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EXHIBIT 10.6
January 30, 1996
Robert S. Muehlberg
10385 Eagle Lake Drive
San Diego, CA 92029
Dear Mr. Muehlberg:
As you are aware, the Compensation/Stock Option Committee of the Board
of Directors of Medical Imaging Centers of America, Inc. (the "Company") granted
you a severance package on May 25, 1994 which includes one year of salary and
benefits upon involuntary termination of your employment with the Company. The
Company and you desire to restate the terms of such package and to include
therein an amendment with respect to the definition of "change in control". Now,
therefore, in consideration of the foregoing and the mutual covenants and
agreements herein contained, the Company and you hereby agree as follows:
In the event of the involuntary termination of your employment with the
Company, at any time, the Company irrevocably agrees to provide you with the
following benefits:
1. You will be paid in a lump sum, within 30 days after your
termination, an amount equal to one (1) times the sum of your
then existing annual salary, car allowance and prior year's
bonus. In addition, during the 12-month period following your
last day of actual service with the Company, you will be
provided all benefit programs, or reasonable equivalents
thereof, which are offered by the Company at the time of
termination and in which you and your dependents are then
enrolled. These benefits will be fully governed by the
insurance contracts or benefit plans in force at the time of
termination. During the 12-month period referred to above,
pension benefits will continue to accrue and you will be fully
vested in such benefits, but no further vacation pay shall be
accrued and you will not be entitled to reimbursement for
business expenses incurred during such period. The lump sum
payment referred to above shall be in addition to, and not a
substitution for, any accrued and unpaid salary, vacation,
pension, retirement benefits, unreimbursed expenses or other
payments to which you may be otherwise entitled or which may
have been accrued to you under any other programs in which you
have been previously enrolled as an employee of the Company.
In addition, all stock options you hold for Company capital
stock shall fully vest as of your last day of active service.
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Robert S. Muehlberg
January 30, 1996
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2. Subject to paragraph 3 below, the phrase "involuntary
termination" as used in this letter shall include, but not be
limited to, any termination of your employment by the Company
for any reason, and any termination of your employment by you
due to the following circumstances:
a) a reduction in your salary or Company paid benefits;
b) a reduction of your eligibility for any Company
bonus, incentive compensation, stock option plans or
other benefit programs;
c) a substantial change in your title, position or
authority within the Company;
d) a change of your principal place of employment from
San Diego, California; or
e) a change in control due to (1) the Company or its
shareholders entering into an agreement to dispose
of, whether by sale, exchange, merger, consolidation,
reorganization, dissolution or liquidation (A) not
less than 80% of the assets of the Company or (B) a
portion of the outstanding common stock such that one
person or "group" (as defined by the Securities and
Exchange Commission) owns, of record or beneficially,
not less than 25% of the outstanding common stock; or
(2) the Company issues and sells to one person or
"group" (as defined by the Securities and Exchange
Commission) such number of shares of common stock
that said person or group owns, of record or
beneficially, not less than 25% of the common stock
outstanding after such issuance; or (3) a change in
the composition of the Board of Directors of the
Company (the "Board") such that the individuals who,
as of the date of this agreement, constitute the
Board (such Board shall be hereinafter referred to as
the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board;
provided, however, for purposes of this paragraph
2(e), that any individual who becomes a member of the
Board subsequent to the date of this Agreement whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a
majority of those individuals who are members of the
Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this
provision) shall be considered as though such
individual were a member of the Incumbent Board; but,
provided further, that any such individual whose
initial assumption of office occurs as a result of
either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the
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Robert S. Muehlberg
January 30, 1996
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Securities Exchange Act of 1934) or other actual or
threatened solicitation of proxies or consents by or
on behalf of a person or "group" (as defined by the
Securities and Exchange Commission) other than the
Board shall not be so considered as a member of the
Incumbent Board.
