<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 10-K/A-1
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended
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OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from July 1, 1994 to December 31, 1994
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COMMISSION FILE NUMBER 0-16079
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AIR METHODS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 84-0915893
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
7301 SOUTH PEORIA, ENGLEWOOD, COLORADO 80112
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (303) 792-7400
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Not Applicable
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.06 PAR VALUE PER SHARE (the "Common Stock")
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(Title of Class)
NASDAQ STOCK MARKET
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(Name of each exchange on which registered)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by
non-affiliates of the Registrant as of June 15, 1995 was approximately
$15,106,680/1/. The number of outstanding shares of Common Stock as
of June 15, 1995, was 8,075,023.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
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/1/ Excludes 1,360,943 shares of Common Stock held by directors,
officers, and shareholders whose ownership exceeds five percent
of the shares outstanding at June 15, 1995. Exclusion of shares
held by any person should not be construed to indicate that such
person possesses the power, direct or indirect, to direct or
cause the direction of the management of policies of the
Registrant, or that such person is controlled by or under common
control with the Registrant.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the
Company to the persons serving as Chief Executive Officer of the
Company during 1994 and the other executive officers of the Company
other than the Chief Executive Officer whose annual salary and bonus
exceeded $100,000 during that period. In view of the Company's new
December 31 fiscal year end and to facilitate comparability, the table
reflects compensation received during the calendar years ended
December 31, 1992, 1993 and 1994.
<TABLE>
<CAPTION>
Long Term
Compensation Awards
Annual Compensation Other -------------------------
-------------------------- Annual Restricted<F2> Options/ All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($)<F1> Stock SARs(#)<F3> Compensation($)<F4>
- --------------------------- ---- --------- -------- ------------------- ------------- ----------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
George W. Belsey 1994 96,250<F5> -- 8,050<F6> -- 250,000 --
Chairman and Chief 1993 -- -- -- -- -- --
Executive Officer 1992 -- -- -- -- -- --
Marius Burke, Jr. 1994 100,594 -- -- -- -- 2,236
Vice President 1993 73,491 -- -- 24,473 89,266<F12> 1,638
Director of Operations 1992 89,396 -- -- -- -- 1,970
Roy L. Morgan 1994 155,880 -- -- -- 200,000<F13> 3,441
Director and Co-Founder 1993 133,376 -- -- 48,122 251,666 3,095
1992 167,043 -- -- -- -- 3,973
Maurice L. Martin, Jr. 1994 131,909 -- -- -- -- 2,277
Vice-President 1993 113,153 -- -- 25,781 172,916<F7> 1,785
Air Medical Services 1992 124,526 -- -- -- -- 2,767
Michael G. Prieto 1994 116,545 -- -- -- 25,000 22,417<F11>
Vice-President 1993 -- -- -- -- -- --
Products Division 1992 -- -- -- -- -- --
W. Terrance Schreier 1994 66,116 -- -- -- -- 288,918<F8>
Prior Chairman and Chief 1993 139,997 -- -- 48,122 331,666 2,431
Executive Officer 1992 166,868 --<F9> 38,750<F10> -- -- 1,604
____________________
<FN>
<F1> Personal automobile or other transportation benefits provided to each of the named executive officers during
the reporting periods do not exceed the disclosure thresholds established by the SEC and are thus not
reported.
<F2> Reflects shares of restricted Common Stock issued to the named executive officers under the Company's
Restricted Stock Plan, except as otherwise noted, valued at the closing market price of such shares on the
date they were issued. The Company issued a total of 102,907 shares of Common Stock under the Restricted
Stock Plan, all of which vested or were forfeited on the one year anniversary of the January 9, 1993 grant
date. No dividends were paid on these restricted shares. The restrictions on all shares issued under the
Restricted Stock Plan have been lifted.
<F3> Consists only of options to purchase the common stock of the Company.
<F4> Consists of employer matching contributions for the named executive officers under the Company's 401(k)
Plan, except as otherwise noted.
<F5> Mr. Belsey was a nonemployee director of the Company until June 1, 1994 when he was elected Chief Executive
Officer of the Company. Mr. Belsey's annual salary as Chief Executive Officer is $165,000.
<F6> Stock compensation to Mr. Belsey as a nonemployee director of the Company pursuant to the Company's
Nonemployee Director Equity Compensation Plan.
