EXHIBIT 10.24
SUMMARY OF COMPENSATION
FOR DIRECTORS OF
AIRNET SYSTEMS, INC.
Cash Compensation
Directors of AirNet Systems, Inc. (“AirNet”) who are not officers or employees
of AirNet (“Non-Employee Directors”) are paid fees for their services as members
of the Board of Directors (the “Board”) and as members of Board committees. The
Non-Employee Directors of AirNet are James M. Chadwick, Russell M. Gertmenian,
Gerald Hellerman, David P. Lauer, Bruce D. Parker and James E. Riddle. The
quarterly fee paid during the fiscal year ended December 31, 2005 (the “2005
fiscal year”) and to be paid during the fiscal year ending December 31, 2006
(the “2006 fiscal year”) for serving as a Non-Employee Director has been and
remains $6,000. The fee for attending each meeting of the full Board in person
was $2,000 during the 2005 fiscal year and continues to be the same amount
during the 2006 fiscal year. The fee for attending telephonic meetings of the
full Board was $1,000 for each meeting attended during the 2005 fiscal year and
remains that amount during the 2006 fiscal year.
The Audit Committee of AirNet’s Board currently consists of David P. Lauer
(Chair), James M. Chadwick, Bruce D. Parker and James E. Riddle. Each of
Messrs. Lauer, Parker and Riddle also served on the Audit Committee throughout
the 2005 fiscal year. Mr. Chadwick was appointed to the Audit Committee
effective July 20, 2005.
The Compensation Committee of AirNet’s Board currently consists of James E.
Riddle (Chair), Gerald Hellerman, David P. Lauer and Bruce D. Parker. Each of
Messrs. Riddle, Lauer and Parker also served on the Compensation Committee
throughout the 2005 fiscal year. Mr. Hellerman was appointed to the Compensation
Committee effective July 20, 2005.
The Nominating and Corporate Governance Committee of AirNet’s Board currently
consists of Bruce D. Parker (Chair), David P. Lauer and James E. Riddle, each of
whom also served on such Committee throughout the 2005 fiscal year.
The fee for Audit Committee members has been and remains $2,000 per meeting
attended in person during each of the 2005 fiscal year and the 2006 fiscal year,
with the Chair of the Audit Committee receiving an additional $1,000 per meeting
attended in person. The fee for Compensation Committee members and Nominating
and Corporate Governance Committee members has been and remains $1,000 per
meeting attended in person during each of the 2005 fiscal year and the 2006
fiscal year, with the Chair of each of those Committees receiving an additional
$2,000 for each meeting of the Committee attended in person. The fees for
attending telephonic meetings of each Committee held during each of the 2005
fiscal year and the 2006 fiscal year have been and remain one-half (50%) of the
amount of the fees for attending a meeting of the particular Committee in
person.
On April 29, 2005, AirNet’s Board established a Special Committee, consisting
solely of independent directors, to oversee the process of reviewing, developing
and evaluating strategic alternatives to enhance shareholder value. During the
2005 fiscal year, Gerald Hellerman, David P. Lauer, Bruce D. Parker and James E.
Riddle served on the Special Committee. Each of Messrs. Lauer, Parker and Riddle
was appointed to the Special Committee upon its establishment. Mr. Hellerman was
appointed to the Special Committee on August 9, 2005. The Special Committee was
dissolved on December 16, 2005. The fees for Special Committee members during
the 2005 fiscal year were $1,000 per meeting attended in person and $500 for
each telephonic meeting attended.
On December 16, 2005, AirNet’s Board established a Strategy Committee to work
with management on the ongoing business strategy and alternatives for AirNet to
enhance shareholder value. The Strategy Committee is comprised of Bruce D.
Parker and James M. Chadwick. The fees for Strategy Committee members for each
of the 2005 fiscal year and the 2006 fiscal year have been and remain $1,000 per
meeting attended in person and $500 for each telephonic meeting attended.
As the lead director of AirNet, James E. Riddle received an additional quarterly
fee of $6,000 for service in that capacity during each of the 2005 fiscal year
and the 2006 fiscal year and continues to receive that amount.
The Non-Employee Directors meet without management present in connection with
each of the regularly scheduled meetings of the full Board and receive no
meeting fees for attending such meetings. To the extent the Non-Employee
Directors determine to meet by telephone or in person other than in connection
with a regularly scheduled Board meeting, they receive $2,000 per meeting
attended in person and $1,000 per telephonic meeting.
As an officer and employee of AirNet, Joel E. Biggerstaff receives no fees for
serving as a director of AirNet.
The directors are reimbursed for out-of-pocket expenses incurred in connection
with their service as directors, including travel expenses.

