EXHIBIT 10.32
SEVERANCE AGREEMENT
THIS AMENDMENT is made and entered into as of this 10th day of October,
1994, by and between American Medical International, Inc., a Delaware
corporation ("AMI"), and Bary G. Bailey ("Executive").
W I T N E S S E T H:
WHEREAS, in recognition of the substantial contribution that Executive has
made to the Company, the Company desires to provide for certain severance and
other bonus payments in the event of his termination of employment upon or as a
result of a change of control of the Company.
WHEREAS, AMI and Executive desire to enter into this Severance Agreement as
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
1. EXECUTIVE INCENTIVE COMPENSATION PLAN. Immediately upon the
occurrence of any "Change of Control" (as defined in paragraph 3 below),
Executive shall be entitled to and shall fully vest in 100% of any and all
amounts payable to him pursuant to AMI's Executive Incentive Compensation Plan
(formerly known as the Short-Term Cash Incentive Plan) for services rendered by
Executive through the date and for the fiscal year in which such Change of
Control occurs, which amounts shall be calculated (with interest) as if any and
all individual and AMI performance goals applicable
to any such payments (whether to be made currently or on a deferred basis) had
been achieved immediately prior to such "Change of Control." AMI shall be
obligated to pay and hereby agrees to pay Executive any and all amounts due him
pursuant hereto within 7 calendar days after the occurrence of any Change of
Control.
2. SEVERANCE.
(a) In the event Executive voluntarily terminates his employment with
AMI within 120 days after the occurrence of a Change of Control or in the
event of his "Involuntary Termination" (as defined in paragraph 2(b)
hereof) within 12 months after the occurrence of a Change of Control,
Executive shall be entitled to receive and AMI shall be obligated to pay to
Executive, his estate or personal representative, a payment in an amount
equal to 12 months base compensation (excluding bonuses, incentive
compensation, employment benefits, stock options or any other benefits
except those required to be made available by applicable state or federal
law, notwithstanding this Agreement) determined on the basis of his annual
salary for AMI's fiscal year then most recently commenced (the "Severance
Payment"). Any and all payments to be made to Executive pursuant to this
paragraph 2(a) shall be made in a lump sum within 14 calendar days after
the effective date of Executive's voluntary termination or his Involuntary
Termination. The obligations of AMI referenced in this paragraph 2(a)
shall be the only obligations of AMI and its subsidiaries for the payment
of compensation to Executive in
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the event of the termination of his employment as described in this
paragraph 2(a).
(b) For purposes of this Employment Agreement, an "Involuntary
Termination" of Executive's employment with AMI shall be deemed to have
occurred if: (i) Executive's employment with AMI or its successor is
terminated for any reason other than "cause"; (ii) Executive's total
compensation, including benefits, is substantially reduced other than in
connection with an across-the-board reduction similarly affecting all
executives of AMI; (iii) the title, functions, duties, authority or
responsibilities of Executive's present position are materially reduced or
diminished; (iv) Executive is reassigned to another geographic location
more than 50 miles from his current place of employment; or (v) AMI is
liquidated, dissolved, consolidated or merged, or all or substantially all
of its assets are transferred, assigned or sold.
3. CHANGE OF CONTROL. For purposes of this Employment Agreement, a
"Change of Control" shall be deemed to have occurred if GKH Investments, L.P.
shall sell, transfer, assign or otherwise dispose of its direct ownership in all
or a substantial percentage of the equity securities of American Medical
Holdings, Inc. held thereby as of August 22, 1991 or shall fail to either
designate a majority of nominees or maintain a majority of directors to serve on
American Medical Holdings, Inc.'s Board of Directors.
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4. REFERENCES. For purposes of this Severance Agreement, all references
to AMI shall be deemed to include American Medical Holdings, Inc. and its
subsidiaries.
5. NO CONTRACT OF EMPLOYMENT. Except as otherwise provided for by the
terms of this Agreement, this Agreement shall not constitute a contract of
employment between the Company and the Executive.
6. GOVERNING LAW. The terms of this Severance Agreement shall be subject
to and governed by the laws of the State of Texas, without regard to any
conflict of laws provision.
7. AMENDMENT. This Severance Agreement may not be amended except by the
written consent of both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
AMERICAN MEDICAL INTERNATIONAL, INC.
By: /s/ Alan J. Chamison
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Its: EVP & CFO
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EXECUTIVE
By: /s/ Bary G. Bailey
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Bary G. Bailey
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