Document:

EX-10.25

 

EXHIBIT 10.25

SUMMARY OF AIRNET SYSTEMS, INC. 2005 INCENTIVE COMPENSATION PLAN

     On February 2, 2005, the Board of Directors (the “Board”) of AirNet Systems, Inc. (“AirNet”),
upon the recommendation of the Compensation Committee, adopted the 2005 Incentive Compensation Plan
(the “2005 Incentive Plan”). The Compensation Committee and the Board subsequently approved
clarifications and modifications to the 2005 Incentive Plan on March 8, 2005 and March 29, 2005.
As discussed further below, on August 9, 2005, the Board, upon the recommendation of the
Compensation Committee, adopted amendments and clarifications to the 2005 Incentive Plan to address
the possibility that a transaction for the sale of AirNet would be consummated prior to the end of
the fiscal year ended December 31, 2005 (the “2005 fiscal year”). On November 20, 2005, the Board,
upon the recommendation of the Compensation Committee, ratified a change to the 2005 Incentive Plan
to address the impact of the non-cash impairment charge recorded by AirNet in the third quarter of
the 2005 fiscal year in determining pre-tax income (as determined under the terms of the 2005
Incentive Plan) for the 2005 fiscal year.

     The purpose of the 2005 Incentive Plan was to promote the following goals of AirNet for the
2005 fiscal year by providing incentive compensation to certain employees of AirNet and its
subsidiaries:

	 	•	 	Exceeding budgeted pre-tax income (as determined under the terms of the 2005 Incentive Plan);
	 
	 	•	 	Reducing fixed costs;
	 
	 	•	 	Creating and executing contingency plans for changes in AirNet’s Bank business;
	 
	 	•	 	Refining AirNet’s business plan for its Express and Jetride businesses to more
quickly and profitably diversify AirNet;
	 
	 	•	 	Developing AirNet’s leadership team; and
	 
	 	•	 	Meeting high priority deadlines related to compliance with the Sarbanes-Oxley Act
of 2002 and other key projects.

     Participants in the 2005 Incentive Plan included AirNet’s executive officers, Joel E.
Biggerstaff, Gary W. Qualmann, Larry M. Glasscock, Jr., Jeffery B. Harris, Wynn D. Peterson, Ray L.
Druseikis and Craig A. Leach, and certain department managers and department directors. At the
start of the 2005 fiscal year, there were 45 participants in the 2005 Incentive Plan. As of the
end of the 2005 fiscal year, there were 43 participants in the 2005 Incentive Plan.

     Payments under the 2005 Incentive Plan were based on a combination of AirNet’s pre-tax income
(as determined under the terms of the 2005 Incentive Plan) for the 2005 fiscal year, operating
performance of AirNet’s various business components and the achievement of personal goals assigned
to each participant. The Compensation Committee approved personal goals for executive officers and
reviewed the personal goals for other participants. The personal goals approved by the
Compensation Committee for each of the executive officers related to specific business objectives
related to general business operations (e.g., regulatory compliance, expense reductions, etc.) and
each business component (e.g., execution of specific contracts with customers and vendors, cost
reductions, service improvements, etc.). No incentive compensation was to be paid to the executive
officers under the 2005 Incentive Plan for the achievement of personal goals unless AirNet attained
the designated threshold level of pre-tax income (other than certain amounts payable to Wynn D.
Peterson, as discussed below).

     No incentive compensation was to be paid under the 2005 Incentive Plan unless AirNet achieved
a designated threshold level of pre-tax income (as determined under the terms of the 2005 Incentive
Plan) for the 2005 fiscal year. If the designated threshold level were achieved, incentive
compensation payments would increase at predetermined pre-tax income levels until the maximum
compensation payout of $1.9 million was reached at approximately 200% of pre-tax income for the
2004 fiscal year, determined without regard to the 2004 fiscal year impairment charges related to
property and equipment and goodwill.

     Once the overall amount of incentive compensation was determined based upon AirNet’s pre-tax
income (as determined under the terms of the 2005 Incentive Plan), incentive compensation was
allocated to Bank, Express, Jetride and corporate based upon pre-established targets. Incentive
compensation was then allocated to the participants most closely involved in managing each of those
business areas based upon each participant’s base salary. Finally, participants must have achieved
their pre-established personal goals to achieve their maximum incentive compensation payment.