3. The benefits set forth in this letter will not be payable or
will cease to be paid to you:
a) in the case of any of the events giving rise to
involuntary termination of the type referred to in
paragraph 2 above, unless you tender your resignation
in writing from all positions you then hold in the
Company and its subsidiaries and affiliates as a
director, officer or member of any board or committee
within 30 days after the occurrence of the events as
described in paragraph 2, sections a) through d) and
within 180 days after the occurrence of the event
described in paragraph 2, section e); and
b) in the case of any termination by the Company, such
termination is due to your having committed fraud or
having disclosed confidential information that would
be seriously detrimental to the Company, or your
having committed a similar corrupt act that would be
seriously detrimental to the Company.
4. This agreement shall bind and inure to the benefit of the
successors, heirs, assigns and personal representatives of
each of you and the Company, and may not be assigned by the
Company, in whole or in part, without your prior written
consent. This agreement supercedes any other understandings or
agreements between the parties hereto regarding the subject
matter hereof. In the event of a dispute concerning this
agreement, the prevailing party shall be entitled to be
awarded reasonable expenses, including attorney's fees.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and year first above written.
MEDICAL IMAGING CENTERS OF AMERICA, INC.
a California corporation
By: /s/ Denise L. Sunseri
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Name: Denise L. Sunseri
Its: Vice President and Chief Financial Officer
/s/ Robert S. Muehlberg
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Robert S. Muehlberg
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FIRST AMENDMENT TO
SEVERANCE AGREEMENT
This First Amendment to Severance Agreement (this "Amendment") is made
and entered into as of the 19th day of March, 1996, by and between MEDICAL
IMAGING CENTERS OF AMERICA, INC., a California corporation (the "Company"), and
Robert S. Muehlberg.
The Company and Mr. Muehlberg hereby agree to amend that certain letter
agreement between the Company and Mr. Muehlberg concerning the Company's
obligations in the event of Mr. Muehlberg's involuntary termination, dated as of
January 30, 1996 (the "Severance Agreement"), in the manner set forth below:
1. Amendments.
(a) Paragraph 2 of the Severance Agreement is hereby amended by
adding the following clause f):
"f) the termination of the Auction Period (as such term is defined in
Section 1 of the Agreement of Compromise and Settlement dated as of March 19,
1996 by and among Medical Imaging Centers of America, Inc. ("MICA"), Keith R.
Burnett, Robert S. Muehlberg, Denise L. Sunseri and Robert G. Ricci, on the one
hand, and Warren G. Lichtenstein, Lawrence Butler, Jack L. Howard, Steel
Partners II, L.P., Steel Partners, L.L.C., and Steel Partners Services, Ltd., on
the other hand) without the consummation of an Auction Transaction (as such term
is defined in Section 1 of the Agreement of Compromise and Settlement) prior to
the end of the Auction Period."
(b) Paragraph 3(a) of the Severance Agreement is hereby amended by
amending and restating the last line of Paragraph 3(a) as follows:
"occurrence of any of the events described in paragraph 2, sections e)
and f); and"
2. No Other Changes. Except as specifically set forth herein, no change
to the Severance Agreement is intended by the parties hereto. Except as modified
hereby, the parties to the Severance Agreement hereby reaffirm in all respects
all of the covenants, agreements, terms and conditions set forth in the
Severance Agreement, which are incorporated in full herein by reference, and all
terms, conditions and provisions thereof shall remain in full force and effect,
except as amended hereby.
3. Miscellaneous. The headings and titles of this Amendment are for
convenience only and do not constitute a part hereof. This Amendment shall be
governed by and construed in accordance with the laws of the State of
California. This Amendment may be executed in any number of counterparts, any
one of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
MEDICAL IMAGING CENTERS OF AMERICA, INC.
a California corporation
By: /s/ Robert S. Muehlberg
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Name: Robert S. Muehlberg
Its: President and Chief Executive Officer
/s/ Denise L. Sunseri
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