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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant
[X] |
Filed by a Party other than
the Registrant [ ] |
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Check the appropriate
box: |
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Preliminary Proxy
Statement |
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Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy
Statement |
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Definitive Additional
Materials |
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Soliciting Material Pursuant to §240.14a-12 |
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Air Methods Corporation |
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(Name of Registrant as
Specified In Its Charter) |
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant) |
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Payment of Filing Fee (Check
the appropriate box): |
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No fee required. |
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Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing. |
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Table of
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NOTICE OF
The
2015 Annual Meeting and
Proxy Statement
Table of
Contents
Letter from our
Chairman
Air Methods Corporation
7211 South
Peoria Street
Englewood, Colorado 80211
April 22, 2015
Dear Fellow Stockholders:
You are cordially invited to attend the
2015 Annual Meeting of Stockholders of Air Methods Corporation to be held on
Wednesday, May 20, 2015, at 1881 Curtis Street, Denver, Colorado 80202 (the
Ritz-Carlton, Denver), at 8:00 a.m., Mountain Time.
As noted in my letter to stockholders last
year, the Company embarked on 2014 with a sharpened focus after its
disappointing results in 2013. The decisive actions undertaken by the senior
management team in 2014 resulted in solid operational and financial results for
the Company. 2014 was a milestone year for the Company, as it was the first time
in the Companys history that it surpassed $1 billion in revenue. The Company
also delivered a 57% year-over-year increase in earnings from continuing
operations (after minority interests). In addition to the financial performance,
the Company launched ten new green field locations, while partnering with its
hospital customers to outsource nine of their operating locations. The Company
expects to realize the full-year effect of these outsourcing opportunities in
2015. The Company also continued to invest in its commitment to safety,
negotiating a long-term relationship with Flight Safety International to have
four full motion simulators built in Denver. Our safety record continues to lead
the industry.
In 2015, we are concentrating our efforts
on seeking to profitability grow our business and expand our sources of revenue.
All of these efforts are undertaken in a manner that allows the Company to
remain responsive to the challenges arising from the dynamic health care and
aviation environments.
On behalf of the Board of Directors, thank
you for your continued support and ownership of Air Methods
Corporation.
Sincerely,
C. David Kikumoto
Chairman of the Board of
Directors
Table of
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Notice of Annual Meeting of
Stockholders |
Date and
Time |
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Wednesday, May 20, 2015 at
8:00 a.m., Mountain Time |
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Place |
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1881 Curtis
Street, Denver, Colorado 80202 (The Ritz-Carlton,
Denver) |
Items of
Business |
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Item One: |
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To elect Ralph J. Bernstein, Mark D.
Carleton, and Claire M. Gulmi as Class III directors of the Company for
three-year terms. |
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Item Two: |
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To ratify the appointment of KPMG
LLP as the Companys independent registered public accounting firm for the
fiscal year ending December 31, 2015. |
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Item Three: |
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To approve, on an advisory basis,
named executive officer compensation. |
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Item Four: |
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To approve the 2015 Equity Incentive
Plan. |
Record Date
Holders of record of our common stock as of the close of
business on Friday, April 10, 2015 will be entitled to notice of, and to vote
at, the Annual Meeting. A list of such stockholders will be available at the
Companys corporate office commencing Sunday, May 10, 2015, for review by
interested parties. The list will also be available at the Annual
Meeting.
Meeting Admission
You are entitled to attend the Annual Meeting only if you were
a Company stockholder at the close of business on April 10, 2015 or you hold a
valid proxy to vote at the meeting. You should be prepared to present photo
identification to be admitted to the meeting. If your shares are not registered
in your name but are held in street name through a bank, broker or other
nominee, you must provide proof of beneficial ownership at the record date.
Proof of beneficial ownership could include items such as your most recent
account statement prior to April 10, 2015, a copy of the voting instruction card
provided by your nominee, or other similar evidence of share ownership.
Voting By
Proxy
Your vote is very important.
Whether or not you plan to attend the Annual Meeting in person, please promptly
vote by telephone or over the Internet, or by completing, signing, dating and
returning your proxy card or voting instructions so that your shares will be
represented at the Annual Meeting.
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By Order of the Board of
Directors, |
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Crystal L.
Gordon General Counsel, Secretary,
and Senior Vice President |
Important Notice
Regarding the Availability of Proxy Materials for the Annual Meeting to be Held
on May 20, 2015:
This notice, the
accompanying proxy statement and the Companys Annual Report on Form 10-K for
the fiscal year ended December 31, 2014 are available on our website
www.airmethods.com under the Investors tab.
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
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Table of
Contents
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2015 Proxy Statement at a
Glance |
This summary highlights information
contained elsewhere in these proxy materials, but does not contain all of the
information that you should consider, and you should read the entire proxy
statement carefully before voting.
Meeting
Information
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Date and Time: |
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May 20,
2015, 8:00 a.m., Mountain Time |
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Record Date: |
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April 10,
2015 |
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Place: |
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1881 Curtis
Street, Denver, Colorado 80202 (The Ritz-Carlton, Denver) |
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Voting: |
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Stockholders
of record as of April 10, 2015 are entitled to vote by telephone or over
the Internet, or by completing, signing, dating and returning their proxy
card or voting instructions. |
Voting Matters and Board
Recommendations
Proposals |
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Boards
Recommendation |
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Page |
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To elect Ralph J.
Bernstein, Mark D. Carleton, and Claire M. Gulmi as Class III
directors of the Company for three-year terms. |
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FOR all Director
Nominees |
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4 |
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To ratify the appointment of KPMG
LLP as the Companys independent registered public accounting firm for
the fiscal year ending December 31, 2015. |
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FOR |
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38 |
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To approve, on an
advisory basis, named executive officer compensation. |
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FOR |
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41 |
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To approve the 2015 Equity
Compensation Plan. |
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FOR |
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42 |
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Select Performance and Compensation
Highlights for 2014
For more complete information, please
review the Companys Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 27, 2015 and the complete proxy statement.
2014 Business
Performance:
● |
The Company reached the significant
$1 billion milestone in revenue. Revenue increased 14% to $1,004.8 million
compared to $879.2 million in the prior year. |
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Earnings from continuing operations
(after minority interests) increased 57% to $98.8 million ($2.56 per
diluted share) as compared to the prior year. |
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Our community-based transports grew
8% as compared to the prior year. |
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Community-based transports
originating from our Direct Call transfer center increased 70%, as
compared to the prior year, representing over 800 additional
transports. |
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Our diversification into helicopter
tourism has been beneficial to our stockholders, as segment net income
increased 52% as compared to the prior year to $9.6 million (this amount
is after allocation of purchase financing costs). |
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Successfully launched ten new green
field locations, while partnering with our hospital customers to outsource
nine of their operating locations. |
● |
Successfully negotiated a long-term
relationship with Flight Safety International to have four full motion
simulators built in Denver, Colorado. Our safety record continues to lead
the industry. |
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
Table of
Contents
Despite the business achievements outlined
above, the Companys operating performance fell below target in 2014, and the
Companys 1-year annualized total shareholder return (TSR) was -24.42%.
However, as evidenced in the chart below, the Companys 5-year annualized TSR
(33.20%) ranked the Company as number 3 of 19 against the Companys peer group
(the Compensation Peer Group) (see page 29 for a list of the Companys
Compensation Peer Group).
5-Year Annualized
TSR
5-year TSR not available for LPNT, HELI, ERA, EXAM, SEM, EVHC, and HLS because the companies were not publicly traded at the time.
Proposals to be Voted on by Stockholders
Proposal One: Election of Directors (page 4)
The Board of Directors recommends a vote
FOR each of the director nominees.
Subject to the Uncontested Elections
Policy set forth in Section 2(h) of our Corporate Governance Guidelines (see
Board of Directors and Governance Principles for further information about the
Uncontested Elections Policy), the director nominees receiving the highest
number of votes cast (plurality) at the Annual Meeting will be elected for a
term of three (3) years. The nominating and corporate governance committee of
the Board of Directors has evaluated each individual director nominee listed
below and confirmed that each nominee has the skills, education, experience and
qualifications required to help further the success of the Companys business
and represent stockholder interests.
Name |
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Age |
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Director
Since |
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Committee Membership |
Ralph J. Bernstein |
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57 |
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1994 |
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Compensation and Stock Option Committee,
Finance & Strategic Planning Committee, and Nominating and Corporate
Governance Committee |
Mark D. Carleton |
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54 |
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2008 |
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Audit Committee, Compensation and Stock Option Committee, and
Finance & Strategic Planning Committee |
Claire M. Gulmi |
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61 |
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2015 |
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Audit
Committee |
Attendance Other than Ms. Gulmi who joined the Board on March 30, 2015, each of
the director nominees attended 100% of the Board meetings (during the period for
which such person was a director) and 100% of the committee meetings on which
each director served (during the period for which such person was a member of
such committee) during 2014.
Key Qualifications of Each
Nominee Senior leadership experience,
health care experience, air medical services experience and financial experience
(See page 9 for additional details)
Table of
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2015 Proxy Statement at A Glance |
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Proposal Two: Ratification of KPMG LLP as Independent Auditors
(pages 38 40)
The Board of
Directors recommends a vote FOR the approval of the appointment of KPMG LLP as
the Companys independent accountants for the 2015 fiscal year.
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2014 |
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2013 |
Audit fees |
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$ |
885,000 |
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$ |
803,000 |
Audit-related fees |
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$ |
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$ |
25,000 |
Tax fees |
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$ |
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$ |
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All other fees |
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$ |
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$ |
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Total |
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$ |
885,000 |
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$ |
828,000 |
Proposal Three: Advisory Vote to Approve Executive
Compensation
The Board of
Directors recommends a vote FOR the approval, on an advisory basis, of the
compensation for the named executive officers as disclosed in this proxy
statement. The Board recommends a vote FOR this Proposal No. 3 because it
believes that the executive compensation programs established for the named
executive officers and the compensation amounts paid thereunder align with the
interests of stockholders.
This advisory proposal was supported by
approximately 97% of the votes cast in each of 2014 and 2013. Please see the
Compensation Discussion and Analysis, Summary Compensation Table and other
tables and disclosures beginning on page 18 of this proxy statement for a full
discussion of our executive compensation program.
The table below highlights the 2014 total
annual direct compensation actions for each of the named executive officers.
This table does not include all of the information included in the Summary
Compensation Table.
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Named Executive
Officer |
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Base
Salary Earnings |
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2014 Annual Cash
Incentive Compensation Paid Under the STIP |
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Equity Awards (Stock
Options and Performance Share Units)1 |
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2014 Total Annual
Direct Compensation |
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Aaron D. Todd, |
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Chief Executive Officer |
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$ |
765,000 |
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$ |
578,095 |
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$ |
2,485,973 |
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$ |
3,829,068 |
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Michael D.
Allen, |
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President, Domestic Air Medical
Services |
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$ |
459,000 |
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$ |
346,857 |
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$ |
932,297 |
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$ |
1,738,154 |
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Trent J. Carman, |
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Chief Financial Officer and
Treasurer |
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$ |
408,000 |
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$ |
288,748 |
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$ |
828,712 |
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$ |
1,525,460 |
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David
Doerr, |
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EVP, Business Development |
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$ |
408,000 |
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$ |
308,317 |
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$ |
828,712 |
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$ |
1,545,029 |
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Crystal L. Gordon, |
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General Counsel,
Secretary, and Senior Vice President |
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$ |
331,500 |
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$ |
250,508 |
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$ |
673,286 |
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$ |
1,255,294 |
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1 |
In 2014, each of
the named executive officers received (i) stock options with a 3-year
cliff vesting period and (ii) performance share units, which are subject
to a designated three-year performance period. The vesting period for the
performance share units is determined by the Companys total shareholder
return percentile (the TSR Percentile). The TSR Percentile means the
percentile rank of the Companys total shareholder return (TSR) during
the performance period relative to the TSR of other companies in the
designated peer group during the performance period as determined by the
Company. |
Proposal Four: Approval of 2015 Equity Incentive Plan (pages 42
49)
The Board of
Directors recommends a vote FOR the approval of the 2015 Equity Incentive
Plan.
The 2015 Equity Incentive Plan is an
omnibus equity incentive plan pursuant to which the Company may grant equity and
cash incentive awards to employees, officers, directors, and certain service
providers of the Company and its subsidiaries. The 2015 Plan will allow the
Company to use a broader range of equity incentives, to allow full value awards
to be issued in a manner intended to be qualified performance based
compensation under Code Section 162(m), and to incorporate certain other
best-practice corporate governance features into the Companys equity
compensation plan. Our Board of Directors believes the 2015 Equity Incentive
Plan is advisable in order to promote the success of the Company and to increase
stockholder value by providing an additional means to attract, motivate, retain
and reward selected employees and other eligible persons. If approved by our
stockholders, the 2006 Plan will be frozen such that no future awards shall be
issued under the 2006 Plan, and all remaining shares available for issuance
under the 2006 Plan shall instead be made available for issuance under the 2006
Plan.
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
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Table of
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Table of Contents
Table of
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Table of
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AIR METHODS CORPORATION
7211
South Peoria Street
Englewood, CO 80112
(303) 792-7400
PROXY
STATEMENT
ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON MAY 20, 2015
The Board of Directors of Air Methods
Corporation, a Delaware corporation (the Company), is soliciting the enclosed
proxy for use at our Annual Meeting to be held on Wednesday, May 20, 2015,
beginning at 8:00 a.m., Mountain Time, at The Ritz-Carlton, Denver, located at
1881 Curtis Street, Denver, Colorado 80202, and at any time and date to which
the Annual Meeting may be properly adjourned or postponed. This proxy statement
and the accompanying Notice of Annual
Meeting of Stockholders describe the
purpose of the Annual Meeting. Distribution of these proxy solicitation
materials is scheduled to begin on or about April 22, 2015. The proxy statement,
the Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2014 and proxy card are also available on our website www.airmethods.com under the
Investors tab. The contents of our website are not incorporated by reference
into this document for any purpose.
Why am I receiving this proxy
statement and proxy card?
You have
received these proxy materials because our Board of Directors is soliciting your
proxy to vote your shares on the proposals described below at the Annual
Meeting. This proxy statement describes issues on which we would like you to
vote on at our Annual Meeting. It also provides you with information on these
issues so that you may make an informed decision on the proposals to be voted on
at the Annual Meeting.
What is the purpose of the Annual
Meeting?
At our Annual Meeting,
stockholders will vote on the following four items of business:
1) |
To elect Ralph J.
Bernstein, Mark D. Carleton, and Claire M. Gulmi as Class III directors of
the Company for three-year terms. |
2) |
To ratify the
appointment of KPMG LLP as the Companys independent registered public
accounting firm for the fiscal year ending December 31, 2015. |
3) |
To approve, on an
advisory basis, named executive officer compensation. |
4) |
To approve the 2015
Equity Incentive Plan. |
You will also vote on such other matters
as may properly come before the meeting or any postponement or adjournment
thereof.
What are the recommendations of the
Board of Directors?
Our Board of Directors recommends
that you vote:
● |
FOR the election of each of the
three (3) nominated directors (see Proposal 1). |
● |
FOR the ratification of the
appointment of KPMG LLP as the Companys independent registered public
accounting firm for the fiscal year ending December 31, 2015 (see Proposal
2). |
● |
FOR the approval of the advisory
vote on executive compensation (see Proposal 3). |
● |
FOR the approval of the 2015
Equity Incentive Plan (see Proposal 4). |
With respect to any other matter that
properly comes before the meeting, the proxy holders will vote as recommended by
the Board of Directors or, if no recommendation is given, in their own
discretion.
What shares are entitled to
vote?
As of April 10, 2015, the record
date for the Annual Meeting, we had 39,263,952 shares of common stock
outstanding. Each share of our common stock outstanding on the record date is
entitled to one vote on each item being voted on at the Annual Meeting. You can
vote all of the shares that you owned on the record date. These shares include:
(1) shares held directly in your name as the
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
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Table of
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stockholder of record and (2) shares held for you as the beneficial owner through a broker, bank or other nominee.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Most stockholders hold their shares through a broker, bank or other holder of record rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
Stockholder of Record. If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the stockholder of record, and we are sending these proxy materials directly to you. As the stockholder of record, you have the right to grant your voting proxy directly to the named proxy holder or to vote in person at the Annual Meeting. We have enclosed a proxy card for you to use.
Beneficial Owner. If your shares are held in a brokerage account, by a bank, or other nominee, you are considered the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you from that holder together with a voting instruction card. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote and are also invited to attend the Annual Meeting.
Since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a legal proxy from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting. Your broker, bank or other nominee has enclosed or provided voting instructions for you to use in directing the broker, bank or other nominee how to vote your shares.
Who may attend the Annual Meeting?
All stockholders as of the record date, or their duly appointed proxies, and beneficial owners may attend the Annual Meeting. If you are a beneficial owner and not a stockholder of record, you should provide proof of beneficial ownership on the record date, such as your most recent account statement as of April 10, 2015, a copy of the voting instruction card provided by your broker, bank or other nominee, or other similar evidence of ownership. Registration and seating will begin at 7:30 a.m., Mountain Time. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting.
How may I vote my shares in person at the Annual Meeting?
Shares held in your name as the stockholder of record may be voted in person at the Annual Meeting. Shares for which are the beneficial owner may be voted in person
only if you obtain a legal proxy from the broker, bank or other nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy or voting instructions prior to the Annual Meeting as described below so that your vote will be counted if you later decide not to attend the Annual Meeting.
How may I vote my shares without attending the Annual Meeting?
Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the Annual Meeting. If you are a stockholder of record, you may vote by submitting a proxy. If you hold shares beneficially in street name, you may vote by submitting voting instructions to your broker, bank or other nominee. For directions on how to vote, please refer to the instructions included on your proxy card or, for shares held beneficially in street name, the voting instruction card provided by your broker, bank or other nominee.
May I change my vote or revoke my proxy after I return my proxy card?
Yes. Even after you have submitted your proxy, you may change the votes you cast or revoke your proxy at any time before the votes are cast at the Annual Meeting by: (1) delivering a written notice of your revocation to our corporate secretary at our principal executive office, 7211 South Peoria Street, Englewood, Colorado 80112 or (2) executing and delivering a later dated proxy. In addition, the powers of the proxy holders will be suspended if you attend the Annual Meeting in person and so request, although attendance at the Annual Meeting will not by itself revoke a previously granted proxy.
What is a broker non-vote?
If you are a beneficial owner whose shares are held of record by a broker, bank or other nominee and you do not provide voting instructions to such broker, bank or other nominee, your shares will not be voted on any proposal on which the broker, bank or other nominee does not have discretionary authority to vote. This is called a broker non-vote. Your broker, bank or other nominee only has discretionary authority to vote on Proposal Two (Ratification of KPMG LLP). Therefore, your broker, bank or other nominee will not have discretion to vote on Proposals One, Three or Four unless you specifically instruct them on how to vote your shares by returning your completed and signed voting instruction card.
What constitutes a quorum?
The presence at the Annual Meeting, in person or by proxy, of the holders of one-third of the shares of our common stock outstanding as of the record date will constitute a quorum. There must be a quorum for any action to be taken at the meeting (other than an adjournment or
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Table of
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postponement of the meeting). If you
submit a properly executed proxy card, even if you abstain from voting, then
your shares will be counted for purposes of determining the presence of a
quorum. Broker non-votes will be counted for purposes of determining the
presence of a quorum at the Annual Meeting.
What vote is required to approve
each item?
Proposal |
Vote
Required |
Proposal No. 1: Election of three
(3) Class III directors |
Subject to our Uncontested Elections
Policy, the three nominees who receive the greatest number of votes cast
(plurality) will be elected as directors for a term of three (3) years.
There is no cumulative voting for directors. Abstentions and broker
non-votes will not be counted for purposes of the election of directors
and therefore, will have no effect on the outcome of such
election. |
Proposal No. 2: Ratification of KPMG
LLP as the Companys independent registered public accounting firm for the
fiscal year ending December 31, 2015 |
Majority of votes cast. Abstentions
are not considered votes cast and therefore will have no effect on the
outcome of Proposal No. 2. |
Proposal No. 3: Advisory vote on the
compensation for the Companys named executive officers |
Majority of votes cast. Abstentions
and broker non-votes are not considered votes cast and therefore will have
no effect on the outcome of Proposal No. 3. |
Proposal No. 4: Approval of the 2015
Equity Incentive Plan |
Majority of votes cast. Abstentions
and broker non-votes are not considered votes cast and therefore will have
no effect on the outcome of Proposal No.
4. |
What does it mean if I receive more
than one proxy card?
If you receive
more than one proxy card, it means that you hold shares registered in more than
one name or brokerage account. You should sign and return all proxies for each
proxy card that you receive in order to ensure that all of your shares are
voted.
Who will count the proxy
votes?
Votes will be counted by our
transfer agent, American Stock Transfer & Trust Company.
Where can I find voting results of
the Annual Meeting?
We will announce
preliminary voting results at the Annual Meeting. We will file with the
Securities and Exchange Commission (SEC) a Current Report on Form 8-K
containing the final voting results within four business days of the Annual
Meeting or, if final results are not available at that time, within four
business days of the date on which final voting results become
available.
How will voting on any other
business be conducted?
We do not
expect any matters to be presented for a vote at the Annual Meeting other than
the matters described in this proxy statement. If you grant a proxy, either of
the officers named as proxy holder, Aaron D. Todd or Crystal L. Gordon or their
nominee(s) or substitute(s), will have the discretion to vote your shares on any
additional matters that are properly presented for a vote at the Annual Meeting.
If a nominee is not available as a candidate for Class III director, the person
named as the proxy holder will vote your proxy for another candidate nominated
by our Board of Directors.
What rights of appraisal or similar
rights of dissenters do I have with respect to any matter to be acted upon at
the meeting?
No action is proposed
herein for which the laws of the State of Delaware or our bylaws provide a right
to our stockholders to dissent and obtain appraisal of, or payment for, such
stockholders common stock.
The Company will furnish a copy of any
exhibit to the Form 10-K to any stockholder upon payment of the Companys
reasonable expenses in furnishing such exhibit(s). Interested parties may
request a copy of
any exhibit to the Form 10-K from the
Secretary of the Company at the Companys principal offices, 7211 South Peoria
Street, Englewood, Colorado 80112.
|
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
3 |
Table of
Contents
|
|
Proposal No. 1 Election of
Directors |
Introduction
Our Board of Directors currently is
comprised of eleven directors, divided among three classes, with three directors
in Class I, four directors in Class II, and four directors in Class III. Class I
directors hold office for a term expiring at the 2016 Annual Meeting; Class II
directors hold office for a term expiring at the 2017 Annual Meeting; and Class
III directors term will expire at the 2015 Annual Meeting to be held on May 20,
2015.
Our Board of Directors has nominated Ralph
J. Bernstein, Mark D. Carleton, and Claire M. Gulmi to serve as the Class III
directors for three-year terms expiring at the Annual Meeting in the year 2018
or until their successors have been duly elected and qualified, or until the
earlier of their respective deaths, resignations
or retirement. Dr. Lowell Miller, who has
served on our Board since 1990, notified the Board of his intention to retire
immediately before the 2015 Annual Meeting. Upon Dr. Millers retirement, the
number of members of our Board of Directors will automatically decrease from
eleven directors to ten directors, divided among three classes, with three
directors in Class I, four directors in Class II, and three directors in Class
III.
The principal occupation and certain other
information regarding the nominees and the other directors whose terms of office
will continue after the Annual Meeting, can be found beginning on page 5.
Information about the share ownership of the nominees and other directors can be
found beginning on page 37.
Assuming the presence of a quorum and
subject to our Uncontested Elections Policy, the three persons receiving the
highest number of FOR votes from stockholders in the election of directors at the
Annual Meeting will be elected. Cumulative voting is not permitted in the
election of directors. Consequently, each stockholder is entitled
to one vote for each share of common stock
held in the stockholders name. In the event that any nominee should be
unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as the Board of
Directors may propose.
Recommendation of the
Board of Directors
The Board of Directors recommends a
vote FOR the proposal to elect each of Ralph J. Bernstein, Mark D. Carleton,
and Claire M. Gulmi as Class III directors on our Board of
Directors.
4
Table of
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|
|
Directors and Named Executive
Officers |
Summary information concerning the
Companys directors and executive officers is set forth below:
Name |
Age |
|
Position |
|
Class/ Year Term
of Office Expires(1) |
|
George W. Belsey |
75 |
|
Director |
|
I/2016 |
|
Ralph J. Bernstein |
57 |
|
Director |
|
III/2015* |
|
Mark D. Carleton |
54 |
|
Director |
|
III/2015* |
|
John J. Connolly, Ed.D. |
75 |
|
Director |
|
II/2017 |
|
Jeffrey A. Dorsey |
66 |
|
Director |
|
II/2017 |
|
Claire M. Gulmi |
61 |
|
Director |
|
III/2015* |
|
C. David Kikumoto |
65 |
|
Chairman of the Board |
|
I/2016 |
|
MG Carl H. McNair, Jr. USA
(Ret.) |
81 |
|
Director |
|
I/2016 |
|
Morad Tahbaz |
59 |
|
Director |
|
II/2017 |
|
Aaron D. Todd |
53 |
|
Director and Chief Executive
Officer |
|
II/2017 |
|
Michael D. Allen |
52 |
|
President, Domestic Air Medical
Services |
|
N/A |
|
Trent J. Carman |
54 |
|
Chief Financial Officer and
Treasurer |
|
N/A |
|
David M. Doerr |
45 |
|
EVP, Business
Development |
|
N/A |
|
Crystal L. Gordon |
36 |
|
General Counsel, Secretary, and Senior
Vice President |
|
N/A |
|
* |
Director nominee. |
(1) |
Refers to the calendar year in which
the Annual Meeting of stockholders is expected to be held and at which the
term of the pertinent director class shall
expire. |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
5 |
Table of
Contents
Below, you can find the principal
occupation and other information about each of the Companys continuing
directors, director nominees, and executive officers.
Continuing Directors for
Term Ending Upon the 2016 Annual Meeting of Stockholders Class I
Directors
Mr. GEORGE W. BELSEY has served on the
Board of Directors since December 1992, including serving as the Boards
Chairman from April 1994 to October 2011. Mr. Belsey was appointed Chief
Executive Officer of the Company effective in June 1994, and served in that
capacity until July 2003, and thereafter provided consulting services to the
Company pursuant to the terms of his Consulting Agreement which terminated in
2008. Mr. Belsey previously served in various executive and administrative
positions at the American Hospital Association and at a number of hospitals. He
received his Bachelors Degree in Economics from DePauw University in
Greencastle, Indiana, and holds a Masters Degree in Business Administration
from George Washington University, Washington, D.C.
Other Public Company Board
Service: None.
Recent Past Public Company Board
Service: None.
Key Attributes, Experience and
Skills: Mr. Belsey brings to the Board of
Directors, among his other skills and qualifications, a vast understanding of
the Companys business acquired through his prior service as the Companys Chief
Executive Officer and Chairman of the Board. Mr. Belsey has also served in other
executive positions in the health care industry. This experience, combined with
his knowledge of the Company and its operations, make him particularly
well-suited to serve our Board of Directors. In light of the foregoing, our
Board of Directors has concluded that Mr. Belsey should continue as a member of
our Board.
Mr. C. DAVID KIKUMOTO has served on the
Board of Directors since June 2004. Mr. Kikumoto is the cofounder and Chief
Executive Officer of Denver Management Advisors. From 1999 to 2000, Mr. Kikumoto
was President and Vice Chairman of Anthem Blue Cross and Blue Shield, Colorado
and Nevada, and from 1987 to 1999, served in several roles, including Chief
Executive Officer of Blue Cross and Blue Shield of Colorado, Nevada and New
Mexico. He received his Bachelor of Science degree in accounting
from the University of Utah, pursued
graduate studies at the University of Utah, and graduated from the Executive
Development Program at the University of Chicago.
Other Public Company Board
Service: None.
Recent Past Public Company Board
Service: Corgenix (April 2006 March
2011).
Key Attributes, Experience and
Skills: Mr. Kikumoto brings to the Board of
Directors, among his other skills and qualifications, significant experience in
the health care industry, as well as extensive management and operations
experience gained while serving in executive positions with Anthem Blue Cross
and Blue Shield. Additionally, given Mr. Kikumotos prior experience and service
on several other private company boards, he is versed on a number of complex
issues affecting the health care industry. In light of the foregoing, our Board
of Directors has concluded that Mr. Kikumoto should continue as a member of our
Board.
Major General CARL H. MCNAIR, JR., USA
(Ret.) has served on the Board of Directors since March 1996. In April 1999,
General McNair retired from his position as Corporate Vice President and
President, Enterprise Management, for DynCorp, a technical and professional
services company headquartered in Reston, Virginia, where he was responsible for
the companys core businesses in facility management, marine operations, test
and evaluation, administration and security, and biotechnology and health
services. He then served as Special Assistant, Government Relations and
Legislative Affairs to the CEO of DynCorp until 2003 when DynCorp was acquired
by Computer Sciences Corporation. He continued service in the corporate offices
of Computer Sciences Corporation until 2010.
During his more than three decades of
military service, General McNair held many high level command and staff
positions in Army Research, Development and Acquisition, as well as extensive
aviation experience in the development and operation of both rotary and fixed
wing aircraft, which led to his command of the United States
6
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Directors and Named
Executive Officers |
|
|
Army Aviation Center and service as the
first Chief of the Army Aviation Branch. General McNair currently serves on
multiple non-profit boards, including, without limitation, the boards of Easter
Seals, the Army Historical Foundation and the Army Aviation Association of
America.
General McNair has a Bachelor of Science
degree in Engineering from the U.S. Military Academy at West Point, a Bachelors
degree and Masters degree in Aerospace Engineering from the Georgia Institute
of Technology, and a Master of Science degree in Public Administration from
Shippensburg University.
Other Public Company Board Service: None.
Recent Past Public Company Board Service: None.
Key Attributes, Experience and Skills: Major General Carl H. McNair, Jr. USA (Ret.) brings to the
Board of Directors, among his other skills and qualifications, a vast
understanding of the aviation industry, and a technical understanding of our
business that he gained through his service in the military and DynCorp.
Further, he has significant knowledge and understanding of our business and
operations, which he gained through his prior service on our Board. In light of
the foregoing, our Board of Directors has concluded that Major General Carl H.
McNair, Jr. USA (Ret.) should continue as a member of our
Board.