<F7> Includes 16,666 options which are deemed to have been regranted by virtue of the Stock Option Committee's
action on July 29, 1993 to reprice these, and other out-of-the-money options previously issued to employees
and officers of the Company under the Employee Option Plan, to $5.50 per share, the fair market value of the
Company's Common Stock on July 29, 1993.
<F8> Includes severance payments, pursuant to contractual obligations of the Company, upon the resignation of
Mr. Schreier ($287,500) in 1994.
<F9> See footnote 10 and accompanying figures.
1<PAGE>
<F10>Reflects compensation consisting of salary restoration payments for salary compensation foregone in earlier
years and bonus payments by Cell Technology, Inc. for the completion of the merger with Air Methods -
Colorado.
<F11>Reflects various relocation expenses borne by the Company in connection with the commencement of Mr.
Prieto's employment with the Company.
<F12>Includes 8,333 options repriced in 1993 as discussed at footnote 7.
<F13>Issued upon the cancellation of 240,000 options issued in 1993.
</TABLE>
STOCK OPTIONS
The following tables present for calendar year 1994 certain
information regarding stock options granted to or held by the named
executive officers.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST YEAR
----------------------------------
Individual Grants
-------------------------- Potential Realized Value at
% of Total Assumed Annual Rates of
Options/SARs Stock Price Appreciation for
Granted to Exercise or Market Price Option Term<F1>
Options/SARs Employees in Base Price on Grant Expiration -----------------------------
Name Granted (#) 1994 ($/Sh) Date ($/Sh) Date 5% ($) 10% ($)
- -------------------- ------------ ------------ ----------- ------------ ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
George W. Belsey 250,000<F2> 50.1% 3.00 3.00 6/1/99 207,211 457,883
Roy L. Morgan 200,000<F3> 40.1 1.75 1.75 12/31/99 96,699 167,094
Michael G. Prieto<F4> 25,000<F4> 5.0 11.375 11.375 1/4/99 78,568 135,763
____________________
<FN>
<F1> Calculated based upon the closing market price of the Common Stock on the Option grant date.
<F2> Exercisable as to 1/5 of the option shares on the 6/1/94 grant date, and an additional 1/5 on each subsequent
anniversary of the grant date until fully vested.
<F3> Exercisable in full as of the 12/31/94 grant date.
<F4> Exercisable as to 1/3 of the option shares on each anniversary of the 1/4/94 grant date.
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST YEAR AND YEAR END OPTIONS/SAR VALUES
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Value of Unexercised In-
Number of Unexercised the-Money Options/SARs at
Shares Acquired Options/SARs at Year End (#) Year End ($) Exercisable/
Name on Exercise (#) Value Realized ($) Exercisable/Unexercisable<F1> Unexercisable<F1>
- ------------------------ --------------- ------------------ ----------------------------- --------------------------
<S> <C> <C> <C> <C>
George Belsey 2,222 7,499 52,222/202,222 -0-/-0-
Marius Burke, Jr. -- -- 83,310/ 23,955 -0-/-0-
Roy L. Morgan -- -- 200,000/-0- -0-/-0-
Maurice L. Martin, Jr. -- -- 118,749/ 54,167 -0-/-0-
Michael G. Prieto -- -- -0-/ 25,000 -0-/-0-
W. Terrance Schreier<F2> 15,453 74,138 -0-/-0- -0-/-0-
____________________
<FN>
<F1> Consists of options only.
<F2> Reported option exercises include options for 2,645 shares exercised by Mr. Schreier's wife as to which options
and shares Mr. Schreier disclaims beneficial ownership.
</TABLE>
EMPLOYMENT AGREEMENTS
In June 1994, the Company entered into an Employment Agreement
with Mr. Belsey for an initial term of five years, subject to
successive one-year extensions by written agreement of both parties.
The Agreement
2<PAGE>
may be terminated by either party without cause upon 30 days' written
notice and provides for a severance payment equal to one year's base
salary in the event of termination by the Company without cause. For
a period of one year following the termination of employment with the
Company, Mr. Belsey may not engage in any business which competes with
the Company anywhere in the United States.
In November 1993, the Company entered into an Employment
Agreement with Mr. Prieto for an initial term of one year to be
effective December 1, 1993 and renewable each December 1. The
Agreement may be terminated by either party without cause upon 90 days
written notice and is terminable by the Company with no notice for
cause. Mr. Prieto would continue to receive compensation and benefits
for the duration of his then-current term of employment in the event
of disability; otherwise, there is no provision for severance beyond
the initial one-year term.
