EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of April 1, 2000, between
AIR METHODS CORPORATION, a Delaware corporation (the "Company"), and Xxxx X.
Xxxxxx (the "Executive").
RECITALS
The Company desires to employ the Executive as Vice President-Air
Medical Services Division, and the Executive desires to be employed by the
Company, upon the terms and conditions set forth in this Agreement.
In consideration of the mutual promises contained herein, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
AGREEMENT
1. Employment; Position; Term. The Company hereby employs the
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Executive, and the Executive hereby accepts employment with the Company, in the
capacity of Vice President-Air Medical Services Division. Subject to Section 4,
the term of the Executive's employment under this Agreement shall be for one (1)
year, beginning April 1, 2000. The term of this Agreement shall be extended for
successive one-year periods on April 1 of each year beginning April 1, 2001,
unless on or before February 1, prior to any such renewal date, the Company or
the Executive provides written notice to the other of its intention not to
renew.
2. Duties, Responsibilities and Authority. In his capacity as
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Vice President-Air Medical Services Division, the Executive shall have primary
responsibility for all operations and functions of the Air Medical Services
Division, and shall perform such other duties as are prescribed by applicable
law and the Company's bylaws for the office which the Executive shall hold
pursuant to this Agreement, all of which duties shall be conducted in accordance
with policies established by the Company's board of directors (the "Board"). In
his capacity as Vice President-Air Medical Services Division, the Executive
shall report to the Chief Executive Officer and be subject to the additional
direction and control of the Board. The Executive shall devote his full
professional and managerial time and effort to the performance of his duties as
Vice President-Air Medical Services Division of the Company and he shall not
engage in any other business activity or activities which, in the mutual
judgment of the Executive and the Board, do, in fact, conflict with the
performance of his duties under this Agreement.
3. Compensation.
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(a) Salary. For services rendered under this Agreement, the
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Company shall pay the Executive a salary of $162,000 per annum beginning April
1, 2000.
(b) Annual Review. The Executive's salary will not be reviewed
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during the initial one-year term of the Agreement. The Executive's first salary
review shall be for the period ending March 31, 2001, and, as appropriate, his
salary shall be adjusted effective April 1, 2001 and shall be reviewed annually
thereafter during the term of this Agreement.
(c) Stock Options. The Executive may participate in stock option
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programs of the Company in accordance with the policies applicable to other
officers of the Company, upon such terms as the administrators of such programs
in their discretion determine.
(d) Benefits and Vacation. The Executive shall be eligible to
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participate in such insurance programs (health, disability, or life) or such
other health, dental, retirement, or similar employee benefits programs as the
Board may approve, on a basis comparable to that available to other officers and
executive employees of the Company. The Executive shall be entitled to four (4)
weeks of paid vacation per year. Vacation time may be accumulated for one (1)
year beyond the year for which it is accrued and used any time during such year,
but any vacation time not used during such additional year shall be forfeited.
The value of any accrued but unused vacation time shall be paid in cash to the
Executive upon termination of his employment for any reason.
(e) Reimbursement of Expenses. The Company shall reimburse the
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Executive for all reasonable out-of-pocket expenses incurred by the Executive in
connection with the business of the Company and in the performance of his duties
under this Agreement upon the Executive's presentation to the Company of an
itemized accounting of such expenses with reasonable supporting data.
4. Termination. Either party may terminate the Executive's
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employment under this Agreement, without cause, upon ninety (90) days' written
advance notice to the other party, but subject to the provisions of Section 7
hereof. The Company may terminate the Executive's employment for "Cause" (as
hereinafter defined) immediately upon written notice stating the basis for such
termination. "Cause" for termination of the Executive's employment shall only
be deemed to exist if the Executive has breached this Agreement and if such
breach continues or recurs more than 30 days after notice from the Company
specifying the action which constitutes the breach and demanding its
discontinuance, exhibited willful disobedience of reasonable directions of the
Board, or committed gross malfeasance in performance of his duties hereunder or
acts resulting in an indictment charging the Executive with the commission of a
felony; provided that the commission of acts resulting in such an indictment
shall constitute Cause only if a majority of the directors who are not also
subject to any such indictment determine that the Executive's conduct has
substantially adversely affected the Company or its reputation. A material
failure to perform his duties hereunder that results from the disability of the
Executive shall not be considered Cause for his termination.
