
dated as of January 10, 2005 between InSight Health Services Corp., a
Delaware corporation (“Company”), and Mitch C. Hill (“Executive”).  InSight Health Services Holdings Corp., a
Delaware corporation (“Parent”) is a party to this Agreement solely for the
purposes of Section 3.07.

 

Company
wishes to employ Executive, and Executive wishes to accept such employment, in
each case subject to the terms and conditions hereof.  Accordingly, Company and Executive hereby
agree as follows:

 

I.                                         TERM

 

Commencing
as of the first date of Executive’s employment with Company, Executive is to be
employed by Company for rolling twelve (12) month periods, whereby Executive’s
term of employment is twelve (12) months on a continuing basis, unless earlier
terminated in accordance with Article IV below.

 

II.                                     EMPLOYMENT

 

SECTION 2.01  Employment by Company.  Company, for itself and its subsidiaries and
affiliates, employs Executive for the term of this Agreement to render full
time services as Company’s Executive Vice President and Chief Financial Officer
and in such other capacities as the Board of Directors of Company (“Board”) may
assign and, in connection therewith, to perform such duties as are reasonably
consistent with Executive’s position and as the Board shall direct.  Executive agrees to perform such duties as
are reasonably consistent with the duties normally pertaining to the office to
which Executive has been elected or appointed, subject always to the direction
of the Board.  Subject to Section 5.01
hereof, Executive’s expenditure of reasonable amounts of time for personal
business, charitable or professional activities will not be deemed a breach of
Executive’s undertaking to provide full time services hereunder, provided that
such activities do not interfere materially with Executive’s rendering of such
services.

 

SECTION 2.02  Acceptance of Employment
by Executive.  Executive
accepts such employment and shall render the services required by this
Agreement to be rendered by Executive. 
Executive shall also serve on request during all or any part of the term
of this Agreement as an officer of Company and of any of its subsidiaries or
affiliates without any compensation therefor other than as specified in this
Agreement.

 

SECTION 2.03  Place of Employment.  Executive’s principal place of employment
shall be located at 26250 Enterprise Court, Suite 100, Lake Forest, California
92630.  In the event that the principal
place of employment of Executive is relocated to a site that is more than
50 miles from Executive’s principal residence, subject to Section 4.05(a)
hereof, Company may require Executive to relocate Executive’s principal
residence to within 50 miles of such site. 
Notwithstanding the foregoing, Executive acknowledges that the duties to
be performed by

 

 

Executive
hereunder are such that Executive may be required to travel extensively,
principally within the United States, in connection with Company Business (as
defined below).

 

III.                                 COMPENSATION

 

SECTION 3.01  Salary, Bonuses, Life
Insurance.  As
compensation for the services to be rendered pursuant to this Agreement,
Company shall pay Executive, and Executive shall accept, a salary of  $275,000.00 per annum (“Annual Salary”),
payable in accordance with the payroll policies of Company for senior
executives as from time to time in effect, less such amounts as may be required
to be withheld by applicable federal, state and local law and regulations (the “Payroll
Policies”).

 

In
addition to the Annual Salary, Executive shall be eligible to receive and
Company shall pay an annual bonus based on a percentage of Executive’s Annual
Salary agreed upon by the Executive and the Company’s President and Chief
Executive Officer, (“Bonus”) (a) 75% of which Bonus shall be based upon
Company achieving the goals set forth in a budget prepared by Company
management and adopted or approved by the Board; and (b) 25% of which
Bonus shall be based upon the achievement of other goals mutually agreed upon
by Executive and the President and Chief Executive Officer of Company and
approved by the Board.  Such Bonuses are
payable on the earlier to occur of the date Parent’s (i) annual report on Form
10-K is filed with the Securities and Exchange Commission (“SEC”) for such year
and (ii) year-end audit has been completed for such year.

 

For
the fiscal year ending June 30, 2005, Executive shall receive a Bonus,
which shall  equal 40% of Executive’s
Annual Salary, prorated from the first date of employment through June 30,
2005.  Subject to compliance with all
state and federal securities laws, Executive shall be entitled to purchase no
less than 2,525 shares of Parent’s common stock at a price equal to $19.82 per
share, within 30 days of the filing of Parent’s annual report on Form 10-K with
the SEC.

