EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This is an Agreement made and entered into as of January 1, 2003,
between AIR METHODS CORPORATION, a Delaware corporation (the "Company"), and
Aaron D. Todd (the "Executive").
RECITALS
Executive is presently employed by the Company and has been since the
year 1995. The Executive presently holds the position of Chief Operating
Officer, Chief Financial Officer, Secretary and Treasurer. 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
----------------------------
Executive, and the Executive hereby accepts employment with the Company, in the
capacity of Chief Operating Officer, Chief Financial Officer, Secretary and
Treasurer. Subject to Section 4, the term of the Executive's employment under
this Agreement shall be for two (2) years, beginning January 1, 2003. The term
of this Agreement shall be extended for successive one-year periods on January 1
of each year beginning January 1, 2005, 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 Chief
-----------------------------------------
Operating Officer, the Executive shall have primary responsibility for the
overall operation of the Company, which shall be conducted in accordance with
policies established by the Company's board of directors (the "Board"). In his
capacity as Chief Operating Officer, the Executive shall report to and be
subject to the direction and control of the Chief Executive Officer.
In his capacity as Chief Financial Officer, Secretary and Treasurer,
the Executive shall have primary responsibility for maintenance of the Company's
books and records including, without limitation, its financial and general
corporate records, and shall perform such other duties as are prescribed by
applicable law and the Company's bylaws for the offices which the Executive
shall hold pursuant to this Agreement, all of which duties shall be conducted in
accordance with policies established by the Board. In his capacity as Chief
Financial Officer, Secretary and Treasurer, 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 Chief Operating Officer and Chief
Financial Officer, Secretary and Treasurer of the Company and he shall not
engage in any other business activity or activities which, in the mutual
judgment of the Executive, the Chief Executive Officer and the Board, do, in
fact, conflict with the performance of his duties under this Agreement.
3. Compensation.
------------
(a) Salary. For services rendered under this Agreement, the
------
Company shall pay the Executive a salary of $270,000 per annum beginning January
1, 2003.
(b) Annual Review and Salary Adjustment. The Executive's salary
-----------------------------------
will not be reviewed during the initial calendar year of the Agreement. The
Executive's first salary review shall be for the period ending December 31,
2003, and, as appropriate, his salary shall be adjusted effective January 1,
2004 and shall be reviewed annually thereafter during the term of this
Agreement.
(c) Stock Options. The Executive may participate in stock option
-------------
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
---------------------
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 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
-----------
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
-2-
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,
----------
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 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
-----
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 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 eighteen (18) months following the
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. 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 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
-3-
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 Executive shall be entitled for
a period of three (3) 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 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 employment
-----------------------
by the Company and for a period of eighteen (18) months after termination of his
employment, the Executive shall not, anywhere in the United States, engage in
any business which competes
-4-
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 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 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 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.
-------------
(a) Notices. Any notice required or permitted to be given under
-------
this Agreement shall be directed to the appropriate party in writing and mailed
or delivered, if to the Company, to P.O. Box 4114, 7301 South Peoria, Englewood,
Colorado 80155 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
--------------
agreement 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.
-5-
(c) Amendment. This Agreement may not be amended except by an
---------
instrument in writing executed by each of the parties hereto.
(d) Applicable Law. This Agreement is entered into in the 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 more
------------
counterparts, each of which shall be deemed an original.
(f) Entire Agreement. This Agreement supersedes and replaces 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
January 1, 2003, the date first above written.
AIR METHODS CORPORATION
By: /s/ George Belsey
---------------------------------
George Belsey, Chairman and Chief
Executive Officer
THE EXECUTIVE:
/s/ Aaron D. Todd
-------------------------------------
-6-