In November 1991, the Company entered into individual Employment
Agreements with Messrs. Martin and Burke for initial terms of two
years. Because the Agreements are subject to a continuous renewal
clause, the remaining term on any date for the Agreements is two
years. The Agreements may be terminated by either party without cause
upon 90 days' written notice and provide for a severance payment equal
to two years' base salary in the event of termination by the Company
without cause. For a period of two years following the termination of
employment with the Company, neither Mr. Martin nor Mr. Burke may
engage in any business which competes with the Company anywhere in the
United States.
The Employment Agreement between the Company and Mr. Schreier
terminated on May 12, 1994 upon the resignation of Mr. Schreier from
his position at the Company.
DIRECTOR COMPENSATION
It is the Company's policy to pay its nonemployee directors an
annual retainer of $8,000, plus $800 per Board meeting attended, $500
per teleconference Board meeting and $500 per Board committee meeting
attended ($750, if Chairman of the committee). Effective July 1,
1993, each nonemployee director may elect to receive shares of Common
Stock in lieu of cash payments pursuant to the Company's Equity
Compensation Plan for Nonemployee Directors, discussed below. The
Company also reimburses its nonemployee directors for their reasonable
expenses incurred in attending Board and committee meetings.
Messrs. Joseph Bernstein, Ralph Bernstein and Morad Tahbaz have
voluntarily waived all director fees to date and have received no
compensation for their services as directors apart from customary
reimbursement of out-of-pocket expenses.
Nonemployee Director Stock Option Plan. The Company has adopted
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compensation and incentive benefit plans to enhance its ability to
continue to attract, retain and motivate qualified persons to serve as
nonemployee directors of the Company. The Nonemployee Director Stock
Option Plan ("Director Option Plan") provides for the issuance of up
to 300,000 shares of the Company's Common Stock, under options which
are exercisable in full upon issuance and do not terminate prematurely
after an option recipient ceases to be a director of the Company.
Pursuant to the Director Option Plan, on the last day of each fiscal
year each nonemployee director in office on such date who has served
on the Board for the entire preceding fiscal year will receive a five-
year option to purchase 5,000 shares of Common Stock, exercisable at
the then-current fair market value of the Company's Common Stock.
Equity Compensation Plan for Nonemployee Directors. In
--------------------------------------------------
February and March 1993, respectively, the Company's Board of
Directors and stockholders approved the Air Methods Corporation Equity
Compensation Plan for Nonemployee Directors (the "Director Equity
Plan"). The Director Equity Plan authorizes the issuance of up to
150,000 shares of Common Stock to nonemployee directors of the
Company. The Director Equity Plan enables the Company to conserve
cash with respect to nonemployee directors who have elected to
participate.
3<PAGE>
The Director Equity Plan is administered by the Board of
Directors, and provides that each nonemployee director may elect to
receive his annual retainer for a particular fiscal year of the
Company in Common Stock rather than cash. The number of shares of
Common Stock issued to a Nonemployee Director making such election is
equal to the then-current annual director retainer paid by the Company
(currently $8,000) divided by 95% of the fair market value of the
Company's Common Stock on the first day of the fiscal year. The
Common Stock will be forfeited and returned to the Company, however,
if the Nonemployee Director does not remain a director of the Company
through the end of the fiscal year or fails to attend at least 75% of
all Board meetings and applicable Board committee meetings held during
such year. Common Stock issued under the Director Equity Plan in lieu
of the annual retainer is not transferable until after the forfeiture
provisions lapse, other than by will or the laws of descent and
distribution in the event of the director's death or pursuant to a
qualified domestic relations order as defined by the Code, Title I of
ERISA or the rules thereunder.
In addition, Nonemployee Directors also may elect to receive
their meeting fees in Common Stock rather than cash. The number of
shares issued to a Nonemployee Director making such an election is
equal to the then-current meeting fee -- currently $800 per Board
meeting attended, $500 per teleconference Board meeting and $500 per
Board committee meeting attended ($750 if Chairman of the committee)
- -- divided by 95% of the fair market value of the Company's Common
Stock on the date of the meeting in question. Common Stock issued in
lieu of meeting fees is not forfeitable.
Board members who are also officers do not receive any separate
compensation or fees for attending Board or committee meetings,
although they may receive option grants under the Company's Employee
Stock Option Plan.