Continuing Directors for Term Ending Upon the 2017 Annual Meeting
of Stockholders Class II Directors
Dr. JOHN J. CONNOLLY has served on the
Board since May 2012. He is the President and CEO of Castle Connolly Medical
Ltd., publisher of Americas Top Doctors and other consumer guides to help
people find the best health care. Dr. Connolly previously served as President of
New York Medical College, the nations second largest private medical college,
for more than ten years. He is a Fellow of the New York Academy of Medicine, a
Fellow of the New York Academy of Sciences, a Director of the Northeast Business
Group on Health, a member of the Presidents Council of the United Hospital
Fund. Founder and past Chairman of the American Lyme Disease Foundation. Dr.
Connolly additionally serves on the following Boards: Baker & Taylor Inc.;
Dearborn Risk Management; and Advisory Board, The Hudson Group.
Other Public Company Board Service: None.
Recent Past Public Company Board Service: Mortons Restaurant Group (1991-2001 and 2005-2012); Delaware
Mutual Funds; Truck Components; McCormack & Smicks; Director &
Chairman, Professional Examination Service, Inc.; Chairman and Director, Alpha
Gene, Inc.
Key Attributes, Experience and
Skills: Dr. Connolly brings to the Board of Directors, among his other skills and
qualifications, insight into the dynamics of the evolving health care industry and financial expertise gained during his
work with Castle Connolly Medical Ltd. Dr. Connolly also has extensive corporate governance experience, which he gained
during his service on the board of directors of Morton Restaurant Group, Inc. In light of the foregoing, our Board of
Directors has concluded that Dr. Connolly should continue as a member of our Board of Directors.
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
7 |
Table of Contents
Mr. JEFFREY A. DORSEY has served on the
Board since May 2012. He began his career at Portsmouth General Hospital in
1972. Following work as a senior administrator at Virginia Beach General
Hospital, Mr. Dorsey joined Hospital Corporation of America (HCA) in 1980 and
worked for them as an Administrator in Terre Haute, Indiana, Riyadh, Saudi
Arabia, Emporia, Kansas and Denver, Colorado where in 1995 he helped form and
served as President and Chief Executive Officer of HealthONE LLC. Mr. Dorsey
most recently served as the President and Chief Executive Officer of the HCA
Continental Division, including operations in Oklahoma, Kansas, and
HCA-HealthONE LLC, the largest healthcare system in the metro-Denver area with
8,500 employees and 3,000-affiliated physicians.
Other Public Company Board Service: None.
Recent Past Public Company Board Service: None.
Key Attributes, Experience and
Skills: Mr. Dorsey brings to the Board of Directors, among his other skills and
qualifications, a vast understanding of the health care industry and insight into the dynamics of the evolving health care
industry. Further, as a result of Mr. Dorseys service in senior management positions at various health care systems,
he has an understanding of the operations of a health care company. In light of the foregoing, our Board of Directors has
concluded that Mr. Dorsey should continue as a member of our Board of Directors.
Mr. MORAD TAHBAZ has served on the Board
of Directors since February 1994. He is a co-founder and General Partner of
Americas Partners, an investment firm. Additionally, Mr. Tahbaz is the founder
and a partner of M.T. Capital, L.L.C., an investment company for real estate and
private equity transactions. Mr. Tahbaz received his Bachelors degree in
Philosophy and Fine Arts from Colgate University and attended the Institute for
Architecture and Urban Studies in New York City. He holds a Masters degree in
Business Administration from Columbia University Graduate School of
Business.
Other Public Company Board Service: None.
Recent Past Public Company Board Service: Empire Resorts, Inc. (2003-2005)
Key Attributes, Experience and Skills: Mr. Tahbaz brings to the Board of Directors, among his other
skills and qualifications, valuable strategic planning and management skills
gained as a General Partner of Americas Partners, as well as extensive
institutional knowledge of the Companys business and operations. In light of
the foregoing, our Board of Directors has concluded that Mr. Tahbaz should
continue as a member of our Board of Directors.
Mr. AARON D. TODD has served on the Board
of Directors since June 2002 and as Chief Executive Officer since July 2003. He
joined the Company as Chief Financial Officer in July of 1995 and was appointed
Secretary and Treasurer during that same year. Mr. Todd holds a Bachelor of
Science degree in Accounting from Brigham Young University.
Other Public Company Board Service: None.
Recent Past Public Company Board Service: None.
Key Attributes, Experience and Skills: Mr. Todd brings to the Board of Directors, among his other
skills and qualifications, a vast understanding of financial and accounting
matters, as well as significant knowledge and understanding of our operations
and the aviation and health care industries generally. In light of the
foregoing, our Board of Directors has concluded that Mr. Todd should continue as
a member of our Board of Directors.
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Directors and Named
Executive Officers |
|
|
Director
Nominees Class III Directors
Mr. RALPH J. BERNSTEIN has served on the
Board of Directors since February 1994. He is the co-founder and General Partner
of Bernstein Capital, LLC. Prior to forming Bernstein Capital, LLC, Mr.
Bernstein was the managing partner of Americas Partners and Americas Tower
Partners. He holds a Bachelor of Arts Degree in Economics from the University of
California at Davis.
Other Public Company Board Service: None.
Recent Past Public Company Board Service: Empire Resorts, Inc. (2004 2010).
Key Attributes, Experience and Skills: Mr. Bernstein brings to the Board of Directors, among his
other skills and qualifications, valuable strategic planning and management
skills gained as a General Partner of Bernstein Capital, LLC. In addition and as
a result of Mr. Bernsteins prior service on our Board of Directors,
Mr. Bernstein has a vast amount of institutional knowledge regarding the
Companys operations and business generally. In light of the foregoing, our
Board of Directors has concluded that Mr. Bernstein should be re-elected as a
member of our Board.
Mr. MARK D. CARLETON has served on the
Board of Directors since August 2008 and has been a Senior Vice President at
Liberty Media Corporation since December 2003. His primary responsibilities
include corporate development and oversight of Libertys technology, music,
telecom, satellite and sports interests. Prior to joining Liberty Media
Corporation, Mark was a partner at KPMG LLP, where he had overall responsibility
for the communications sector. Mr. Carleton was also a member of KPMG LLPs
Board of Directors. Mr. Carleton received a Bachelor of Science degree in
Accounting from Colorado State University, where he currently is a member of the
College of Business Global Leadership Council. He also is a member of the
University of Colorado Sports and Entertainment Advisory Council. In addition,
Mr. Carleton was the Executive in Residence at the Colorado State University
Business School for the 2011-2012 school year. Mr. Carleton also serves on the
Board of Directors for Junior Achievement-Rocky Mountain, Inc.
Other Public Company Board Service: Live Nation Entertainment (January 2010 present), Barnes
& Noble, Inc. (September 2011 present), Mobile Streams, Inc. (January 2006
present), and Sirius XM Radio (February 2013 Present).
Recent Past Public Company Board Service: The DIRECTV Group, Inc. (February 2008 June 2009),
Ticketmaster Entertainment (August 2008 February 2010), and Ideiasnet (July
2011 March 2015).
Key Attributes, Experience and
Skills: Mr. Carleton brings to the Board of Directors, among his other skills and
qualifications, financial and accounting expertise acquired while serving as a partner at KPMG LLP. In addition, Mr.
Carletons service on other public company boards has provided him with a number of skills, including leadership
development and succession planning, risk assessment, and shareholder and government relations. In light of the foregoing,
our Board of Directors concluded that Mr. Carleton should be re-elected as a member of our Board.
CLAIRE M. GULMI has served on the Board of
Directors since March 2015.
Ms. Gulmi is a seasoned health care
executive and has served since 1994 as the Chief Financial Officer of AmSurg
Corp., a nationally recognized leader in development, management and operation
of outpatient surgery centers. During her tenure with AmSurg Corp. she also
served as the Executive Vice President since 2006 and Secretary since 1997.
Prior to her appointment as Executive Vice President with AmSurg Corp.,
Ms. Gulmi served as a Senior Vice President from 1997 to 2006 and as a Vice
President from 1994 through 1997. Ms. Gulmi has a
BBA in Accounting and Finance from Belmont University.
Other Public Company Board Service: AmSurg Corp.
Recent Past Public Company Board Service: None.
Key Attributes, Experience and Skills: Ms. Gulmi brings to the Board of Directors, among her other
skills and qualifications, extensive experience in finance and accounting and
the health care industry. In addition, her service on the AmSurg Corp. board of
directors has provided her with insight into various issues addressed by public
company boards, including issues specific to public health care companies. In
light of the foregoing, our Board of Directors concluded that Ms. Gulmi should
be re-elected as a member of our Board.
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
9 |
Table of Contents
Named
Executive Officers*
Mr. MICHAEL D. ALLEN was named President,
Domestic Air Medical Services in August 2012. Mr. Allen has been with Air
Methods since 1992 and served in several positions including line pilot, safety
representative, aviation site manager, training captain/check airman, operations
manager and Senior Vice President. As the President, Domestic Air Medical
Services Mr. Allen has responsibility and oversight of all business, aviation,
maintenance, clinical and dispatch operations supporting 280 air medical base
sites with over 3,350 employees and more than 400 aircraft. Prior to joining the
Company Mr. Allen worked for Petroleum Helicopters, Inc. and served in the US
Army. During his more than five years of service in the US Army, Mr. Allen
served in Germany as an aero scout pilot and as a maintenance test pilot.
Mr. Allen graduated from Portland State University with a BS in
Mathematics.
Mr. TRENT J. CARMAN joined the Company in
April 2003 and is the Chief Financial Officer and Treasurer. Prior to joining
the Company, Mr. Carman served as Chief Financial Officer of StorNet, Inc. from
January 2000 until April 2003, and served in various capacities including Senior
Vice President and Chief Financial Officer for United Artists Theatre Circuit,
Inc., from June 1992 until January 2000. Mr. Carman received his Bachelor of
Science degree in Accounting from Utah State University and holds a Masters
degree in Business Administration-Finance from Indiana
University.
Mr. DAVID M. DOERR joined the Company as
Executive Vice President, Business Development in October 2013. Prior to joining
the Company, Mr. Doerr had obtained more than 20 years of experience including
over 17 years in the healthcare industry in financial, operational and general
management positions. Prior to joining Air Methods Corporation, Mr. Doerr served
as Vice President of Global Business Development for Gambro AB, a Swedish
healthcare company where he also served in various senior management roles in
finance, operations and business development. Prior to Gambro, Mr. Doerr worked
for PricewaterhouseCoopers within its audit and assurance practice. David
received his Bachelor of Science, Accounting, with distinction from Indiana
University School of Business in May 1992 and his CPA in 1993.
Ms. CRYSTAL L. GORDON was appointed as
General Counsel, Corporate Secretary and Senior Vice President of the Company in
2012. Prior to her appointment, Ms. Gordon was the Vice President and Associate
General Counsel of the Company. Before joining the Company in April 2011, Ms.
Gordon was with Davis Graham & Stubbs LLP in Denver, Colorado focusing on
mergers and acquisitions, securities offerings, SEC compliance matters, and
corporate governance. Ms. Gordon received her law degree from the University of
Denver, and received her Bachelor of Science degree in Biology from Santa Clara
University. Prior to attending law school, Ms. Gordon worked as a compliance
associate with a boutique investment advisory firm in Northern
California.
* |
Biographical information for Mr.
Aaron D. Todd, our Chief Executive Officer, is set forth above under
Continuing Directors for Term Ending Upon the 2017 Annual Meeting of
Stockholders Class II Directors. |
10
Table of Contents
|
|
Corporate Governance and
Board Matters |
Board of
Directors and Governance Principles
The core responsibility of the Companys
Board is to exercise its business judgment to act in what it reasonably believes
to be in the best interests of the Company and its stockholders. Further,
members of the Board fulfill their responsibilities consistent with their
fiduciary duty to the stockholders, and in compliance with all applicable laws
and regulations. The primary responsibilities of the Board-include:
● |
Oversight of management performance and
assurance that stockholder interests are served; |
● |
Oversight of the Companys business affairs and
long-term strategy, including Chief Executive Officer succession planning;
and |
● |
Monitoring adherence to the Companys standards
and policies, including, among other things, policies governing internal
controls over financial reporting. |
Corporate Governance Guidelines &
Uncontested Elections
Policy
In fulfilling such responsibilities, the Board is guided by the
principles set forth in the Corporate Governance Guidelines, a copy of which is
available on our website www.airmethods.com under the
Investors tab. The Corporate Governance Guidelines were adopted by the Board
in May 2010. To ensure sound corporate governance practices, the Board regularly
reviews the governance practices set forth in the Corporate Governance
Guidelines, as well as Delaware law (the state in which we are incorporated) and
the listing standards of The NASDAQ® Stock Market, and SEC
regulations. The Board also considers best practices suggested by recognized
corporate governance authorities.
In an effort to continue to demonstrate
good governance, in 2014 the Board approved revisions to the Corporate
Governance Guidelines to include an Uncontested Elections Policy (the Policy),
which is set forth in Section 2(h) of the Corporate Governance Guidelines. Under
the Policy, any nominee for director in an
uncontested election who receives a greater number of withhold votes than
for votes will submit to the Board a letter of resignation for consideration
by the nominating and corporate governance committee. The nominating and
corporate governance committee will promptly consider the tendered resignation
and will recommend to the Board whether or not to accept the tendered
resignation or to take other action, such as rejecting the tendered resignation
and addressing the apparent underlying causes of the withhold votes in a
different way.
In making this recommendation, the
nominating and corporate governance committee will consider all factors deemed
relevant by its members. These factors may include the underlying reasons for
stockholders withholding of votes from such director nominee (if
ascertainable), the length of service and qualifications of the director whose
resignation has been tendered, the directors contributions to the Company,
whether the Company will remain in compliance with applicable laws, rules,
regulations and governing documents if it accepts the resignation and,
generally, whether or not accepting the resignation is in the best interests of
the Company and our stockholders. In considering the nominating and corporate
governance committees recommendation, the Board will take into account the
factors considered by the nominating and corporate governance committee and such
additional information and factors as the Board believes to be relevant.
Code of Business Conduct for
Members
of the Board of Directors
The Board also
performs its responsibilities in accordance with the Code of Business Conduct
for Members of the Board of Directors adopted on November 2, 2011 (the Director
Code of Conduct). A copy of the Director Code of Conduct is available on our
website www.airmethods. com under the Investors tab.
Board
Leadership Structure and Independent Chairman
The Board separated the positions of
Chairman and Chief Executive Officer in July 2003. Maintaining separate
positions allows our Chief Executive Officer to focus on developing and
implementing the Companys business
plans and supervising the Companys
day-to-day business operations and allows our Chairman to lead the Board in its
oversight and advisory roles. Because of the many responsibilities of the Board
and the significant time and
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Table of Contents
effort required by each of the Chairman
and the Chief Executive Officer to perform their respective duties, the Company
believes that having separate persons in these roles enhances the ability of
each to discharge those duties effectively and, as a corollary, enhances the
Companys prospects for success. The Board also believes that having separate
positions provides a clear delineation of responsibilities for each position and
fosters greater accountability of management. At this time, the Board has
determined for the foregoing
reasons that its leadership structure is
appropriate and in the best interests of the Companys stockholders. The Company
will continue to periodically evaluate whether this leadership structure best
serves the Company and its stockholders.
The Board of Directors regularly holds
executive sessions with directors who are all independent, as defined under
applicable NASDAQ® rules and regulations.
Our Board, together with our named
executive officers, oversees the management of risks inherent in the operation
of the Companys businesses and the implementation of its strategic plan. The
Board performs this oversight role by reviewing the operations of the Companys
business and corporate functions and addressing the primary risks associated
therewith. The Board has delegated certain responsibilities to the finance and
strategic planning committee and the audit committee, including, among other
things, reviewing the risks associated with the Companys strategic plan,
discussing policies with management regarding financial risk assessment and
enterprise risk management, developing guidelines to govern the process by which
major financial and accounting risk assessment is undertaken by the Company,
identifying the primary risks to the Companys business and interim updates of
those risks, and monitoring and evaluating the primary risks associated with
particular business units and functions.
In an effort to continue appropriately
monitoring and understanding the Companys risks, in 2012, the Board formed the
health care affairs committee, which is a subcommittee of the finance and
strategic planning committee. The health care affairs committee is comprised
of Board members with a strong background
in health care. The health care affairs committee focuses on health care matters
impacting the Company, including the Companys health care compliance efforts.
Since the formation of the health care affairs committee, the committee has
focused on, among other things, the Companys health care compliance plan and
management of risks related to health care.
In performing such functions, the audit
committee, the finance and strategic planning committee, and the health care
affairs committee have full access to management, as well as the ability to
engage advisors. The foregoing committees provide reports to the Board regarding
the risk areas identified above. In addition, the compensation and stock
option committee and the nominating and corporate governance committee address
relevant risks during their respective meetings. The Board believes that the
work undertaken by the audit committee, the finance and strategic planning
committee and the health care affairs committee, together with the work of the
full Board, the other committees, and our named executive officers, enables the
Board to effectively oversee the Companys risk management.
Board
Membership and Director Independence
Currently, the Companys Board has eleven
members. The Board has determined that ten of those eleven directors, namely
Chairman Kikumoto, Ms. Gulmi, Drs. Connolly and Miller and Messrs. Belsey,
Bernstein, Dorsey, Carleton, McNair, and Tahbaz, satisfy The NASDAQ®
Stock Market standard for director independence. The Board has determined that
Mr. Todd, as our Chief Executive Officer is not independent under The
NASDAQ® Stock Market standard for director independence.
The Board held 4 meetings in 2014. Each
director attended 100% of the Board meetings during 2014 (during the period for
which such person was a director) and 100% of the committee meetings on which
each director served (during the period for which such person was a member of
such committee). Four members of the Board attended the Companys 2014 Annual
Meeting. The Board does not have a policy for Board member attendance at the
Companys annual meetings.
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Corporate Governance and
Board Matters |
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|
Our Board conducts its business through
meetings of the Board and through activities of the standing committees, as
further described below. The Board and each of the standing committees meets
throughout the year on a set schedule and also holds special meetings and acts
by written consent from time to time, as appropriate. Board agendas include
regularly scheduled executive sessions
of the independent directors to meet
without the presence of management. The Board has delegated various
responsibilities and authority to different committees of the Board, as
described below. Members of the Board have access to all of our members of
management outside of Board meetings.
Committees of the Board of Directors
The Board has established an audit
committee, finance and strategic planning committee, compensation and stock
option committee and a nominating and corporate governance committee. Each of
the committees regularly report on their activities and actions to the full
Board.
The charters for the audit committee, the
compensation and stock option committee, and the nominating and corporate
governance committee are available on the Companys website at www.airmethods.com.
2014
Board Committee Membership
Director |
|
Audit |
Financial & Strategic
Planning |
Compensation & Stock Option |
Nominating & Corporate
Governance |
George W. Belsey |
|
|
|
|
|
Ralph J.
Bernstein |
|
|
|
|
|
Mark D. Carleton |
|
|
|
|
|
John J. Connolly |
|
|
|
|
|
Jeffery A. Dorsey |
|
|
|
|
|
C. David
Kikumoto |
★ |
|
|
|
|
Carl H. McNair |
|
|
|
|
|
Lowell D. Miller |
|
|
|
|
|
Morad Tahbaz |
|
|
|
|
|
Aaron D. Todd |
|
|
|
|
|
Number of Meetings in 2014 |
|
5 |
11 |
5 |
7 |
★ - Chairman of the
Board - Committee
Member - Chair |
The audit committee, which met 5 times
during 2014, currently consists of Messrs. McNair (Chairman) and Carleton, Dr.
Connolly, and Ms. Gulmi. Ms. Gulmi joined the Board in March 2015 and as such
did not attend any meetings in 2014. The Board has determined that all members
of the audit committee are independent within the meaning of the listing
standards of The NASDAQ® Stock Market and the SEC rules
governing
audit committees. In addition, the Board
determined that Mr. Carleton, Dr. Connolly and Ms. Gulmi meet the criteria of an
audit committee financial expert as defined under the applicable SEC
rules.
See the Audit Committee Report on page
40 for a description of the audit committees duties and
responsibilities.
Continues on next page ► |
|
|
|
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
13 |
Table of
Contents
Finance and Strategic Planning
Committee
The finance and strategic planning
committee was formed by the Board in April 2003. The current members of the
finance and strategic planning committee are Messrs. Tahbaz (Chairman),
Bernstein, Carleton, and Todd. The finance and strategic planning committee
oversees establishment and achievement of corporate
financial objectives and key growth
initiatives, including acquisitions that are significant to the Companys
business. In addition, the committee analyzes and evaluates the capital
structure of the Company. The finance and strategic planning committee met 11
times in 2014.
Compensation and Stock Option
Committee
The compensation and stock option
committee currently consists of Messrs. Carleton (Chairman), Bernstein and
Dorsey and Dr. Miller. The compensation and stock option committee, which met 5
times in 2014, is responsible for making recommendations to the Board regarding
executive compensation matters. The specific nature of the compensation and
stock option committees
responsibilities is described under
Compensation Discussion and Analysis.
The Board has determined that all members
of the compensation and stock option committee are independent within the
meaning of The NASDAQ® Stock Markets listing
standards.
Nominating and Corporate Governance
Committee
The nominating and corporate governance
committee currently consists of Messrs. Bernstein (Chairman) and Tahbaz and Dr.
Miller. The nominating and corporate governance committee provides committee
membership recommendations to the Board along with changes to those committees.
In addition, the nominating and corporate governance committee identifies,
evaluates and recommends to the Board individuals, including individuals
proposed by stockholders, qualified to serve as members of the Board. The
nominating and corporate governance committee also identifies, evaluates and
recommends to the Board, nominees for election as directors of the Company at
the next annual or special
meeting of stockholders at which directors
are to be elected. The nominating and corporate governance committee also
develops and recommends to the Board corporate governance principles applicable
to the Company and oversees succession planning for the chief executive officer.
The nominating and corporate governance committee met 7 times in
2014.
The Board has determined that all members
of the nominating and corporate governance committee are independent within
the meaning of The NASDAQ® Stock Markets listing
standards.
Nomination of
Directors
In accordance with its written charter,
the nominating and corporate governance committee investigates suggestions for
candidates for membership on the Board, including candidates nominated by our
stockholders, and recommends prospective directors, as required, to provide an
appropriate balance of knowledge, experience and capability on the
Board.
Directors may be nominated by the Board or
by stockholders in accordance with our Bylaws. The specific requirements for
such a nomination are described under Stockholder Proposals.
In recommending candidates for appointment
or reelection to the Board, the nominating and corporate governance committee
considers the appropriate balance of experience, skills and characteristics
required of the Board. Specifically, the nominating and corporate governance
committee considers, among other things, the candidates independence,
character, corporate governance skills and abilities, business experience,
industry specific experience, training and education, commitment to performing
the duties of a director, and other skills, abilities or attributes that fill
specific needs of the Board or its committees. While there is
no
14
Table of
Contents
Corporate Governance and Board
Matters |
|
|
formal policy with regard to consideration
of diversity in identifying director nominees, the nominating and corporate
governance committee considers diversity in business experience, professional
expertise, gender and ethnic background, along with various other factors when
evaluating director nominees.
In addition, the nominating and corporate
governance committee seeks to ensure that at least a majority of the directors
are independent under the rules of The NASDAQ® Stock Market, and that
members of the Companys audit committee meet the financial literacy and
sophistication requirements under The NASDAQ®
Stock Market rules and at least one of
them qualifies as an audit committee financial expert under the rules of the
SEC. Nominees for director are selected on the basis of their depth and breadth
of experience, integrity, ability to make independent analytical inquiries,
understanding of the Companys business environment and willingness to devote
adequate time to Board duties.
In determining whether to recommend a
director for re-election, the nominating and corporate governance committee
considers, among other things, the directors past attendance at meetings and
participation in and contributions to the activities of the
Board.
The following table summarizes all
compensation earned by members of the Board during the fiscal year ended
December 31, 2014:
|
|
Fees Earned |
|
|
|
|
|
|
|
|
|
|
or Paid in |
|
Stock |
|
Option |
|
All Other |
|
|
|
|
Cash |
|
Awards(10) |
|
Grants(11) |
|
Compensation |
|
Total |
Name |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
George W. Belsey(1)(9) |
|
103,200 |
|
110,140 |
|
80,400 |
|
|
|
293,740 |
Ralph J. Bernstein(2)(9) |
|
128,800 |
|
110,140 |
|
80,400 |
|
|
|
319,340 |
Mark D. Carleton(3)(9) |
|
107,800 |
|
110,140 |
|
80,400 |
|
|
|
298,340 |
John J. Connolly, Ed.D.(4)(9) |
|
98,200 |
|
110,140 |
|
80,400 |
|
|
|
288,700 |
Jeffrey A. Dorsey(5)(9) |
|
97,600 |
|
110,140 |
|
80,400 |
|
|
|
288,140 |
C.
David Kikumoto(6)(9) |
|
195,000 |
|
110,140 |
|
120,600 |
|
|
|
425,740 |
MG Carl H. McNair, Jr. USA (Ret.)(7)(9) |
|
102,000 |
|
110,140 |
|
80,400 |
|
|
|
292,540 |
Lowell D. Miller Ph.D.(9) |
|
113,600 |
|
110,140 |
|
80,400 |
|
|
|
304,140 |
Morad Tahbaz(8)(9) |
|
117,800 |
|
110,140 |
|
80,400 |
|
|
|
308,340 |
(1) |
As of December 31, 2014, Mr.
Belsey held three stock option awards exercisable for an aggregate 6,500
shares of the Companys common stock, all of which are fully
vested. |
(2) |
As of December 31, 2014, Mr.
Bernstein held four stock option awards exercisable for an aggregate
17,840 shares of the Companys common stock, all of which are fully
vested. |
(3) |
As of December 31, 2014, Mr.
Carleton held four stock option awards exercisable for an aggregate 17,840
shares of the Companys common stock, all of which are fully
vested. |
(4) |
As of December 31, 2014, Dr.
Connolly held three stock options awards exercisable for an aggregate
5,900 shares of the Companys common stock, all of which are fully
vested. |
(5) |
As of December 31, 2014, Mr.
Dorsey held three stock options awards exercisable for an aggregate 5,900
shares of the Companys common stock, all of which are fully
vested. |
(6) |
As of December 31, 2014, Mr.
Kikumoto held four stock option awards exercisable for an aggregate 17,840
shares of the Companys common stock, all of which are fully
vested. |
(7) |
As of December 31, 2014, General
McNair held four stock option awards exercisable for an aggregate 17,840
shares of the Companys common stock, all of which are fully
vested. |
(8) |
As of December 31, 2014, Mr.
Tahbaz held four stock option awards exercisable for an aggregate 17,840
shares of the Companys common stock, all of which are fully
vested. |
(9) |
As of December 31, 2014, such
director held 2,000 shares of restricted stock which will fully vest on
January 1, 2016. |
(10) |
Restricted stock is valued at the
closing price of the common stock on the date of grant. |
(11) |
Option awards are calculated in
accordance with the requirements of FASB ASC Topic 718, as explained
below. The options granted in 2014 vested immediately upon grant and will
expire five years from date of grant. The fair value of each option grant
is estimated on the date of grant using the Black- Scholes option-pricing
model. The Company uses historical option exercise data for similar
employee groups, as well as the vesting period and contractual term, to
estimate the expected term of options granted; the expected term
represents the period of time that options granted are expected to be
outstanding. Expected volatility is based on historical volatility of the
Companys stock. The risk-free rate for periods within the contractual
life of the option is based on the U.S. Treasury yield curve in effect at
the time of the grant. The amounts presented in these columns reflect the
dollar amount to be recognized for financial statement reporting purposes
over the vesting term of the options (excluding any impact of assumed
forfeitures), in accordance with FASB ASC Topic 718. Assumptions used in
the calculation of expense for the 2014 awards are included in Note 10 to
the consolidated financial statements in our 2014 Annual Report on Form
10-K, which was filed with the SEC on February 27,
2015. |
Continues on next page ► |
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|
|
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
15 |
Table of
Contents
On January 15, 2015, the Company granted
each non-employee director (except for Mr. Kikumoto, the chairman of the Board,
and Ms. Gulmi who was appointed to the Board on March 30, 2015) an option to
purchase 10,698 shares of the Companys common stock at $41.545 per share. Mr.
Kikumoto was awarded an option to purchase 12,992 shares of the Companys common
stock at $41.545 per share. Upon her appointment to the Board, Ms. Gulmi was
awarded an option to purchase 6,980 shares of the Companys common stock at
$46.75 per share. All options vest 50% on January 1, 2016 and 50% on January 1,
2017 and expire on January 15, 2020.
On January 15, 2015, the Company also
awarded 1,524 shares of restricted stock to each non-employee director (except
for Mr. Kikumoto, the chairman of the Board, and Ms. Gulmi who was appointed to
the Board on March 30, 2015). Mr. Kikumoto was awarded 1,851 shares of
restricted stock, and upon her appointment to the Board, Ms. Gulmi was awarded
1,016 shares of restricted stock. For each of the directors, 50% of the shares
vest and become freely tradable on January 1, 2016 and the remaining 50% vest
and become freely tradable on January 1, 2017.
Annual Retainer and
Meeting Fees
In 2014, the non-employee directors
received the following compensation for serving on our Board and committees of
our Board:
● |
Annual retainer of
$65,000; |
● |
Board chairman annual retainer
of $120,000 (such amount is in addition to the annual retainer amount
received by all Board members); |
● |
Board attendance fee of $2,500
per meeting; and |
● |
Each committee
chairman is paid an annual retainer in the amount of $24,000 and each
committee member is paid an annual retainer of $8,000. All committee
members also receive a $600 fee for each committee
meeting. |
We also reimburse our non-employee
directors for their reasonable expenses incurred in attending Board and
committee meetings. Board members who are also officers do not receive any
separate compensation or fees for attending Board or committee
meetings.
In 2015, the Board revised its
compensation structure such that board members will no longer receive fees for
each Board or committee meeting that they attend.
Transactions with
Related Persons
None.
Review, Approval or
Ratification of Transactions with Related Persons
The audit committee charter charges the
audit committee with the responsibility to investigate, review, and report to
the Board the propriety and ethical implications of any transactions between the
Company and any employee, officer, or Board member, or any affiliates of the
foregoing. The audit committee charter operates in conjunction with other
aspects of the Director Code of Conduct and the Companys Code of Conduct. The
audit committee evaluates related party transactions for purposes of
recommending to the disinterested members of the Board that the transactions are
fair, reasonable
and within the Company policies and
practices. The Board will approve or ratify only transactions that are fair to
the Company and not inconsistent with the best interests of the Company and its
stockholders. Related party transactions involving directors are also subject to
approval or ratification by the disinterested directors when so required under
Delaware law. Applicable transactions may be reported to the audit committee by
our independent auditors, employees, officers, Board members, or other
parties.
