Executive Employment Agreement - InSight Health Services Corp. and Steven T. Plochocki
EXECUTIVE EMPLOYMENT AGREEMENT
AGREEMENT dated as of November 17, 1999 between INSIGHT HEALTH SERVICES CORP., a
Delaware corporation ("Company"), and STEVEN T. PLOCHOCKI ("Executive").
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
The term of this Agreement and of Executive's employment hereunder shall
commence on November 22, 1999 ("Effective Date") and shall continue for a period
of three (3) years from the Effective Date unless 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 President and CEO 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 initial
appointment as Company's President and CEO and as the Board shall reasonably
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 at 4400 MacArthur Boulevard, Suite 800, Newport Beach, CA 92660. 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 4.06(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's 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
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accept, a salary of $250,000 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.
In addition to the Annual Salary, Executive shall be eligible to receive
and Company shall pay (i) for the fiscal year ending June 30, 2000, (a) a
nondiscretionary bonus of $75,000; and (b) an additional $50,000 bonus payable
at the discretion of the Compensation Committee of the Board ("Compensation
Committee") based upon goals mutually agreed upon by Executive and the Board
within 30 days of the Effective Date; and (ii) for the fiscal year ending June
30, 2001, (a) a discretionary bonus of up to 75% of the Annual Salary if Company
achieves the goals set forth in a business plan mutually agreed upon by
Executive and the Board; and (b) a discretionary bonus of up to an additional
25% of the Annual Salary upon the achievement of other goals mutually agreed
upon by Executive and the Board. Such bonuses are payable only after Company's
annual report on Form 10-K is filed with the Securities and Exchange Commission
("SEC") each year.
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. Within the 90 days of Executive's employment
commencement date, and annually on the anniversary date of Executive's
employment commencement date during the term of this Agreement, Executive's
performance shall be reviewed and evaluated by the Compensation Committee.
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 four (4) weeks of paid
vacation each year during the term of this Agreement, which Executive may
accumulate up to eight (8) weeks, to be taken at a time or times which do not
unreasonably interfere with Executive's duties hereunder.
SECTION 3.07 STOCK OPTIONS. As an inducement essential to Executive entering
into this Agreement, the Compensation Committee will recommend and the Board
will grant to
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Executive, pursuant to the 1999 Stock Option Plan, (i) on the Effective Date,
an option to purchase 125,000 shares of Company common stock at the option
exercise price of $8.37 per share in accordance with the terms of a Stock
Option Agreement in the form attached hereto as Exhibit A, and (ii) on
November 22, 2000 an option to purchase an additional 50,000 shares of
Company common stock at the option exercise price which is the greater of
$8.37 per share or the Fair Market Value (as defined in the 1999 Stock Option
Plan) of Company common stock in accordance with the terms of a Stock Option
Agreement in the form attached hereto as Exhibit B.
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 for
any crime of moral turpitude;
(b) Executive has committed fraud or embezzlement;
(c) Executive has intentionally breached any of Executive's
obligations under this Agreement which is likely to have a material adverse
impact on the business operations or financial or other condition of Company 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
intentionally violated material written policies and procedures of Company,
including but not necessarily limited to, policies and procedures pertaining to
harassment and discrimination;
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(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.
SECTION 4.04 TERMINATION IN DISCRETION OF COMPANY. If the Board determines in
the reasonable exercise of its discretion that, for reasons other than Cause,
severance of Executive from Company is in the best interests 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 DUE TO CHANGE OF CONTROL. If there is a
Change of Control (as defined below) of Company, Executive shall have the right,
to terminate Executive's employment with Company, whereupon Executive shall
become entitled to receive compensation as provided in Section 4.07 hereof.