 

Company
shall purchase and maintain in full force and effect at all times during the
term of this Agreement a policy of term insurance on the life of Executive
payable to such beneficiary or beneficiaries as Executive may designate in an
amount equal to three (3) times the amount of the Annual Salary; provided
Executive shall comply with the issuing insurance company’s requirements for
issuance of the policy.

 

SECTION 3.02  Performance Review.
Executive’s performance shall be reviewed and evaluated by the Board annually
during the term of this Agreement.

 

SECTION 3.03  Participation in Employee
Benefit Plans.  Executive
shall be entitled during the term of this Agreement, if and to the extent
eligible, to participate in any life insurance, medical, health and accident
and disability plan or program, pension plan or similar benefit plan of
Company, which may be available to senior executives of Company generally, on
the same terms as such other executives.

 

 

SECTION 3.04  Expenses.  Subject to such policies as may from time to
time be established by Company for senior executives of Company generally,
Company shall pay or reimburse Executive for all reasonable business expenses
actually incurred or paid by Executive during the term of this Agreement in the
performance by Executive of services under this Agreement, upon presentation of
expense statements or vouchers or such other supporting information as Company
may reasonably require.

 

SECTION 3.05  Automobile Allowance.  Company shall pay Executive $750 per month
and all reasonable expenses of operating an automobile subject to such policies
as may from time to time be established and amended by Company.

 

SECTION 3.06  Vacation.  Executive shall be entitled to three (3)
weeks of paid vacation each year during the term of this Agreement, which
Executive may accumulate up to six (6) weeks, to be taken at a time or times
which do not unreasonably interfere with Executive’s duties hereunder.

 

SECTION 3.07  Stock Options.  Parent shall grant stock options to Executive,
pursuant to the terms of the Stock Option Agreement substantially in the form
of Exhibit A, to purchase shares of Parent common stock in an amount to be
determined by the President and Chief Executive Officer of Company and approved
by the board of directors of Parent.

 

IV.                                TERMINATION

 

SECTION 4.01  Termination upon Death.  If Executive dies during the term of this
Agreement, this Agreement shall terminate as of the date of Executive’s death.

 

SECTION 4.02  Termination upon
Disability.  Executive’s
employment may be terminated by Company due to Executive’s permanent and total
disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended) (“Disability”), so that Executive is unable
substantially to perform Executive’s services required by this Agreement to be
rendered by Executive for (i) a period of three (3) consecutive months or
(ii) for shorter periods aggregating three (3) months during any twelve
(12) month period.  Company may, at any
time after the last day of the three (3) consecutive months of Disability or
the day on which the shorter periods of Disability equal an aggregate of three
(3) months, by 30 days’ written notice to Executive, terminate this Agreement
and Executive’s employment hereunder.  Any
such determination of Disability shall be made by a physician chosen by a
majority of the members of the Board in its sole and unfettered
discretion.  Nothing in this Section 4.02
shall be deemed to extend the term of this Agreement or of Executive’s employment
hereunder, beyond the term specified in Article I hereof.

 

SECTION 4.03  Termination for Cause.  If the Board decides that Cause (as defined
below) exists, it may remove Executive for Cause and terminate this Agreement
and the term of Executive’s employment hereunder on the date specified in
written notice to Executive.  If
terminated for Cause, Executive shall have no right to receive any monetary
compensation or benefit hereunder with respect to any period after the date
specified in such notice. Such notice

 

 

may
also terminate Executive’s right to enter Company’s premises.  For purposes of this Agreement, the term “Cause”
means any of the following:

 

(a)                                  Executive
has been convicted or pled guilty or no contest to any crime or offense (other
than any crime or offense relating to the operation of a motor vehicle) which
is likely to have a material adverse impact on the business operations or
financial or other condition of Company, or any felony offense;

 

(b)                                 Executive
has committed fraud or embezzlement;

 