 

--------------------------------------------------------------------------------

 

     Director Deferred Compensation Plan
Effective May 27, 1998, AirNet established the AirNet Systems, Inc. Director
Deferred Compensation Plan (the “Director Deferred Plan”). The Director Deferred
Plan as in effect on March 31, 2006 has previously been filed as Exhibit 10.7 to
AirNet’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.
Voluntary participation in the Director Deferred Plan enables a Non-Employee
Director of AirNet to defer all or a part of his director’s fees, including
federal income tax thereon. Such deferred fees may be credited to (i) a cash
account where the funds will earn interest at the rate prescribed in the
Director Deferred Plan, or (ii) a stock account where the funds will be
converted into a common share equivalent (determined by dividing the amount to
be allocated to the Non-Employee Director’s stock account by the fair market
value of AirNet’s common shares when the credit to the stock account is made).
In his deferral election, a Non-Employee Director will elect whether
distribution of the amount in his account(s) under the Director Deferred Plan is
to be made in a single lump sum payment or in equal annual installments, payable
over a period of not more than ten years. Distributions will commence within
30 days of the earlier of (a) the date specified by a Non-Employee Director at
the time a deferral election is made or (b) the date the Non-Employee Director
ceases to so serve. Cash accounts will be distributed in the form of cash and
stock accounts will be distributed in the form of common shares or cash, as
selected by AirNet. As of March 31, 2006, none of the Non-Employee Directors was
participating in the Director Deferred Plan.
     Options Granted under Amended and Restated 1996 Incentive Stock Plan
Non-Employee Directors were automatically granted options to purchase AirNet
common shares in accordance with the terms of the AirNet Systems, Inc. Amended
and Restated 1996 Incentive Stock Plan (the “1996 Plan”). The 1996 Plan as in
effect on March 31, 2006 has previously been filed as Exhibit 10.1 to AirNet’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2003. On
March 7, 1997, each individual then serving as a Non-Employee Director was
automatically granted an immediately exercisable option to purchase 2,000 AirNet
common shares with an exercise price equal to the fair market value of the
common shares on the grant date. On August 19, 1998, each individual then
serving as a Non-Employee Director was automatically granted an option to
purchase 20,000 AirNet common shares with an exercise price equal to the fair
market value of the common shares on the grant date. Each option granted on
August 19, 1998 vested and became exercisable with respect to 20% of the common
shares covered thereby on each of the grant date and the first, second, third
and fourth anniversaries of the grant date.
Pursuant to the 1996 Plan, each individual newly-elected or appointed as a
Non-Employee Director from August 19, 1998 until June 4, 2004 was automatically
granted an option to purchase 20,000 AirNet common shares effective on the date
of his election or appointment to the Board. In addition, on the first business
day of each of the 2002, 2003 and 2004 fiscal years of AirNet, each individual
who was then serving as a Non-Employee Director and had served for at least one
full one-year term as a Non-Employee Director, was automatically granted an
option to purchase 4,000 AirNet common shares. All of these options were granted
with an exercise price per share equal to the fair market value of the common
shares on the grant date. In addition, all of these options have vested and are
to vest and become exercisable with respect to 20% of the common shares on each
of the grant date and the first, second, third and fourth anniversaries of the
grant date.
Each option granted to a Non-Employee Director under the 1996 Plan since
August 18, 1999, which has not expired, been cancelled or been exercised prior
to the effective date of the event, will become immediately exercisable in full
(i) if the Non-Employee Director retires from service as an AirNet director,
becomes totally disabled or dies, (ii) if AirNet merges with another entity and
AirNet is not the survivor in the merger, or (iii) if all or substantially all
of AirNet’s assets or stock is acquired by another entity.
Each option granted to a Non-Employee Director under the 1996 Plan has a
ten-year term. If a Non-Employee Director ceases to be a member of the Board,
his vested options may be exercised for a period of three months (12 months in
the case of a Non-Employee Director who becomes disabled or dies) after the date
his service ends, subject in each case to the stated term of each option.
However, a Non-Employee Director who ceases to be a director after having been
convicted of, or pled guilty or nolo contendere to, a felony immediately
forfeits all of his options.
Following the approval of the AirNet Systems, Inc. 2004 Stock Incentive Plan
(the “2004 Plan”) by the shareholders of AirNet at the 2004 Annual Meeting of
Shareholders, no further options have been or will be granted to the
Non-Employee Directors under the 1996 Plan.
     Options Granted under 2004 Stock Incentive Plan
The 2004 Plan as in effect on March 31, 2006 has been filed as Exhibit 10.1 to
AirNet’s Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2004. Under the 2004 Plan, each individual newly-elected or appointed as a
Non-Employee Director after June 4, 2004 has been and is to be granted an option
to purchase 20,000 AirNet common shares effective on the

