Document:

EX-10.26

 

EXHIBIT 10.26

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 of AirNet (the “Board”) and as members of Board committees. The current Non-Employee Directors of AirNet are
James M. Chadwick, Russell M. Gertmenian, Gerald Hellerman, and James E. Riddle. David P. Lauer,
who resigned from the Board on May 11, 2006, was also a
Non-Employee Director during the fiscal year ended December 31, 2006
(the “2006 fiscal year”), serving from January 1, 2006
until May 11, 2006. Bruce D. Parker, who has served on the Board since 2002, assumed the position of Chief Executive
Officer of AirNet on December 28, 2006. Mr. Parker was also a Non-Employee Director until such
date. Effective December 31, 2006, Mr. Parker was elected Chairman of
the Board of AirNet.

The
quarterly fee paid during the 2006 fiscal year and
to be paid during the fiscal year ending December 31, 2007 (the “2007 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 2006 fiscal year and continues to be the same amount during
the 2007 fiscal year. The fee for attending telephonic meetings of the full Board was $1,000 for
each meeting attended during the 2006 fiscal year and remains that amount during the 2007 fiscal
year.

The Audit Committee of AirNet’s Board currently consists of Gerald Hellerman (Chair), James M.
Chadwick and James E. Riddle. David P. Lauer served as a member
and Chair of the Audit Committee during the 2006 fiscal year from
January 1, 2006 until his
resignation on May 11, 2006. Mr. Hellerman was appointed a member and Chair of the Audit Committee
on May 17, 2006 and has served in those positions since that
date. Bruce D. Parker served as a member of the Audit Committee during the 2006 fiscal year from
January 1, 2006 until he assumed the
position of Chief Executive Officer of AirNet on December 28, 2006, on which date he resigned.
Messrs. Riddle and Chadwick also served on the Audit Committee throughout the 2006 fiscal year.

The Compensation Committee of AirNet’s Board currently consists of James E. Riddle (Chair), Gerald
Hellerman and James M. Chadwick. Bruce D. Parker served as a member of the Compensation Committee
until he assumed the position of Chief Executive Officer of AirNet on December 28, 2006, on which
date he resigned. David P. Lauer served as a member of the
Compensation Committee during the 2006 fiscal year from
January 1, 2006 until his resignation
on May 11, 2006. Mr. Chadwick was appointed to the Compensation Committee effective February 27,
2007. Mr. Riddle also served on the Compensation Committee throughout the 2006 fiscal year.

The Nominating and Corporate Governance Committee of AirNet’s Board currently consists of James M.
Chadwick (Chair), James E. Riddle and Gerald Hellerman. David P. Lauer served as member of the
Nominating and Corporate Governance Committee during the 2006 fiscal year from
January 1, 2006 until his resignation on May 11, 2006. Bruce D.
Parker served as a member and Chair of the Nominating and Corporate
Governance Committee during the 2006 fiscal year from
January 1, 2006 until he
assumed the position of Chief Executive Officer of AirNet on December 28, 2006, on which date he
resigned. Mr. Chadwick was appointed a member and Chair of the Nominating and Corporate Governance
Committee on February 27, 2007. Mr. Riddle also served on the Nominating and Corporate Governance
Committee throughout the 2006 fiscal year.

The fee for Audit Committee members has been and remains $2,000 per meeting attended in person
during each of the 2006 fiscal year and the 2007 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 2006 fiscal year and the 2007 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 2006 fiscal year and the 2007 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 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 was comprised of Bruce D. Parker and James M. Chadwick. The Strategy Committee
was dissolved on February 27, 2007. The fees for Strategy Committee members during of the 2006
fiscal year were $1,000 per meeting attended in person and $500 for
each telephonic meeting attended. In addition, on May 11, 2006, the Board approved a $5,000 quarterly fee for Mr. Parker for service in the
capacity as Chair of the Strategy Committee, retroactive to January 1, 2006.  The Strategy Committee did
not meet during the 2007 fiscal year and no fees were paid to Strategy Committee members during the 2007
fiscal year prior to the dissolution of the Strategy Committee.

As the lead director of AirNet, James E. Riddle received an additional quarterly fee of $6,000 for
service in that capacity during the 2006 fiscal year and continues to receive that amount during
the 2007 fiscal year.

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 received no fees for serving as a
director of AirNet during the 2006 fiscal year from
January 1, 2006 until the date of his resignation from the Board
effective December 31, 2006. Since December 28, 2006, Bruce D.
Parker has not received and will not receive any fees for serving as a
director of AirNet because he also serves as an officer and employee
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 30, 2007 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 30,
2007, 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 30, 2007 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
respective 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 30, 2007 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.

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.  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.  On January 2, 2007 (the first business day of the 2007 fiscal year), each of the individuals then
serving as a Non-Employee Director who had served for at least one full one-year term on that date, thereby
being eligible for the grant - James M. Chadwick, Russell M. Gertmenian, Gerald Hellerman and James E.
Riddle - was automatically granted an option to purchase 4,000 AirNet common shares with an exercise
price of $2.91.