(c)                                  Executive
has breached any of Executive’s obligations under this Agreement and Executive
has failed to cure the breach within 30 business days following receipt of
written notice of such breach from Company;

 

(d)                                 Company,
after reasonable investigation, finds that Executive has violated material
written policies and procedures of Company, including but not necessarily
limited to, policies and procedures pertaining to harassment and
discrimination;

 

(e)                                  Executive
has failed to obey a specific written direction from the Board (unless such
specific written instruction represents an illegal act), provided that
(i) such failure continues for a period of 30 business days after
receipt of such specific written direction, and (ii) such specific written
direction includes a statement that the failure to comply therewith will be a
basis for termination hereunder; or

 

(f)                                    any
willful act or omission on Executive’s part which is materially injurious to
the financial condition or business reputation of Company or any of its
subsidiaries.

 

SECTION 4.04  Termination in Discretion
of Company.  Company may,
at any time thereafter by 30 days’ written notice to Executive, terminate
this Agreement and the term of Executive’s employment hereunder, and Executive
thereafter shall have only such rights to receive monetary compensation or
benefits hereunder in respect of any period after the effective date of
termination as are provided in Section 4.07 hereof.  Such notice may also terminate Executive’s
right to enter Company’s premises.

 

SECTION 4.05  Voluntary Termination for
Good Reason.  During the
period commencing upon the occurrence of Good Reason (as defined below) and
continuing for 60 days thereafter, Executive shall have the right to terminate
Executive’s employment for Good Reason (as defined below), whereupon Executive
shall become entitled to receive compensation as provided in Section 4.07
hereof.  Termination by the Executive
pursuant to the preceding sentence shall be effective upon 60 days written
notice to Company.  For purposes of this
Agreement, “Good Reason” means any of the following:

 

(a)                                  the
movement by Company, without Executive’s consent, of Executive’s principal
place of employment to a site that is more than 50 miles from Executive’s
principal residence;

 

 

(b)                                 a
reduction by Company, without Executive’s consent, in Executive’s Annual
Salary, duties and responsibilities, and title, as they may exist from time to
time; or

 

(c)                                  a
failure by Company to comply with any material provisions of this Agreement
which has not been cured within 30 days after notice of such noncompliance has
been given by Executive to Company, or if such failure is not capable of being
cured in such time, for which a cure shall not have been diligently initiated
by Company within the 30 day period.

 

SECTION 4.06  Voluntary Termination
Without Good Reason.  Executive
shall have the right to terminate this Agreement upon 60 days’ written notice
to Company and, upon such termination, Executive shall not have the right to
receive any monetary compensation or benefit hereunder with respect to any
period after the date specified in such notice.

 

SECTION 4.07  Compensation on
Termination.

 

(a)                                  If
the term of Executive’s employment hereunder is terminated pursuant to Section 4.01
hereof, Company shall pay to the executors or administrators of Executive’s
estate or Executive’s heirs or legatees (as the case may be) all compensation
accrued and unpaid up to the date of Executive’s death.

 

(b)                                 If
the term of Executive’s employment hereunder is terminated pursuant to Section 4.02,
4.04, 4.05, or 4.07(c) hereof, Company shall (i) pay to Executive all
compensation accrued and unpaid up to the effective date of termination;
(ii) pay to Executive additional compensation in an amount equal to twelve
(12) months of compensation at the Annual Salary rate then in effect, payable
in accordance with the Payroll Policies; and (iii) maintain, at Company’s
expense, in full force and effect, for Executive’s continued benefit until the
earlier of (x) twelve (12) months after the effective date of termination or
(y) commencement of Executive’s benefits pursuant to full time employment
with a new employer under such employer’s standard benefits program, all life
insurance, medical, health and accident, and disability plans or programs, in
which Executive was entitled to participate immediately prior to the effective
date of termination; provided, that Executive’s continued participation is
permissible under the general terms and provisions of such plans or programs
and provided further, that Company shall be entitled to amend or terminate any
employee benefit plans which are applicable generally to Company’s
employees.  In the event that Executive’s
participation in any such plan or program is prohibited, Company shall arrange
to provide Executive with benefits substantially similar to those which
Executive was entitled to receive under such plans or programs.  Any amounts paid by Company to Executive
under (i) and (ii) above may be reduced, in the case of termination pursuant to
Section 4.02, by the amount which Executive is entitled to receive under
the terms of Company’s long-term disability insurance policy for senior
executives as and if in effect at the effective date of termination.  Any payments made pursuant to this Section 4.07
shall be reduced by such amounts as are required by law to be withheld or
deducted.