5. Disability. If the Executive shall be prevented by illness,
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accident, or other incapacity from properly performing his duties hereunder
(and, if required by the Company upon the furnishing of evidence satisfactory to
the Company of such disability), the Company shall, during the continuance of
his disability but only for the remaining term of this Agreement, pay the
Executive his compensation payable under the provisions of Section 3 (above) and
continue to provide the Executive all other benefits provided hereunder. As
used herein, the term "disability" shall mean the complete and total inability
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of the Executive, due to illness, physical or comprehensive mental impairment to
substantially perform all of his duties as described herein for a consecutive
period of thirty (30) days or more.
6. Death. In the event of the death of the Executive, except with
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respect to any benefits which have accrued and have not been paid to the
Executive hereunder, the provisions of this Employment Agreement shall terminate
immediately. However, the Executive's estate shall have the right to receive
compensation due to the Executive as of and to the date of his death and,
furthermore, to receive an additional amount equal to one-twelfth (1/12) of the
Executive's annual compensation then in effect as specified in Section 3, above.
7. Severance Pay. In the event that the Executive's employment is
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terminated by the Company other than for Cause, whether during or after the term
of this Agreement, the Executive shall be entitled to receive his then current
compensation, payable at the Company's regular payment intervals, for a period
of one year following the date of termination; provided, that if any of such
payments would (i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986 (the "Code") and (ii) but for
this proviso be subject to the excise tax imposed by Section 4999 of the Code
(the "Excise Tax"), the amount payable hereunder shall be reduced to the largest
amount which the Executive determines would result in no portion of the payments
hereunder being subject to the Excise Tax. If the Executive voluntarily resigns
his employment hereunder, or if his employment is terminated for Cause, the
Executive shall not be entitled to any severance pay or other compensation
beyond the date of termination of his employment.
8. Covenant Not to Compete. During the continuance of his employment
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by the Company and for a period of twenty-four (24) months after termination of
his employment, the Executive shall not, anywhere in the United States, engage
in any business which competes directly or indirectly with the Company.
9. Trade Secrets and Confidential Information. During his employment
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by the Company, and for a period of five years thereafter, the Executive shall
not, directly or indirectly, use, disseminate, or disclose for any purpose other
than for the purposes of the Company's business, any of the Company's
confidential information or trade secrets, unless such disclosure is compelled
in a judicial proceeding. Upon termination of his employment, all documents,
records, notebooks, and similar repositories of records containing information
relating to any trade secrets or confidential information then in the
Executive's possession or control, whether prepared by him or by others, shall
be left with the Company or returned to the Company upon its request.
10. Severability. It is the desire and intent of the parties that the
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provisions of Sections 8 and 9 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular sentence or portion
of either Section 8 or 9 shall be adjudicated to be invalid or unenforceable,
the remaining portions of such section nevertheless shall continue to be valid
and enforceable as though the invalid portions were not a part thereof. In the
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event that any of the provisions of Section 8 relating to the geographic areas
of restriction or the period of restriction shall be deemed to exceed the
maximum area or period of time which a court of competent jurisdiction would
deem enforceable, the geographic areas and times shall, for the purposes of this
Agreement, be deemed to be the maximum areas or time periods which a court of
competent jurisdiction would deem valid and enforceable in any state in which
such court of competent jurisdiction shall be convened.
11. Injunctive Relief. The Executive agrees that any violation by him
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of the agreements contained in sections 8 and 9 are likely to cause irreparable
damage to the Company, and therefore agrees that if there is a breach or
threatened breach by the Executive of the provisions of said sections, the
Company shall be entitled to an injunction restraining the Executive from such
breach. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies for such breach or threatened breach.
12. Miscellaneous.
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(a) Notices. Any notice required or permitted to be given under
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this Agreement shall be directed to the appropriate party in writing and mailed
or delivered, if to the Company, to X.X. Xxx 0000, 0000 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 or to the Company's then principal office, if different, and if
to the Executive, to X.X. Xxx 0000, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000
or to the Company's then principal office, if different.
(b) Binding Effect. This Agreement is a personal service agreement
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and may not be assigned by the Company or the Executive, except that the Company
may assign this Agreement to a successor by merger, consolidation, sale of
assets or other reorganization. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns, and legal representatives.
(c) Amendment. This Agreement may not be amended except by an
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instrument in writing executed by each of the parties hereto.
(d) Applicable Law. This Agreement is entered into in the State
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of Colorado and for all purposes shall be governed by the laws of the State of
Colorado.
(e) Counterparts. This instrument may be executed in one or more
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counterparts, each of which shall be deemed an original.
(f) Entire Agreement. This Agreement supersedes and replaces all
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prior agreements between the parties related to the employment of the Executive
by the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AIR METHODS CORPORATION
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, Chairman and Chief
Executive Officer
THE EXECUTIVE:
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
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