 

 

     The maximum percentage of annual base salary that the following executive officers could have
received as incentive compensation under the 2005 Incentive Plan was: (i) for Joel E. Biggerstaff,
100%; (ii) for Gary W. Qualmann, Larry M. Glasscock, Jr. and Jeffery B. Harris, 75%; and (iii) for
Ray L. Druseikis and Craig A. Leach, 50%. In connection with his promotion in June 2005 to Senior
Vice President, Jetride Services, the incentive compensation which Mr. Peterson could have received
under the 2005 Incentive Plan was modified to include two components. He was eligible to receive
incentive compensation up to a maximum amount of $75,000 (50% of his $150,000 annual base salary
prior to the increase) based on the level of achievement through June 30, 2005 of his personal
goals in the position as Vice President, Strategic Planning and Analysis, and achievement by AirNet
of a designated level of pre-tax income (as determined under the terms of the 2005 Incentive Plan),
for the six months ended June 30, 2005. The amount of $60,000 in incentive compensation was paid
to Mr. Peterson in respect of the six-month period ended June 30, 2005, which payment was made in
March of 2006. Mr. Peterson was also eligible to receive incentive compensation from zero to a
maximum amount of $161,250 (75% of his $215,000 annual base salary after the increase) based on the
level of achievement of personal goals related to the performance of Jetride for the period from
July 1 through December 31, 2005, and achievement by Jetride, and AirNet, of designated levels of
pre-tax income (as determined under the terms of the 2005 Incentive Plan) for the six months ending
December 31, 2005. In March of 2006, the amount of $46,438 in incentive compensation was paid to
Mr. Peterson in respect of the six-month period ended December 31, 2005.

     Except for payments to the executive officers, payments under the 2005 Incentive Plan were
paid in quarterly payments commencing with the second quarter of the 2005 fiscal year based upon
AirNet’s year-to-date financial performance. Except as described above in respect of Mr. Peterson,
payments of incentive compensation to AirNet’s executive officers serving at the time of such
payments, were made in March of 2006 based upon AirNet’s performance for the 2005 fiscal year. New
employees who qualified for the 2005 Incentive Plan were eligible to participate on the first day
of the calendar quarter following their date of hire.

     On August 9, 2005, the Board, upon the recommendation of the Compensation Committee, had
adopted the following amendments and clarifications to the 2005 Incentive Plan to address the
possibility that a transaction for the sale of AirNet would be consummated prior to the end of the
2005 fiscal year. In such event, (i) participants in the 2005 Incentive Plan would have been
entitled to receive incentive compensation measured as a percentage of their full year base salary
rather than a pro-rated portion; (ii) to the extent that bonuses were based in part on pre-tax
income (as determined under the terms of the 2005 Incentive Plan) for the 2005 fiscal year, such
pre-tax income would have been measured through the month ending immediately prior to the
consummation date of the sale transaction; (iii) to the extent bonuses for any individual were
determined in part based upon the performance of a business unit against a pre-determined target,
the performance of such business unit would have been based upon the performance through the month
ending immediately prior to the consummation date of the sale transaction versus the targeted
performance through such month end; and (iv) individuals who were employed by AirNet at the time of
the consummation of a sale transaction would have been entitled to a bonus under the 2005 Incentive
Plan whether or not they are employed at the time the bonus was to be paid.

     On November 20, 2005, the Board, upon the recommendation of the Compensation Committee,
ratified a change to the 2005 Incentive Plan to provide that, for purposes of computing the pre-tax
income of AirNet for the 2005 fiscal year for purposes of the 2005 Incentive Plan, the $16.1
million non-cash impairment charge recorded by AirNet in the third quarter of the 2005 fiscal year
would be disregarded and the pre-tax income for the 2005 fiscal year would be computed as if no
impairment charge had been incurred.

     During
the 2005 fiscal year and the fiscal quarter ending March 31,
2006, AirNet made payments under the terms of the 2005 Incentive Plan
in the aggregate amount of approximately $1.6 million. In March of 2006, the executive officers of
AirNet were paid the following amounts under the 2005 Incentive Plan: Joel E. Biggerstaff -
$250,000; Jeffery B. Harris — $190,250; Gary W. Qualmann — $148,000; Larry M. Glasscock, Jr. -
$141,125; Wynn D. Peterson — $106,438 ($60,000 in respect of the six-month period ended June 30,
2005; $46,438 in respect of the six-month period ended December 31, 2005); Craig A. Leach -
$72,000; and Ray L. Druseikis - $29,000 (became a participant effective July 1, 2005 following his
election as an executive officer of AirNet and employment with AirNet effective June 30, 2005.)

     After reviewing AirNet’s pre-tax income (as determined under the terms of the 2005 Incentive Plan),
the operating performance of AirNet’s various business components, the level of achievement of the
personal goals assigned to each executive officer and, in the case of Mr. Peterson, Jetride’s
pre-tax income (as determined under the terms of the 2005 Incentive Plan), at the meeting of the
Compensation Committee held on March 8, 2006, the Compensation Committee determined the amount of
incentive compensation to be paid to each executive officer (other than Mr. Peterson) in respect of
the 2005 fiscal year and the incentive compensation to be paid to Mr. Peterson in respect of the
six-month period ended December 31, 2005.EX-10.29

 

Exhibit 10.29

Adoption of 2006 Incentive Compensation Plan

On March 24, 2006, the Board of Directors of AirNet, upon the recommendation of the Compensation
Committee, adopted the 2006 Incentive Compensation Plan (the “2006 Incentive Plan”).