 

(c)                                  Notwithstanding
any provision herein to the contrary, if Executive is terminated by Company
without Cause, or Executive terminates Executive’s employment for Good Reason,
within twelve (12) months of a Change in Control (as defined herein) which
occurs after the

 

 

Effective
Time, Executive shall be entitled to the payments and benefits set forth in Section 4.07(b).  For purposes hereof, a “Change in Control”
shall be deemed to have occurred if (i) any person, or any two or more persons
acting as a group, and all affiliates of such person or persons (a “Group”),
who prior to such time beneficially owned less than 50% of the then outstanding
capital stock of Company or Parent, shall acquire shares of Company’s or Parent’s
capital stock in one or more transactions or series of transactions, including
by merger, and after such transaction or transactions such person or group and
affiliates beneficially own 50% or more of Company’s or Parent’s outstanding
capital stock, or (ii) Company or Parent shall sell all or substantially all of
its assets to any Group which, immediately prior to the time of such
transaction, beneficially owned less than 50% of the then outstanding capital
stock of Company or Parent.

 

(d)                                 The
compensation rights provided for Executive in this Section 4.07 shall be
Executive’s sole and exclusive remedies with respect to Section 4.01,
4.02, 4.04, 4.05, or 4.07(c) hereof, and Executive, the executors or
administrators of Executive’s estate or Executive’s heirs or legatees (as the
case may be) shall not be entitled to any other compensation, damages or relief
in connection therewith.

 

V.                                    CERTAIN COVENANTS OF EXECUTIVE

 

SECTION 5.01  Covenants Against Unfair
Competition.

 

(a)                                  Acknowledgments.  Executive acknowledges that, as of the date
hereof (i) the principal business of Company and its affiliates is the
provision of diagnostic imaging, treatment and related management services
through a network of mobile magnetic resonance imaging (“MRI”) and positron
emission tomography (“PET”) facilities, fixed-site MRI and PET facilities and
multi-modality centers, at times, together with other healthcare providers,
utilizing the related equipment and computer programs and “software” and
various corporate investment structures (“Company Business”); (ii) Company
Business is primarily national in scope; (iii) the industry is highly
competitive; and (iv) Executive’s duties hereunder will cause Executive to
have access to and be entrusted with various trade secrets not readily
available to the public or competitors, consisting of business accounts, lists
of customers and other business contacts, information concerning Company’s
relationships with actual or potential clients or customers and the needs or
requirements of such clients or customers, budgets, business and financial
plans, employee lists, financial information, artwork, designs, graphics,
marketing plans and techniques, business strategy and development, know-how or
other matters connected with Company Business, computer software programs and
specifications (some of which may be developed in part by Executive under this
Agreement), which items are owned exclusively by Company and used in the operation
of Company Business (“Trade Secrets”). 
Notwithstanding the foregoing, the parties agree that the term “Trade
Secrets” shall not include information which (i) is or becomes generally
available to the public, without violation of any obligation of confidentiality
by Executive, (ii) is or becomes available from a third party on a
nonconfidential basis, provided that such third party is not bound by a
confidentiality agreement concerning the Trade Secrets and (iii) is or has
been independently acquired or developed by Executive without violating the
provisions of this Section.

 

 

Executive
further acknowledges that the Trade Secrets will be disclosed to Executive or
obtained by Executive and received in confidence and trust for the sole purpose
of using the same for the sole benefit of Company Business.  Executive also acknowledges that such Trade
Secrets are valuable to Company, of a unique and special nature, and important
to Company in competing in the marketplace.