16
Table of
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Corporate Governance and Board
Matters |
|
|
Compensation and
Stock Option Committee Interlocks and Insider
Participation
During the last fiscal year, none of the
members of the compensation and stock option committee has been or will be one
of the Companys officers or employees. The Company does not have any
interlocking relationships
between its executive officers and the
compensation and stock option committee and the executive officers and
compensation committee of any other entities, nor has any such interlocking
relationship existed in the past.
We have adopted a Code of Ethics for our
officers and employees, as well as the Director Code of Conduct for our
non-employee directors (together, the Codes). The Codes are intended to
promote honest and ethical conduct, compliance with applicable laws, full and
accurate reporting, and prompt internal reporting of
violations of the code, as well as other
matters. Each year, our employees and our non-employee directors confirm that
they have read the applicable Code and will comply with its standards. Both
Codes are available on our website www.airmethods.com under the
Investor tab.
|
|
Section 16(A) Beneficial Ownership Reporting
Compliance |
Based on our review of the copies of
reports filed and upon written representations, we believe that during 2014,
named executive officers, directors and ten percent
stockholders of the Company were in
compliance with their filing requirements under Section 16(a) of the Exchange
Act of 1934, as amended.
|
|
Stockholder
Communications |
The Board recommends that stockholders
initiate any communications with the Board in writing directed to the Companys
secretary at: Secretary, Air Methods Corporation, 7211 South Peoria, Englewood,
Colorado 80112. This centralized process assists the Board in reviewing and
responding to stockholder communications
in an appropriate manner. Each
communication intended for the Board and received by the Secretary that is a
communication made by the stockholder in such capacity (as opposed to acting in
its capacity as a party with a commercial relationship with the Company) will be
promptly forwarded to the specified party.
Air
Methods Corporation Notice of the 2015 Annual Meeting & Proxy
Statement 17
Table of
Contents
|
|
Compensation Discussion and
Analysis |
This Compensation Discussion and Analysis
(CD&A) describes the philosophy and the material elements of our
compensation program for fiscal year 2014 for our named executive officers,
including our chief executive
officer, our chief financial officer, and
our three other most highly compensated executive officers (collectively, the
named executive officers).
Our named executive officers for 2014
were:
Name |
Title |
Aaron D. Todd |
Chief Executive Officer and Director |
Michael D. Allen |
President, Domestic Air Medical Services |
Trent J. Carman |
Chief Financial Officer & Treasurer |
David M. Doerr |
EVP, Business Development |
Crystal L. Gordon |
General Counsel, Secretary, and Senior Vice
President |
References to Air Methods, the
Company, we, us and our in this discussion and analysis refer to Air
Methods Corporation and its management, as applicable.
Overview of Our
Compensation Programs
Compensation
Philosophy
Our compensation programs are intended to
link increasing the long-term value of stockholder investment in the Company and
the compensation earned by our named executive officers. We strive to reward
sustained financial and operating performance and leadership excellence, as well
as align the executives long-term interests with those of our
stockholders.
We believe that payment of the variable
compensation components of our executive compensation program should coincide
with increased value for our stockholders. For example, under our annual cash
incentive program a minimum level of corporate performance must be achieved
before any bonus is payable. Even if the minimum level is achieved, the
committee reserves the sole discretion to exercise negative discretion to the
extent it deems reasonable and prudent under the circumstances.
The committee regularly reviews the
Companys compensation programs to ensure that such programs adequately reflect
the committees compensation philosophy and are achieving the desired results.
In an effort to continue improving the Companys compensation programs, in 2014
the committee undertook a comprehensive review and analysis of the Companys
compensation programs, and in connection with that review, implemented a new
long term incentive compensation program in substitution for the Economic Value
Added Plans previously utilized by the Company. A key component of the new long
term incentive compensation program is the addition of performance share units
based upon the Companys total shareholder return over a three-year
period.
Compensation
Principles
The foregoing compensation philosophy is
implemented through the following guiding principles:
● |
Attract, motivate and
retain executive officers capable of leading us to meet our business
objectives; |
● |
Encourage prudent risk
taking by our named executive officers; |
● |
Establish target
compensation levels that are competitive with those of other companies
with whom we compete for executive talent; |
● |
Adequately compensate our named executive officers for achieving
important short-term objectives; and |
● |
Align the
interests of named executive officers and stockholders through the use of
equity and other long-term incentives. |
Stockholder Feedback and Say-On-Pay Results
Each year, the committee considers the
outcome of stockholder advisory votes on executive compensation when making
future decisions relating to the compensation of the named executive officers
and our executive compensation program and policies.
Stockholders continued their strong
support of our executive compensation programs with 97% of the votes cast for
approval of the say on pay proposal at the 2014 Annual Meeting of
Shareholders. The committee believes that the voting results conveyed our
stockholders strong support of the philosophy, strategy and objectives of our
executive compensation programs.
18
Table of
Contents
Compensation Discussion and Analysis |
|
|
Components of Executive
Compensation
The committee has a practice of annually
reviewing the compensation program components, targets and payouts on an annual
basis to ensure our pay-for-performance alignment. The compensation program is
designed to incentivize responsible achievement of operating goals
over one and three-year periods, with
targets and metrics selected because they are directly linked to our strategic
goals. Additionally, our long-term incentives measure the creation of
stockholder value through increases in stock price.
Our executive compensation has three
primary elements, as shown in the following chart and described further
below:
Element |
|
Purpose |
|
Form |
Base Salary |
|
Salary and benefits are paid for
ongoing performance throughout the year. The amount of base salary payable
to each named executive officer is intended to be commensurate with each
executives responsibilities, experience and past
performance. |
|
Cash |
Performance-Based Annual
Bonus |
|
The annual bonus component of
executive compensation is designed to encourage and reward the achievement
of various Company objectives, including, among other things, certain
growth targets of our patient transports, executing certain human capital
management objectives, achieving cost management initiatives, securing and
retaining air medical service contracts, achieving earnings per share
goals and divisional earnings goals. The annual bonus rewards the
achievement of short-term objectives which the committee believes should
translate into value for the stockholders. 70% of the annual bonus is
based upon Company financial performance. The remaining 30% is based upon
achievement of certain personal goals. |
|
Cash payments under the Executive
Short Term Incentive Program, established under the Performance Pay
Plan. |
Long-Term Incentive
Compensation |
|
The long-term incentive compensation
currently consists of stock options to purchase our common stock (stock
options) under our Second Amended and Restated 2006 Equity Compensation
Plan (the 2006 Plan), performance share units awarded under the
Performance Pay Plan, and cash awarded under various cash-based long-term
incentive plans. Our long term incentive compensation is designed to
reward executives for success in increasing the value of stockholder
investments. It also helps encourage executives to avoid behavior which
results in short-term benefit at the expense of long-term share value.
Finally, the time-vested component provides a retention component to our
executive compensation program which is also linked to stockholder
value. |
|
●Stock options are granted under the 2006 Plan.
●Pending approval of a new equity incentive plan, performance share
units are granted under the Performance Pay Plan.
●In prior years, cash payments under the 2011-2014 Bonus Program and
the 2012-2014 Bonus Program, established under the Performance Pay
Plan. |
Base
Salary
The annual base salary component of each
named executive officers compensation provides each individual with a fixed
level of annual cash compensation. Base pay is set by the committee in an amount
which is adequate to attract, motivate and retain the best talent for the
Companys needs. The amount of base salary payable to each named executive
officer is commensurate with each executives responsibilities, experience and
past performance, and also takes into consideration
peer and competitive data. Base pay is
not utilized by the Company to reward outstanding individual and/ or corporate
performance, which is instead tied to the short-term and long-term incentive
plans. There are three situations that may warrant an adjustment to base salary:
(i) cost of living increases; (ii) promotions or changes in role; or (iii)
market adjustments. No increase in base salary is automatic or
guaranteed.
The following table shows our named
executive officers respective base salaries for 2014:
Name |
2014 Base
Salary |
Aaron D. Todd, Chief Executive Officer |
|
$765,000 |
Michael D. Allen, President, Domestic Air Medical
Services |
|
$459,000 |
Trent J. Carman, Chief Financial Officer &
Treasurer |
|
$408,000 |
David M. Doerr, EVP, Business Development |
|
$408,000 |
Crystal L. Gordon, General Counsel, Secretary, and Senior
Vice President |
|
$331,500 |
Performance-Based
Annual Bonus
The Executive Short Term Incentive Plan
(the STIP) is an annual incentive program which is adopted pursuant to the
Companys Performance Pay Plan, a stockholder-approved incentive plan. This is
our primary vehicle for regularly recognizing Company and individual
performance. We believe that measuring and rewarding
performance on an annual basis in a
compensation program is appropriate because, like our primary peers and other
public companies, we measure and report our business accomplishments annually.
Further, the STIP drives achievement of key business results on an annual basis.
Payments under the STIP are performance-based and not guaranteed, as further
discussed below.
Continues on next page ► |
|
|
|
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
19 |
Table of
Contents
The 2014 STIP included, and the 2015 STIP
also includes, a threshold performance target based on a minimum fully-diluted
earnings per share metric (the EPS Threshold Metric). All amounts payable
under the STIP are subject to EPS Threshold Metric being satisfied.
Assuming
satisfaction of this threshold target,
specific payments under the STIP are calculated using the following formula for
all named executive officers, subject to committees discretion to modify the
award:
Long-Term Incentive
Compensation
Long-term incentive compensation awards
are designed to align the interests of our named executive officers with those
of our stockholders. This portion of compensation consists of performance-based
awards that provide incentives for achieving results consistent with the goal of
sustained growth in stockholder value, as well as time-vested awards that
provide retention value which is also linked to stockholder value. In
establishing the target value of long-term incentive awards for each named
executive officer, the committee relies on compensation data provided by its
independent compensation consultant, Denver Compensation & Benefits, LLC
(DCB). The committee also considers the named executive officers historical
individual and team performance, as well as the expected contribution in future
years.
Prior to 2014, the executive compensation
program historically included two types of awards: restricted stock grants and
potential cash payments under the 2011-2014 Bonus Plan (the 2011 EVA Plan) and
the 2012-2014 Bonus Plan (the 2012 EVA Plan and together with the 2011 EVA
Plan, the EVA Plans). In mid-2014, the Company implemented a new long term
incentive program comprised solely of equity awards to be granted on an annual
basis. They are designed to focus management on our strategy of driving
consistent, sustainable achievement of long-term goals, both incrementally and
over long performance periods. The annual granting of multi-year performance
compensation (including three-year performance targets) is designed to ensure
that the execution of the Companys strategic plan considers appropriate risks
and returns and allows for initiatives that span several fiscal years. In 2014,
these grants consisted of options under the 2006 Plan and performance share
units under the Performance Pay Plan. Each of these long-term incentive
compensation components are described in greater detail below.
Stock
Options
The Company uses stock options to align
the interests of its executive officers with stockholders because value is
realized only if the stock price appreciates (stock price performance). The
stock options granted in 2014 have a 3-year cliff vesting period.
Performance Share
Units
The Company also uses performance share
units to help retain its executives and further align their interests with our
stockholders. The performance share units are subject to a designated three-year
performance period. The vesting percentage is determined by the Companys total
shareholder return percentile (the TSR Percentile). The TSR Percentile means
the percentile rank of the Companys total shareholder return (TSR) during the
performance period relative to the TSR of other companies in the designated peer
group during the performance period as determined by the Company; provided that
for purposes of measuring the TSR Percentile, the beginning and ending TSR
values shall be calculated based on the average of the closing prices of the
applicable companys stock for the 20 trading days prior to and including the
beginning or ending date, as applicable, of the performance period. It is
anticipated that future performance share units would be issued pursuant to the
proposed 2015 Equity Incentive Plan (see Proposal 4 Approval of 2015 Equity
Incentive Plan beginning on page 42).
The EVA
Plans
Prior to 2014, a key component of the
Companys long-term incentive compensation included cash bonuses potentially
payable under the 2011 EVA Plan and the 2012 EVA Plan, each established under
the Performance Pay Plan which was approved by the Companys stockholders on May
31, 2012. The 2011 EVA Plan and the 2012 EVA Plan were adopted on September 30,
2011 and September 25, 2012, respectively.
20
Table of
Contents
|
Compensation Discussion and Analysis |
|
|
2011 EVA Plan
Under the 2011 EVA Plan, certain members
of senior management were eligible to receive cash compensation based upon the
financial performance of the Company (measured in terms of economic value
added) during the period commencing July 1, 2011 and ending June 30,
2014.
Under the 2011 EVA Plan, the economic
value added was the difference of (a) the Closing Valuation minus (b) the Opening
Valuation. The foregoing valuations are determined as follows:
● |
The Opening Valuation is
calculated as follows: (a) EBITDAR (Earnings Before Interest, Taxes
Depreciation, Amortization and Rent) for the twelve (12) month period
ending on June 30, 2011 multiplied (b) by six (6),
minus
(c) any Debt (as defined in the EVA Plans) as of June 30, 2011,
plus
(d) any Cash (as defined in the EVA Plans) as of June 30,
2011. |
● |
The Closing Valuation is
calculated as follows: (a) EBITDAR (Earnings Before Interest, Taxes
Depreciation, Amortization and Rent) for the twelve (12) month period
ended on June 30, 2014 multiplied (b) by six (6),
minus
(c) any Debt as of June 30, 2014, plus (d) any Cash as of June 30, 2014.
|
The named executive officers participating
in the 2011 EVA Plan are Aaron Todd, Michael Allen and Trent Carman. In the
event the economic value added was a positive number, each of the foregoing
named executive officers was entitled to receive a certain percentage (as set
forth in Section 3 of the 2011 EVA Plan) of the increase in the economic value
added. Amounts payable
under the 2011 EVA Plan are to be paid in
three equal annual installments on September 15, 2014, January 1, 2015 and
January 1, 2016.
2012 EVA Plan
In connection with an earlier benchmarking
study undertaken by DCB in 2012, the committee adopted the 2012 EVA Plan, which
supplemented (but does not alter or amend) the 2011 EVA Plan for the period
beginning July 1, 2012 and ending June 30, 2014 (the 2012 EVA Performance
Period). The 2012 EVA Plan supplemented the 2011 EVA Plan as
follows:
● |
Added new participants from senior
management, including Ms. Gordon, for the 2012 EVA Performance
Period; |
● |
Adjusted the portion of the bonus
pool to which each participant may be entitled during the 2012 EVA
Performance Period; |
● |
Modified the calculation of
economic value added for such period by increasing the Business
Valuation Multiple (as such term is defined in the 2012 EVA Plan) from 6
to 7; |
● |
Provided an offset (as determined at
the discretion of the committee in order to preserve maximum flexibility)
against amounts payable under the 2011 EVA Plan to achieve the desired
economics without double paying participants for the same financial
performance under both the 2011 EVA Plan and the 2012 EVA Plan;
and |
● |
Modified the termination without
cause section to mirror the language set forth in the amended employment
agreements executed by the named executive officers in September
2012. |
Compensation Mix
To determine the appropriate level and mix
of incentive compensation, the committee considers a number of factors,
including the information provided by the committees independent compensation
consultant (see Role of Independent Compensation Consultant, page
29).
There is not a pre-established policy or
target for the allocation between either cash and non-cash or short-term and
long-term incentive compensation. Our philosophy is to place the executive team
in the shoes of the stockholders to
the greatest extent possible. Therefore, a
significant portion of potential compensation comes from payments and awards
under our Performance Pay Plan as well as equity awards under the 2006 Plan. The
committee believes that executives should have the greatest opportunity for gain
when the value of stockholders investment is increased. The committee intends
that the named executive officers compensation be tied together with Company and
individual performance through various forms of incentive compensation, rather
than be built into base pay.
Governance Features of the Executive
Compensation Program
Below we summarize certain executive
compensation practices, both the practices we have implemented to drive
performance and the practices we have not
implemented because we do not believe they
would serve our stockholders long-term interests.
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
21 |
Table of
Contents
Stock Ownership Guidelines
In 2010, the committee established stock
ownership guidelines for members of senior management and directors (the
Original Ownership Guidelines). The stock ownership guidelines have been
established to better align the interests of our named executive officers and
directors with the interests of our stockholders and to promote our commitment
to sound corporate governance.
As a result of the Companys growth in
stock price and to ensure best corporate governance practices, in January 2013
the committee evaluated the Original Ownership Guidelines. In connection with
such evaluation, the committee revised the Original Ownership Guidelines as
follows (the Revised Ownership Guidelines):
● |
Modified the ownership requirement
for non-employee directors to three times the non-employee director annual
retainer amount as of January 1, 2013. Under the Original Ownership
Guidelines, the directors were required to hold 45,000 Qualifying Shares
(as defined hereafter); |
● |
Given the compensation benchmarking
study undertaken by the committee in early 2013, clarified that the base
salary used to calculate compliance with the ownership guidelines is each
named executive officers base salary as of January 1,
2013; |
● |
Modified the definition of
Qualifying Shares to exclude unexercised options; |
● |
Added a provision providing that
named executive officers and directors are precluded from selling shares
(with limited exceptions) if they are not in compliance with the Revised
Ownership Guidelines; and |
● |
Added a provision stating that any
Company shares pledged or used to support margin debt would not be counted
towards meeting the ownership requirements. |
As noted above, the ownership requirement
for our non-employee directors is three (3) times the annual retainer amount as
of January 1, 2013. Named executive officers must own a number of Qualifying
Shares equal to a multiple of their base salary, ranging from 5 (CEO) to 1
(Regional Vice Presidents). Qualifying Shares includes the Companys common
stock (including vested and unvested restricted common stock, but excluding the
stock described above).
Each named executive officer is required
to achieve the target stock ownership within three (3) years after being
designated as a Section 16 Officer, or in the case of a named executive officer
designated as a Section 16 Officer at the time the Original Guidelines were
adopted, by December 31, 2015, which is five (5) years from the date of adoption
of such guidelines. Non-employee directors are required to achieve the target
stock ownership within three (3) years of joining the Board of Directors, or in
the case of non-employee directors serving
at the time the guidelines were adopted,
by December 31, 2013, which was three (3) years from the date of adoption of the
Original Ownership Guidelines.
As of December 31, 2014, all named
executive officers and non-employee directors subject to the Revised Ownership
Guidelines have met or are on track to meet their ownership
requirements.
Prohibition on Derivative
Transactions
Our Insider Trading Policy prohibits,
among many other actions, our named executive officers and directors from
entering into derivative transactions such as puts, calls or hedges with our
stock. Directors and officers are also encouraged to exercise caution in
pledging the Companys securities or using the Companys securities to support
margin debt. In an effort to discourage pledging of the Companys stock, the
committee does not permit employees and non-employee directors subject to the
stock ownership guidelines to count such pledged shares towards meeting the
ownership requirements set forth in the stock ownership guidelines.
Responsible Equity Grant
Practices
The Companys equity grant practices
ensure all grants are made on fixed grant dates and at exercise prices or grant
prices equal to the Fair Market Value of the Companys common stock on such
dates. In addition, all equity grants are awarded independent of the timing of
our release of material, non-public information.
Clawback Policy
At this time, the committee has not
adopted a clawback policy for the executive management team. While in full
support of such a policy, the committee is waiting for the adoption of final
rules by the Securities and Exchange Commission before adoption and
implementation of a specific policy. The amended employment agreements entered
into between the Company and each of the named executive officers, however, do
contain a provision that makes each named executive officers compensation
subject to any clawback or recoupment policies of the Company that are generally
applicable to the Companys senior management, as may be in effect from time to
time, or as required by applicable law.
In addition, as required under Section 304
of the Sarbanes-Oxley Act of 2002, the annual bonus and other incentive
compensation must be forfeited by the Companys chief executive officer and the
chief financial officer if, during the 12-month period following the issuance of
financial statements, those financial statements must be restated due to
material noncompliance as a result of misconduct in the preparation of those
financial statements.
22
Table of
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|
Compensation Discussion and Analysis |
|
|
Risk Mitigation
We believe our compensation programs are
discretionary, balanced and focused on the long term. Under this structure, the
highest amount of compensation that can be achieved is through consistent
superior performance over sustained periods of time. This provides strong
incentives to manage the Company for the long term, while avoiding excessive
risk-taking in the short term. Goals and objectives reflect a balanced mix of
quantitative and qualitative performance measures to avoid excessive weight on a
single performance measure. Likewise, the
elements of compensation are balanced
among current cash payments, deferred cash and equity awards. In addition, a
significant percentage of our managements incentive compensation is based on
the total performance of the Company. This is designed to mitigate any incentive
to pursue strategies that might maximize the performance of a single operating
division or financial metric to the detriment of our Company as a whole.
Finally, with limited exceptions, the committee retains a large amount of
discretion to adjust compensation downward for quality of performance and
adherence to Company values.
How We Performed in 2014
During 2014 the Company saw improvements
in revenue, earnings per share and community-based transports. Set forth below
are select highlights from the Companys performance in 2014:
● |
The Company reached the significant
$1 billion milestone in revenue. Revenue increased 14% to $1,004.8 million
compared to $879.2 million in the prior year. |
● |
Earnings from continuing operations
(after minority interests) increased 57% to $98.8 million ($2.56 per
diluted share) as compared to the prior year. |
● |
Our community-based transports grew
8% as compared to the prior year. |
● |
Community-based transports
originating from our Direct Call transfer center increased 70%, as
compared to the prior year, representing over 800 additional
transports. |
● |
Our diversification into helicopter
tourism has been beneficial to our shareholders, as segment net income
increased 52% as compared to the prior year to $9.6 million (this amount
is after allocation of purchase financing costs). |
● |
Successfully launched ten new green
field locations, while partnering with our hospital customers to outsource
nine of their operating locations. |
● |
Successfully negotiated a long-term
relationship with Flight Safety International to have four full motion
simulators built in Denver, Colorado. Our safety record continues to lead
the industry. |
Despite the business achievements outlined
above, the Companys 1-year annualized total shareholder return (TSR) was
-24.42%. However, as evidenced in the chart below, the Company has historically
delivered consistent positive return to stockholders over time, as evidenced by
the Companys 5-year annualized TSR (33.20%) and 3-year annualized TSR (18.62%).
TSR Relative to Market
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
23 |
Table of
Contents
How Our 2014 Performance Affected Our
Pay
Annual Incentive - Executive Short Term
Incentive Plan
The 2014 STIP included an EPS Threshold
Metric of $1.90. All amounts payable under the STIP were subject to satisfaction
of the EPS Threshold Metric. The Company achieved fully-diluted earnings per
share of $2.41 in 2014, satisfying the EPS Threshold Metric.
Under the 2014 STIP, 70% of the annual
incentive was tied to achievement of Company specific financial performance
metrics while the remaining 30% was tied to achievement of key individual
performance objectives. The performance goals set forth in the 2014 STIP
included specific annual corporate financial objectives consistent with the
Companys annual operating plan, as well as achievement of Company strategic and
operational objectives.
Target bonus opportunities under our STIP
are equal to a pre-established percentage of the executives base salary. For
each financial metric, the committee set a threshold, target and maximum level
of performance. No bonus is payable below the threshold level of performance,
and performance at or above the maximum level equates to a maximum payout for
that particular financial metric. For 2014, threshold performance resulted in a
payout equal to 50% of the executives base salary, target performance resulted
in a payout equal to 100% of the executives base salary, and maximum
performance resulted in a payout equal to 200% of the executives base
salary.
Financial Measurements of the 2014
STIP
For 2014, 35% of the annual incentive was
contingent upon achievement of an annual Company EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) target, 17.5% on an annual
Company earnings per share (EPS) target and 17.5% on an annual return on
equity (ROE) target, all designed to focus managements efforts on continuing
to improve performance and maximizing stockholder returns.
This proxy statement includes financial
measures that are not presented in accordance with generally accepted accounting
principles (GAAP). These non-GAAP financial measures are included to help
facilitate comparisons of Company operating performance across periods and with
peer companies. Specifically, the Company utilizes EBITDA as a key performance
target. The Company defines EBITDA as earnings before interest, income taxes,
depreciation, amortization and gain or loss on disposition of assets. EBITDA is
calculated by taking the Companys net income, and adding the following: (i)
interest expense; (ii) income tax expense; (iii) depreciation and amortization;
and (iv) gain/loss on disposition of assets.
Bonuses are determined by comparing the
Companys fiscal year EBITDA, EPS and ROE to a target level of EBITDA, EPS and
ROE for the year established by our compensation committee. The table set forth
below describes the respective weight of each 2014 financial metric, as well as
the threshold, target and maximum for each such metric. The Company did not
achieve the target for any of the financial objectives.
Objective |
|
Threshold |
|
Target |
|
Maximum |
|
Actual Results |
|
|
|
|
|
|
|
|
$2.41 |
EPS Objective (weighted 25%) |
|
$2.00 |
|
$2.85 |
|
$3.42 |
|
(74% of Target) |
|
|
|
|
|
|
|
|
$262,054,000 |
EBITDA
Objective (weighted 30%) |
|
$220,000,000 |
|
$280,694,000 |
|
$336,832,800 |
|
(84% of
Target) |
|
|
|
|
|
|
|
|
25.80% |
EBITDA Margin Objective (weighted 15%) |
|
21% |
|
30% |
|
36% |
|
(77% of Target) |
Strategic and Operational Goals of the 2014
STIP
The Chief Executive Officer recommended,
and the committee, together with the full Board, approved the specific
operational and strategic goals to be accomplished in 2014 (30% weight) for each
named executive officer. In 2014, the operational and strategic goals were
focused on, among other things, senior
team recruiting, cost reductions, days
sales outstanding maintenance, outsourcing initiatives, various operational
metrics, target acquisitions and efficiencies in certain company-wide training
programs.
For 2014, each named executive officer
satisfied 66% of his or her individual operational and strategic goals, except
for Mr. Carman, who satisfied 50% of his individual operational and strategic
goals.
24
Table of
Contents
|
Compensation Discussion and Analysis |
|
|
2014 STIP Awards
The amounts awarded under the 2014 STIP to
the named executive officers are as follows:
|
Name |
Amount Earned (Financial
Metrics) |
|
Amount
Earned (Individual Goals) |
|
Total
Amount Earned |
|
|
Aaron D. Todd, |
|
|
|
|
|
|
|
|
|
Chief Executive Officer |
$426,739 |
|
$ |
151,356 |
|
$ |
578,095 |
|
|
Michael D.
Allen, |
|
|
|
|
|
|
|
|
|
President, Domestic Air Medical
Services |
$256,044 |
|
$ |
90,813 |
|
$ |
346,857 |
|
|
Trent J. Carman, |
|
|
|
|
|
|
|
|
|
Chief Financial Officer &
Treasurer |
$227,594 |
|
$ |
61,154 |
|
$ |
288,748 |
|
|
David M.
Doerr, |
|
|
|
|
|
|
|
|
|
EVP, Business Development |
$227,594 |
|
$ |
80,723 |
|
$ |
308,317 |
|
|
Crystal L. Gordon, |
|
|
|
|
|
|
|
|
|
General Counsel, Secretary, and
Senior Vice President |
$184,920 |
|
$ |
65,588 |
|
$ |
250,508 |
|
2014 Long-Term Incentive
Compensation
In determining 2014 awards under our long
term incentive program, our compensation committee reviewed the market analysis
provided by DCB. In addition, the compensation committee reviewed
recommendations from our chief executive officer for awards to named executive
officers other than for himself. The compensation committee compared such
recommendations against DCBs market analysis to assist in determining the
appropriate amount of equity to grant to each named executive officer based on
market data, while also taking into consideration the Companys performance as
well as individual performance and retention concerns.
Beginning in 2014, our compensation
committee began to grant both options and performance share units to our named
executive officers and key employees. The Company believes that options and
performance
share units have retentive attributes and
effectively align our executive officers interests with the interests of our
stockholders on a long-term basis. Performance share units also have an
additional performance-based component that compares our performance with that
of our peer companies. We believe this combination of long-term equity awards
appropriately provides incentives that capture absolute total return performance
of our common stock as well as awards that also capture variable performance
relative to the performance of other companies of our peer group. The
compensation committee may determine in the future that different and/or
additional award types are appropriate.
In 2014, each of our named executive
officers received 50% of his or her long-term incentive award in the form of
options and 50% of his or her long-term incentive award in the form of
performance share units. The amount and type of equity granted to our named
executive officers in 2014 was as follows:
|
Name |
Targeted
Long-Term Equity Grant Value (200% of Base Salary for CEO and
125% for Other NEOs) ($) |
|
Stock
Options (#) |
|
Performance Share
Units(1) (#) |
|
|
Aaron D. Todd, |
|
|
|
|
|
|
|
|
Chief Executive Officer |
$ |
1,530,000 |
|
50,596 |
|
14,429 |
|
|
Michael D.
Allen, |
|
|
|
|
|
|
|
|
President, Domestic Air Medical
Services |
$ |
573,750 |
|
18,974 |
|
5,411 |
|
|
Trent J. Carman, |
|
|
|
|
|
|
|
|
Chief Financial Officer &
Treasurer |
$ |
510,000 |
|
16,866 |
|
4,810 |
|
|
David M.
Doerr, |
|
|
|
|
|
|
|
|
EVP, Business
Development1 |
$ |
510,000 |
|
16,866 |
|
4,810 |
|
|
Crystal L. Gordon, |
|
|
|
|
|
|
|
|
General Counsel, Secretary, and
Senior Vice President |
$ |
414,375 |
|
13,703 |
|
3,908 |
|
(1) |
The performance share
units granted in 2014 are subject to a designated three-year performance
period from July 1, 2014 through and including June 30, 2017. This amount
reflects the threshold number of performance share units, assuming
satisfaction of a TSR Percentile of
25%. |
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
25 |
Table of
Contents
Stock Options
The 2014 options cliff vest after a
three-year period, provided the award recipient remains continuously employed
through the applicable vesting date. 100% of the options vest on July 1,
2017.
The exercise price for the options is
equal to $53.02, which was the closing stock price of the Companys common stock
on the date of the grant. Each of the options expires five years after the date
of its grant.
