EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This is an Agreement made and entered into as of January 4, 2006,
between AIR METHODS CORPORATION, a Delaware corporation (the "Company"), and
Xxxxxxx X. Xxxxx (the "Executive").
RECITALS
Executive is presently employed by the Company and has been since the
year 1992. As of the date of this Agreement, the Executive has been appointed
to the position of Senior Vice President, Air Medical Services. The Company and
the Executive desire to set forth in this Agreement the terms and conditions of
the Executive's continued employment by the Company, effective as the date first
set forth above.
AGREEMENT
In consideration of the mutual promises contained herein, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
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 Senior Vice President, Air Medical Services. Subject to Section 4,
the term of the Executive's employment under this Agreement shall be through
December 31, 2006. The term of this Agreement shall be extended for successive
one-year periods on January 1 of each year beginning January 1, 2007, unless on
or before three months prior to any such renewal date the Company or the
Executive provides written notice to the other of its or his intention not to
renew.
2. Duties, Responsibilities and Authority. In his capacity as
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Senior Vice President, Air Medical Services, the Executive shall have primary
responsibility for the management of the hospital based operations of the
Company, which shall be conducted in accordance with policies established by the
Company's board of directors (the "Board"). The Executive shall report to and
be subject to the direction and control of the Chief Operating Officer. The
Executive shall devote his full professional and managerial time and effort to
the performance of his duties as Senior Vice President, Air Medical Services,
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 $180,000 per annum.
(b) Annual Review and Salary Adjustment. The Executive's
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salary will not be subject to adjustment during the initial calendar year of the
Agreement. The Executive's first salary review shall occur prior to December
31, 2006, and, as appropriate, his salary shall be adjusted effective January 1,
2007 and shall be reviewed annually thereafter during the term of this
Agreement.
(c) Stock Options. The Executive may participate in equity
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compensation 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
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to 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. The Executive may accumulate up to one and
one-half times his annual vacation accrual rate at any one time. The value of
any unforfeited, 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
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the 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
Chief Executive Officer or 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 was willful and 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
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Company shall, during the continuance of his disability but only for the
remaining term of this Agreement or six (6) months, whichever is greater, pay
the Executive his compensation payable under the provisions of Section 3 (above)
and continue to provide the Executive all other benefits provided hereunder,
provided that any amount received during such time by the Executive under a
disability insurance policy carried by the Company shall be credited against the
compensation due to the Executive. As used herein, the term "disability" shall
mean the complete and total inability 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. Subject to the conditions set forth below, in
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the event that the Executive's employment is terminated by the Company other
than for Cause, whether during or after the term of this Agreement, the
Executive shall be entitled, for a period of six (6) months following the
termination (if such termination occurs on or before December 31, 2006), or for
a period of twelve (12) months following the termination (if such termination
occurs after December 31, 2006), to receive compensation at an annual rate equal
to the Executive's highest cash compensation received during any 12-month period
of his employment, payable at the Company's regular payment intervals; 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 l986 (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. In addition,
the Executive shall be entitled to continue to receive at the Company's expense,
coverage under the Company's health insurance policies, or comparable coverage,
during the term of such severance payments, but only until the Executive begins
other employment in connection with which he is entitled to health insurance
coverage. As a condition of the Executive's right to receive severance
compensation as provided above, the Executive shall sign and deliver to the
Company a release of all claims that the Executive might otherwise assert
against the Company, in a form approved by the Company. 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. Change of Control/Constructive Termination. In the event that
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a Change of Control of the Company, as hereinafter defined, occurs, and the
Executive's employment by the Company, or a successor to the business of the
Company, is terminated by the Company or the successor in connection with, or
within one year after, the occurrence of such Change of Control, or if, after a
Change of Control, the Executive terminates his employment as a result of a
"constructive termination" of his employment by the Company or such successor,
the
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Executive shall be entitled for a period of two (2) years following such
termination or constructive termination, to receive compensation at an annual
rate equal to the Executive's highest cash compensation received during any
12-month period of his employment, payable at the Company's regular payment
intervals; 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 l986 (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. For purposes of this Section, a "constructive termination" by the Company
or its successor shall be deemed to occur if the Executive is assigned to
another position, not comparable in terms of salary, duties, status or
authority, or substantially reducing the Executive's job responsibilities and
authority from the position, responsibilities and/or authority held by the
Executive prior to the Change of Control, or if the Executive's place of work
shall be moved more than 75 miles from the Executive's place of work with the
Company prior to the Change of Control. For purposes of this Section 8, a
Change of Control shall be deemed to have occurred in the event that a merger,
sale of assets, sale or exchange of stock, or other corporate reorganization
occurs with another corporation or other entity, following which and as a result
of which, at least 50% of the ownership interest of the surviving corporation is
held by persons other than the shareholders of the Company prior to such
transaction, or a majority of the directors of the surviving corporation are
persons other than the directors of the Company prior to such transaction. Any
notice by the Executive to the Company or its successor claiming a constructive
termination of the Executive shall specify the claimed default by the Company or
the successor and the Company or its successor shall have ninety (90) days to
make such modifications in the Executive's working relationship as to overcome
the constructive termination.
9. Indemnification. The Company shall, to the full extent
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permitted by applicable law, indemnify the Executive and hold him harmless if he
is a party, or is threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative, by reason of the fact that the Executive is or was an officer
and employee of the Company or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the Executive in connection with such action, suit or proceeding so
long as the Executive acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. To the fullest extent permitted by law, the Company
shall pay such expenses of the Executive in advance of the final disposition of
such action upon satisfying such conditions as may be imposed by law with
respect to such advances.
10. Covenant Not to Compete. During the continuance of his
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employment by the Company and for a period of six (6) months after termination
(if such termination occurs on or before December 31, 2006), or for twelve (12)
months after termination of his employment (if such termination occurs after
December 31, 2006), the Executive shall not, anywhere in the
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Xxxxxx Xxxxxx, engage in any business which competes directly or indirectly with
the Company. Any company or business which is engaged in the air medical
transport business or the business of furnishing or retrofitting aircraft to
provide medical transports shall be deemed to be engaged in business in
competition with the Company.
11. Trade Secrets and Confidential Information. During his
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employment 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.
12. Severability. It is the desire and intent of the parties that
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the provisions of Sections 10 and 11 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 10 or 11 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
event that any of the provisions of Section 10 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.
13. Injunctive Relief. The Executive agrees that any violation by
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him of the agreements contained in Sections 10 and 11 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.
14. Miscellaneous.
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(a) Notices. Any notice required or permitted to be given
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under 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 such address as the Executive may have
furnished to the Company for this purpose or, if the Executive has furnished no
such address, to the Executive's last known address as shown on the Company's
records.
(b) Binding Effect. This Agreement is a personal service
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agreement and may not be assigned by the Company or the Executive, except that
the Company may assign
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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
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an instrument in writing executed by each of the parties hereto.
(d) Applicable Law. This Agreement is entered into in the
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State 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
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more counterparts, each of which shall be deemed an original.
(f) Entire Agreement. This Agreement supersedes and replaces
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all prior agreements between the parties related to the employment of the
Executive by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AIR METHODS CORPORATION
By: /s/ Xxxxx X. Xxxx 5/5/06
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Xxxxx X. Xxxx, Chief Executive Officer
THE EXECUTIVE:
/s/ Xxxxxxx X. Xxxxx 5/5/06
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