 

During
and after the term of this Agreement (otherwise than in the performance of this
Agreement), without Company’s prior written consent, Executive shall not
divulge or use all or any of the Trade Secrets to or for any person or entity
except (i) for the benefit of Company and as necessary to perform
Executive’s services under this Agreement; and (ii) when required by law,
and then only after consultation with Company or unless such information is in
the public domain.  In the event that
Executive, becomes or is legally compelled (whether by deposition,
interrogatories, request for documents, subpoena, civil investigative demand or
similar process) to disclose any Trade Secrets, Executive shall provide Company
with prompt, prior written notice of such requirement so that Company may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section.  Executive
agrees that Executive’s obligations under this Section 5.01 shall be
absolute and unconditional.

 

(b)                                 Breach.  Executive understands and agrees that
Executive’s employment with Company may be terminated if Executive breaches
this Agreement or in any way divulges such Trade Secrets.  Executive further understands and agrees that
Company may be irreparably harmed by any violation or threatened violation of
this Agreement and, therefore, Company may be entitled to injunctive relief to
enforce any of the provisions contained herein.

 

(c)                                  Non-Compete.  During the period of Executive’s employment,
Executive will not directly or indirectly either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer,
director, or in any other individual or representative capacity, engage or
participate in any activity or business which Company shall determine in good
faith to be in competition in any substantial way with Company Business within
any metropolitan area in the United States or elsewhere in which Company is
then engaged in Company Business.  The
parties acknowledge that in California and some states post-employment non-compete
clauses may be generally unenforceable, but that other states and jurisdictions
permit such agreements.  Executive hereby
agrees that Executive will not directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder, corporate
officer, director, or in any other individual or representative capacity,
engage or participate in any activity or business which Company shall determine
in good faith to be in competition in any substantial way with Company Business
as conducted at the effective date of termination of Executive’s employment by
Company for or a period of twelve (12) months after the termination of
Executive’s employment and that this Section will be enforceable to the
greatest extent of the law.

 

(d)                                 No Solicitation of Employees.  During Executive’s employment and for a
period of twelve (12) months after the termination of Executive’s employment,
Executive will not, either directly or indirectly, either alone or in concert
with others, solicit or entice or participate in the solicitation or attempt to
solicit or in any manner encourage employees of Company to leave Company or
work for anyone that is in competition in any substantial way with Company
Business (which in the case of the period following Executive’s termination,
shall mean

 

 

Company
Business as conducted as of the effective date of termination of Executive’s
employment with Company); provided, however, that the public listing,
advertising or posting of an available position shall not constitute
solicitation or an attempt to solicit hereunder and this subsection (d)
shall not preclude Executive from hiring an individual pursuant thereto.

 

(e)                                  No Solicitation of Customers.  Executive will not during the course of
Executive’s employment, or for twelve (12) months thereafter, either directly
or indirectly call on, solicit, or take away, or attempt to call on, solicit or
take away any of Company’s customers on behalf of any business that is in
competition in any substantial way with Company.  Executive promises and agrees not to engage
in any unfair competition with Company. 
During Executive’s employment, Executive agrees not to plan or otherwise
take any preliminary steps, either alone or in concert with others, to set up
or engage in any business enterprise that would be in competition with Company
Business.  In the event of the
termination of Executive’s employment and for a period of twelve (12) months
thereafter, Executive will not accept any employment or engage in any
activities which Company shall determine in good faith to be competitive with
Company, if the fulfillment of the duties of the competitive employment or
activities would inherently require Executive to reveal Trade Secrets to which
Executive has access or learned during Executive’s employment on behalf of any
business that is in competition in any substantial way with Company.

 

(f)                                    Return of Company Property.  In the event of the termination of Executive’s
employment, Executive will deliver to Company all devices, records, sketches,
reports, proposals, files, customer lists, mailing or contact lists,
correspondence, computer tapes, discs and design and other document and data
storage and retrieval materials (and all copies, compilations and summaries
thereof), equipment, documents, duplicates, notes, drawings, specifications,
research tape or other electronic recordings, programs, data and other
materials or property of any nature belonging to Company or relating to Company
Business, and Executive will not take with Executive or allow a third party to
take, any of the foregoing or any reproduction of any of the foregoing.  Company property includes personal property,
made or compiled by Executive, in whole or in part and alone or with others, or
in any way coming into Executive’s possession concerning Company Business or
other affairs of Company or any of its affiliates.