Such right may be exercised at any time prior to the expiration of 180 days
following the Change of Control by giving Company (or its successor) at least 30
days' written notice before the effective date of termination. For purposes of
this Agreement, "Change of Control" means if Company or its stockholders enter
into an agreement or agreements, in one or a series of related transactions, to
dispose of, whether by sale, exchange, merger, consolidation, reorganization,
recapitalization, dissolution or liquidation (a) not less than 80% of the assets
of Company or (b) a portion of the outstanding capital stock such that after the
transaction or transactions one person or "group" (as defined by the SEC) [other
than General Electric Company ("GE") and the entities to whom shares of
Company's Convertible Preferred Stock, Series B were initially issued
("Carlyle") and successors and permitted assigns of GE and Carlyle individually
and collectively] owns, of record or beneficially, 50% or more of the
outstanding capital stock of Company, or the right (by whatever means) or the
voting power to elect 50% or more of the directors of Company.
SECTION 4.06 VOLUNTARY TERMINATION FOR GOOD REASON. Executive shall have the
right, effective upon 60 days' written notice to Company, 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. 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;
(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
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time, for which a cure shall not have been diligently initiated by Company
within the 30 day period.
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 Sections 4.02, 4.04, 4.05 or 4.06 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
twenty four (24) months of compensation at the Annual Salary rate then in
effect, payable within fifteen (15) days of the effective date of termination;
and (iii) maintain, at Company's expense, in full force and effect, for
Executive's continued benefit until the earlier of (x) twenty four (24) months
after the effective date of termination or (y) Executive's commencement of full
time employment with a new employer, 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. 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) The compensation rights provided for Executive in this Section
shall be Executive's sole and exclusive remedies with respect to Sections 4.01,
4.02, 4.04, 4.05 or 4.06 hereof, and Executive 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") facilities, fixed-site MRI
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
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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 non-confidential 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.
(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 its provisions.
(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 a period
of twenty four (24) months after the termination of Executive's employment and
that this Section will be enforceable to the greatest extent of the law;
provided however, that if Executive's employment
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is terminated pursuant to Sections 4.04 or 4.06 hereof, this subsection (c)
will have no force or effect.
(d) NO SOLICITATION OF EMPLOYEES. During Executive's employment and
for a period of twenty four (24) 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
if Executive's employment is terminated pursuant to Sections 4.04 or 4.06
hereof, this subsection (d) will have no force or effect; provided further, 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 twenty four (24) 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
twenty four (24) 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. Notwithstanding the foregoing, if Executive's employment is terminated
pursuant to Sections 4.04 or 4.06 hereof, this subsection (e) will have no force
or effect.
(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
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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 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.
SECTION 5.03 SEVERABILITY OF COVENANTS. 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. MISCELLANEOUS
SECTION 6.01 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 telecopied, or sent by certified, registered or express
mail, postage prepaid, and shall be deemed given when so delivered personally,
telegraphed, telexed or telecopied, 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.
4400 MacArthur Boulevard,
Suite 800
Newport Beach, CA 92660
Attention: General Counsel
(ii) If to Executive, addressed to Executive at such address as
Executive shall have filed with Company for such purpose, or at such other
address as Executive may from time to time specify by giving notice to Company.
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SECTION 6.02 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 6.03 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 and the Chairman of the
Compensation Committee. 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 6.04 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 6.05 COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
SECTION 6.06 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 6.07 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 6.08 GOVERNING LAW. This Agreement shall be governed and interpreted
in accordance with the laws of the State of California, without giving effect to
the provisions thereof relating to conflicts of law.
SECTION 6.09 (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
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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 (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.
SECTION 6.10 EXPENSES. Should either party institute arbitration 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
the arbitration proceeding if Executive is the prevailing party or such portion
thereof as the arbitrator(s) may award in the event of a split decision.
SECTION 6.11 EFFECTIVE DATE. This Agreement shall be effective upon execution
of this Agreement by all parties who are signatories hereto.
IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement as of the date first above written.
INSIGHT HEALTH SERVICES CORP.
By: /s/ L. H. Habas
---------------------------------------
Leonard H. Habas,
Chairman, Compensation Committee
EXECUTIVE
/s/ Steven T. Plochocki
------------------------------------------
EXECUTIVE EMPLOYMENT AGREEMENT -- STP PAGE 10
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Steven T. Plochocki
EXECUTIVE EMPLOYMENT AGREEMENT -- STP PAGE 11