 

--------------------------------------------------------------------------------

 

date of his election or appointment to the Board. In accordance with the terms
of the 2004 Plan, on July 20, 2005, each of James M. Chadwick and Gerald
Hellerman was automatically granted an option to purchase 20,000 common shares
with an exercise price of $4.26, the fair market value of the underlying common
shares on the grant date.
In addition, on the first business day of each fiscal year of AirNet, each
individual who is then serving as a Non-Employee Director and has served for at
least one full one-year term as a Non-Employee Director, is to be automatically
granted an option to purchase 4,000 AirNet common shares. However, each of the
individuals serving as a Non-Employee Director on January 3, 2005 (the first
business day of the 2005 fiscal year) and each of the individuals serving as a
Non-Employee Director on January 2, 2006 (the first business day of the 2006
fiscal year) who had served for at least one full one-year term on that date,
thereby being eligible for the grant — Russell M. Gertmenian, David P. Lauer,
Bruce D. Parker and James E. Riddle — determined not to accept the option to
purchase 4,000 AirNet common shares which would have been automatically granted
to him on each such date.
Each option automatically granted under the 2004 Plan is to vest and become
exercisable as to 20% of the common shares covered thereby on each of the grant
date and the first, second, third and fourth anniversaries of the grant date.
Each option automatically granted under the 2004 Plan is to have an exercise
price per share equal to the fair market value of the underlying common shares
on the grant date. Each such option, which has not expired, been cancelled or
been exercised prior to the effective date of the event, will become fully
exercisable (i) if the Non-Employee Director retires from service as an AirNet
director after having served at least one full one-year term, becomes totally
disabled or dies or (ii) if AirNet undergoes a merger or consolidation or
reclassification of the common shares or the exchange of the common shares for
the securities of another entity (other than a subsidiary of AirNet) that has
acquired AirNet’s assets or which is in control of an entity that has acquired
AirNet’s assets.
Once vested and exercisable, each option automatically granted to a Non-Employee
Director under the 2004 Plan will remain exercisable until the earlier to occur
of (i) ten years after the grant date or (ii) three months after the
Non-Employee Director ceases to be a member of the Board (24 months in the case
of a Non-Employee Director who becomes disabled, dies or retires after having
served at least one full one-year term), subject in to the stated term of each
option. However, if a Non-Employee Director’s service as a director is
terminated for cause, he will immediately forfeit his options.
At any time, the Board of Directors may, in its discretion and without the
consent of the affected director, cancel an outstanding option granted to a
Non-Employee Director under the 2004 Plan, whether or not then exercisable, by
giving written notice to the director of AirNet’s intent to buy out the option.
In the event of such a buyout, AirNet will pay the excess, if any, of the fair
market value of the common shares underlying the exercisable portion of the
option to be cancelled over the exercise price associated therewith. No payment
will be made for the portion of an option with is not exercisable when
cancelled. At the option of the Board, payment of the buyout amount may be made
in cash, common shares or a combination thereof.