 

(g)                                 Disclosure and Assignment of Rights.  (i)  Executive shall promptly
disclose and assign to Company and its affiliates or its nominee(s), to the
maximum extent permitted by Section 2870 of the California Labor Code, as
it may be hereafter amended from time to time, all right, title and interest of
Executive in and to any and all ideas, inventions, discoveries, secret
processes and methods and improvements, together with any and all patents that
may be issued thereon in the United States and in all foreign countries, which
Executive may invent, develop or improve, or cause to be invented, developed or
improved, during the term of this Agreement or which are (1) conceived and
developed during normal working hours, and (2) related to the scope of
Company Business.  As used in this
Agreement, the term “invent” includes “make”, “discover”, “develop”, “manufacture”
or “produce”, or any of them; “invention” includes the phrase “any new or
useful original art, machine, methods of manufacture, process, composition of
matter, design, or configuration of any kind”; “improvement” includes “discovery”
or

 

 

“production”;
and “patent” includes “Letters Patent” and “all the extensions, renewals,
modifications, improvements and reissues of such patents”.

 

(ii)                                  Executive
shall disclose immediately to duly authorized representatives of Company any
ideas, inventions, discoveries, secret processes and methods and improvements
covered by the provisions of paragraph (i) above, and execute all
documents reasonably required in connection with the application for an
issuance of Letters Patent in the United States and in any foreign country and
the assignment thereof to Company and its affiliates or its nominee(s).

 

SECTION 5.02  Rights and Remedies Upon
Breach.  If Executive
breaches, or threatens to breach, in any material respect any of the provisions
of Section 5.01 hereof (“Restrictive Covenants”), Company shall, in
addition to all its other rights hereunder and under applicable law and in
equity, have the right to seek specific enforcement of the Restrictive
Covenants by any court having jurisdiction, including, without limitation, the
granting of a preliminary injunction which may be granted without the necessity
of proving damages or the posting of a bond or other security, it being
acknowledged that any such breach or threatened breach may cause irreparable
injury to Company and that money damages may not provide an adequate remedy to
Company.  In addition to and not in lieu
of any other remedy that Company may have pursuant to this Agreement or
otherwise, in the event of any breach of any provision of Section 5.01
during the period which Executive is entitled to receive payments and benefits
pursuant to Section 4.07, such period shall terminate as of the date of
such breach and Executive shall not thereafter be entitled to receive any
salary or other payments or benefits under this Agreement, including, but not
limited to, any stock options granted to Executive.

 

SECTION 5.03  Severability and
Modification of Covenants. 
Company and Executive agree and acknowledge that the duration, scope and
geographic area of the Restrictive Covenants described in this Section 5.01
are fair, reasonable and necessary in order to protect the good will and other
legitimate interests of Company, that adequate consideration has been received
by Executive for such obligations, and that these obligations do not prevent
Executive from earning a livelihood.  If
any court of competent jurisdiction determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions. 
If any court of competent jurisdiction construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration or
geographic scope of such provision or otherwise, such provision shall be deemed
amended to the minimum extent required to make it enforceable and, in its
reduced form, such provision shall then be enforceable and enforced.

 

VI.                                CERTAIN AGREEMENTS

 

SECTION 6.01 
(a)  Customers, Suppliers.  Executive does not have, and at any time during
the term of this Agreement shall not have, any employment with or any direct or
indirect interest in (as owner, partner, shareholder, employee, director,
officer, agent, consultant or otherwise) any customer of or supplier to
Company.