Performance Share Units
The 2014 performance share units are
subject to a designated three-year performance period beginning on July 1, 2014
through and including June 30, 2017. Satisfaction of the performance conditions
for the performance share units granted during 2014 is determined at the end of
the three-year measurement period. Any performance share units that have not
vested at the end of the measurement period are forfeited. The performance
criterion for the performance share units are based on a comparison of the
Companys TSR for the three-year measurement period with the TSRs of a group of
peer companies for the same three-year measurement period; provided that for
purposes of measuring the TSR Percentile, the beginning and ending TSR values
shall be calculated based on the average of the closing prices of the applicable
companys stock for the 20 trading days prior to and including the beginning or
ending date, as applicable, of the performance period. The number of earned
shares of the Companys common stock will be calculated based on which quartile
its TSR Percentile ranks as of the end of the annual measuring period relative
to the other companies in the peer group as follows:
TSR Percentile |
CEO |
|
Other
NEOs |
75% percentile or above |
300% |
|
187.5% |
25th percentile |
100% |
|
62.5% |
Less than 25% percentile |
0% |
|
0% |
If the Company is ranked between the 25th
and 75th percentiles, the percentage multiple will be interpolated on a linear
basis based on the actual percentile ranking of the Company. All 2014
performance share units earned after the measurement period will be settled in
shares of the Companys common stock following the end of the three-year
performance cycle.
EVA Plans
The financial performance measurement
period for the 2011 EVA Plan and the 2012 EVA Plan ended on June 30, 2014. Under
both the 2011 EVA Plan and the 2012 EVA Plan, the economic value added was
defined as the difference of (a) the Closing Valuation minus (b) the Opening
Valuation. The Opening Valuation for the 2011 EVA Plan was $648,743,000 and the
Closing Valuation for the 2011 EVA Plan was $949,416,000, accordingly, the
economic value added for the 2011 EVA Plan was $300,673,000. The Opening
Valuation for the 2012 EVA Plan was $1,066,392,000 and the Closing Valuation for
the 2012 EVA Plan was $1,199,937,354, accordingly, the economic value added for
the 2012 EVA Plan was $133,545,354.
Under the EVA Plans, the aggregate amount
distributable to the participants, including the named executive officers, is an
amount equal to three percent (3%) of the economic value added (the
Distributable EVA). The percentage of the economic value added amount
allocable to each of the named executive officers and the aggregate amount
payable under each of the EVA Plans to such named executive officers are shown
in the table below. The EVA Plan payouts are payable in three equal annual
installments. Two installments have already been paid, on each of September 15,
2014 and January 1, 2015, and the third installment is due on January 1,
2016.
Name |
2011 EVA %
of Distributable EVA |
|
2011 EVA Plan
Payout ($) |
|
2012 EVA %
of Distributable EVA |
|
2012 EVA Plan
Payout ($) |
Aaron D. Todd, |
|
|
|
|
|
|
|
Chief Executive Officer |
28.5% |
|
1,630,434 |
|
25% |
|
1,001,590 |
Michael D. Allen, |
|
|
|
|
|
|
|
President, Domestic Air Medical Services |
14.3% |
|
818,077 |
|
15% |
|
600,954 |
Trent J. Carman, |
|
|
|
|
|
|
|
Chief Financial Officer & Treasurer |
14.3% |
|
818,077 |
|
12.5% |
|
500,795 |
Crystal L. Gordon, |
|
|
|
|
|
|
|
General Counsel, Secretary, and Senior Vice
President(1) |
|
|
|
|
10% |
|
400,636 |
(1) |
Ms. Gordon did not participate in the
2011 EVA Plan. Mr. Doerr joined the Company in 2013 and therefore, did not
participate any either of the EVA Plans. |
26
Table of
Contents
|
Compensation Discussion and Analysis |
|
|
Summary of 2015 Compensation
Activity
The 2015 compensation program for the
named executive officers is substantially similar to the 2014 compensation
program other than the long-term grant equity targets for the named executive
officers were decreased by the committee to align overall compensation more
closely to the Companys Compensation Peer Group. A brief description of each of
the components of our 2015 compensation program is set forth below.
2015 Base Salary
In 2015, the committee determined not to
increase the base salary for each of the named executive officers. Accordingly,
the base salary for each of the named executive officers in 2015 will be the
same as in 2014. The following table shows the base salary for each of the named
executive officers in 2015.
Name |
2015 Base Salary |
Aaron D. Todd, |
|
Chief Executive Officer |
$765,000 |
Michael D. Allen, |
|
President, Domestic Air Medical Services |
$459,000 |
Trent J. Carman, |
|
Chief Financial Officer & Treasurer |
$408,000 |
David M. Doerr, |
|
EVP, Business Development |
$408,000 |
Crystal L.
Gordon, |
|
General Counsel, Secretary, and Senior Vice
President |
$331,500 |
2015 Annual Cash Incentive
Compensation
The committee determined that the design
of the 2014 STIP was appropriate and elected to use a similar design for the
2015 STIP with some changes made to target salary percentages associated with
each metric. Similar to the 2014 STIP, the 2015 STIP also contains an EPS
Threshold Metric.
2015 Financial Performance
Measures
The 2015 financial performance metrics
focus executives on maximizing operating income and are good indicators of how
effectively the Companys annual business objectives and strategies are being
executed. The following table sets forth the respective weight of each 2015
financial performance metric, as well as the rationale for each of the
metrics:
Metric |
|
Rationale for Metric |
|
%
of Bonus Potential |
Earnings Per Share |
|
Measures delivery of stockholder value at
the corporate level |
|
17.5% |
EBITDA |
|
Motivates growth, gross margin performance and expense
management; direct correlation of earnings performance with share
valuation |
|
35% |
Return on Equity |
|
It is determined by dividing net income for
the past 12 months by common stockholder equity (adjusted for stock
splits). It is an indicator of profitability, and the result is shown as a
percentage. Investors use ROE as a measure of how a company is using its
money. |
|
17.5% |
TOTAL: |
|
|
|
70% |
2015 Strategic and Operational
Goals
Similar to the 2014 STIP, the Chief
Executive Officer recommended, and the committee, together with the full Board,
approved the specific operational and strategic goals to be accomplished in 2015
(30% weight) for each named executive officer. In 2015, the operational and
strategic goals are focused on, among other things, achievement of certain
process improvement initiatives, revenue growth for key strategic value-add
services and completion of strategic growth drivers outlined for
2015.
2015 Long-Term Incentive
Compensation
In February 2015, the compensation
committee made equity grants to the Companys named executive officers, 50% of
the awards consisting of options and 50% of the
awards consisting of performance share
units. As noted above, after further review of the 2014 Compensation Program,
the committee decreased the long-term equity targets for the CEO and other named
executive officers in 2015 to align more closely with the Compensation Peer
Group. In 2015, the committee decreased the targeted amount for equity grants to
100% of the respective named executive officers salary (other than the CEO),
compared to the 125% target of base salary previously established for 2014
equity grants. The targeted equity grant amount for the CEO was also decreased
to 150% of the CEOs salary, compared to the 200% target of base salary
previously established for the 2014 equity grants.
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
27 |
Table of
Contents
|
Name |
|
Targeted Long-Term Equity Grant
Value (150% of Base Salary for CEO and 100% for Other
NEOs) ($) |
|
Stock Options (#) |
|
Performance Share
Units(1) (#) |
|
|
Aaron D. Todd, |
|
|
|
|
|
|
|
|
|
Chief Executive Officer |
|
$ |
1,530,000 |
|
46,047 |
|
13,031 |
|
|
Michael D. Allen, |
|
|
|
|
|
|
|
|
|
President, Domestic Air Medical Services |
|
$ |
459,000 |
|
18,419 |
|
5,212 |
|
|
Trent J. Carman, |
|
|
|
|
|
|
|
|
|
Chief Financial Officer & Treasurer |
|
$ |
408,000 |
|
16,372 |
|
4,633 |
|
|
David M. Doerr, |
|
|
|
|
|
|
|
|
|
EVP, Business Development |
|
$ |
408,000 |
|
16,372 |
|
4,633 |
|
|
Crystal L.
Gordon, |
|
|
|
|
|
|
|
|
|
General Counsel, Secretary, and Senior Vice
President |
|
$ |
331,500 |
|
13,303 |
|
3,764 |
|
(1) |
The
performance share units granted in 2015 are subject to a designated
three-year performance period from January 1, 2015 through and including
December 31, 2017. This amount reflects the threshold number of
performance share units, assuming satisfaction of a TSR Percentile of
25%. |
The options will vest, subject to
continued employment, over a three-year period commencing January 1, 2015, with
one-third vesting on each anniversary of January 1, 2015. The performance share
units granted in 2015 are subject to a designated three-year performance period
from January 1, 2015 through and including December 31, 2017. Between 0% and
200% of the target number of performance share units may vest on December 31,
2017, with the vesting percentage to be determined based on the TSR
Percentile.
Role of the Committee and Management in Executive
Compensation
The committee
oversees the design and administration of the Companys compensation program and
evaluates the program against competitive practices,
legal and regulatory developments and
general corporate governance trends. In February of each year, the committee
reviews the performance and total compensation of the named executive officers.
In addition, the committee reviews and establishes each named executive
officers total compensation target, which includes base salary, annual bonus
opportunities and long-term incentive awards for the current year.
The following table depicts the roles of
management, the committee, and our Board of Directors in recommending or
approving actions relating to the compensation of our named executive
officers.
Action |
For the Chief Executive Officer (CEO) |
For Other Named Executive Officers |
Design compensation
program |
Board of Directors (other
than the CEO) and the |
Board of Directors and
compensation committee |
|
compensation committee |
|
Establish target and maximum
Incentive |
Board of Directors (other than the CEO) and
the |
CEO and compensation committee |
Plan awards |
compensation committee |
|
Performance appraisal |
Board of Directors (other than the CEO) |
CEO |
Recommend base salary adjustments |
Board of Directors (other than the CEO) and
the |
CEO |
|
compensation committee |
|
Approve base salary adjustments |
Board of Directors (other than the CEO) |
compensation committee |
Recommend Incentive Plan awards |
Board of Directors (other than the CEO) and
the |
CEO |
|
compensation committee |
|
Approve Incentive Plan
awards |
Board of Directors (other
than the CEO) and the |
compensation
committee |
|
compensation committee |
|
As noted above, the committee makes all
base, bonus and equity compensation decisions regarding named executive
officers, with the exception of Mr. Todd, whose compensation is approved by the
entire Board of Directors (other than Mr. Todd). In making such determinations,
the committee considers the recommendations provided by Mr. Todd with respect to
all of the other named executive officers, as well as information provided by
management with respect to financial projections for the Company and divisional
performance goals.
Management does interact with the
committees independent compensation consultant as necessary and prepares
materials for each committee meeting to assist the committee in its
consideration of executive compensation programs and policies and its
administration of the compensation program.
28
Table of
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|
Compensation Discussion and
Analysis |
|
|
Role of Independent Compensation Consultant
Our committee
charter authorizes the committee to engage independent legal and other advisors
and consultants as it deems necessary or appropriate to carry out its
responsibilities. The committee has engaged DCB as its independent compensation
consultant. The committee considers analysis and advice from DCB when making
compensation decisions and when making decisions on plan design. Specifically,
the committee relies on DCB for, among other things:
● |
Reviewing total compensation
strategy and pay levels for executives. |
● |
Performing competitive analyses of
non-employee director compensation. |
● |
Examining the executive compensation
programs to ensure they support the business
strategy. |
The committee may request information or
advice directly from DCB and may direct the Company to provide or solicit
information from DCB. The principal consultant for DCB regularly interacts with
representatives of the Company. The principal consultant for DCB attended three
of the five committee meetings during our 2014 fiscal year. DCB was paid
$104,201 for services rendered during 2014. During 2014, DCB did not provide any
services to the Company unrelated to executive compensation, did not have any
business or personal relationships with the committee members, and maintained
policies and procedures designed to avoid conflicts of interest.
Role of Comparative Compensation Data
The committee
utilizes the Compensation Peer Group to help evaluate executive compensation
based upon compensation levels for similarly situated executives within the
Compensation Peer Group. To conduct these comparisons, DCB at least annually
provides a compensation comparison based on information that is derived from
comparable businesses (based primarily on revenue and market capitalization).
This data is used as a frame of reference for establishing compensation targets
for base salary, annual bonus and long-term incentives for executive
officers.
The Compensation Peer Group utilized as
part of the DCB reports consist of health care, aviation, transportation, and
logistics companies. The committee, upon the recommendation of DCB, chose this
group because they are reflective of the market in which we operate for
executive talent and because of each of the respective companys relative
leadership position in their sector, relative size as measured by revenues,
market valuation and performance. The committee periodically reviews the
Compensation Peer Group, based on the Companys size, financial results, as well
as other pertinent attributes, and updates the Compensation Peer Group as
appropriate in order to accurately reflect the Companys position within the
market. No changes were made to the Compensation Peer Group for 2015.
The Compensation Peer Group is comprised
of the following companies:
Ticker |
Company Name |
Ticker |
Company Name |
ATSG |
Air Transport Services Group Inc. |
KNX |
Knight Transportation |
AMSG |
AmSurg Corp |
LHCG |
LHC
Group, Inc. |
AAWW |
Atlas Air Worldwide Holdings, Inc. |
LPNT |
LifePoint Hospitals, Inc. |
BRLI |
Bio-Reference Laboratories |
MD |
Mednax Inc. |
BRS |
Bristow Group Inc. |
PHII |
Phi, Inc. |
GMT |
GATX Corp. |
RRTS |
Roadrunner Transportation Systems |
HGR |
Hanger, Inc. |
SEM |
Select Medical Holdings Corporation |
HLS |
HealthSouth Corp. |
TMH |
Team Health Holdings LLC |
HWAY |
Healthways |
UTIW |
UTi Worldwide Inc. |
HEI |
HEICO Corporation |
VVI |
Viad Corp |
HUBG |
Hub Group, Inc. |
|
|
Specific Forms of Compensation and the Role of
Discretion
In the past, the
committee has retained the authority to review named executive officer base
compensation and to make increases in base compensation based on changed
responsibilities, cost of living, and market norms. Also,
the committee has the authority to
recommend equity grants, which may be based on executive performance and market
norms. The committee intends to retain the discretion to make decisions about
named executive officer base compensation, levels of stock option grants, and
levels of restricted stock/restricted stock unit grants, including the use of
predetermined performance goals.
Continues on next page ► |
|
|
|
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
29 |
Table of
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In addition, the committee has discretion
in setting the performance targets and bonus potential in adopting annual bonus
programs and long-term cash incentive programs. Once performance periods are
complete, generally the plans pursuant to which such long-term cash incentives
are awarded provide the committee with the ability to apply negative discretion
in making the final awards. In addition, the adoption of the umbrella plan in
connection with the 2015 STIP provides the committee additional discretion in
making final awards once certain threshold performance is achieved, up to the
maximums set forth in the 2015 STIP. Pursuant to the 2015 STIP, if less than the
maximum amounts are awarded, the committee shall be deemed to have exercised its
negative discretion in establishing the award. For 2015 and future periods, the
committee has not determined whether it would exercise discretion to increase or
reduce the size of an award or payout, whether performance goals are satisfied
or not. However, the committee has no current intention to increase the size of
any objectively determined equity compensation award, especially if performance
goals are not met.
The committee may make future grants of
options, restricted stock/restricted stock units, or other equity compensation,
subject to objective performance goals. At this time, it has not determined
whether it would exercise discretion to reduce the size of an award or payout
even if performance goals are met. However, the committee has no current
intention to increase the size of any objectively determined equity compensation
award, especially if performance goals are not met.
Previously Earned
Compensation
We maintain no supplemental pension
plans or other programs in which gains from prior compensation could influence
amounts earned currently. The committee may consider gains from prior awards
when determining the appropriate size of long-term incentive grants.
Tax and Accounting
Considerations
Section 162(m) of the Internal Revenue
Code (the Code) limits the deductibility for tax purposes of compensation over
$1 million in any taxable year paid by a company to certain named executive
officers. The policy of the compensation committee is to establish and maintain
a compensation program that maximizes the creation of long-term stockholder
value. The compensation committee attempts to generally structure most
compensation approaches to preserve deductibility. The compensation committee,
however, reserves the right to adopt programs giving consideration to factors
other than deductibility where the compensation committee believes stockholder
interests are best served by retaining flexibility. In such cases, the
compensation committee may consider various alternatives to preserving the
deductibility of compensation payments and benefits to the extent reasonably
practicable and to the extent consistent with its compensation
objectives.
As discussed above, performance bonuses
are generally paid under the Performance Pay Plan and thus are intended to
qualify as performance-based compensation under Section 162(m) of the Code.
Accordingly, such amounts are intended to be deductible by the Company even if
they are in excess of the $1 million statutory limit. Certain of our annual
equity awards to our executives are not performance-based. Consequently, a
portion of that compensation may not be deductible in future years if such
executives aggregate compensation is in excess of statutory limits.
Section 409A of the Code provides that all
amounts deferred under a nonqualified deferred compensation plan are currently
included in gross income and are subject to an additional 20% income tax, to the
extent not subject to a substantial risk of forfeiture and not previously
included in gross income, unless certain requirements are met. We have designed
or amended our plans and programs with the intent that they either be exempt
from or comply with Code Section 409A.
In addition to the foregoing, we monitor
the treatment of options under FASB ASC Topic 718 in determining the form and
size of option grants.
30
Table of
Contents
|
|
Compensation and Stock
Option Committee Report |
The compensation and stock option
committee of the Board of Directors (the Committee) has reviewed and discussed
the section of this proxy statement entitled Compensation Discussion and
Analysis with management. Based on such review and discussions, the Committee
recommended to the Board that the Compensation Discussion and Analysis be
included in this proxy statement and the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 2014.
By the Compensation and Stock Option
Committee
Mark D. Carleton, Chairman
Lowell D.
Miller, Ph.D.
Ralph J. Bernstein
Jeffrey A. Dorsey
Equity Compensation
Tables
Summary Compensation Table
The following
table sets forth the total compensation earned by the named executive officers
for the fiscal years ended December 31, 2014, 2013, and 2012:
Name and Principal
Position (a) |
|
Year (b) |
|
Salary ($) (c) |
|
Bonus ($) (d) |
|
Option Awards ($) (e) |
|
Stock Awards ($) (f) |
|
Non-Equity Incentive
Plan Compensation ($) (g) |
|
All
Other Compensation ($) (h) |
|
Total ($) (i) |
Aaron D. Todd, |
|
2014 |
|
765,000 |
|
578,095 |
|
765,012 |
|
1,720,962 |
|
877,341 |
|
51,984 |
|
4,758,394 |
Chief Executive Officer |
|
2013 |
|
749,577 |
|
|
|
|
|
388,400 |
|
|
|
42,716 |
|
1,180,693 |
|
|
2012 |
|
521,655 |
|
720,000 |
|
|
|
264,000 |
|
|
|
91,087 |
|
1,596,742 |
Michael D.
Allen, |
|
2014 |
|
459,000 |
|
346,857 |
|
286,887 |
|
645,410 |
|
473,010 |
|
35,410 |
|
2,246,574 |
President,
Domestic Air Services |
|
2013 |
|
446,008 |
|
|
|
|
|
291,300 |
|
|
|
32,282 |
|
769,590 |
|
|
2012 |
|
348,005 |
|
354,600 |
|
|
|
|
|
|
|
13,971 |
|
716,576 |
Trent J. Carman, |
|
2014 |
|
408,000 |
|
288,748 |
|
255,014 |
|
573,698 |
|
439,624 |
|
42,366 |
|
2,007,450 |
Chief Financial Officer and Treasurer |
|
2013 |
|
400,000 |
|
|
|
|
|
194,200 |
|
|
|
32,482 |
|
626,682 |
|
|
2012 |
|
314,569 |
|
330,000 |
|
|
|
176,000 |
|
|
|
103,568 |
|
924,137 |
David M.
Doerr, |
|
2014 |
|
408,000 |
|
308,317 |
|
255,014 |
|
573,698 |
|
|
|
32,762 |
|
1,577,791 |
EVP, Business
Development |
|
2013 |
|
61,538 |
|
|
|
130,679 |
|
664,650 |
|
|
|
|
|
856,867 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crystal L. Gordon, |
|
2014 |
|
331,500 |
|
250,508 |
|
207,189 |
|
466,097 |
|
133,545 |
|
18,989 |
|
1,407,828 |
General Counsel, Secretary and SVP |
|
2013 |
|
325,000 |
|
|
|
|
|
194,200 |
|
|
|
16,238 |
|
535,438 |
|
|
2012 |
|
205,000 |
|
240,000 |
|
|
|
448,770 |
|
|
|
2,423 |
|
896,193 |
Salary
(Column (c))
The amount in the
Salary column represents the base salary earned by each named executive officer
in the applicable year.
Bonus
(Column (d))
The amount in the
Bonus column represents the amount earned under the Executive Short Term
Incentive Program (the STIP), established under the Performance Pay Plan.
Bonuses earned in 2012 and paid in 2013 are included in the 2012 compensation.
No bonuses were earned in 2013. Bonuses earned in 2014 and paid in 2015 are
included in 2014 compensation.
Option
Awards (Column (e))
This column shows
the aggregate grant date fair value of stock options granted in the years shown.
These amounts reflect the Companys accounting expense (calculated in accordance
with FASB ASC Topic 718) and do not correspond to the actual value that that
named executives will realize. The fair value of each option grant is estimated
on the date of grant using the Black-Scholes option-pricing model. The Company
uses historical option exercise data for similar employee groups, as well as the
vesting period and contractual term, to estimate the expected term of options
granted; the expected term represents the period of time that options granted
are expected to be outstanding. Expected volatility is based on historical
volatility of the Companys stock. The risk-free
Continues on next page ► |
|
|
|
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
31 |
Table of
Contents
rate for periods within the contractual
life of the option is based on the U.S. Treasury yield curve in effect at the
time of the grant. Assumptions used in the calculation of expense for the 2013
option award for Mr. Doerr and the named executive officers in 2014 are included
in Note 10 to the consolidated financial statements in our 2014 Annual Report on
Form 10-K, which was filed with the SEC on February 27, 2015. See the 2014
Grants of Plan-Based Awards Table on page 32 for additional information on stock
options granted in 2014.
Stock Awards
(Column (f))
This column shows
(i) the aggregate grant date fair value of PSUs granted in 2014 to the named
executive officers; and (ii) the value of the shares of restricted stock granted
in 2012 and 2013, which is valued at the closing price of the common stock on
the date of grant. Generally, the aggregate grant date fair value for the PSUs
is the amount the Company expects to expense for accounting purposes over the
awards vesting schedule and does not correspond to the actual value that the
named executive officers will realize from the award. The cost the Company
records for PSUs granted in 2014 is determined using a Monte Carlo simulation
model. The number of PSUs that will vest depends on the level of achievement of
a market performance condition, over a three-year period based on the TSR of the
Company relative to the TSR of a pre-defined competitor group. If a PSUs
minimum performance measure is not met, no award is earned and the Company will
not adjust the amounts related to the PSUs that are reported as compensation in
2014.
The value of the maximum amount of shares
issuable under the PSUs granted in 2014, assuming that the maximum level of
performance conditions are achieved, to each of our named executive officers is
as follows: Mr. Todd $2,839,994; Mr. Allen $1,065,047; Mr. Carman $946,687; Mr.
Doerr $946,687; and Ms. Gordon $769,212.
Non-Equity
Incentive Plan Compensation (Column (g))
This column
reflects the amount paid to each named executive officer under the EVA Plans in
2014. Amounts earned under the EVA Plans are paid in three equal installments
with the first two installments paid on September 15, 2014 and January 1, 2015.
The final installment will be paid on January 1, 2016. Mr. Doerr did not
participate any of the EVA Plans and Ms. Gordon did not participate in the 2011
EVA Plan.
All Other
Compensation (Column (h))
This column
reflects for each named executive officer, the sum of (i) the amounts
contributed by the Company to the applicable Company 401(k) and savings plan;
and (ii) the dollar value of life insurance and disability premiums paid by the
Company. Amounts contributed to the Company 401(k) and savings plan are
calculated on the same basis for all participants, including the named executive
officers. The named executive officers do not receive any other forms of
compensation from the Company.
2014 Grants of
Plan-Based Awards
During fiscal
2014, the named executive officers received (i) time-based incentive stock
option awards under the 2006 Plan and (ii) performance share units, under the
Performance Pay Plan. The following table provides additional information about
the equity awards granted to our named executive officers during fiscal 2014:
|
|
Estimated
Future Payouts Under Equity Incentive Plan Awards |
|
|
|
Name (a) |
Grant Date (b) |
Threshold (25th TSR Percentile)
(#) (c) |
Target (50th TSR Percentile
(#) (d) |
Maximum (75th TSR Percentile and Above)
(#) (e) |
All Other Option Awards: Number of Securities
Underlying Options (#) (f) |
Exercise Price of Option
Award ($/Share) (g) |
Grant Date Fair Value of Stock and Option Awards
($) (h) |
Aaron D. Todd,
Chief |
08/06/14 |
14,429 |
28,854 |
43,286 |
|
|
1,720,962 |
Executive Officer |
08/06/14 |
|
|
|
50,596 |
53.02 |
756,012 |
Michael D. Allen, |
|
|
|
|
|
|
|
President Domestic Air |
08/06/14 |
5,411 |
10,821 |
16,233 |
|
|
645,410 |
Medical Services |
08/06/14 |
|
|
|
18,974 |
53.02 |
286,887 |
Trent J. Carman,
Chief |
|
|
|
|
|
|
|
Financial Officer
& |
08/06/14 |
4,810 |
9,618 |
14,429 |
|
|
573,698 |
Treasurer |
08/06/14 |
|
|
|
16,866 |
53.02 |
255,014 |
David M. Doerr, EVP, |
08/06/14 |
4,810 |
9,618 |
14,429 |
|
|
573,698 |
Business Development |
08/06/14 |
|
|
|
16,866 |
53.02 |
255,014 |
Crystal L.
Gordon, |
|
|
|
|
|
|
|
General Counsel, |
|
|
|
|
|
|
|
Secretary, and
Senior |
08/06/14 |
3,908 |
7,815 |
11,724 |
|
|
466,097 |
Vice President |
08/06/14 |
|
|
|
13,703 |
53.02 |
207,189 |
32
Table of
Contents
|
Compensation and Stock
Option Committee Report |
|
|
Estimated
Payouts Under Equity Incentive Plan Awards (Columns (c),(d) and
(e))
The awards
represent PSUs granted in August 2014 under the Performance Pay Plan. The
performance period for the awards is from July 1, 2014 to June 30, 2017. For
additional details of the PSU awards granted in 2014, see the discussion
beginning on page 26.
All Other
Option Awards (Stock Options) (Columns (f) and (g))
The awards
represent stock options granted in August 2014 under the 2006 Plan. These
options have a term of five years from the date of grant and vest 100% on July
1, 2017 (3-year period). The exercise price of the stock options is $53.02, the
closing price of the Companys stock on the date of grant.
2014 Option
Exercises and Stock Vested
The following
table contains information with respect to the named executive officers
concerning option exercises and vesting of restricted stock during fiscal year
2014:
|
Option Awards |
|
Stock Awards |
Name |
Number of Shares Acquired
on Exercise (#) (a) |
|
Value Realized on Exercise
($) (b) |
|
Number of Shares Acquired
on Vesting (#) (c) |
|
Value Realized on Vesting
($) (d) |
Aaron D. Todd, |
|
|
|
|
|
|
|
Chief Executive Officer |
22,500 |
|
961,650 |
|
6,000 |
|
346,140 |
Michael D.
Allen, |
|
|
|
|
|
|
|
President, Domestic Air Medical
Services |
|
|
|
|
2,001 |
|
115,438 |
Trent J. Carman, |
|
|
|
|
|
|
|
Chief Financial Officer and
Treasurer |
|
|
|
|
3,999 |
|
230,702 |
David
Doerr |
|
|
|
|
|
|
|
EVP, Business Development |
|
|
|
|
|
|
|
Crystal L. Gordon, |
|
|
|
|
|
|
|
General Counsel, Corporate
Secretary and Senior Vice President |
|
|
|
|
3,501 |
|
193,589 |
(a) |
Represents aggregate number of
shares acquired upon exercise in fiscal year 2014. |
(b) |
Represents aggregate net gain on
shares acquired by options exercised in fiscal year 2014. Value is based
upon the closing price of our common stock on the date of share
acquisition less the exercise price of the options. |
(c) |
Represents the aggregate number
of shares acquired upon vesting of restricted stock in 2014. |
(d) |
Represents the aggregate value of
shares acquired by the vesting of restricted stock in 2014 and is the
product of the number of vested shares and the market value of the
underlying shares on the vesting date. The vesting date for all Officers
is January 1, 2014 with the exception of Ms. Gordon, who vested additional
shares on April 4, 2014. |
Outstanding Equity
Awards at December 31, 2014
The following
table provides certain summary information concerning unexercised options and
shares of restricted stock that have not vested as of December 31,
2014:
|
|
Option
Awards |
|
Stock
Awards |
Name |
|
Number
of Securities Underlying Unexercised Options (Exercisable) (#) |
|
Number
of Securities Underlying Unexercised Options (Unexercisable) (#) |
|
Option Exercise Price ($) |
|
Option Expiration Date |
|
Number of Shares or Units of Stock That Have Not
Vested (#) |
|
Market Value of Shares or Units of Stock That Have
Not Vested ($) |
Aaron D. Todd, |
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer |
|
|
|
50,596 |
|
53.02 |
|
08/06/2019 |
|
8,000 |
|
388,400 |
Michael D. Allen, |
|
|
|
|
|
|
|
|
|
|
|
|
President, Domestic Air Medical Services |
|
|
|
18,974 |
|
53.02 |
|
08/06/2019 |
|
6,000 |
|
291,300 |
Trent J. Carman, |
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer and Treasurer |
|
|
|
16,866 |
|
53.02 |
|
08/06/2019 |
|
4,000 |
|
194,200 |
David Doerr, |
|
10,000 |
|
|
|
44.31 |
|
10/21/2018 |
|
15,000 |
|
664,650 |
EVP, Business Development |
|
|
|
16,866 |
|
53.02 |
|
08/06/2019 |
|
|
|
|
Crystal L.
Gordon, |
|
|
|
|
|
|
|
|
|
|
|
|
General Counsel, Corporate Secretary and |
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President |
|
|
|
13,703 |
|
53.02 |
|
08/06/2019 |
|
13,000 |
|
510,970 |
Air Methods Corporation Notice of the 2015 Annual
Meeting & Proxy Statement |
33 |
Table of
Contents
On September 24, 2012, the Company entered
into Amended and Restated Employment Agreements (the Amended Employment
Agreements) with each of Michael D. Allen, President of Domestic Air Medical
Services, Trent J. Carman, Chief Financial Officer, and Crystal L. Gordon,
Senior Vice President, General Counsel and Secretary, and Aaron D. Todd, Chief
Executive Officer. The Amended Employment Agreements superseded and replaced the
employment agreements between the named executive officers (other than Mr.
