AIR METHODS CORP

Honorable JESSICA L. WRIGHT, Major General (Ret.) has served on the Board of Directors since February 2016. General Wright brings a wealth of leadership experience from her distinguished career. She previously served as the Undersecretary of Defense for Personnel and Readiness before retiring in early 2015. As the Undersecretary of Defense, she served as the senior policy advisor to the Secretary of Defense on all matters relating to recruitment, retention, pay and healthcare and benefits for the uniformed members and civilians of the department. In addition, she had supervisory responsibility for 32,000 personnel, the execution of an annual budget of $43.6B, overall responsibility for the world-wide Defense Health Programs which included 54 Hospitals, 350 Clinics, 280 Dental Clinics and TRICARE management and its 9.6 million beneficiaries. During her first year as the Undersecretary of Defense, she implemented the Defense Health Agency and instituted 10 shared services across the Department of Defense medical communities, resulting in significant savings. Prior to serving as Undersecretary of Defense, General Wright was appointed as the Adjutant General by the Governor of Pennsylvania in 2004. She also served as the National Guard Bureau Chair for the Safety (Aviation/Ground) Committee for 54 States, Territories and the District of Columbia. General Wright was the first female Army Aviator in the Army National Guard and the first female Combat Aviation Brigade Commander in the entire Army.

The Company believes its 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 the Company’s management’s 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 the Company as a whole.  Finally, with limited exceptions, the compensation committee retains a large amount of discretion to adjust compensation downward for quality of performance and adherence to Company values.

On September 24, 2012, the Company entered into Amended and Restated Employment Agreements (the “Amended Employment Agreements”) with each of Michael D. Allen, Trent J. Carman, Crystal L. Gordon, and Aaron D. Todd.  The Amended Employment Agreements superseded and replaced the employment agreements between the named executive officers (other than Messrs. Csapo and Doerr) and the Company that were entered into on the following dates: January 4, 2006 (Mr. Allen), April 18, 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. Doerr’s 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. Todd’s Amended Employment Agreement, “Mr. Todd’s Employment Agreement”). The Company entered into an employment agreement with Peter Csapo on May 26, 2016 and for purposes of the description herein, Mr. Csapo’s Employment Agreement shall be deemed an “Amended Employment Agreement”. On July 2, 2012, the Company entered into an amendment to its Amended Employment Agreement with Michael D. Allen and on July 8, 2016, the Company entered into amendments to its Amended Employment Agreements with Peter Csapo, David D. Doerr, and Crystal L. Gordon (collectively, the “2016 Amendments”).

The initial term of Mr. Todd’s Employment Agreement expired on August 31, 2015 and automatically renews for subsequent one-year terms thereafter until Mr. Todd’s employment is terminated in accordance with the agreement.  Mr. Todd’s Employment Agreement may be terminated by either party upon 90 days’ written notice, or immediately by us for cause.  In the event the Company terminates Mr. Todd’s 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.

Following the 2016 Amendments, each Amended Employment Agreement with the named executive officers (other Mr. Carman) was for an initial term of two years starting on the effective date and upon the expiration of the applicable initial term, each executive’s employment automatically renews for subsequent one year terms until such executive’s employment with the Company is terminated in accordance with the agreement.  Each Amended Employment Agreement (other than Mr. Carman) may be terminated either by the Company or by the executive upon 90 days’ written notice, or immediately by the Company for cause.  In the event the Company terminates 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 the Company anywhere in the United States.

None of the Amended Employment Agreements contain a 280G Gross-Up Provision that would result in an 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. 

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 Company’s Code of Conduct.  The audit committee evaluates related party transactions for purposes of recommending to the disinterested members of the Board, when appropriate, 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 the Company’s independent auditors, employees, officers, Board members, or other parties.