 

 

(b)                                 Certain Activities.  Executive during the term of this Agreement
shall not (i) give or agree to give, any gift or similar benefit of more
than nominal value to any customer, supplier, or governmental employee or
official or any other person who is or may be in a position to assist or hinder
Company in connection with any proposed transaction, which gift or similar
benefit, if not given or continued in the future, might adversely affect the
business or prospects of Company, (ii) use any corporate or other funds for
unlawful contributions, payments, gifts or entertainment, (iii) make any
unlawful expenditures relating to political activity to government officials or
others, (iv) establish or maintain any unlawful or unrecorded funds in
violation of Section 30A of the Securities Exchange Act of 1934, as
amended, and (v) accept or receive any unlawful contributions, payments, gifts,
or expenditures.

 

VII.                            MISCELLANEOUS

 

SECTION 7.01  Notices.  Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed or faxed, or sent by certified, registered or
express mail, postage prepaid, and shall be deemed given when so delivered
personally, telegraphed, telexed or faxed, or if mailed, two (2) days after the
date of mailing, as follows:

 

	
  (i)

  	
  If
  to Company, addressed to it at:

  	
  InSight
  Health Services Corp.

  
	
   

  	
   

  	
  26250
  Enterprise Court, Suite 100

  
	
   

  	
   

  	
  Lake
  Forest, CA 92630

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Facsimile
  No.:

  	
  (949)
  462-3703

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  If
  to Parent, addressed to it at:

  	
  InSight
  Health Services Holdings Corp.

  
	
   

  	
   

  	
  c/o
  J.W. Childs Associates, L.P.

  
	
   

  	
   

  	
  111
  Huntington Avenue, Suite 2900

  
	
   

  	
   

  	
  Boston,
  MA 02199

  
	
   

  	
   

  	
  Attention:
  Edward D. Yun

  
	
   

  	
   

  	
  Facsimile
  No.:

  	
  (617)
  753-1101

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  copies to:

  	
  The
  Halifax Group, L.L.C.

  
	
   

  	
   

  	
  1133
  Connecticut Avenue, N.W., Suite 700

  
	
   

  	
   

  	
  Washington,
  D.C. 20036

  
	
   

  	
   

  	
  Attention:
  David Dupree

  
	
   

  	
   

  	
  Facsimile
  No.:

  	
  (202)
  296-7133

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kaye
  Scholer LLP

  
	
   

  	
   

  	
  425
  Park Avenue

  
	
   

  	
   

  	
  New
  York, NY 10022

  
	
   

  	
   

  	
  Attention:
  Stephen C. Koval, Esq.

  
	
   

  	
   

  	
  Facsimile
  No.:

  	
  (212)
  836-8689

  

 

 

(iii)                               If
to Executive, to the address or facsimile set forth below Executive’s signature
hereto.  Any party hereto may, by notice
to the other, change its address for receipt of notices hereunder.

 

SECTION 7.02  Entire Agreement.  This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements, written or oral, with respect thereto.

 

SECTION 7.03  Waivers and Amendments.  This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, amended, modified, superseded, canceled, renewed or extended,
only by a written instrument signed by Executive, Company and Parent.  No waiver of any provision of this Agreement
shall be deemed to be a waiver of any other provision, whether or not
similar.  No such waiver shall constitute
a continuing waiver.  No delay on the
part of either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of either
party of any right, power or privilege hereunder, preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.

 

SECTION 7.04  Assignment.  This Agreement is personal to Executive, and
Executive’s rights and obligations hereunder may not be assigned by
Executive.  Company may assign this
Agreement and its rights, together with its obligations, hereunder (i) in
connection with any sale, transfer or other disposition of all or substantially
all of its assets or business(s), whether by merger, consolidation or
otherwise; or (ii) to any wholly owned subsidiary of Company, provided
that Company shall remain liable for all of its obligations under this
Agreement.

 

SECTION 7.05  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

SECTION 7.06  Headings.  The article and section headings in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.

 

SECTION 7.07  Number.  Unless the context of this Agreement
otherwise requires, words using the singular or plural number will also include
the plural or singular number.

 

SECTION 7.08  Governing Law.  This Agreement shall be governed by the laws
of the State of California, without regard to any conflicts of law principles
thereof that would call for the application of the laws of any other
jurisdiction.  Subject to Section 7.11
below, any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against either of
the parties in the courts of the State of California, or if it has or can
acquire jurisdiction, in the United States District Court for the Southern
District of California, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.  Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the world, whether
within or without the State of California.