The purpose of the 2006 Incentive Plan is to promote the following goals of AirNet for the fiscal
year ending on December 31, 2006 (“Fiscal 2006”) by providing incentive compensation to certain
employees of AirNet and its subsidiaries:

	 	•	 	Attaining designated levels of pre-tax income;
	 
	 	•	 	Improving cash flow and reducing debt;
	 
	 	•	 	Defining and executing plans to offset expected declines in Bank Services revenues;
	 
	 	•	 	Reducing the fixed cost structure of AirNet; and
	 
	 	•	 	Meeting high priority deadlines of AirNet.

Participants in the 2006 Incentive Plan include AirNet’s executive officers — Joel E. Biggerstaff
(Chairman of the Board, Chief Executive Officer and President), Gary W. Qualmann (Chief Financial
Officer, Treasurer and Secretary), Larry M. Glasscock, Jr. (Senior Vice President, Express
Services), Jeffery B. Harris (Senior Vice President, Bank Services), Wynn D. Peterson (Senior Vice
President, Jetride Services), Ray L. Druseikis (Controller and Principal Accounting Officer), Craig
A. Leach (Vice President, Information Systems) — and certain department managers and department
directors. As of the date of this Annual Report on Form 10-K, there were 47 participants in the
2006 Incentive Plan.

Payments under the 2006 Incentive Plan will be based upon a combination of AirNet’s pre-tax income
for Fiscal 2006, the operating performance of AirNet’s Delivery Services and Passenger Charter
Services business segments, and the achievement of personal goals assigned to each participant. The
Compensation Committee approves personal goals for executive officers and reviews the personal
goals for other participants. The personal goals approved by the Compensation Committee for each
of the executive officers relate to specific business objectives related to general business
operations (e.g., regulatory compliance, expense reductions, etc.) and each business segment (e.g.,
execution of specific contracts with customers and vendors, cost reductions, service improvements,
etc.).

No incentive compensation will be paid under the 2006 Incentive Plan unless AirNet achieves a
designated threshold level of pre-tax income for Fiscal 2006. Once the designated threshold level
is achieved, the available incentive compensation payments will increase based upon predetermined
pre-tax income levels until a maximum aggregate amount of $1.9 million in incentive compensation
payments is reached. After the overall amount of incentive compensation is determined based upon
AirNet’s pre-tax income for Fiscal 2006, incentive compensation will be allocated to individual
participants based upon the following four factors: (i) level of pre-tax income attained by AirNet;
(ii) level of contribution margin attained by Delivery Services as compared to certain
predetermined levels; (iii) levels of contribution margin attained by Passenger Charter Services as
compared to certain predetermined levels; and (iv) attainment of personal goals.

A participant’s maximum incentive compensation payment ranges from 20% to 100% of the participant’s
base salary, depending upon such participant’s level of responsibility for achieving AirNet’s goals
for Fiscal 2006. Twenty percent of each participant’s incentive compensation payments will be
based upon the participant’s achievement of pre-established personal goals. The remaining 80% of
each participant’s incentive compensation payment will be based upon a combination of the other
three factors discussed above, which will be allocated to each participant based upon such
participant’s overall responsibility for attaining the designated levels of AirNet’s pre-tax income
and contribution margins for the Delivery Services and Passenger Charter Services business
segments.

In the event the incentive compensation payments otherwise available for payment under the 2006
Incentive Plan based upon AirNet’s level of pre-tax income is not paid to certain participants as a
result of those participants’ failure to attain their personal goals or AirNet’s failure to attain
the predetermined levels of budgeted contribution margins in Delivery Services or Passenger Charter
Services, such unpaid amounts may be awarded at the discretion of the Compensation Committee to
participants in the 2006 Incentive Plan or to other employees of AirNet not participating in the
2006 Incentive Plan.

 

The maximum percentage of annual base salary that each of AirNet’s executive officers may receive
as incentive compensation under the Incentive Plan is as follows: Joel E. Biggerstaff, 100%; Gary
W. Qualmann, Larry M. Glasscock, Jr., Jeffrey B. Harris and Wynn D. Peterson, 75%; Ray L. Druseikis
and Craig A. Leach, 50%.

Except for payments to the executive officers, payments under the 2006 Incentive Plan will be paid
in quarterly payments commencing with the second quarter of Fiscal 2006 based upon AirNet’s year to
date financial performance. Payments of incentive compensation to executive officers will be made
in the first quarter of the fiscal year ending December 31, 2007 based upon AirNet’s performance
and each executive officer’s performance for Fiscal 2006. In order to receive payment, a
participant must be actively employed by AirNet at the time the payment is made. New employees who
qualify for the 2006 Incentive Plan will be eligible to participate on the first day of the
calendar quarter following their date of hire.

The Compensation Committee may amend, modify or terminate the 2006 Incentive Plan at any time.

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