Doerr) and the Company that were entered into on the following dates: January 4,
2006 (Mr. Allen), April 28, 2003 (Mr. Carman), April 4, 2011 (Ms. Gordon), and
July 1, 2003 (Mr. Todd) (collectively, the Original Employment Agreements).
The Company entered into an Employment Agreement with Mr. Doerr on October 21,
2013 and for purposes of the description herein, Mr. Doerrs Employment
Agreement shall be deemed an Amended Employment Agreement. On October 1, 2014,
the Company entered into a First Amendment to the Amended Employment Agreement
with Mr. Todd (together with Mr. Todds Amended Employment Agreement, Mr.
Todds Employment Agreement).
Mr. Todds Employment Agreement is for an
initial term expiring on August 31, 2015 and automatically renews for subsequent
one-year terms thereafter until Mr. Todds employment is terminated in
accordance with the agreement. Mr. Todds Employment Agreement may be terminated
by either party upon 90 days written notice, or immediately by us for cause. In
the event we terminate Mr. Todds Employment Agreement without cause or Mr. Todd
terminates his employment agreement for good reason, Mr. Todd is entitled to
severance payments for 18 months following termination at an annual rate equal
to one and a half times the sum of his annual base salary as in effect
immediately prior to the date of termination plus an amount equal to his highest
annual average of annual bonuses earned for the performance in any two
consecutive fiscal years in the last three completed fiscal years immediately
preceding the fiscal year in which termination occurs. During the term of
employment and for 18 months following the termination of employment, Mr. Todd
may not engage in any business which competes with us anywhere in the United
States.
In the event of termination resulting from
a change in control of the Company, Mr. Todd is entitled to severance payments
for 36 months following termination at an annual rate equal to three times the
sum of his annual base salary as in effect immediately prior to the date of
termination plus an amount equal to his highest annual average of annual bonuses
earned for the performance
in any two consecutive fiscal years in the
last three completed fiscal years immediately preceding the fiscal year in which
termination occurs.
Each Amended Employment Agreement with the
named executive officers (other than Mr. Todd) is for an initial term of two
years starting on the effective date and is subject to successive one-year
extensions. Each agreement may be terminated either by us or by the executive
upon 90 days written notice, or immediately by us for cause. In the event we
terminate an agreement without cause or the executive terminates the agreement
for good reason, the executive is entitled to severance payments for 12 months
following termination at an annual rate equal to the sum of his/her highest
annual base salary as in effect immediately prior to the date of termination
plus an amount equal to his/her highest annual average of annual bonuses earned
for the performance in any two consecutive fiscal years in the last three
completed fiscal years immediately preceding the fiscal year in which
termination occurs. During the term of employment and for 12 months following
the termination of employment, the executive may not engage in any business
which competes with us anywhere in the United States.
In the event of termination resulting from
a change in control of the Company, each named executive officer (other than
Mr. Todd) is entitled to severance payments for 24 months following termination
at an annual rate equal to two times the sum of his/her annual base salary as in
effect immediately prior to the date of termination plus an amount equal to
his/her highest annual average of annual bonuses earned for the performance in
any two consecutive fiscal years in the last three completed fiscal years
immediately preceding the fiscal year in which termination occurs.
The Original Employment Agreements
provided for a tax equalization payment or gross-up payment to the executive,
which would place the executive in the same after-tax position as if the excise
tax penalty of Section 4999 of the Internal Revenue Code of 1986, as amended,
did not apply. Such provision is typically referred to as a 280G Gross-Up.
Each of the Amended Employment Agreements has been revised to eliminate the 280G
Gross-Up Provision. Additionally, a provision was added to the Amended
Employment Agreements stating that each executives compensation is subject to
the clawback or recoupment policies of the Company that are generally applicable
to the Companys senior management, as may be in effect from time to time, or as
required by applicable law.
34
Table of Contents
In addition to the severance payments
described above, the executive is entitled to continue to receive, at our
expense, coverage under our 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/she is entitled to health insurance
coverage. As a condition of the executives right to receive severance
compensation, the
executive must sign and deliver to the
Company a release of all claims that the executive might otherwise assert
against the Company. During the term of employment and for five years following
the termination of employment, the executive may not directly or indirectly use,
disseminate, or disclose any of our confidential information or trade
secrets.
2014
Potential Payments Upon Termination or Change in Control
The following table summarizes potential
payments that would be made to the named executive officers upon termination or
a change in control of the
Company, assuming the triggering event
took place on December 31, 2014, and the stock price was the closing market
price as of that date.
|
|
|
|
|
Term w/o Cause (not a
Change of Control) |
|
Term w/o Cause or for Good
Reason (Change of Control) |
|
Death |
|
Disability |
|
CiC |
|
|
Aaron Todd, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive
Officer |
|
Severance |
|
$ |
3,832,350 |
|
$ |
5,795,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Death |
|
|
|
|
|
|
|
$ |
1,836,168 |
|
|
|
|
|
|
|
|
|
|
Disability |
|
|
|
|
|
|
|
|
|
|
$ |
1,836,168 |
|
|
|
|
|
|
|
Accelerated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
484,330 |
|
|
|
|
Tax Gross Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
Michael Allen, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Domestic Air |
|
Severance |
|
$ |
1,657,851 |
|
$ |
2,331,651 |
|
|
|
|
|
|
|
|
|
|
|
Medical Services |
|
Death |
|
|
|
|
|
|
|
$ |
967,911 |
|
|
|
|
|
|
|
|
|
|
Disability |
|
|
|
|
|
|
|
|
|
|
$ |
967,911 |
|
|
|
|
|
|
|
Accelerated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
264,180 |
|
|
|
|
Tax
Gross Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
Trent Carman, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial
Officer |
|
Severance |
|
$ |
1,537,565 |
|
$ |
2,160,565 |
|
|
|
|
|
|
|
|
|
|
|
and Treasurer |
|
Death |
|
|
|
|
|
|
|
$ |
892,469 |
|
|
|
|
|
|
|
|
|
|
Disability |
|
|
|
|
|
|
|
|
|
|
$ |
892,469 |
|
|
|
|
|
|
|
Accelerated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
264,180 |
|
|
|
|
Tax Gross Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
David Doerr, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EVP, Business Development |
|
Severance |
|
$ |
807,277 |
|
$ |
1,283,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Death |
|
|
|
|
|
|
|
$ |
308,681 |
|
|
|
|
|
|
|
|
|
|
Disability |
|
|
|
|
|
|
|
|
|
|
$ |
308,681 |
|
|
|
|
|
|
|
Accelerated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
638,435 |
|
|
|
|
Tax
Gross Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
Crystal Gordon, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Counsel, |
|
Severance |
|
$ |
446,323 |
|
$ |
821,857 |
|
|
|
|
|
|
|
|
|
|
|
Corporate Secretary
and |
|
Death |
|
|
|
|
|
|
|
$ |
16,344 |
|
|
|
|
|
|
|
|
Senior Vice
President |
|
Disability |
|
|
|
|
|
|
|
|
|
|
$ |
16,344 |
|
|
|
|
|
|
|
Accelerated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
660,450 |
|
|
|
|
Tax Gross Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
Continues on next page ► |
|
|
|
Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
35 |
Table of Contents
Change-in-Control
Arrangements
In addition to change-in-control
provisions included in the employment agreements described above, our 2006 Plan
and the EVA Plans also contain change-in-control provisions. Under the 2006
Plan, outstanding options or other equity compensation grants under the plan
become fully vested in connection with the disposition
of all, or substantially all, of the
Companys assets or outstanding capital stock by means of a sale, a merger or
reorganization in which the Company is not the surviving corporation. Under the
EVA Plans, any amounts due will be immediately payable upon a Change in Control
(as such term is defined in the EVA Plans).
The following equity compensation plan has
been previously approved by our stockholders:
● | 2006 Plan provides for the granting of
incentive stock options, non-statutory stock options, shares of restricted
stock, stock appreciation rights and |
| supplemental bonuses consisting of shares
of common stock, cash or a combination thereof to employees, directors, and
consultants. |
Information regarding the securities under
the 2006 Plan was as follows as of December 31, 2014:
|
Plan
Category |
|
Number of securities to be issued upon exercise of
outstanding options, warrants, and rights (a) |
|
|
Weighted-average exercise
price of outstanding options, warrants, and rights (b) |
|
Number of securities remaining available
for future issuance under equity compensation plans (excluding
securities reflected in column (a)) (c) |
|
|
Equity compensation plans approved by
stockholders |
|
495,070 |
|
|
$ |
40.67 |
|
2,990,936 |
|
|
Equity compensation plans not approved by
stockholders |
|
|
|
|
|
N/A |
|
|
|
|
Total |
|
495,070 |
(1) |
|
$ |
40.67 |
|
2,990,936 |
|
(1) |
Represents options
outstanding under the 2006 Plan. |
|
|
Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters |
The following table sets forth, as of
March 31, 2015, the beneficial ownership of our outstanding common stock: (i) by
each person who owns (or is known by us to own beneficially) more than 5% of the
common stock, (ii) by each of our directors and named executive officers, and
(iii) by all directors and executive officers as a group. All information is
taken from or based upon ownership filings made by such persons with the SEC and
other information
provided by such persons to us. Unless
otherwise indicated, the stockholders listed below have sole voting and
investment power with respect to the shares reported as owned. Unless otherwise
indicated, the address for each of the named security holders is c/o 7211 S.
Peoria Street, Englewood, Colorado 80112. On March 31, 2015, there were
39,489,296 shares of our common stock outstanding.
36
Table of Contents
|
Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters |
|
|
|
Title
of Class |
|
Name of Beneficial
Owner |
|
Amount and Nature
of Beneficial Ownership |
|
|
Percent of
Class(1) |
|
|
Officers and Directors |
|
|
|
|
|
|
|
|
|
|
Michael D. Allen |
|
30,349 |
(2) |
|
* |
|
|
|
|
|
George W. Belsey |
|
84,112 |
(3) |
|
* |
|
|
|
|
|
Ralph J. Bernstein |
|
2,852,729 |
(4) |
|
7.22 |
% |
|
|
|
|
Mark D. Carleton |
|
33,494 |
(5) |
|
* |
|
|
|
|
|
Trent J. Carman |
|
73,903 |
(6) |
|
* |
|
|
|
|
|
John J. Connolly, Ed.D. |
|
13,754 |
(7) |
|
* |
|
|
|
|
|
David M. Doerr |
|
25,000 |
(8) |
|
* |
|
|
|
|
|
Jeffrey A. Dorsey |
|
13,754 |
(9) |
|
* |
|
|
|
|
|
Crystal L. Gordon |
|
13,000 |
(10) |
|
* |
|
|
|
|
|
Claire M. Gulmi |
|
1,016 |
(11) |
|
|
|
|
|
|
|
C. David Kikumoto |
|
77,566 |
(12) |
|
* |
|
|
|
|
|
MG Carl H. McNair, Jr. USA
(Ret.) |
|
177,396 |
(13) |
|
* |
|
|
|
|
|
Lowell D. Miller, Ph.D. |
|
72,708 |
(14) |
|
* |
|
|
|
|
|
Morad Tahbaz |
|
83,243 |
(15) |
|
* |
|
|
|
|
|
Aaron D. Todd |
|
85,051 |
(16) |
|
* |
|
|
|
|
|
All Directors and Executive Officers
as a group |
|
3,637,075 |
(17) |
|
9.18 |
% |
|
|
5%
Beneficial Owners |
|
|
|
|
|
|
|
|
|
|
The Vanguard
Group 23-1945930 |
|
|
|
|
|
|
|
|
|
|
100 Vanguard Blvd. |
|
|
|
|
|
|
|
|
|
|
Malvern,
Pennsylvania 19355 |
|
2,395,476 |
(18) |
|
6.07 |
% |
|
|
|
|
Jennison Associates LLC |
|
|
|
|
|
|
|
|
|
|
466 Lexington Avenue |
|
|
|
|
|
|
|
|
|
|
New York,
New York 10017 |
|
2,060,820 |
(19) |
|
5.22 |
% |
|
|
|
|
Prudential
Financial, Inc. |
|
|
|
|
|
|
|
|
|
|
751 Broad Street |
|
|
|
|
|
|
|
|
|
|
Newark, New
Jersey 07102 |
|
2,140,294 |
(20) |
|
5.42 |
% |
|
|
|
|
BlackRock, Inc. |
|
|
|
|
|
|
|
|
|
|
55 East 52nd Street |
|
|
|
|
|
|
|
|
|
|
New York,
New York 10022 |
|
3,290,040 |
(21) |
|
8.33 |
% |
|
|
|
|
T. Rowe Price
Associates, Inc. |
|
|
|
|
|
|
|
|
|
|
100 E. Pratt Street |
|
|
|
|
|
|
|
|
|
|
Baltimore,
Maryland 21202 |
|
2,586,551 |
(22) |
|
6.55 |
% |
|
|
|
|
FMR LLC |
|
|
|
|
|
|
|
|
|
|
245 Summer Street |
|
|
|
|
|
|
|
|
|
|
Boston,
Massachusetts 02210 |
|
5,880,815 |
(23) |
|
14.89 |
% |
|
|
|
|
Clifton Park
Capital Management, LLC |
|
|
|
|
|
|
|
|
|
|
2711 Centerville Road, Suite 400 |
|
|
|
|
|
|
|
|
|
|
Wilmington,
Delaware 19808 |
|
2,172,900 |
(24) |
|
5.50 |
% |
|
* |
Represents beneficial ownership of
less than one percent (1.0%) of the outstanding shares of our common
stock. |
(1) |
Shares not outstanding but deemed
beneficially owned by virtue of the right of a person to acquire them
within 60 days of March 31, 2015 are treated as outstanding only for
determination of the number and percent owned by such person. |
(2) |
Includes 6,000 shares of
restricted stock subject to future vesting requirements. |
(3) |
Includes (i) options to purchase
8,580 shares of common stock exercisable within 60 days of March 31, 2015,
and (ii) 2,000 shares of restricted stock subject to future vesting
requirements. Stock is directly owned by George and Phyllis Belsey. Mr.
Belsey holds shares in a brokerage account, which is subject to standard
margin terms. Such shares secure his obligations under such
account. |
(4) |
Includes (i) options to purchase
19,920 shares of commons stock exercisable within 60 days of March 31,
2015, (ii) 2,000 shares of restricted stock subject to future vesting
requirements, (iii) 46,500 shares directly owned by Yasmeen Bernstein, Mr.
Bernsteins spouse, (iv) 135,000 shares held in the Ralph J. Bernstein
Family 2012 Delaware Trust and (v) 135,000 shares held in the Yasmeen
Bernstein Family 2012 Delaware Trust. Mr. Bernstein holds shares in a
brokerage account, which is subject to standard margin terms. The shares
secure his obligations under such account. |
(5) |
Includes (i) options to purchase
19,920 shares of common stock exercisable within 60 days of March 31, 2015
and (ii) 2,000 shares of restricted stock subject to future vesting
requirements. |
(6) |
Includes 4,000 shares of
restricted stock subject to future vesting requirements. |
(7) |
Includes (i) options to purchase
7,980 shares of common stock exercisable within 60 days of March 31, 2015
and (ii) 2,000 shares of restricted stock subject to future vesting
requirements. |
(8) |
Includes (i) options to purchase
10,000 shares of common stock exercisable within 60 days of March 31, 2015
and (ii) 15,000 shares of restricted stock subject to future vesting
requirements. |
(9) |
Includes (i) options to purchase
7,980 shares of common stock exercisable within 60 days of March 31, 2015
and (ii) 2,000 shares of restricted stock subject to future vesting
requirements. |
(10) |
Includes 13,000 shares of
restricted stock subject to future vesting requirements. |
(11) |
Includes 1,016 shares of
restricted stock subject to future vesting requirements. |
(12) |
Includes (i) options to purchase
20,965 shares of common stock exercisable within 60 days of March 31, 2015
and (ii) 2,000 shares of restricted stock subject to future vesting
requirements. |
(13) |
Includes (i) options to purchase
19,920 shares of common stock exercisable within 60 days of March 31, 2015
(ii) 2,000 shares of restricted stock subject to future vesting
requirements, and (iii) 157,476 shares jointly owned with Jo Ann McNair,
Mr. McNairs spouse. |
(14) |
Includes (i) options to purchase
2,080 shares of common stock exercisable within 60 days of March 31, 2015
and (ii) 2,000 shares of restricted stock subject to future vesting
requirements. |
Continues on next page ► |
|
|
|
Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
37 |
Table of Contents
(15) |
Includes (i) options to purchase
19,920 shares of common stock exercisable within 60 days of March 31, 2015
and (iii) 2,000 shares of restricted stock subject to future vesting
requirements. Mr. Tahbaz holds shares in a brokerage account, which is
subject to standard margin terms. Such shares secure his obligations under
such account. |
(16) |
Includes (i) 5,457 shares of
common stock beneficially owned by Mr. Todd in his 401(k) plan and (iii)
8,000 shares of restricted stock subject to future vesting
requirements. |
(17) |
Includes (i) options to purchase
a total of 137,265 shares of common stock exercisable within 60 days of
March 31, 2015, and (ii) 89,543 shares of restricted stock subject to
future vesting requirements. |
(18) |
This disclosure is based on an
amendment to Schedule 13G filed with the SEC by The Vanguard Group 23
1945930 (Vanguard), an investment advisor, on February 11, 2015.
Vanguard has sole voting power over 51,345 shares, shared voting power
over 0 shares, shared dispositive power over 47,745 shares, and sole
dispositive power over 2,347,731 shares. Vanguard Fiduciary Trust Company,
a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial
owner of 47,745 shares as a result of its serving as investment manager of
collective trust accounts. Vanguard Investments Australia, Ltd., a
wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial
owner of 3,600 shares as a result of its serving as investment manager of
Australian investment offerings. |
(19) |
This disclosure is based on a
Schedule 13G filed with the SEC by Jennison Associates LLC (Jennison) on
February 9, 2015. At the time of filing, the reporting person reported
being an investment adviser to several investment companies, insurance
separate accounts and institutional clients (Managed Portfolios) with
sole voting power over 2,050,142 shares, shared voting power over 0
shares, sole dispositive power over 0 shares, and shared dispositive power
over 2,060,820 shares. As a result of its role as investment adviser of
the Managed Portfolios, Jennison may be deemed to be the beneficial owner
of the stock held by such Managed Portfolios. Prudential Financial, Inc.
(Prudential) indirectly owns 100% of equity interests of Jennison. As a
result, Prudential may be deemed to have the power to exercise or to
direct the exercise of such voting and/or dispositive power that Jennison
may have with respect to the Companys common stock held by the Managed
Portfolios. Jennison does not file jointly with Prudential, as such,
shares of the Companys common stock reported on Jennisons 13G may be
included in the shares reported on the 13G/A by Prudential. |
(20) |
This disclosure is based on an
amendment to Schedule 13G filed with the SEC by Prudential Financial, Inc.
(Prudential), a parent holding company, on January 27, 2015. Prudential
has sole voting power over 129,997 shares, shared voting power over
1,999,619 shares, sole dispositive power over 129,997 shares and shared
dispositive power over 2,010,297 shares. Through its parent/subsidiary
relationship, Prudential may be deemed the beneficial owner of securities
beneficially owned by the entities listed below and may have direct or
indirect voting and/or investment discretion over 2,140,294 shares. The
parent holding company subsidiaries are: The Prudential Insurance Company
of America, Prudential Investment Management, Inc., Jennison Associates
LLC, and Qualitative Management Associates LLC. |
(21) |
This disclosure is based on an
amendment to Schedule 13G filed by BlackRock, Inc., a parent holding
company, with the SEC on January 23, 2015. BlackRock, Inc. has sole voting
power over 3,205,130 shares, shared voting power over 0 shares, sole
dispositive power over 3,290,040 shares, and shared dispositive power over
0 shares. Subsidiaries of the parent holding company, listed below, are
identified as having acquired the common stock of the Company. Various
persons have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of the common stock of the
Company. The parent holding company subsidiaries are: BlackRock Advisors
(UK) Limited; BlackRock Advisors, LLC; BlackRock Asset Management Canada
Limited; BlackRock Asset Management Ireland Limited; BlackRock Fund
Advisors; BlackRock Institutional Trust Company, N.A.; BlackRock
Investment Management (Australia) Limited; BlackRock Investment Management
(UK) Ltd; and BlackRock Investment Management, LLC. BlackRock Fund Advisor
beneficially owns 5% or greater of the outstanding shares of the security
class being reported on the Schedule 13G/A. |
(22) |
This disclosure is based on an
amendment to Schedule 13G filed with the SEC by T. Rowe Price Associates,
Inc. (Price Associates), an investment advisor, on February 13, 2015.
Price Associates has sole voting power over 444,951 shares, shared voting
power over 0 shares, sole dispositive power over 2,586,551 shares, and
shared dispositive power over 0 shares. |
(23) |
This disclosure is based on an
amendment to Schedule 13G filed with the SEC by FMR LLC (FMR), an
individual, on February 13, 2015. FMR has sole voting power over 2,396,414
shares, shared voting power over 0 shares, sole dispositive power over
5,880,815 shares, and shared dispositive power over 0 shares. |
(24) |
This disclosure is based on a
Schedule 13G filed with the SEC by Clifton Park Capital Management, LLC
(Clifton Park), on February 13, 2015. Clifton Park has sole voting power
over 0 shares, shared voting power over 2,172,900 shares, sole dispositive
power over 0 shares, and shared dispositive power over 2,172,900
shares. |
|
|
Proposal No. 2
Ratification of Appointment of Independent Registered Public Accounting Firm |
The firm of KPMG LLP served as our
independent registered public accounting firm for the 2014 fiscal year ended
December 31, 2014. The audit committee has appointed KPMG LLP to serve for the
current fiscal year ending December 31, 2015. Our Board is requesting
ratification by our stockholders of KPMG LLPs appointment. Representatives of
KPMG LLP will be present at the meeting, will have an opportunity to make a
statement if they desire to do so, and will be available to respond to any
questions that might arise.
In the event this proposal is defeated,
the stockholder vote will not be binding on the Company but may be considered by
our audit committee when it considers selecting other independent registered
public accounting firms for the next fiscal year. However, because of the
difficulty and expense of making any substitution of an independent registered
public accounting firm after the beginning of the fiscal year, KPMG LLPs
appointment for the 2015 fiscal year will be permitted to stand unless the audit
committee finds other reasons for making a change.
38
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|
Proposal No. 2 Ratification
of Appointment of Independent Registered Public Accounting
Firm |
|
|
Principal
Accountant Fees and Services
KPMG LLP, the Companys independent
registered public accounting firm, audited our consolidated financial statements
for the years ended December 31, 2014 and 2013. The aggregate fees incurred by
us for audit,
audit-related, tax and other services
provided by KPMG LLP during the years ended December 31, 2014 and 2013 were
approximately as follows:
|
|
|
|
2014 |
|
|
2013 |
|
|
Audit fees |
|
$ |
885,000 |
|
$ |
803,000 |
|
|
Audit-related fees |
|
$ |
|
|
$ |
25,000 |
|
|
Tax fees |
|
$ |
|
|
$ |
|
|
|
All
other fees |
|
$ |
|
|
$ |
|
|
|
Total |
|
$ |
885,000 |
|
$ |
828,000 |
|
Audit fees include fees for the audit of
the annual consolidated financial statements, review of unaudited consolidated
financial statements included in quarterly reports on Form 10-Q, the audit of
managements assessment of the effectiveness of internal control over financial
reporting as of December 31, 2014 and 2013, review of SEC filings, consents,
comfort letters and other services normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those years.
Audit-related fees include assurance and
related services that are reasonably related to the performance of the audit or
review of financial statements. These services
include the review of registration
statements and other services not directly impacting the audit of the annual
financial statements and related services. KPMG LLP performed no such services
during 2014.
Tax fees include tax services related to
the preparation and/or review of, and consultations with respect to, federal,
state, and local tax returns. KPMG LLP performed no such services during 2014 or
2013.
All other fees include fees for services
not considered audit or tax services. KPMG LLP performed no such services during
2014 or 2013.
Pre-Approval Policies and Procedures
All audit and non-audit services performed
by our independent registered public accounting firm during the fiscal year
ended December 31, 2014 were pre-approved by the audit committee, which
concluded that the provision of such services by KPMG LLP was compatible with
the maintenance of that firms independence in the conduct of its auditing
functions.
The audit committees pre-approval policy
provides for categorical pre-approval of specified audit and permissible
non-audit services. Audit services not covered by the annual engagement letter,
audit-related services and tax services require the specific pre-approval by the
audit committee prior to engagement. In addition, services to be provided by the
independent registered
public accounting firm that are not within
the category of pre-approved services must be pre-approved by the audit
committee prior to engagement, regardless of the service being requested or the
dollar amount involved.
The audit committee may delegate
pre-approval authority to one or more of its members. The member or members to
whom such authority is delegated are required to report any pre-approval
decisions to the audit committee at the meeting of the audit committee following
the decision. The audit committee is not permitted to delegate to management its
responsibilities to pre-approve services to be performed by our independent
registered public accounting firm.
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
39 |
Table of Contents
The affirmative vote of a majority of the
votes cast on Proposal No. 2 at the Annual Meeting is required for approval of
this proposal.
Recommendation of the Board of Directors
The Board recommends that you vote FOR
ratification of the appointment of KPMG LLP as the Companys independent
registered public accounting firm for the fiscal year ending December 31,
2015.
The members of the audit committee have
been appointed by the Board. The audit committee operates under a written
charter adopted by the Board, which is available on the Companys website at
www.airmethods.com under the Investors tab. The contents of our website are not
incorporated by reference into this document for any purpose.
The audit committee serves in an oversight
capacity and is not intended to be part of the Companys operational or
managerial decision-making process. The Companys management is responsible for
preparing the Companys consolidated financial statements, and its independent
auditors are responsible for auditing the consolidated financial statements. The
principal purpose of the audit committee is to monitor these
processes.
In this context, the audit committee or
the Chairman met and held discussions with management and the independent
auditors, KPMG LLP. Management represented to the audit committee that the
Companys consolidated financial statements were prepared in accordance with
generally accepted accounting principles applied on a consistent basis, and the
audit committee has reviewed and discussed the consolidated financial statements
with management and the independent auditors.
As further detailed in its charter, the
role of the audit committee is to assist the Board in fulfilling its oversight
responsibilities regarding the following:
● | the integrity of the Companys financial statements, including matters relating to
its internal controls; |
● | the qualification and independence of the Companys independent auditors; |
● | the performance of the independent auditors; and |
● | compliance
with legal and regulatory requirements. |
In the performance of established
oversight functions, the audit committee reviewed and discussed the audited
financial statements with management and the independent auditors. The audit
committee also has discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61, Communications with Audit Committees, as currently in effect. Finally, the audit committee has
received the written disclosures and the letter from the independent auditors
required by applicable requirements of the Public Company Accounting Oversight
Board regarding the independent accountants communications with the audit
committee concerning independence and has discussed with the independent
accountant the independent accountants independence.
Based upon the review and discussions
described in this report, and subject to the limitations on the role and
responsibilities of the audit committee referred to above and in the audit
committees charter, the audit committee recommended to the Board and the Board
approved inclusion of the audited financial statements in the Companys Annual
Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC.
Also, in 2014, the audit committee recommended, and the Board approved, the
selection of KPMG LLP to serve as the Companys independent registered public
accounting firm for fiscal year 2015.
By the Audit Committee:
MG Carl H. McNair, Jr. (Chair)
Mark D.
Carleton
John J. Connolly, Ed. D.
40
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|
|
Proposal No. 3 Advisory Vote on Executive
Compensation |
The following proposal gives our
stockholders the opportunity to vote to approve or not approve, on an advisory
basis, the compensation of our named executive officers. This vote, commonly
referred to as say on pay, is not intended to address any specific item of
compensation, but rather the overall compensation of our named executive
officers, as disclosed in this proxy statement in accordance with SEC rules. We
are providing this vote as required by Section 14A of the Exchange Act.
Accordingly, we are asking our stockholders to vote FOR the adoption of the
following resolution:
RESOLVED, that the compensation paid to
the companys named executive officers, as disclosed pursuant to Item 402 of
Regulation S-K, including the Compensation Discussion and Analysis, compensation
tables and narrative discussion is hereby APPROVED.
The Board recommends a vote FOR this
resolution because it believes that the policies and practices described in the
Compensation Discussion and Analysis
are effective in achieving the Companys
goals of rewarding sustained financial and operating performance and leadership
excellence, aligning the executives long-term interests with those of the
stockholders and motivating the executives to remain with the Company for long
and productive careers.
We urge stockholders to read the
Compensation Discussion and Analysis beginning on page 18 of this proxy
statement, as well as the 2014 Summary Compensation Table and related
compensation tables and narrative, appearing on pages 31 through 36, which
provide detailed information on the Companys compensation policies and
practices and the compensation of our named executive officers.
This advisory resolution, commonly
referred to as say-on-pay resolution, is non-binding on the Board. Although
non-binding, the Board and the compensation and stock option committee will
review and consider the voting results when evaluating our executive
compensation program.
Approval of Proposal No. 3 requires the
affirmative vote of a majority of the votes cast on such proposal at the Annual
Meeting.
The Board recommends a vote FOR
approval of the advisory resolution on executive compensation.
|
|
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41 |
Table of Contents
|
|
Proposal No. 4 Approval
of 2015 Equity Incentive Plan |
Description
of Our 2015 Equity Incentive Plan
We are asking our stockholders to approve
the Air Methods Corporation 2015 Equity Incentive Plan (the 2015 Plan), an
omnibus equity incentive plan pursuant to which the Company may grant equity and
cash incentive awards to employees, officers, directors, and certain service
providers of the Company and its subsidiaries. If approved by our stockholders,
the 2015 Plan will become effective, the 2006 Plan will be frozen such that no
future awards shall be issued under that 2006 Plan, and all remaining shares
available for issuance under the 2006 Plan shall instead be made available for
issuance under the 2015 Plan, with such shares constituting the entirety of the
2015 Plans share reserve. The purpose of the 2015 Plan is to allow the Company
to use a broader range of equity incentives, to allow full value awards to be
issued in a manner intended to be qualified performance based compensation
under Code Section 162(m), and to incorporate certain other best-practice
corporate governance features into the 2015 Plan.