On November 30, 1994 the Company entered into a Consulting and
Non-Competition Agreement with Roy L. Morgan ("Agreement"). The
Employment Agreement between the Company and Mr. Morgan previously in
effect terminated on December 31, 1994, at which time his resignation
as President of the Company became effective. Mr. Morgan continues as
a director of the Company. Under the terms of the Agreement,
Mr. Morgan will remain a consultant to the Company through July 1,
1999, and is subject to a global non-competition restriction for the
term of the Agreement. In consideration of Mr. Morgan's consulting
services and non-compete agreement, Mr. Morgan received $7,500 on
January 1, 1995, and will receive a semi-annual payment of $37,263
commencing July 1, 1995 for the term of the Agreement. In addition,
and in connection with the cancellation of his previously issued
employee options, Mr. Morgan was granted replacement options for
200,000 shares exercisable at $1.75 per share, the fair market value
of the Common Stock on the option grant date.
During fiscal year 1994, the Company paid approximately $27,000
to Donald R. Segner in consideration of aviation consulting services
provided by Mr. Segner to the Company during the fiscal year,
independent of his service to the Company as a director. Mr. Segner
initially provided these consulting services on retainer, pursuant to
a Consulting Agreement entered into with the Company in October 1993.
Effective October 1994, and in connection with the Company's recent
restructuring, Mr. Segner and the Company have terminated the
Consulting Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors of the
Company during early calendar year 1994 consisted of Messrs. Miller
(Chairman), Gray, Schreier (then Chief Executive Officer of the
Company) and Belsey. Following Mr. Schreier's resignation from the
Company and Mr. Belsey's appointment as Chief Executive Officer, the
membership of the Compensation Committee was revised so that it now
consists of Messrs. Miller (Chairman), Gray and J. Bernstein
In December 1993, Americas Partners, a New York general
partnership composed of Joseph Bernstein, Ralph Bernstein and Morad
Tahbaz, each currently a director of the Company, co-guaranteed a
$2,500,000 short-term credit extended to the Company by Swiss Bank
Corporation, New York branch. In consideration of
4<PAGE>
this co-guaranty, the Company granted Americas Partners warrants to
purchase 50,000 shares of Common Stock at an exercise price of $10.625
per share (later reduced to $6.00 per share), exercisable for a term
of five years from the warrant issuance date. The warrant was
reissued in May 1995 to reduce the exercise price to $3.00 per share
in consideration of the events discussed below.
In February 1994, Americas Partners agreed to make a bridge loan
of $250,000 to Air Medica Movil, S.A. de C.V. ("AMM"), an air medical
transportation joint venture in Mexico City, Mexico to which the
Company is a party. The loan was convertible at any time into ten
percent of the post-conversion outstanding shares of AMM and was non-
recourse as to the Company. Americas Partners had an option to
provide or arrange for the balance of up to $2,000,000 of third party
financing for the venture on terms satisfactory to the venture and to
the partnership. In consideration of this loan, the Company granted
Americas Partners five-year warrants to purchase 150,000 shares of
Common Stock at an exercise price of $6.00 per share. In May, 1995,
the warrant was reissued to reduce the exercise price to $3.00 per
share in consideration of the assignment by Americas Partners of the
note and all other rights relating to AMM to the Company.
Ralph Bernstein and Morad Tahbaz were elected directors of the Company
in connection with the establishment of a Finance Committee and a
Marketing and New Business Committee of the Company's Board of
Directors, and the approval of the original financing commitment for
AMM. Mr. Tahbaz has also been designated to serve as director of AMM.
5<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
Amendment No. 1 to its Transition Report on Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized.
AIR METHODS CORPORATION
Date: June 29, 1995 By: /s/ George W. Belsey
--------------------------------
George W. Belsey
Chairman of the Board
Chief Executive Officer
IV-1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors
Air Methods Corporation:
We consent to incorporation by reference in the registration
statements on Form S-8 (No. 33-24980, No. 33-46691, No. 33-55750,
No. 33-65370 and No. 33-75742) and Form S-3 (No. 33-59690 and
No. 33-75744) of Air Methods Corporation of our report dated June 8,
1995 relating to the consolidated balance sheets of Air Methods
Corporation and subsidiary as of December 31 and June 30, 1994, and
the related consolidated statements of operations, stockholders'
equity, and cash flows for the six months ended December 31, 1994 and
each of the years in the three-year period ended June 30, 1994, which
report appears in the December 31, 1994 annual report on Form 10-K of
Air Methods Corporation.
KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Denver, Colorado
June 26, 1995
