EXHIBIT 10.2
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
George W. Belsey (the "Executive").
RECITALS
Executive is presently employed by the Company and has been since the
year 1994. The Executive presently holds the position of Chairman and Chief
Executive Officer. 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 Chairman and Chief Executive Officer. 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
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Executive Officer, the Executive shall have primary responsibility for the
overall management 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 Executive Officer, the Executive shall report to and be
subject to the 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 Executive Officer, and he shall not engage in any other business
activity or activities which, in the mutual judgment of the Executive and the
Board, to, 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 $290,000 per annum beginning January
1, 2003.
(b) Annual Review and Salary Adjustment. The Executive's salary
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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
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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. 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
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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 employment
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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 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
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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 the
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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
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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 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
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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
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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
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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 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
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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.
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12. Severability. It is the desire and intent of the parties that the
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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
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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 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 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
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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.
(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
January 1, 2003, the date first above written.
AIR METHODS CORPORATION
By: /s/ Aaron D. Todd
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Aaron D. Todd, Chief Operating Officer
and Chief Financial Officer
THE EXECUTIVE:
/s/ George W. Belsey
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