Compared to the 2006 Plan, the 2015
Plan:
● | WILL NOT result in an increase in the aggregate number of shares issuable under
the Companys equity incentive plans; |
● | WILL
NOT result in an increase in the duration of
the Companys equity plans (the 2015 Plan is scheduled to terminate on the
scheduled termination date of the 2006 Plan); |
● | WILL
permit a more extensive range of equity awards, such as restricted stock units,
performance shares, and performance stock units; |
● | WILL
permit the Company to issue full value awards under the 2015 Plan that are
intended to be qualified performance based compensation under Code Section
162(m); |
● | WILL
require that at least 95% of the shares reserved for issuance be granted
pursuant to awards that have a vesting schedule of at least one year;
and |
● | WILL
prohibit liberal share recycling. |
Our Board of Directors believes the 2015 Plan is advisable in order to
promote the success of the Company and to increase stockholder value by providing an additional means to attract, motivate,
retain and reward selected employees and other eligible persons. Accordingly, on February 5, 2015, our Board of Directors
voted unanimously to adopt the 2015 Plan.
Set forth below is a summary of the 2015
Plan. This summary is qualified in its entirety by reference to the full text of
the 2015 Plan, a copy of which is included as Appendix A to this Proxy
Statement.
The 2015 Plan share reserve shall be
equal to the number of shares available for issuance under the 2006 Plan as of
the date the 2015 Plan is approved by the Companys stockholders. Upon approval
by the stockholders of the 2015 Plan, the 2006 Plan shall be frozen and no new
awards shall be issued under that plan. As of April 10, 2015, 39,263,952 shares
of our common stock remained available for the issuance under the 2006 Plan, and
we anticipate that the ultimate number of shares that will become issuable under
the 2015 Plan upon the freezing of the 2006 Plan will be similar to such number.
All of the shares of stock available for issuance under the 2015 Plan are
available for issuance pursuant to incentive stock options (ISOs) under
Section 422 of the Internal Revenue Code of 1986, as amended (the Code) or as
other type of awards. The Administrator (as defined
below) may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting (as, for
example, in the case of tandem or substitute awards) and make adjustments in
accordance with the 2015 Plan. Shares shall be counted against those reserved to
the extent such shares have been delivered and are no longer subject to a
substantial risk of forfeiture. To the extent that an award under the 2015 Plan,
in whole or in part, is canceled, expired, forfeited, settled in cash, or
otherwise terminated without delivery of shares to the participant, the shares
retained by or returned to the Company will not be deemed to have been delivered
under the 2015 Plan and will be deemed to remain or to become available under
the 2015 Plan. Liberal share recycling shall not be permitted under the 2015
Plan. Shares that are withheld from an award or separately surrendered
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|
Proposal No. 4 Approval of 2015 Equity Incentive Plan |
|
|
by the participant in payment of the
exercise price or taxes relating to such an award, and shares underlying the
exercised portion of an SAR (regardless of the actual number of shares issued
upon the SAR exercise) shall be deemed to have been issued under the 2015 Plan
and will reduce the number of shares remaining available for issuance under the
2015 Plan. The foregoing adjustments to the share limit of the 2015 Plan are
subject to any applicable limitations under Section 162(m) of the Code with
respect to awards intended to qualify as performance-based compensation under
Section 162(m) of the Code.
The number of shares available for
issuance under the 2015 Plan (as well as the number of shares that may be issued
as ISOs, and the share limitations set forth below under the heading
Performance Based
Compensation) are subject to
proportionate adjustment by the Administrator in the event of any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend) or reverse stock split, or upon any merger,
arrangement, combination, consolidation, or other reorganization, or upon any
spin-off, split-up or similar extraordinary dividend distribution in respect of
our common stock, or upon any exchange of our common stock or other securities
of the Company, or upon any similar unusual or extraordinary corporate
transaction in respect of our common stock.
As of March 31, 2015, the closing price
per share of our common stock on NASDAQ was $46.59 per share and our total
market capitalization was approximately $1.84 billion.
The 2015 Plan will be administered by our
Board of Directors or by one or more committees of directors appointed by our
Board (the Administrator). Our Board may delegate different levels of
authority to different committees with administrative and grant authority under
the 2015 Plan. Any committee delegated administrative authority under the 2015
Plan may further delegate its authority under the Plan to another committee of
directors, and any such delegate shall be deemed to be an Administrator of the
2015 Plan. Any Administrator may
also, within its administrative authority
under the 2015 Plan and in accordance with applicable law, delegate to one or
more officers of the Company the ability to make awards to eligible persons (as
defined below) under the 2015 Plan. It is anticipated that the Administrator
(either generally or with respect to specific transactions) will be constituted
so as to comply, as necessary or desirable, with the requirements of Section
162(m) of the Code and Rule 16b-3 promulgated under the Exchange Act.
Awards may be granted pursuant to the 2015
Plan only to persons who are eligible persons. Under the 2015 Plan, eligible
person means any person who is either: (a) an officer (whether or not a
director) or employee of the Company or one of its subsidiaries; (b) a director
of the Company or one of its subsidiaries; or (c) an individual consultant who
renders bona fide services
to the Company or one of its subsidiaries;
provided, however, that ISOs may be granted only to employees. As of April 10,
2015, the approximate number of eligible persons under the 2015 Plan included
five officers or employees of the Company or one of its subsidiaries, and ten
non-employee directors of the Company.
The 2015 Plan permits the grant of: (a)
stock options, which may be intended as ISOs or as nonqualified stock options
(options not meeting the requirements to qualify as ISOs); (b) stock
appreciation rights (SARs); (c) restricted stock; (d) restricted stock units;
(e) cash awards; or (f) other awards, including: (i) stock bonuses, performance
stock, performance units, dividend equivalents, or similar
rights to purchase or acquire shares,
whether at a fixed or variable price or ratio related to our common stock, upon
the passage of time, the occurrence of one or more events, or the satisfaction
of performance criteria or other conditions, or any combination thereof; or (ii)
any similar securities with a value derived from the value of or related to our
common stock and/or returns thereon.
Continues on next page ► |
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Option and SAR
Awards. Option and SAR awards granted
under the 2015 Plan must have an exercise price or base price of no less than
100% of the fair market value of our common stock on the date of grant (or 110%
of the fair market value on the date of grant, in the case of ISOs granted to
certain ten percent stockholders of the Company). Options and SAR awards shall
become exercisable upon such conditions (which may include the passage of time
or the attainment of certain performance criteria) as the Administrator may
establish in its sole discretion. The exercise price of any option shall be paid
in cash or by any of the methods set forth below under the heading
Consideration for Awards. Option and SAR awards are exercisable for a period
established by the Administrator, which in no event shall exceed ten years from
the date of grant (five years in the case of ISOs granted to certain ten percent
stockholders of the Company). If the Administrator does not specify otherwise in
an award agreement, upon termination of a participants employment or other
service to the Company, option and SAR awards shall expire (1) three months
after the last day that the participant is employed by or provides services to
the Company or any subsidiary (provided;
however, that in the event of the
participants death during this period, those persons entitled to exercise the
option or SAR pursuant to the laws of descent and distribution shall have one
year following the date of death within which to exercise such option or SAR);
(2) in the case of a participant whose termination of employment or services is
due to death or disability (as defined in the applicable award agreement), 12
months after the last day that the participant is employed by or provides
services to the Company or its subsidiary; and (3) immediately upon a
participants termination for cause.
Restricted
Stock. Restricted stock is our common
stock subject to such restrictions on transferability, risk of forfeiture and
other restrictions, if any, as the Administrator may impose, which restrictions
may lapse separately or in combination at such times, under such circumstances
(including based on achievement of
performance goals and/or future service
requirements), in such installments or otherwise, as the Administrator may
determine at the date of grant or thereafter. Except to the extent restricted
under the terms of the 2015 Plan and the applicable award agreement relating to
the restricted stock, a participant granted restricted stock shall have all of
the rights of a stockholder of the Company, including the right to vote the
restricted stock and the right to receive dividends thereon (subject to any
mandatory reinvestment or other requirement imposed by the
Administrator).
Restricted Stock
Units. A restricted stock unit represents
the right to receive from the Company on the respective scheduled vesting or
payment date for such restricted stock unit, one share of our common stock or,
if specified in the applicable award agreement, the fair market value of one
share of our common stock paid in cash. The vesting or payment of an award of
restricted stock units may be subject to the attainment of specified performance
goals or targets, forfeitability provisions and such other terms and conditions
as the Administrator may determine, subject to the provisions of the 2015 Plan.
Subject to the restrictions imposed under the terms and conditions of the 2015
Plan and the applicable award agreement, each participant receiving restricted
stock units shall have no rights as a stockholder of the Company with respect to
such restricted stock units until such time as shares of our common stock are
issued to the participant.
Other Awards. The other types of awards that may be granted under the 2015
Plan include: (a) stock bonuses, performance stock, performance units, dividend
equivalents, or similar rights to purchase or acquire shares, whether at a fixed
or variable price or ratio related to our common stock, upon the passage of
time, the occurrence of one or more events, or the satisfaction of performance
criteria or other conditions, or any combination thereof; or (b) any similar
securities with a value derived from the value of or related to our common stock
and/or returns thereon.
Awards issued under the 2015 Plan shall be
subject to a minimum vesting period of at least one (1) year; provided, however,
that up to 5% of the shares issuable under the
2015 Plan may be issued without regard to
such minimum vesting period.
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Proposal No. 4 Approval of 2015 Equity Incentive Plan |
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|
Performance Based
Compensation
The 2015 Plan provides for the grant of
certain awards, the vesting or payment of which may be contingent on the
satisfaction of certain performance criteria. Such performance-based awards are
designed to be exempt from the limitations of Section 162(m) of the Code, as
described below under Certain Federal Tax Consequences. The maximum aggregate
number of shares of our common stock that may be issued to any single
participant person during the term of the 2015 Plan pursuant to options and SARs
may not exceed 1,500,000 shares of our common stock. The maximum aggregate number of
shares of our common stock that may be issued to any single participant pursuant
to performance-based awards granted during the 162(m) Term may not exceed
1,000,000 shares of our common stock. The maximum amount that may be paid to any
single participant pursuant to Performance-Based Awards granted during the
162(m) Term may not exceed $15,000,000. The 162(m) Term is the period beginning
on the effective date of the 2015 Plan and ending on the date of the first
stockholder meeting that occurs in the fifth year following the year in which
the Companys stockholders first approve this 2015 Plan (the 162(m)
Term).
The 2015 Plan includes the following
performance criteria that may be used by the Administrator when granting
performance-based awards: (1) total stockholder return; (2) revenues, net
revenues or sales; (3) return on total stockholders equity; (4) earnings per
share of our common stock; (5) increase in the trading price per share of our
common stock; (6) net income (before or after
taxes) or net operating income; (7) return
on assets, return on investment or return on capital; (8) economic value added;
(9) operating budget or margin; (10) contribution margin; (11) earnings from
continuing operations; (12) levels of operating expense or other expense, cost
or liability items reported on the Companys income statement; (13) earnings
before all or any interest, taxes, depreciation, amortization and/or other
expense (EBIT, EBITA, EBITDA or EBITDAX); (14) net income (loss) before
depreciation, amortization, interest and other expense, net, taxes, severance,
acquisition costs, stock-based compensation and asset impairment charges
(Adjusted EBITDA); (15) cash flow; (16) debt reduction; (17) market share;
(18) third-party capital sourcing; (19) acquisition cost efficiency; (20)
infrastructure development for business units or administrative departments
(such as information technology and human resources); (21) measures of pricing
efficiency and/or growth; (22) satisfactory completion of a major project or
organizational initiative set in advance by the Administrator; (23) measures of
safety; (24) strategic sales or acquisitions in compliance with specific
criteria set forth in advance by the Administrator; (25) personal management
objectives; (26) number of patient transports; (27) such other criteria as the
stockholders of the Company may approve; in each case as applicable, as
determined in accordance with generally accepted accounting principles; and (28)
any combination of the foregoing, or a specified increase or decrease of one or
more of the foregoing over a specified period.
Under the 2015 Plan, fair market value
means the closing sales price per share of our common stock on the U.S. national
securities exchange or over-the-counter market on which such stock is
principally traded on the date of the grant of such award or if the shares of
our common stock are not then listed on any national
securities exchange or traded in an
over-the-counter market or the value of such shares is not otherwise
determinable, such value as reasonably determined by the Administrator in good
faith and, to the extent necessary, in accordance with the requirements of
Section 409A of the Code.
The purchase price for any award granted
under the 2015 Plan or our common stock to be delivered pursuant to any such
award, as applicable, may be paid by means of any lawful consideration as
determined by the Administrator, including, without limitation, one or a
combination of the following methods:
● |
services rendered by the recipient of such award;
|
● |
cash, check
payable to the order of the Company, or electronic funds transfer; |
● |
notice and third
party payment in such manner as may be authorized by the
Administrator; |
Continues on next page ► |
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Air Methods Corporation Notice of the 2015 Annual Meeting & Proxy Statement |
45 |
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● |
the delivery of previously owned
shares of our common stock that are fully vested and unencumbered;
|
● |
by a reduction in the number of
shares otherwise deliverable pursuant to the award; or |
● |
subject to such procedures as the
Administrator may adopt, pursuant to a cashless exercise with a third
party who provides financing for the purposes of (or who otherwise
facilitates) the purchase or exercise of
awards. |
In the event that the Administrator allows
a participant to exercise an award by delivering shares of our common stock
previously owned by such participant and unless otherwise expressly provided by
the Administrator, any shares delivered which were initially acquired by the
participant from the Company (upon exercise of
a stock option or otherwise) must have
been owned by the participant at least six months as of the date of delivery (or
such other period as may be required by the Administrator in order to avoid
adverse accounting treatment). Shares of our common stock used to satisfy the
exercise price of an option are valued at their fair market value on the date of
exercise. The Company will not be obligated to deliver any shares unless and
until it receives full payment of the exercise or purchase price for the shares
and any related withholding obligations and any other conditions to exercise or
purchase, as established from time to time by the Administrator, have been
satisfied. Unless otherwise expressly provided in the applicable award
agreement, the Administrator may at any time eliminate or limit a participants
ability to pay the purchase or exercise price of any award by any method other
than cash payment to the Company.
The 2015 Plan does not provide for
automatic accelerated vesting of awards upon a change in control. However,
unless the Administrator fails to make appropriate provision for the
substitution, assumption, exchange or other continuation of the award pursuant
to the change in control, each then-outstanding option and SAR shall
automatically become fully vested, all restricted shares then outstanding shall
automatically fully vest free of restrictions, and each other award granted
under the 2015 Plan that is then outstanding shall automatically become vested
in full (assuming all performance targets have been achieved at 100% of target)
and payable to the holder of such award. Notwithstanding the foregoing, the
Administrator, in its sole and absolute discretion, may choose (in an award
agreement or otherwise) to provide for full or partial accelerated vesting of
any award upon a change in control (or upon any other event or other
circumstance related to the change in control, such as an involuntary
termination of employment occurring after such change in control, as the
Administrator may determine), irrespective of whether such any such award has
been substituted, assumed, exchanged or otherwise continued pursuant to the
change in control.
For purposes of the 2015 Plan, a change
in control will be deemed to have occurred if:
(i) The acquisition by any person of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of more than 50% or more of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors;
(ii) In the event our Board is a
classified board, a majority of the individuals who serve in the same class of
directors that constitute our Board as of the effective date of the 2015 (the
Incumbent Board) Plan cease for any reason to constitute at least a majority
of that class of directors, or in the event our Board is not a classified board,
members of the Incumbent Board cease for any reason to constitute at least a
majority of our Board; provided, however, that any individual becoming a
director subsequent to the effective date of the 2015 Plan whose election, or
nomination for election by the Companys stockholders, was approved by a vote of
at least two-thirds of the directors then comprising the Incumbent Board
(including for these purposes, the new members whose election or nomination was
so approved, without counting the member and her predecessor twice) shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than our
Board;
(iii) Consummation of a reorganization,
merger, statutory share exchange or consolidation or similar corporate
transaction involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the
acquisition of assets or stock of another entity by the Company or any of its
subsidiaries (each, a Business Combination), in each case unless, following
such Business Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of
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the Companys outstanding voting
securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding voting securities
of the entity resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns the Company or
all or substantially all of the Companys assets directly or through one or more
subsidiaries (a Parent)), and (B) at least a majority of the members of the
board of directors or trustees of the entity resulting from such Business
Combination or a Parent were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of our Board providing for
such Business Combination; or
(iv) Approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, a change in
control shall not be deemed to have occurred by virtue of the consummation of
any transaction or series of integrated transactions immediately following which
the holders of the Companys voting securities immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions. No compensation that has been deferred for purposes of Section
409A of the Code shall be payable as a result of a change in control unless the
change in control qualifies as a change in ownership or effective control of the
Company within the meaning of Section 409A of the Code.
Amendment and Termination of the 2015
Plan
Our Board may, at any time, terminate or,
from time to time, amend, modify or suspend the 2015 Plan, in whole or in part.
No awards may be granted during any period that the Board suspends the 2015
Plan. To the extent then required by applicable law or any applicable stock
exchange or deemed necessary or advisable by our Board, any amendment to the
Plan shall be subject to approval by the stockholders of the Company. No
amendment, suspension or termination of the 2015 Plan or change of or affecting
any outstanding award shall, without written consent of the participant, affect
in any manner materially adverse to the participant any rights or benefits of
the participant or obligations of the Company under any award granted under the
2015 Plan prior to the effective date of such change.
Unless earlier terminated by our Board,
the 2015 Plan shall terminate at the close of business on September 9, 2022.
After the termination of the Plan either upon such stated expiration date or its
earlier termination by our Board, no additional awards may be granted under the
2015 Plan, but previously granted awards (and the authority of the Administrator
with respect thereto, including the authority to amend such awards) shall remain
outstanding in accordance with their applicable terms and conditions and the
terms and conditions of the 2015 Plan.
Certain Federal Tax
Consequences
The following summary of the federal
income tax consequences of awards under the 2015 Plan is based upon federal
income tax laws in effect on the date of this Proxy Statement. This summary does
not purport to be complete, and does not discuss state, local or non-U.S. tax
consequences. The tax consequences of individual awards may vary depending upon
the particular circumstances applicable to any individual participant.
Nonqualified Stock
Options. The grant of a nonqualified
stock option under the 2015 Plan will not result in any federal income tax
consequences to the participant or to the Company. Upon exercise of a
nonqualified stock option, the participant will recognize ordinary compensation
income equal to the excess of
the fair market value of the shares of
common stock at the time of exercise over the option exercise price. If the
participant is an employee, this income is subject to withholding for federal
income and employment tax purposes. The Company is entitled to an income tax
deduction in the amount of the income recognized by the participant, subject to
possible limitations imposed by the Code, including Section 162(m) thereof. Any
gain or loss on the participants subsequent disposition of the shares will be
treated as long-term or short-term capital gain or loss, depending on the sales
proceeds received and whether the shares are held for more than one year
following exercise. The Company does not receive a tax deduction for any
subsequent capital gain.
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Incentive Stock Options. The grant of an ISO under the 2015 Plan will not result in any federal income tax consequences to the participant or to the Company. A participant recognizes no federal taxable income upon exercising an ISO (subject to the alternative minimum tax rules discussed below), and the Company receives no deduction at the time of exercise. In the event of a disposition of stock acquired upon exercise of an ISO, the tax consequences depend upon how long the participant has held the shares. If the participant does not dispose of the shares within two years after the ISO was granted, nor within one year after the ISO was exercised, the participant will recognize a long-term capital gain (or loss) equal to the difference between the sale price of the shares and the exercise price. The Company is not entitled to any deduction under these circumstances.
If the participant fails to satisfy either of the foregoing holding periods (referred to as a disqualifying disposition), he or she will recognize ordinary compensation income in the year of the disposition. The amount of ordinary compensation income generally is the lesser of (i) the difference between the amount realized on the disposition and the exercise price or (ii) the difference between the fair market value of the stock at the time of exercise and the exercise price. Such amount is not subject to withholding for federal income and employment tax purposes, even if the participant is an employee of the Company. Any gain in excess of the amount taxed as ordinary income will generally be treated as a short-term capital gain. The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary compensation income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof.
The spread under an ISO (i.e., the difference between the fair market value of the shares at exercise and the exercise price) is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax. If a participants alternative minimum tax liability exceeds such participants regular income tax liability, the participant will owe the alternative minimum tax liability.
Restricted Stock. Restricted stock is generally taxable to the participant as ordinary compensation income on the date that the restrictions lapse (i.e. the date that the stock vests), in an amount equal to the excess of the fair market value of the shares on such date over the amount paid for such stock (if any). If the participant is an employee, this income is subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the ordinary income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof. Any gain or loss
on the participants subsequent disposition of the shares will be treated as long-term or short-term capital gain or loss treatment depending on the sales price and how long the stock has been held since the restrictions lapsed. The Company does not receive a tax deduction for any subsequent gain.
Participants receiving restricted stock awards may make an election under Section 83(b) of the Code (Section 83(b) Election) to recognize as ordinary compensation income in the year that such restricted stock is granted, the amount equal to the excess of the fair market value on the date of the issuance of the stock over the amount paid for such stock. If the participant is an employee, this income is subject to withholding for federal income and employment tax purposes. If such an election is made, the recipient recognizes no further amounts of compensation income upon the lapse of any restrictions and any gain or loss on subsequent disposition will be long-term or short-term capital gain or loss to the recipient. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Section 83(b) Election. The Section 83(b) Election must be made within 30 days from the time the restricted stock is issued. The Company is entitled to a deduction equal to the amount of income taken into account as a result of the Section 83(b) Election, subject to possible limitations imposed by the Code, including Section 162(m) thereof.
To the extent unrestricted dividends are paid while the restrictions on the stock are in effect, any such dividends will be taxable to the participant as ordinary income (and will be treated as additional wages for federal income and employment tax withholding purposes, if the recipient is an employee) and will be deductible by the Company (subject to possible limitations imposed by the Code, including Section 162(m) thereof), unless the participant has made a Section 83(b) Election, in which case the dividends will generally be taxed at dividend rates and will not be deductible by the Company.
Other Awards. Other awards (such as restricted stock units) are generally treated as ordinary compensation income as and when common stock or cash are paid to the participant upon vesting or settlement of such awards. If the participant is an employee, this income is subject to withholding for income and employment tax purposes. The Company is generally entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient, subject to possible limitations imposed by the Code, including Section 162(m) thereof.
Section 162(m) of the Internal Revenue Code. Under Code Section 162(m), no deduction is allowed in any taxable year of the Company for compensation in excess of $1 million paid to the Companys covered
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employees. A covered employee is the
Companys chief executive officer and the three other most highly compensated
officers of the Company other than the chief financial officer. An exception to
this rule applies to qualified performance based compensation, which generally
includes stock options and stock appreciation rights granted under a stockholder
approved plan, and other forms of equity incentives, the vesting or payment of
which is contingent upon the satisfaction of certain stockholder approved
performance goals. The Company intends that the 2015 Plan allow for the grant of
options and stock appreciation rights that may be treated as qualified
performance based compensation that is exempt from the limitations of Code
Section 162(m), and for the grant of other performance-based awards that may be
treated as qualified performance based compensation, but it makes no assurance
that either such type of award will be granted, or if granted, will be so
treated.
Code Section
409A. Section 409A of the Code provides
certain requirements for the deferral and payment of deferred compensation
arrangements. In the event that any award under the 2015 Plan is deemed to be a
deferred compensation arrangement, and if such arrangement does not comply with
Section 409A of the Code, the recipient of such award will recognize ordinary
income once such award is vested, as opposed to at the time or times set forth
above. In addition, the amount taxable will be subject to an additional 20%
federal income tax along with other potential taxes and penalties. It is
intended, although not guaranteed, that all awards issued under the 2015 Plan
will either be exempt from or compliant with the requirements of Section 409A of
the Code.
No awards have been granted under the 2015
Plan. If the 2015 Plan is approved, all awards will be granted at the discretion
of the Administrator. Accordingly,
future benefits, as well as benefits that
would have been received in prior years had the 2015 Plan been in effect, are
not determinable.
The Board of Directors unanimously
adopted the 2015 Plan and recommends that stockholders vote FOR the approval of
the 2015 Plan.
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Incorporation by
Reference |
The information contained in the
Compensation and Stock Option Committee Report and Audit Committee Report shall
not be deemed to be soliciting material or filed or incorporated by
reference in future filings with the SEC, or subject to the liabilities of
Section 18 of the
Exchange Act, except to the extent that
the Company specifically incorporates it by reference into a document filed
under the Securities Act of 1933, as amended, or the Exchange Act.
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Proposals for Inclusion in the 2015
Proxy Statement. For your proposal or
director nomination to be considered for inclusion in our proxy statement for
next years meeting, your written proposal must be received by our corporate
secretary at our principal executive office no later than December 24, 2015. All
proposals must comply with the applicable requirements of federal securities
laws and the Companys Bylaws.
Proposal to be Addressed at 2015
Meeting (but not included in proxy statement). In order for you to properly bring a proposal (not including director
nomination) before next years annual meeting, our corporate secretary must
receive a written notice of the proposal not less than sixty days nor more than
ninety days prior to next years annual meeting; provided however, that in the
event that less than seventy days notice or prior public disclosure of the date
of the meeting is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on the tenth day
following the date on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. In addition, all notice must contain
the additional information required by our
Bylaws. In order for you to properly nominate one or more persons for election
as a director at next years annual meeting, our corporate secretary must
receive a written notice of the nomination no later than February 20, 2016, and
it must contain the additional information required by our Bylaws.
Bylaw Notice
Requirements. Our Bylaws provide that
stockholder notice must include the following information with respect to each
matter the stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting,
(ii) the name and address, as they appear on the Companys books, of the
stockholder proposing such business, (iii) the class and number of shares of the
Company which are beneficially owned by the stockholder, and (iv) any material
interest of the stockholder in such business. The presiding officer of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
Householding of Proxy
Materials. The SEC has adopted rules that
permit companies and intermediaries such as brokers to satisfy delivery
requirements for proxy statements with respect to two or more stockholders
sharing the same address by delivering a single proxy statement addressed to
those stockholders. This process, which is commonly referred to as
householding, potentially provides extra convenience for stockholders and cost
savings for us. Under this procedure, multiple stockholders who share the same
last name and address will receive only one copy of the annual proxy materials,
unless they notify us that they wish to continue receiving multiple copies. We
have undertaken householding to reduce our printing costs and postage
fees.
If you wish to opt-out of householding and
continue to receive multiple copies of the proxy materials at the same address,
you may do so at any time prior to thirty days before the mailing of proxy
materials, which will
typically be mailed at the beginning of
May each year, by notifying us in writing at: Air Methods Corporation, Attn:
Secretary, 7211 South Peoria Street, Englewood, Colorado 80112, or by contacting
us at (303) 792-7400. You also may request additional copies of the proxy
materials by notifying us in writing at the same address or contacting us at
(303) 792-7400, and we will undertake to deliver such additional copies
promptly. If you share an address with another stockholder and currently are
receiving multiple copies of the proxy materials, you may request householding
by notifying us at the above referenced address or telephone number.
Proxy Solicitation
Costs. The accompanying proxy is being
solicited on behalf of the Board of our Company. The expense of preparing,
printing and mailing the form of proxy and the material used in the solicitation
thereof will be borne by the Company. In addition to the use of the mails,
proxies may be solicited by personal interview,
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telephone and telegram by our directors,
officers, and employees at no additional compensation. Arrangements may also be
made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation material to the beneficial owners of stock held
of record by such persons, and we may reimburse them for reasonable
out-of-pocket expenses incurred by them in connection therewith.
Forward-Looking
Statements. This proxy statement may
include forward-looking statements (as defined in the Private Securities
Litigation Reform Act of 1995). The forward-looking statements include
statements regarding additional matters to be presented at the 2015 Annual
Meeting; plans to decrease the size of our Board; timing and anticipated
response to the compensation Committees benchmarking analysis; preliminary 2015
financial and operational results; potential payments upon termination or change
in control; statements regarding Section 162(m), Section 409A and Section 280G
of the Code and ASC Topic 718; and impact of the compensation program on the
Company. These statements are based on our current expectations and involve
risks and uncertainties that may cause actual results to differ materially from
those set forth in the statements, including changes in governmental regulations
and interpretations thereunder and other risks identified in the Risk Factors
section of the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2014. We undertake no obligation to publicly update any
forward-looking statement, whether as a
result of new information, future events or otherwise. Forward-looking
statements should be evaluated together with the many uncertainties that affect
our business, particularly those mentioned in the Risk Factors section in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and in
our quarterly reports on Form 10-Q and current reports on Form 8-K
The Company knows of no business that will
be presented for consideration at the Annual Meeting other than that described
above. However, if any other business should come before the Annual Meeting, it
is the intention of the persons named in the enclosed form of Proxy to vote the
proxies respective to any such business in accordance with their best
judgment.
By Order of the Board of Directors, |
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Crystal L. Gordon General Counsel, Secretary, and Senior Vice
President |
Englewood, Colorado
April 22,
2015
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AIR METHODS CORPORATION 2015 EQUITY
INCENTIVE PLAN
1. PURPOSE OF PLAN
The purpose of this 2015 Equity Incentive
Plan (this Plan) of Air Methods Corporation, a Delaware corporation (the
Corporation), is to promote the success of the Corporation and to increase
stockholder value by providing an additional means to attract, motivate, retain
and reward selected employees and other eligible persons through the grant of
equity awards.
2. ELIGIBILITY
The Administrator (as such term is defined
in Section 3.1) may grant awards under this Plan only to those persons that the
Administrator determines to be Eligible Persons. An Eligible Person is any person who is
either: (a) an officer (whether or not a director) or employee of the
Corporation or one of its Subsidiaries; (b) a director of the Corporation or one
of its Subsidiaries; or (c) an individual consultant who renders bona fide
services (other than services in connection with the offering or sale of
securities of the Corporation or one of its Subsidiaries in a capital-raising
transaction or as a market maker or promoter of securities of the Corporation or
one of its Subsidiaries) to the Corporation or one of its Subsidiaries and who
is selected to participate in this Plan by the Administrator; provided, however, that a person who
is otherwise an Eligible Person under clause (c) above may participate in this
Plan only if such participation would not adversely affect either the
Corporations eligibility to use Form S-8 to register under the Securities Act
of 1933, as amended (the Securities
Act), the offering and sale of shares
issuable under this Plan by the Corporation, or the Corporations compliance
with any other applicable laws. An Eligible Person who has been granted an award
(a participant) may, if otherwise eligible, be granted additional awards if the
Administrator shall so determine. As used herein, Subsidiary means any corporation or
other entity controlled by the Corporation directly or indirectly through one or
more intermediaries; and Board means the Board of Directors of
the Corporation.