 

 

SECTION 7.09  Expenses.  Should either party institute an action to
enforce this Agreement or any provision hereof, or for damages by reason of any
alleged breach of this Agreement or any provisions hereof, Executive shall be
entitled to receive from Company Executive’s reasonable travel and living
expenses, incurred by Executive in connection with preparation for and
participation in any proceeding relating to the action if Executive is the
prevailing party or such portion thereof as the court  may award.

 

SECTION 7.10  Effective Date.  This Agreement shall be effective as of the
date hereof.

 

SECTION 7.11 
(a)  Resolution of Disputes.  Executive and Company mutually
agree and understand that as an inducement for Company to enter into this Agreement,
Executive and Company agree and consent to the resolution by arbitration of all
claims or controversies, past, present or future, whether arising out of the
employment relationship (or its termination) or relating to this Agreement that
Company may have against Executive or that Executive may have against Company
or against its officers, directors, employees or agents in their capacity as
such or otherwise. The only claims that are arbitrable are those that, in the
absence of this arbitration provision, would have been justiciable under
applicable state or federal law. The claims covered by this arbitration
provision, include, but are not limited to, claims for wages or other
compensation due; claims for breach of any contract or covenant (express or
implied); tort claims; claims for discrimination, retaliation or harassment
(including, but not limited to, race, sex, sexual orientation, religion,
national origin, age, marital status, or medical condition, handicap or
disability); claims for benefits (except claims under an employee benefit or
pension plan that either (i) specifies that its claims procedure shall
culminate in an arbitration procedure different from this one, or (ii) is
underwritten by a commercial insurer which decides the claims); and claims for
violation of any federal, state, or other governmental law, statute, regulation
or ordinance, except claims excluded in Section 7.10 (b) below.

 

Except
as otherwise provided in this arbitration provision, both Company and Executive
agree that neither of them shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination)
in any way related to any claim covered by this arbitration provision.

 

(b)                                 Claims Excluded From Arbitration.
Claims Executive may have for workers’ compensation or unemployment
compensation benefits are not covered by this arbitration provision. Also not
covered are claims by Company for injunctive and/or other equitable relief,
including but not limited to those for unfair competition and/or the use and/or
unauthorized disclosure of Trade Secrets or confidential information, as to
which Executive understands and agrees that Company may seek and obtain relief
from a court of competent jurisdiction.

 

(c)                                  Arbitration Procedures.
Executive and Company understand and agree that the arbitration will take place
in Orange County, California, in accordance with the California Employment
Dispute Resolution Rules of the American Arbitration Association then in effect
in the State of California, and judgment upon such award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The
decision of the arbitrator(s) shall 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.

 

IN
WITNESS WHEREOF, the parties have executed this Executive Employment Agreement
as of the date first above written.

 

	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  INSIGHT
  HEALTH SERVICES CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael N. Cannizzaro

  	
   

  
	
   

  	
   

  	
   Name:
  Michael N. Cannizzaro

  
	
   

  	
   

  	
   Title:

  	
  Chairman,
  President and

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Mitch C. Hill

  	
   

  
	
   

  	
  Name:
  Mitch C. Hill

  
	
   

  	
   

  
	
   

  	
  Address
  and Facsimile Number:

  
	
   

  	
   

  
	
   

  	
  2
  Slate Springs

  	
   

  
	
   

  	
  Coto
  de Caza, CA 92679

  	
   

  
	
   

  	
  Fax:
  (949) 888-3664

  	
   

  
	
   

  	
   

  
	
   

  	
  PARENT

  
	
   

  	
   

  
	
   

  	
  INSIGHT
  HEALTH SERVICES

  HOLDINGS CORP.

  
	
   

  	
  (solely
  for the purpose of Section 3.07)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael N. Cannizzaro

  	
   

  
	
   

  	
   

  	
   Name:
  Michael N. Cannizzaro

  
	
   

  	
   

  	
   Title:

  	
  Chairman,
  President and

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Office

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