3. PLAN ADMINISTRATION
3.1 The Administrator. This Plan shall
be administered by and all awards under this Plan shall be authorized by the
Administrator. The Administrator means the Board or one
or more committees appointed by the Board or another committee (within its
delegated authority) to administer all or certain aspects of this Plan.
Any such committee shall be comprised
solely of one or more directors or such other number of directors as may be
required under applicable law. A committee may delegate some or all of its
authority to another committee so constituted. The Board or a committee
comprised solely of directors may also delegate, to the extent permitted by
applicable law, to one or more officers of the Corporation, its powers under
this Plan (a) to determine the Eligible Persons who will receive grants of
awards under this Plan, and (b) to determine the number of shares subject to,
and the other terms and conditions of, such awards. The Board may delegate
different levels of authority to different committees with administrative and
grant authority under this Plan. Unless otherwise provided in the bylaws of the
Corporation or the applicable charter of any Administrator: (a) a majority of
the members of the acting Administrator shall constitute a quorum, and (b) the
affirmative vote of a majority of the members present assuming the presence of a
quorum or the unanimous written consent of the members of the Administrator
shall constitute due authorization of an action by the acting
Administrator.
With respect to awards intended to satisfy
the requirements for performance-based compensation under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the Code), this Plan shall be
administered by a committee consisting solely of two or more outside directors
(as this requirement is applied under Section 162(m) of the Code);
provided, however, that the failure to satisfy such requirement shall not affect the
validity of the action of any committee otherwise duly authorized and acting in
the matter. Award grants, and transactions in or involving awards, intended to
be exempt under Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the Exchange Act), must be duly and timely authorized by the Board or a committee
consisting solely of two or more non-employee directors (as this requirement is
applied under Rule 16b-3 promulgated under the Exchange Act). To the extent
required by any applicable stock exchange, this Plan shall be administered by a
committee composed entirely of independent directors (within the meaning of the
applicable stock exchange). Awards granted to non-employee directors shall not
be subject to the discretion of any officer or employee of the Corporation and
shall be administered exclusively by a committee consisting solely of
independent directors.
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3.2 Powers of the Administrator.
Subject to the express provisions of this Plan, the Administrator is authorized
and empowered to do all things necessary or desirable in connection with the
authorization of awards and the administration of this Plan (in the case of a
committee or delegation to one or more officers, within the authority delegated
to that committee or person(s)), including, without limitation, the authority
to:
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(a) |
determine eligibility and, from
among those persons determined to be eligible, the particular Eligible
Persons who will receive awards under this Plan; |
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(b) |
grant awards to Eligible Persons,
determine the price at which securities will be offered or awarded and the
number of securities to be offered or awarded to any of such persons,
determine the other specific terms and conditions of such awards
consistent with the express limits of this Plan, establish the
installments (if any) in which such awards shall become exercisable or
shall vest (which may include, without limitation, performance and/or
time-based schedules), or determine that no delayed exercisability or
vesting is required, establish any applicable performance targets, and
establish the events of termination or reversion of such
awards; |
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(c) |
approve the forms of award
agreements (which need not be identical either as to type of award or
among participants); |
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(d) |
construe and interpret this Plan
and any agreements defining the rights and obligations of the Corporation,
its Subsidiaries, and participants under this Plan, further define the
terms used in this Plan, and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan or the awards
granted under this Plan; |
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(e) |
cancel, modify, or waive the
Corporations rights with respect to, or modify, discontinue, suspend, or
terminate any or all outstanding awards, subject to any required consent
under Section 8.6.5; |
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(f) |
accelerate or extend the vesting
or exercisability or extend the term of any or all such outstanding awards
(in the case of options or stock appreciation rights, within the maximum
ten-year term of such awards) in such circumstances as the Administrator
may deem appropriate (including, without limitation, in connection with a
termination of employment or services or other events of a personal
nature) subject to any required consent under Section 8.6.5; |
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(g) |
adjust the number of shares of
Common Stock subject to any award, adjust the price of any or all
outstanding awards or otherwise change previously imposed terms and
conditions, in |
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such circumstances as
the Administrator may deem appropriate, in each case subject to compliance
with applicable stock exchange requirements, Sections 4 and 8.6 and the
applicable requirements of Section 162(m) of the Code and treasury
regulations thereunder with respect to awards that are intended to satisfy
the requirements for performance-based compensation under Section 162(m)
of the Code, and provided that in no case (except due to an adjustment
contemplated by Section 7) shall the terms of any outstanding awards be
amended (by amendment, cancellation and regrant, or other means) to reduce
the per share exercise or base price of any outstanding stock option or
stock appreciation right or other award granted under this Plan, or be
exchanged for cash, other awards or stock option or stock appreciation
rights with an exercise price that is less than the per share exercise
price of the original stock option or stock appreciation rights, without
stockholder approval, and further provided that any adjustment or change
in terms made pursuant to this Section 3.2(g) shall be made in a manner
that, in the good faith determination of the Administrator will not likely
result in the imposition of additional taxes or interest under Section
409A of the Code; |
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(h) |
determine the date of
grant of an award, which may be a designated date after but not before the
date of the Administrators action (unless otherwise designated by the
Administrator, the date of grant of an award shall be the date upon which
the Administrator took the action granting an award); |
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(i) |
determine whether, and
the extent to which, adjustments are required pursuant to Section 7 hereof
and authorize the termination, conversion, substitution, acceleration or
succession of awards upon the occurrence of an event of the type described
in Section 7; |
|
(j) |
acquire or settle
(subject to Sections 7 and 8.6) rights under awards in cash, stock of
equivalent value, or other consideration; and |
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(k) |
determine the Fair
Market Value (as defined in Section 5.6) of the Common Stock or awards
under this Plan from time to time and/or the manner in which such value
will be determined. |
3.3 Binding Determinations. Any action
taken by, or inaction of, the Corporation, any Subsidiary, or the Administrator
relating or pursuant to this Plan and within its authority hereunder or under
applicable law shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons. Neither the Board, the
Administrator, nor any Board committee, nor any member thereof or person acting
at the direction thereof, shall be liable for any act,
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omission, interpretation, construction or
determination made in good faith in connection with this Plan (or any award made
under this Plan), and all such persons shall be entitled to indemnification and
reimbursement by the Corporation in respect of any claim, loss, damage or
expense (including, without limitation, legal fees) arising or resulting
therefrom to the fullest extent permitted by law, the Corporations certificate
of incorporation and bylaws, as the same may be amended from time to time, or
under any directors and officers liability insurance coverage or written
indemnification agreement with the Corporation that may be in effect from time
to time.
3.4 Reliance on Experts. In making any
determination or in taking or not taking any action under this Plan, the
Administrator may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. The Administrator shall not be liable
for any such action or determination taken or made or omitted in good faith
based upon such advice.
3.5 Delegation of Non-Discretionary Functions. In addition to the ability to delegate certain grant
authority to officers of the Corporation as set forth in Section 3.1, the
Administrator may also delegate ministerial, non-discretionary functions to
individuals who are officers or employees of the Corporation or any of its
Subsidiaries or to third parties.
4. |
SHARES OF COMMON STOCK SUBJECT TO THE PLAN;
SHARE LIMIT |
4.1 Shares Available. Subject to the
provisions of Section 7.1, the capital stock available for issuance under this
Plan shall be shares of the Corporations authorized but unissued Common Stock.
For purposes of this Plan, Common
Stock shall mean the common stock of the
Corporation, par value $0.06 per share, and such other securities or property as
may become the subject of awards under this Plan pursuant to an adjustment made
under Section 7.1.
4.2 Share Limit. The maximum number of
shares of Common Stock that may be delivered pursuant to awards granted to
Eligible Persons under this Plan (the Share
Limit) may not exceed the number of shares
of Common Stock reserved for issuance as of the Effective Date under the Second
Amended and Restated Air Methods Corporation 2006 Equity Compensation Plan (the
2006 Plan), which 2006 Plan shall be frozen as of (and contingent upon) the
occurrence of the Effective Date.
The foregoing Share Limit is subject to
adjustment as contemplated by Section 7.1 and Section 8.10.
4.3 Awards Settled in Cash, Reissue of
Awards and Shares. The Administrator may adopt reasonable counting procedures to
ensure appropriate counting and to avoid double counting (as, for example, in the case of tandem or substitute awards) as it
may deem necessary or desirable in its sole discretion. Shares shall be counted against those reserved to the extent such
shares have been delivered and are no longer subject to a substantial risk of forfeiture. Accordingly, to the extent that an
award under the Plan, in whole or in part, is canceled, expired, forfeited, settled in cash, or otherwise terminated
without delivery of shares to the participant, the shares retained by or returned to the Corporation will not be deemed to
have been delivered under the Plan and will be deemed to remain or to become available under this Plan. Notwithstanding the
foregoing, liberal share recycling shall not be
permitted. Shares that are withheld from such an award or separately surrendered by the participant in payment of the
exercise price or taxes relating to such an award, and the total number of shares subject to the exercised portion of an
SAR (regardless of the actual lesser of number shares delivered to the Participant), shall be deemed to have been issued
hereunder and shall reduce the number of shares remaining available for issuance under the Plan. The foregoing adjustments
to the Share Limit of this Plan are subject to any applicable limitations under Section 162(m) of the Code with respect to
awards intended as performance-based compensation thereunder.
4.4 Reservation of Shares; No Fractional Shares. The Corporation shall at all times reserve a number of
shares of Common Stock sufficient to cover the Corporations obligations and
contingent obligations to deliver shares with respect to awards then outstanding
under this Plan (exclusive of any dividend equivalent obligations to the extent
the Corporation has the right to settle such rights in cash). No fractional
shares shall be delivered under this Plan. The Administrator may pay cash in
lieu of any fractional shares in settlements of awards under this
Plan.
5. AWARDS
5.1 Type and Form of Awards. The
Administrator shall determine the type or types of award(s) to be made to each
selected Eligible Person. Awards may be granted singly, in combination or in
tandem. Awards also may be made in combination or in tandem with, in replacement
of, as alternatives to, or as the payment form for grants or rights under any
other employee or compensation plan of the Corporation or one of its
Subsidiaries. The types of awards that may be granted under this Plan
are:
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5.1.1 Stock Options. A stock option is
the grant of a right to purchase a specified number of shares of Common Stock
during a specified period as determined by the Administrator. An option may be
intended as an incentive stock option within the meaning of Section 422 of the
Code (an ISO) or a nonqualified stock option (an option not intended to be an ISO).
The award agreement for an option will indicate if the option is intended as an
ISO; otherwise it will be deemed to be a nonqualified stock option. The maximum
term of each option (ISO or nonqualified) shall be ten (10) years. The per share
exercise price for each option shall be not less than 100% of the Fair Market
Value of a share of Common Stock on the date of grant of the option. When an
option is exercised, the exercise price for the shares to be purchased shall be
paid in full in cash or such other method permitted by the Administrator
consistent with Section 5.5. Options may only be granted to Eligible Persons for
whom the Corporation would be deemed to be an eligible issuer of service
recipient stock, as defined in Treasury Regulation 1.409A-1(b)(5)(iii)(E).
5.1.2 Additional Rules Applicable to ISOs. To the extent that the aggregate Fair Market Value (determined at the
time of grant of the applicable option) of stock with respect to which ISOs
first become exercisable by a participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to ISOs under this Plan and stock
subject to ISOs under all other plans of the Corporation or one of its
Subsidiaries (or any parent or predecessor corporation to the extent required by
and within the meaning of Section 422 of the Code and the regulations
promulgated thereunder), such options shall be treated as nonqualified stock
options. In reducing the number of options treated as ISOs to meet the $100,000
limit, the most recently granted options shall be reduced first. To the extent a
reduction of simultaneously granted options is necessary to meet the $100,000
limit, the Administrator may, in the manner and to the extent permitted by law,
designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an ISO. ISOs may only be granted to employees of the
Corporation or one of its subsidiaries (for this purpose, the term subsidiary
is used as defined in Section 424(f) of the Code, which generally requires an
unbroken chain of ownership of at least 50% of the total combined voting power
of all classes of stock of each subsidiary in the chain beginning with the
Corporation and ending with the subsidiary in question). There shall be imposed
in any award agreement relating to ISOs such other terms and conditions as from
time to time are
required in order that the option be an
incentive stock option as that term is defined in Section 422 of the Code. No
ISO may be granted to any person who, at the time the option is granted, owns
(or is deemed to own under Section 424(d) of the Code) shares of outstanding
Common Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation, unless the exercise price of such option is
at least 110% of the Fair Market Value of the stock subject to the option and
such option by its terms is not exercisable after the expiration of five years
from the date such option is granted.
5.1.3 Stock Appreciation Rights. A stock
appreciation right or SAR is a right to receive a payment, in cash and/or Common
Stock, equal to the number of shares of Common Stock being exercised multiplied
by the excess of (i) the Fair Market Value of a share of Common Stock on the
date the SAR is exercised, over (ii) the Fair Market Value of a share of Common
Stock on the date the SAR was granted as specified in the applicable award
agreement (the base price). The maximum term of a SAR shall be ten (10) years. SARs
may only be granted to Eligible Persons for whom the Corporation would be deemed
to be an eligible issuer of service recipient stock, as defined in Treasury
Regulation 1.409A-1(b)(5)(iii)(E).
5.1.4 Restricted Stock.
(a) |
Restrictions. Restricted stock
is Common Stock subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Administrator may
impose, which restrictions may lapse separately or in combination at such
times, under such circumstances (including based on achievement of
performance goals and/or future service requirements), in such
installments or otherwise, as the Administrator may determine at the date
of grant or thereafter. Except to the extent restricted under the terms of
this Plan and the applicable award agreement relating to the restricted
stock, a participant granted restricted stock shall have all of the rights
of a stockholder of the Corporation, including the right to vote the
restricted stock and the right to receive dividends thereon (subject to
any mandatory reinvestment or other requirement imposed by the
Administrator). |
(b) |
Certificates for
Shares. Shares of restricted stock
granted under this Plan may be evidenced in such manner as the
Administrator shall determine. If certificates representing restricted
stock are registered in the name of the participant, the Administrator may
require that such certificates bear an appropriate legend referring to
the |
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terms, conditions and
restrictions applicable to such restricted stock, that the Corporation
retain physical possession of the certificates, and that the participant
deliver a stock power to the Corporation, endorsed in blank, relating to
the restricted stock. The Administrator may require that shares of
restricted stock are held in escrow until all restrictions
lapse. |
(c) |
Dividends and
Splits. As a condition to the grant of
an award of restricted stock, subject to applicable law, the Administrator
may require or permit a participant to elect that any cash dividends paid
on a share of restricted stock be automatically reinvested in additional
shares of restricted stock or applied to the purchase of additional awards
under this Plan or held in escrow by the Corporation unless and until the
related shares of restricted stock become vested. Unless otherwise
determined by the Administrator, stock distributed in connection with a
stock split or stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of forfeiture to the
same extent as the restricted stock with respect to which such stock or
other property has been distributed. |
5.1.5 Restricted Stock Units.
(a) |
Grant of Restricted
Stock Units. A restricted stock unit,
or RSU, represents the right to receive from the Corporation on the
respective scheduled vesting or payment date for such RSU, one share of
Common Stock or, if specified in the applicable award agreement, the Fair
Market Value of one share of Common Stock paid in cash. The vesting or
payment of an award of RSUs may be subject to the attainment of specified
performance goals or targets, forfeitability provisions and such other
terms and conditions as the Administrator may determine, subject to the
provisions of this Plan. |
(b) |
Dividend Equivalent
Accounts. If (and only if) required by
the applicable award agreement, prior to the expiration of the applicable
vesting period of an RSU, the Administrator shall pay dividend equivalent
rights with respect to RSUs, in which case the Corporation shall establish
an account for the participant and reflect in that account any securities,
cash or other property comprising any dividend or property distribution
with respect to the shares of Common Stock underlying each RSU. Each
amount or other property credited to any such account shall be subject to
the same vesting conditions as the RSU to which it relates. The
participant shall be paid the amounts or other property credited to such
account upon vesting of the RSU. |
(c) |
Rights as
a Stockholder. Subject to the
restrictions imposed under the terms and conditions of this Plan and the
applicable award agreement, each participant receiving RSUs shall have no
rights as a stockholder of the Corporation with respect to such RSUs until
such time as shares of Common Stock are issued to the participant. In the
event an RSU is settled in cash, the participant receiving RSUs shall
never receive stockholder rights with respect to such award. No shares of
Common Stock shall be issued at the time a RSU is granted, and the
Corporation will not be required to set aside a fund for the payment of
any such award. Except as otherwise provided in the applicable award
agreement, shares of Common Stock issuable under an RSU, if any, shall be
treated as issued on the first date that the RSU is no longer subject to a
substantial risk of forfeiture as determined for purposes of Section 409A
of the Code, and the holder shall be the owner of such shares of Common
Stock on such date. An award agreement may provide that issuance of shares
of Common Stock (or the settlement of an RSU in cash) under an RSU may be
deferred beyond the first date that the RSU is no longer subject to a
substantial risk of forfeiture, provided that such deferral is structured
in a manner that is intended to comply with the requirements of Section
409A of the Code. |
5.1.6 Cash Awards. The Administrator
may, from time to time, subject to the provisions of the Plan and such other
terms and conditions as it may determine, grant cash bonuses (including without
limitation, discretionary awards, awards based on objective or subjective
performance criteria, awards subject to other vesting criteria or awards granted
consistent with Section 5.2 below). Cash awards shall be awarded in such amount
and at such times during the term of the Plan as the Administrator shall
determine.
5.1.7 Other Awards. The other types of
awards that may be granted under this Plan include: (a) stock bonuses,
performance stock, performance units, dividend equivalents, or similar rights to
purchase or acquire shares, whether at a fixed or variable price or ratio
related to the Common Stock (subject to the requirements of Section 5.1.1 and in
compliance with applicable laws), upon the passage of time, the occurrence of
one or more events, or the satisfaction of performance criteria or other
conditions, or any combination thereof; or (b) any similar securities with a
value derived from the value of or related to the Common Stock and/or returns
thereon.
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5.2 Section 162(m) Performance-Based Awards. Without limiting the generality of the foregoing, any of the types of
awards listed in Sections 5.1.4 through 5.1.7 above may be, and options and SARs
granted with an exercise or base price not less than the Fair Market Value of a
share of Common Stock at the date of grant (Qualifying Options and
Qualifying SARs, respectively) typically will be, granted as awards intended to satisfy
the requirements for performance-based compensation within the meaning of
Section 162(m) of the Code (Performance-Based
Awards). The grant, vesting, exercisability
or payment of Performance-Based Awards may depend (or, in the case of Qualifying
Options or Qualifying SARs, may also depend) on the degree of achievement of one
or more performance goals relative to a pre-established targeted level or levels
using the Business Criteria provided for below for the Corporation on a
consolidated basis or for one or more of the Corporations Subsidiaries,
segments, divisions or business units, or any combination of the foregoing. Such
criteria may be evaluated on an absolute basis or relative to prior periods,
industry peers, or stock market indices. Any Qualifying Option or Qualifying SAR
shall be subject to the requirements of Section 5.2.1 and 5.2.3 in order for
such award to satisfy the requirements for performance-based compensation
under Section 162(m) of the Code. Any other Performance-Based Award shall be
subject to all of the following provisions of this Section 5.2.
5.2.1 Class; Administrator. The eligible
class of persons for Performance-Based Awards under this Section 5.2 shall be
officers and employees of the Corporation or one of its Subsidiaries. The
Administrator approving Performance-Based Awards or making any certification
required pursuant to Section 5.2.4 must be constituted as provided in Section
3.1 for awards that are intended as performance-based compensation under Section
162(m) of the Code.
5.2.2 Performance Goals. The specific
performance goals for Performance-Based Awards (other than Qualifying Options
and Qualifying SARs) shall be based on such business criteria as selected by the
Administrator in its sole discretion (Business Criteria) from the
following: (1) total stockholder return; (2) revenues, net revenues or sales;
(3) return on total stockholders equity; (4) earnings per share of Common
Stock; (5) increase in the trading price per share of Common Stock; (6) net
income (before or after taxes) or net operating income; (7) return on assets,
return on investment or return on capital; (8) economic value added; (9)
operating budget or margin; (10) contribution margin; (11) earnings from
continuing operations; (12) levels of operating expense or other expense, cost
or liability items
reported on the Corporations income
statement; (13) earnings before all or any interest, taxes, depreciation,
amortization and/or other expense (EBIT, EBITA, EBITDA or EBITDAX); (14)
net income (loss) before depreciation, amortization, interest and other expense,
net, taxes, severance, acquisition costs, stock-based compensation and asset
impairment charges (Adjusted EBITDA); (15) cash flow; (16) debt reduction;
(17) market share; (18) third-party capital sourcing; (19) acquisition cost
efficiency; (20) infrastructure development for business units or administrative
departments (such as information technology and human resources); (21) measures
of pricing efficiency and/or growth; (22) satisfactory completion of a major
project or organizational initiative set in advance by the Administrator; (23)
measures of safety; (24) strategic sales or acquisitions in compliance with
specific criteria set forth in advance by the Administrator; (25) personal
management objectives; (26) number of patient transports; (27) such other
criteria as the stockholders of the Corporation may approve; in each case as
applicable, as determined in accordance with generally accepted accounting
principles; and (28) any combination of the foregoing, or a specified increase
or decrease of one or more of the foregoing over a specified period. To qualify
awards as performance-based under Section 162(m) of the Code, the applicable
Business Criterion (or Business Criteria, as the case may be) and specific
performance goal or goals (targets) must be established and
approved by the Administrator during the first 90 days of the performance period
(and, in the case of performance periods of less than one year, in no event
after 25% or more of the performance period has elapsed) and while performance
relating to such target(s) remains substantially uncertain within the meaning of
Section 162(m) of the Code. Performance targets shall be adjusted to mitigate
the unbudgeted impact of material, unusual or nonrecurring gains and losses,
accounting changes or other extraordinary events not foreseen at the time the
targets were set unless the Administrator provides otherwise at the time of
establishing the targets; provided that the Administrator may not make any
adjustment to the extent it would adversely affect the qualification of any
compensation payable under such performance targets as performance-based
compensation under Section 162(m) of Code. The applicable performance
measurement period may not be less than 3 months nor more than 10
years.
5.2.3 Form of Payment. Grants or awards
intended to qualify under this Section 5.2 may be paid in cash or shares of
Common Stock or any combination thereof.
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5.2.4 Certification of Payment. Before
any Performance-Based Award under this Section 5.2 (other than Qualifying
Options and Qualifying SARs) is paid and to the extent required to qualify the
award as performance-based compensation within the meaning of Section 162(m) of
the Code, the Administrator must certify in writing that the performance
target(s) and any other material terms of the Performance-Based Award were in
fact timely satisfied.
5.2.5 Reservation of Discretion. The Administrator will have the discretion to
determine the restrictions or other limitations of the individual awards granted
under this Section 5.2 including the authority to reduce awards, payouts or
vesting or to pay no awards, in its sole discretion, if the Administrator
preserves such authority at the time of grant by language to this effect in its
authorizing resolutions or otherwise.
5.2.6 Expiration of Grant Authority. As
required pursuant to Section 162(m) of the Code and the regulations promulgated
thereunder, the Administrators authority to grant new awards that are intended
to qualify as performance-based compensation within the meaning of Section
162(m) of the Code (other than Qualifying Options and Qualifying SARs) shall
terminate upon the first meeting of the Corporations stockholders that occurs
in the fifth year following the year in which the Corporations stockholders
first approve this Plan (the 162(m) Term).
5.2.7 Compensation Limitations. The
maximum aggregate number of shares of Common Stock that may be issued to any
Eligible Person during the term of this Plan pursuant to Qualifying Options and
Qualifying SARs may not exceed 1,500,000 shares of Common Stock. The maximum
aggregate number of shares of Common Stock that may be issued to any Eligible
Person pursuant to Performance-Based Awards granted during the 162(m) Term
(other than cash awards granted pursuant to Section 5.1.6 and Qualifying Options
or Qualifying SARs) may not exceed 1,000,000 shares of Common Stock. The maximum
amount that may be paid to any Eligible Person pursuant to Performance-Based
Awards granted pursuant to Sections 5.1.6 (cash awards) during the 162(m) Term
may not exceed $15,000,000.
5.3 Award Agreements. Each award shall
be evidenced by a written or electronic award agreement in the form approved by
the Administrator and, if required
by the Administrator, executed or accepted
by the recipient of the award. The Administrator may authorize any officer of
the Corporation (other than the particular award recipient) to execute any or
all award agreements on behalf of the Corporation (electronically or otherwise).
The award agreement shall set forth the material terms and conditions of the
award as established by the Administrator consistent with the express
limitations of this Plan.
5.4 Deferrals and Settlements. Payment
of awards may be in the form of cash, Common Stock, other awards or combinations
thereof as the Administrator shall determine, and with such restrictions as it
may impose. The Administrator may also require or permit participants to elect
to defer the issuance of shares of Common Stock or the settlement of awards in
cash under such rules and procedures as it may establish under this Plan. The
Administrator may also provide that deferred settlements include the payment or
crediting of interest or other earnings on the deferral amounts, or the payment
or crediting of dividend equivalents where the deferred amounts are denominated
in shares. All mandatory or elective deferrals of the issuance of shares of
Common Stock or the settlement of cash awards shall be structured in a manner
that is intended to comply with the requirements of Section 409A of the
Code.
5.5 Consideration for Common Stock or Awards. The purchase price for any award granted under this Plan or the Common
Stock to be delivered pursuant to an award, as applicable, may be paid by means
of any lawful consideration as determined by the Administrator and subject to
compliance with applicable laws, including, without limitation, one or a
combination of the following methods:
● |
services rendered by the recipient
of such award; |
● |
cash, check payable to the order of
the Corporation, or electronic funds transfer; |
● |
notice and third party payment in
such manner as may be authorized by the Administrator; |
● |
the delivery of previously owned
shares of Common Stock that are fully vested and unencumbered;
|
● |
by a reduction in the number of
shares otherwise deliverable pursuant to the award; or |
● |
subject to such procedures as the
Administrator may adopt, pursuant to a cashless exercise with a third
party who provides financing for the purposes of (or who otherwise
facilitates) the purchase or exercise of
awards. |
In the event that the Administrator allows
a participant to exercise an award by delivering shares of Common Stock
previously owned by such participant and unless
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otherwise expressly provided by the
Administrator, any shares delivered which were initially acquired by the
participant from the Corporation (upon exercise of a stock option or otherwise)
must have been owned by the participant at least six months as of the date of
delivery (or such other period as may be required by the Administrator in order
to avoid adverse accounting treatment). Shares of Common Stock used to satisfy
the exercise price of an option shall be valued at their Fair Market Value on
the date of exercise. The Corporation will not be obligated to deliver any
shares unless and until it receives full payment of the exercise or purchase
price therefor and any related withholding obligations under Section 8.5 and any
other conditions to exercise or purchase, as established from time to time by
the Administrator, have been satisfied. Unless otherwise expressly provided in
the applicable award agreement, the Administrator may at any time eliminate or
limit a participants ability to pay the purchase or exercise price of any award
by any method other than cash payment to the Corporation.
5.6 Definition of Fair Market Value. For purposes of this Plan Fair
Market Value of a share of Common Stock, as
of a date of determination, shall mean (i) the closing sales price per share of
Common Stock on the U.S. national securities exchange or over-the-counter market
on which such stock is principally traded on the date of the grant of such award
or (ii) if the shares of Common Stock are not then listed on any national
securities exchange or traded in an over-the-counter market or the value of such
shares is not otherwise determinable, such value as reasonably determined by the
Administrator in good faith and, to the extent necessary, in accordance with the
requirements of Section 409A of the Code.
5.7 Transfer Restrictions.
5.7.1
Limitations on Exercise and
Transfer. Unless otherwise expressly
provided in (or pursuant to) this Section 5.7, by applicable law and by the
award agreement, as the same may be amended, (a) all awards are non-transferable
and shall not be subject in any manner to sale, transfer, anticipation,
alienation, assignment, pledge, encumbrance or charge; (b) awards shall be
exercised only by the participant; and (c) amounts payable or shares issuable
pursuant to any award shall be delivered only to (or for the account of) the
participant.
5.7.2
Exceptions. The Administrator may permit awards to be exercised by and
paid to, or otherwise transferred to, other persons or entities pursuant to such
conditions and procedures, including limitations on subsequent transfers, as the
Administrator may, in its sole discretion, establish in writing (provided that
any such transfers of ISOs shall be limited to the extent permitted under the
federal tax laws governing ISOs). Any permitted transfer shall be subject to
compliance with applicable federal and state securities laws.
5.7.3
Further Exceptions to Limits on
Transfer. The exercise and transfer
restrictions in Section 5.7.1 shall not apply to:
|
(a) |
|
transfers to the
Corporation, |
|
(b) |
|
the designation of a
beneficiary to receive benefits in the event of the participants death
or, if the participant has died, transfers to or exercise by the
participants beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and
distribution, |
|
(c) |
|
subject to any
applicable limitations on ISOs, transfers to a family member (or former
family member) pursuant to a domestic relations order if approved or
ratified by the Administrator, |
|
(d) |
|
subject to any
applicable limitations on ISOs, if the participant has suffered a
disability, permitted transfers or exercises on behalf of the participant
by his or her legal representative, or |
|
(e) |
|
the authorization by
the Administrator of cashless exercise procedures with third parties who
provide financing for the purpose of (or who otherwise facilitate) the
exercise of awards consistent with applicable laws and the express
authorization of the Administrator. |
5.8 International Awards.
One or more awards may be granted to Eligible Persons who provide services to
the Corporation or one of its Subsidiaries outside of the United States. Any
awards granted to such persons may, if deemed necessary or advisable by the
Administrator, be granted pursuant to the terms and conditions of any applicable
sub-plans, if any, appended to this Plan and approved by the
Administrator.
5.9 Minimum Vesting Period of Awards. Except as set forth below, a vesting period of at least one
(1) year shall apply to all awards issued under the Plan. Up to 5% of the shares
of Common Stock reserved for issuance under the Plan as of the Effective Date
may be issued pursuant to awards that do not comply with such minimum one (1)
year vesting period.
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6.
EFFECT OF TERMINATION OF SERVICE ON AWARDS
6.1 Termination of Employment.
6.1.1
Administrator
Determination. The Administrator shall
establish the effect of a termination of employment or service on the rights and
benefits under each award under this Plan and in so doing may make distinctions
based upon, inter alia, the cause of termination and type of award. If the
participant is not an employee of the Corporation or one of its Subsidiaries and
provides other services to the Corporation or one of its Subsidiaries, the
Administrator shall be the sole judge for purposes of this Plan (unless a
contract or the award agreement otherwise provides) of whether the participant
continues to render services to the Corporation or one of its Subsidiaries and
the date, if any, upon which such services shall be deemed to have
terminated.
6.1.2
Stock Options and
SARs. For awards of stock options or
SARs, unless the award agreement provides otherwise, the exercise period of such
options or SARs shall expire: (1) three months after the last day that the
participant is employed by or provides services to the Corporation or a
Subsidiary (provided; however,
that in the event of the participants death
during this period, those persons entitled to exercise the option or SAR
pursuant to the laws of descent and distribution shall have one year following
the date of death within which to exercise such option or SAR); (2) in the case
of a participant whose termination of employment is due to death or disability
(as defined in the applicable award agreement), 12 months after the last day
that the participant is employed by or provides services to the Corporation or a
Subsidiary; and (3) immediately upon a participants termination for cause.
The Administrator will, in its absolute discretion, determine the effect of all
matters and questions relating to a termination of employment, including, but
not by way of limitation, the question of whether a leave of absence constitutes
a termination of employment and whether a participants termination is for
cause.
The term
cause
shall have the meaning assigned to such term in any individual employment or
severance agreement or award agreement with the participant or, if no such
agreement exists or if such agreement does not define cause, cause shall mean
(i) participants act(s) of gross negligence or willful misconduct in the course
of participants employment by the Corporation or any of its Subsidiaries that
is or could reasonably be expected
to be
materially injurious to the Corporation or any of its Subsidiaries, (ii) willful
failure or refusal by participant to perform in any material respect his or her
duties or responsibilities, (iii) misappropriation by participant of any assets
of the Corporation or any of its Subsidiaries, (iv) embezzlement or fraud
committed by participant, or at his or her direction, and (v) participants conviction of, or pleading guilty or no contest to a felony under state or
federal law.
6.1.3
Restricted Stock and
RSUs. For awards of restricted stock,
unless the award agreement provides otherwise, shares of restricted stock that
are subject to restrictions at the time that a participant whose employment or
service is terminated shall be forfeited and reacquired by the Corporation;
provided that, the Administrator may provide, by rule or regulation or in any award
agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to shares of restricted stock shall be waived in
whole or in part in the event of a termination of employment or service, and the
Administrator may in other cases waive in whole or in part the forfeiture of
shares of restricted stock. Similar rules shall apply in respect of
RSUs.
6.2 Events Not Deemed Terminations of Service. Unless the express policy of the Corporation or one of its
Subsidiaries, or the Administrator, otherwise provides, the employment
relationship shall not be considered terminated in the case of (a) sick leave,
(b) military leave, or (c) any other leave of absence authorized by the
Corporation or one of its Subsidiaries, or the Administrator; provided that unless
reemployment upon the expiration of such leave is guaranteed by contract or law,
such leave is for a period of not more than 3 months. In the case of any
employee of the Corporation or one of its Subsidiaries on an approved leave of
absence, continued vesting of the award while on leave from the employ of the
Corporation or one of its Subsidiaries may be suspended until the employee
returns to service, unless the Administrator otherwise provides or applicable
law otherwise requires. In no event shall an award be exercised after the
expiration of the term set forth in the award agreement.
6.3 Effect of Change of Subsidiary Status. For purposes of this Plan and any award, if an entity ceases
to be a Subsidiary of the Corporation, a termination of employment or service
shall be deemed to have occurred with respect to each Eligible Person in respect
of such Subsidiary who does not continue as an Eligible Person in respect of the
Corporation or another Subsidiary that continues as such after giving effect to
the transaction or other event giving rise to the change in status.
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7.
ADJUSTMENTS; ACCELERATION
7.1 Adjustments. Upon or in
contemplation of (a) any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend) or reverse stock split
(stock split), (b) any merger, arrangement, combination, consolidation, or other
reorganization, (c) any spin-off, split-up, or similar extraordinary dividend
distribution in respect of the Common Stock (whether in the form of securities
or property), or (d) any exchange of Common Stock or other securities of the
Corporation, or any similar, unusual or extraordinary corporate transaction in
respect of the Common Stock, the Administrator shall in such manner, to such
extent and at such time as it deems appropriate and equitable in the
circumstances (but subject to compliance with applicable laws and stock exchange
requirements) proportionately adjust any or all of (1) the number and type of
shares of Common Stock (or other securities) that thereafter may be made the
subject of awards (including the Share Limit), (2) the number, amount and type
of shares of Common Stock (or other securities or property) subject to any or
all outstanding awards, (3) the grant, purchase, or exercise price (which term
includes the base price of any SAR or similar right) of any or all outstanding
awards, (4) the securities, cash or other property deliverable upon exercise or
payment of any outstanding awards, and (5) the compensation limitations under
162(m) of the Code set forth in Section 5.2.7 and (subject to Section 8.8.3(a))
the performance standards applicable to any outstanding awards (provided that no
adjustment shall be allowed to the extent inconsistent with the requirements
under Section 162(m) of the Code). Any adjustment made pursuant to this Section
7.1 shall be made in a manner that, in the good faith determination of the
Administrator, will not likely result in the imposition of additional taxes or
interest under Section 409A of the Code. With respect to any award of an ISO,
the Administrator may make such an adjustment that causes the option to cease to
qualify as an ISO without the consent of the affected participant.
7.2 Change in Control. Upon
a Change in Control, each then-outstanding option and SAR shall automatically
become fully vested, all shares of restricted stock and restricted stock units
then outstanding shall automatically fully vest free of restrictions, and each
other award granted under this Plan that is then outstanding shall automatically
become vested in full (assuming all performance targets have been achieved at
100% of target) and payable to the holder of such award unless the Administrator
has made appropriate provision for the substitution, assumption, exchange or
other continuation of the award pursuant to the Change in Control. Notwithstanding the foregoing, the
Administrator, in its sole and absolute discretion, may choose (in an award
agreement or otherwise) to provide for full or partial
accelerated vesting of any award upon a
Change in Control (or upon any other event or other circumstance related to the
Change in Control, such as an involuntary termination of employment occurring
after such Change in Control, as the Administrator may determine), irrespective
of whether any such award has been substituted, assumed, exchanged or otherwise
continued pursuant to the Change in Control.
For purposes of this Plan,
Change in Control shall be deemed to have occurred if the event set forth in any one of
the following paragraphs shall have occurred:
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The acquisition by any Person of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of more than 50% or more of the then-outstanding voting
securities of the Corporation entitled to vote generally in the election
of directors; |
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In the event the Board is a
classified board, a majority of the individuals who serve in the same
class of directors that constitute the Board as of the Effective Date (the
Incumbent Board) cease for any reason to constitute at least a
majority of that class of directors, or in the event the Board is not a
classified board, members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Corporations stockholders,
was approved by a vote of at least two-thirds of the directors then
comprising the Incumbent Board (including for these purposes, the new
members whose election or nomination was so approved, without counting the
member and her predecessor twice) shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; |
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Consummation of a reorganization, merger,
statutory share exchange or consolidation or similar corporate transaction
involving the Corporation or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Corporation,
or the acquisition of assets or stock of another entity by the Corporation
or any of its subsidiaries (each, a Business Combination), in each
case unless, following such Business Combination, (A) all or
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substantially all of
the individuals and entities that were the beneficial owners of the
Corporations outstanding voting securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than
50% of the then- outstanding voting securities of the entity resulting
from such Business Combination (including, without limitation, an entity
that, as a result of such transaction, owns the Corporation or all or
substantially all of the Corporations assets directly or through one or
more subsidiaries (a Parent)), and (B) at least a
majority of the members of the board of directors or trustees of the
entity resulting from such Business Combination or a Parent were members
of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business
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Approval by the
stockholders of the Corporation of a complete liquidation or dissolution
of the Corporation. |
Notwithstanding the foregoing, a Change
in Control shall not be deemed to have occurred by virtue of the consummation of
any transaction or series of integrated transactions immediately following which
the holders of the Corporations voting securities immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Corporation immediately following such transaction or series of
transactions. No compensation that has been deferred for purposes of Section
409A of the Code shall be payable as a result of a Change in Control unless the
Change in Control qualifies as a change in ownership or effective control of the
Corporation within the meaning of Section 409A of the Code.
For purpose of this Section, the term
Person shall have the meaning set forth in Section 3(a)(9) of the Exchange
Act, except that such term shall not include (i) the Corporation, (ii) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Corporation, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) an entity owned, directly or indirectly, by
the stockholders of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation.
7.3 Early Termination of
Awards. Any award that has been
accelerated as required or permitted by Section 7.2 upon a Change in Control (or
would have been so accelerated but for Section 7.4 or 7.5) shall terminate upon
such event, subject to any provision that has been
expressly made by the Administrator,
through a plan of reorganization or otherwise, for the survival, substitution,
assumption, exchange or other continuation of such award and provided that, in
the case of options and SARs that will not survive, be substituted for, assumed,
exchanged, or otherwise continued in the transaction, the holder of such award
shall be given reasonable advance notice of the impending termination and a
reasonable opportunity to exercise his or her outstanding options and SARs in
accordance with their terms before the termination of such awards (except that
in no case shall more than ten days notice of accelerated vesting and the
impending termination be required and any acceleration may be made contingent
upon the actual occurrence of the event).
The Administrator may make provision
for payment in cash or property (or both) in respect of awards terminated
pursuant to this Section as a result of the Change in Control and may adopt such
valuation methodologies for outstanding awards as it deems reasonable and, in
the case of options, SARs or similar rights, and without limiting other
methodologies, may base such settlement solely upon the excess if any of the per
share amount payable upon or in respect of such event over the exercise or base
price of the award.
7.4 Other Acceleration Rules. Any acceleration of awards pursuant to this Section 7 shall comply with
applicable legal and stock exchange requirements and, if necessary to accomplish
the purposes of the acceleration or if the circumstances require, may be deemed
by the Administrator to occur a limited period of time not greater than 30 days
before the event. Without limiting the generality of the foregoing, the
Administrator may deem an acceleration to occur immediately prior to the
applicable event and/or reinstate the original terms of an award if an event
giving rise to the acceleration does not occur. Notwithstanding any other
provision of the Plan to the contrary, the Administrator may override the
provisions of Section 7.2, 7.3, and/or 7.5 by express provision in the award
agreement or otherwise. The portion of any ISO accelerated pursuant to Section
7.2 or any other action permitted hereunder shall remain exercisable as an ISO
only to the extent the applicable $100,000 limitation on ISOs is not exceeded.
To the extent exceeded, the accelerated portion of the option shall be
exercisable as a nonqualified stock option under the Code.
7.5 Possible Rescission of Acceleration. If the vesting of an award has been accelerated expressly in
anticipation of an event and the Administrator later determines that the event
will not occur, the Administrator may rescind the effect of the acceleration as
to
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any then outstanding and unexercised or
otherwise unvested awards; provided,
that, in the case of any compensation that
has been deferred for purposes of Section 409A of the Code, the Administrator
determines that such rescission will not likely result in the imposition of
additional tax or interest under Section 409A of the Code.
8. OTHER PROVISIONS
8.1 Compliance with Laws.
This Plan, the granting and vesting of awards under this Plan, the offer,
issuance and delivery of shares of Common Stock, the payment of money under this
Plan or under awards are subject to compliance with all applicable federal and
state laws, rules and regulations and to such approvals by any applicable stock
exchange listing, regulatory or governmental authority as may, in the opinion of
counsel for the Corporation, be necessary or advisable in connection therewith.
The person acquiring any securities under this Plan will, if requested by the
Corporation or one of its Subsidiaries, provide such assurances and
representations to the Corporation or one of its Subsidiaries as the
Administrator may deem necessary or desirable to assure compliance with all
applicable legal and accounting requirements.
8.2 Future Awards/Other Rights. No person shall have any claim or rights to be granted an award (or
additional awards, as the case may be) under this Plan, subject to any express
contractual rights (set forth in a document other than this Plan) to the
contrary.
8.3 No Employment/Service Contract. Nothing contained in this Plan (or in any other documents under this
Plan or in any award) shall confer upon any Eligible Person or other participant
any right to continue in the employ or other service of the Corporation or one
of its Subsidiaries, constitute any contract or agreement of employment or other
service or affect an employees status as an employee at will, nor shall
interfere in any way with the right of the Corporation or one of its
Subsidiaries to change a persons compensation or other benefits, or to
terminate his or her employment or other service, with or without cause. Nothing
in this Section 8.3, however, is intended to adversely affect any express
independent right of such person under a separate employment or service contract
other than an award agreement.
8.4 Plan Not Funded. Awards
payable under this Plan shall be payable in shares or from the general assets of
the Corporation, and no special or separate reserve, fund or deposit shall be
made to assure payment of such
awards. No participant, beneficiary or
other person shall have any right, title or interest in any fund or in any
specific asset (including shares of Common Stock, except as expressly otherwise
provided) of the Corporation or one of its Subsidiaries by reason of any award
hereunder. Neither the provisions of this Plan (or of any related documents),
nor the creation or adoption of this Plan, nor any action taken pursuant to the
provisions of this Plan shall create, or be construed to create, a trust of any
kind or a fiduciary relationship between the Corporation or one of its
Subsidiaries and any participant, beneficiary or other person. To the extent
that a participant, beneficiary or other person acquires a right to receive
payment pursuant to any award hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Corporation.
8.5 Tax Withholding. Upon
any exercise, vesting, or payment of any award, the Corporation or one of its
Subsidiaries shall have the right at its option to:
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require the participant (or the
participants personal representative or beneficiary, as the case may be)
to pay or provide for payment of at least the minimum amount of any taxes
which the Corporation or one of its Subsidiaries may be required to
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deduct from any amount otherwise
payable in cash to the participant (or the participants personal
representative or beneficiary, as the case may be) the minimum amount of
any taxes which the Corporation or one of its Subsidiaries may be required
to withhold with respect to such cash
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In any case where a tax is required to
be withheld in connection with the delivery of shares of Common Stock under this
Plan, the Administrator may in its sole discretion (subject to Section 8.1)
grant (either at the time of the award or thereafter) to the participant the
right to elect, pursuant to such rules and subject to such conditions as the
Administrator may establish, to have the Corporation reduce the number of shares
to be delivered by (or otherwise reacquire) the appropriate number of shares,
valued in a consistent manner at their Fair Market Value or at the sales price
in accordance with authorized procedures for cashless exercises, necessary to
satisfy the minimum applicable withholding obligation on exercise, vesting or
payment. In no event shall the shares withheld exceed the minimum whole number
of shares required for tax withholding under applicable law.
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8.6 Effective Date, Termination and Suspension,
Amendments.
8.6.1 Effective Date and Termination.
This Plan was approved by the Board and shall become effective upon approval by
the stockholders at the Companys 2015 Annual Meeting (the Effective Date).
Unless earlier terminated by the Board, this Plan shall terminate at the close
of business on September 9, 2022. After the termination of this Plan either upon
such stated expiration date or its earlier termination by the Board, no
additional awards may be granted under this Plan, but previously granted awards
(and the authority of the Administrator with respect thereto, including the
authority to amend such awards) shall remain outstanding in accordance with
their applicable terms and conditions and the terms and conditions of this
Plan.
8.6.2 Board Authorization. The Board
may, at any time, terminate or, from time to time, amend, modify or suspend this
Plan, in whole or in part. No awards may be granted during any period that the
Board suspends this Plan.
8.6.3 Stockholder Approval. To the
extent then required by applicable law or any applicable stock exchange or
required under Sections 162, 422 or 424 of the Code to preserve the intended tax
consequences of this Plan, or deemed necessary or advisable by the Board, this
Plan and any amendment to this Plan shall be subject to approval by the
stockholders of the Corporation.
8.6.4 Amendments to Awards. Without
limiting any other express authority of the Administrator under (but subject to)
the express limits of this Plan, the Administrator by agreement or resolution
may waive conditions of or limitations on awards to participants that the
Administrator in the prior exercise of its discretion has imposed, without the
consent of a participant, and (subject to the requirements of Sections 3.2 and
8.6.5) may make other changes to the terms and conditions of awards. Any
amendment or other action that would constitute a repricing of an award is
subject to the limitations set forth in Section 3.2(g).
8.6.5 Limitations on Amendments to Plan and Awards. No amendment, suspension or termination of this Plan or
change of or affecting any outstanding award shall, without written consent of
the participant, affect in any manner materially adverse to the participant any
rights or benefits of the participant or obligations of the Corporation under
any award granted under this Plan prior to the effective date of
such change. Changes, settlements and
other actions contemplated by Section 7 shall not be deemed to constitute
changes or amendments for purposes of this Section 8.6.
8.7 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the Administrator or this Plan, a
participant shall not be entitled to any privilege of stock ownership as to any
shares of Common Stock not actually delivered to and held of record by the
participant. Except as expressly provided herein, no adjustment will be made for
dividends or other rights as a stockholder of the Corporation for which a record
date is prior to such date of delivery.
8.8 Governing Law; Construction; Severability.
8.8.1 Choice of Law. This Plan, the
awards, all documents evidencing awards and all other related documents shall be
governed by, and construed in accordance with the laws of the State of
Delaware.
8.8.2 Severability. If a court of
competent jurisdiction holds any provision of this Plan invalid and
unenforceable, the remaining provisions of this Plan shall continue in
effect.
8.8.3 Plan Construction.
(a) |
Rule
16b-3. It is the intent of the
Corporation that the awards and transactions permitted by awards be
interpreted in a manner that, in the case of participants who are or may
be subject to Section 16 of the Exchange Act, qualify, to the maximum
extent compatible with the express terms of the award, for exemption from
matching liability under Rule 16b-3 promulgated under the Exchange Act.
Notwithstanding the foregoing, the Corporation shall have no liability to
any participant for Section 16 consequences of awards or events under
awards if an award or event does not so qualify. |
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Section 162(m). Awards
under Sections 5.1.4 through 5.1.7 to persons described in Section 5.2
that are either granted or become vested, exercisable or payable based on
attainment of one or more performance goals related to the Business
Criteria, as well as Qualifying Options and Qualifying SARs granted to
persons described in Section 5.2, that are approved by a committee
composed solely of two or more outside directors (as this requirement is
applied under Section 162(m) of the Code) shall be deemed to be intended
as performance-based compensation within the meaning of Section 162(m) of
the Code unless such committee |
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provides otherwise at
the time of grant of the award. It is the further intent of the
Corporation that (to the extent the Corporation or one of its Subsidiaries
or awards under this Plan may be or become subject to limitations on
deductibility under Section 162(m) of the Code) any such awards and any
other Performance-Based Awards under Section 5.2 that are granted to or
held by a person subject to Section 162(m) of the Code will qualify as
performance-based compensation or otherwise be exempt from deductibility
limitations under Section 162(m) of the Code. |
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Compliance with
Section 409A of the Code. The Board
intends that, except as may be otherwise determined by the Administrator,
any awards under the Plan are either exempt from or satisfy the
requirements of Section 409A of the Code and related regulations and
Treasury pronouncements (Section
409A) to avoid the imposition of any
taxes, including additional income or penalty taxes, thereunder. If the
Administrator determines that an award, award agreement, acceleration,
adjustment to the terms of an award, payment, distribution, deferral
election, transaction or any other action or arrangement contemplated by
the provisions of the Plan would, if undertaken, cause a participants
award to become subject to Section 409A, unless the Administrator
expressly determines otherwise, such award, award agreement, payment,
acceleration, adjustment, distribution, deferral election, transaction or
other action or arrangement shall not be undertaken and the related
provisions of the Plan and/or award agreement will be deemed modified or,
if necessary, rescinded in order to comply with the requirements of
Section 409A to the extent determined by the Administrator without the
consent of or notice to the participant. Notwithstanding the foregoing,
neither the Corporation nor the Administrator shall have any obligation to
take any action to prevent the assessment of any excise tax or penalty on
any participant under Section 409A and neither the Corporation nor the
Administrator will have any liability to any participant for such tax or
penalty. |
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No Guarantee of
Favorable Tax Treatment. Although the
Corporation intends that awards under the Plan will be exempt from, or
will comply with, the requirements of Section 409A of the Code, the
Corporation does not warrant that any award under the Plan will qualify
for favorable tax treatment under Section 409A of the Code or any other
provision of federal, state, local or foreign law. The Corporation shall
not be liable to any participant for any tax, interest or penalties the
participant might owe as a result of the grant, holding, vesting, exercise
or payment of any award under the Plan. |
8.9 Captions. Captions and headings
are given to the sections and subsections of this Plan solely as a convenience
to facilitate reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of this Plan or any provision
thereof.
8.10 Stock-Based Awards in Substitution for Stock Options or Awards Granted by
Other Corporation. Awards may be granted
to Eligible Persons in substitution for or in connection with an assumption of
employee stock options, SARs, restricted stock or other stock-based awards
granted by other entities to persons who are or who will become Eligible Persons
in respect of the Corporation or one of its Subsidiaries, in connection with a
distribution, arrangement, business combination, merger or other reorganization
by or with the granting entity or an affiliated entity, or the acquisition by
the Corporation or one of its Subsidiaries, directly or indirectly, of all or a
substantial part of the stock or assets of the employing entity. The awards so
granted need not comply with other specific terms of this Plan, provided the
awards reflect only adjustments giving effect to the assumption or substitution
consistent with the conversion applicable to the Common Stock in the transaction
and any change in the issuer of the security. Any shares that are delivered and
any awards that are granted by, or become obligations of, the Corporation, as a
result of the assumption by the Corporation of, or in substitution for,
outstanding awards previously granted by an acquired company (or previously
granted by a predecessor employer (or direct or indirect parent thereof) in the
case of persons that become employed by the Corporation or one of its
Subsidiaries in connection with a business or asset acquisition or similar
transaction) shall not be counted against the Share Limit or other limits on the
number of shares available for issuance under this Plan, except as may otherwise
be provided by the Administrator at the time of such assumption or substitution
or as may be required to comply with the requirements of any applicable stock
exchange.
8.11 Non-Exclusivity of Plan. Nothing
in this Plan shall limit or be deemed to limit the authority of the Board or the
Administrator to grant awards or authorize any other compensation, with or
without reference to the Common Stock, under any other plan or
authority.
8.12 No Corporate Action Restriction.
The existence of this Plan, the award agreements and the awards granted
hereunder shall not limit, affect or restrict in any way the right or power of
the Board or the stockholders of the Corporation to make or authorize: (a) any
adjustment, recapitalization, reorganization or other change in the capital
structure or business of the Corporation or any Subsidiary, (b) any merger,
arrangement, business combination, amalgamation,
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consolidation or change in the ownership
of the Corporation or any Subsidiary, (c) any issue of bonds, debentures,
capital, preferred or prior preference stock ahead of or affecting the capital
stock (or the rights thereof) of the Corporation or any Subsidiary, (d) any
dissolution or liquidation of the Corporation or any Subsidiary, (e) any sale or
transfer of all or any part of the assets or business of the Corporation or any
Subsidiary, or (f) any other corporate act or proceeding by the Corporation or
any Subsidiary. No participant, beneficiary or any other person shall have any
claim under any award or award agreement against any member of the Board or the
Administrator, or the Corporation or any employees, officers or agents of the
Corporation or any Subsidiary, as a result of any such action.
8.13 Other Corporation Benefit and Compensation Programs. Payments and other benefits received by a participant under
an award made pursuant to this Plan shall not be deemed a part of a
participants compensation for purposes of the determination of benefits under
any other employee welfare or benefit plans or arrangements, if any, provided
by the Corporation or any Subsidiary,
except where the Administrator expressly otherwise provides or authorizes in
writing or except as otherwise specifically set forth in the terms and
conditions of such other employee welfare or benefit plan or arrangement. Awards
under this Plan may be made in addition to, in combination with, as alternatives
to or in payment of grants, awards or commitments under any other plans or
arrangements of the Corporation or its Subsidiaries.
8.14 Non-Competition, Code of Ethics and Clawback Policy. By accepting awards and as a condition to the exercise of
awards and the enjoyment of any benefits of the Plan, including participation
therein, each participant agrees to be bound by and subject to non-competition,
confidentiality and invention ownership agreements acceptable to the
Administrator and the Corporations code of ethics policy and other policies
applicable to such participant as is in effect from time to time. Awards shall
be subject to any clawback policy adopted by the Corporation from time to
time.
As adopted by the Board of Directors of
Air Methods Corporation on February 5, 2015.
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ANNUAL MEETING OF STOCKHOLDERS
OF
AIR METHODS
CORPORATION
May 20, 2015
GO
GREEN |
e-Consent makes it easy to go
paperless. With e-Consent, you can quickly access your proxy material,
statements and other eligible documents online, while reducing costs,
clutter and paper waste. Enroll today via www.amstock.com to enjoy online
access. |
NOTICE OF INTERNET AVAILABILITY OF
PROXY MATERIAL:
The Notice of Meeting, Proxy Statement, Proxy Card and the
2014 Annual Report on Form 10-K
are available at www.airmethods.com under
the "Investors" tab
Please sign, date and mail
your
proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope
provided.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES LISTED IN PROPOSAL 1 AND
"FOR" PROPOSALS 2, 3 AND 4. PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR
BLACK INK AS SHOWN HERE ☒ |
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1. To elect Ralph J. Bernstein, Mark D.
Carleton and Claire M. Gulmi as Class III directors of the Company for
three-year terms; |
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NOMINEES: |
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FOR ALL
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Ralph J. Bernstein |
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Mark D. Carleton |
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WITHHOLD
AUTHORITY FOR ALL
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Claire M.
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FOR ALL
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INSTRUCTIONS: To withhold
authority to vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the
circle next to each nominee you wish to withhold, as shown
here: ⚫ |
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To change the address on your
account, please check the box at right and indicate your new address in
the address space above. Please note that changes to the registered
name(s) on the account may not be submitted via this method. |
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FOR |
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The ratification of KPMG LLP as the Companys
independent registered public accounting firm for the fiscal year ending
December 31, 2015. |
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Approval, on an advisory basis, of our named executive
compensation. |
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Approval of the 2015 Equity Incentive
Plan. |
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To
transact such other business as may properly come before the
meeting. |
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The undersigned acknowledges
receipt from the Company before the execution of this proxy of the Notice
of Annual Meeting of Stockholders, a Proxy Statement for the Annual
Meeting of Stockholders and the 2014 Annual Report on Form
10-K. |
Signature of
Stockholder |
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Signature of Stockholder |
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Note: |
Please sign exactly as your name or
names appear on this Proxy. When shares are held jointly, each holder
should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full
title as such. If signer is a partnership, please sign in partnership name
by authorized person. |
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Table of
Contents
ANNUAL MEETING OF STOCKHOLDERS
OF
AIR METHODS
CORPORATION
May 20, 2015
PROXY VOTING
INSTRUCTIONS |
INTERNET - Access www.voteproxy.com and
follow the on-screen instructions or scan the QR code with your smartphone. Have
your proxy card available when you access the web page.
TELEPHONE - Call toll-free
1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries
from any touch-tone telephone and follow the instructions. Have your proxy card
available when you call.
Vote online/phone until 11:59
PM EST the day before the meeting.
MAIL - Sign, date and mail your
proxy card in the envelope provided as soon as possible.
IN PERSON - You may vote your shares
in person by attending the Annual Meeting.
GO GREEN - e-Consent makes it easy
to go paperless. With e-Consent, you can quickly access your proxy material,
statements and other eligible documents online, while reducing costs, clutter
and paper waste. Enroll today via www.amstock.com to enjoy online
access.
COMPANY NUMBER |
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ACCOUNT NUMBER |
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NOTICE OF INTERNET
AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, Proxy
Statement, Proxy Card and the 2014 Annual Report on Form 10-K are
available at www.airmethods.com under the "Investors"
tab |
Please detach along perforated line
and mail in the envelope provided you are not voting via telephone or the
Internet.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
LISTED IN PROPOSAL 1 AND "FOR" PROPOSALS 2, 3 AND 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
☒ |
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1. To elect Ralph J. Bernstein, Mark D.
Carleton and Claire M. Gulmi as Class III directors of the Company for
three-year terms; |
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NOMINEES: |
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☐
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FOR ALL
NOMINEES |
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Ralph J. Bernstein |
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◯ |
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Mark D. Carleton |
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WITHHOLD
AUTHORITY FOR ALL
NOMINEES |
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Claire M.
Gulmi |
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☐ |
FOR ALL
EXCEPT (See instructions below) |
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INSTRUCTIONS: To withhold
authority to vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the
circle next to each nominee you wish to withhold, as shown
here: ⚫ |
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To change the address on your
account, please check the box at right and indicate your new address in
the address space above. Please note that changes to the registered
name(s) on the account may not be submitted via this method. |
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☐ |
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FOR |
AGAINST |
ABSTAIN |
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The ratification of KPMG LLP as the Companys
independent registered public accounting firm for the fiscal year ending
December 31, 2015. |
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☐ |
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Approval, on an advisory basis, of our named executive
compensation. |
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Approval of the 2015 Equity Incentive
Plan. |
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To
transact such other business as may properly come before the
meeting. |
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The undersigned acknowledges
receipt from the Company before the execution of this proxy of the Notice
of Annual Meeting of Stockholders, a Proxy Statement for the Annual
Meeting of Stockholders and the 2014 Annual Report on Form
10-K. |
Signature of
Stockholder |
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Date: |
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Signature of Stockholder |
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Date: |
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Note: |
Please sign exactly as your name or
names appear on this Proxy. When shares are held jointly, each holder
should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full
title as such. If signer is a partnership, please sign in partnership name
by authorized person. |
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Table of
Contents
AIR METHODS
CORPORATION
7211 South Peoria Street
Englewood, Colorado 80112
THIS PROXY SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS
The undersigned hereby appoints Aaron D. Todd and
Crystal L. Gordon, and each of them, with full power of substitution and power
to act alone, as proxies to vote all the shares of Common Stock which the
undersigned would be entitled to vote if personally present and acting at the
Annual Meeting of Stockholders of Air Methods Corporation, to be held May 20,
2015, at 8:00 a.m. local time, at The Ritz-Carleton, Denver, located at 1881
Curtis Street, Denver, CO 80202, and at any adjournments or postponements
thereof, as follows:
(Continued and to be signed on the reverse
side.)
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