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 closing price of the underlying common shares as reported on the
American Stock Exchange LLC (“AMEX”) on the grant date (or, if the grant date is not a trading day on
AMEX, on the first trading day following 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 each case 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.EX-10.29

 

EXHIBIT 10.29

SUMMARY OF AIRNET SYSTEMS, INC. 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 was to promote the following goals of AirNet for the fiscal year ended
December 31, 2006 (the 2006 fiscal year”) 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 included the following individuals who served as executive
officers of AirNet during the 2006 fiscal year: Joel E. Biggerstaff (Chairman of the Board until
December 31, 2006 and Chief Executive Officer and President until December 28, 2006), 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), Ray L.
Druseikis (Controller and Principal Accounting Officer), and Craig A. Leach (Vice President,
Information Systems) – as well as certain department managers and department directors. As of the
start of the 2006 fiscal year, there were 47 participants in the 2006 Incentive Plan. New
employees who qualified for the 2006 Incentive Plan were eligible to participate on the first day
of the calendar quarter following their date of hire. There were 46 participants who received
payments under the 2006 Incentive Plan, including Mr. Biggerstaff. There were also 32
non-participants who received discretionary awards totaling
approximately $75,000.

Payments under the 2006 Incentive Plan were based upon a combination of AirNet’s pre-tax income (as
determined under the terms of the 2006 Incentive Plan) for the 2006 fiscal year, 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 approved the
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 segment (e.g., execution of specific contracts with
customers and vendors, cost reductions, service improvements, etc.).

No incentive compensation was to be paid under the 2006 Incentive Plan unless AirNet achieved a
designated threshold level of pre-tax income for the 2006 fiscal year. If the designated threshold
level were achieved, incentive compensation payments would increase based upon predetermined
pre-tax income levels until a maximum aggregate amount of $1.9 million in incentive compensation
payments was reached. After the overall amount of incentive compensation was determined based upon
AirNet’s pre-tax income for the 2006 fiscal year, incentive compensation was 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.

Originally, a participant’s maximum incentive compensation payment was to range from 20% to 100% of
the participant’s base salary, depending upon such participant’s level of responsibility for
achieving AirNet’s goals for the 2006 fiscal year. Twenty percent of each participant’s incentive
compensation payments was to be based upon the participant’s achievement of pre-established
personal goals. The remaining 80% of each participant’s incentive compensation payment was to be
based upon a combination of the other three factors discussed above, which were 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 were 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 could have been 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.

 

 

Except for payments to the executive officers, payments under the 2006 Incentive Plan were paid in
quarterly payments commencing with the second quarter of the 2006 fiscal year based upon AirNet’s
year-to-date financial performance. Except as described below with respect to Mr. Biggerstaff,
payments of incentive compensation to executive officers were made in March 2007 based upon
AirNet’s performance and each executive officer’s performance for the 2006 fiscal year. Except as
described below with respect to Mr. Biggerstaff, in order to receive payment, a participant must
have been actively employed by AirNet at the time the payment was made.

On November 8, 2006, the AirNet Board of Directors, upon the recommendation of the Compensation
Committee, adopted the following amendments to the 2006 Incentive Plan: (i) for purposes of
computing the pre-tax income of AirNet for the 2006 fiscal year for purposes of the 2006 Incentive
Plan, the $24.6 million non-cash impairment charge recorded by AirNet in the third quarter of the
2006 fiscal year was to be disregarded and AirNet’s pre-tax income for the 2006 fiscal year was to
be computed as if no impairment charge had been incurred; (ii) the incentive compensation payable
under the 2006 Incentive Plan to each of AirNet’s officers, Joel E. Biggerstaff, Gary W. Qualmann,
Larry M. Glasscock, Jr., Jeffery B. Harris, Ray L. Druseikis and
Craig A. Leach, was to
be reduced to 60% of the amount each such officer would otherwise have been entitled to receive
under the 2006 Incentive Plan; (iii) for purposes of the 2006 Incentive Plan, the gain on the sale
of Jetride’s passenger charter business was to be excluded from the computation of AirNet’s pre-tax
income for the 2006 fiscal year; and (iv) Jetride’s targeted pre-tax income for the fourth quarter
of 2006 was to be disregarded for purposes of the 2006 Incentive Plan and the predetermined pre-tax income level at which the maximum
incentive compensation payout would be reached under the 2006 Incentive Plan was to be reduced by a
comparable amount.

As previously reported, under the terms of the Separation Agreement and General Release, dated as
of December 28, 2006 (the “Separation Agreement”), between AirNet and Mr. Biggerstaff, the
incentive compensation payable under the 2006 Incentive Plan to Mr. Biggerstaff was calculated
without regard to his personal goals for the 2006 fiscal year and, with respect to the financial
performance criteria, on an equitable basis with the other executive officers of AirNet. While
AirNet exceeded the level of pre-tax income at which the maximum incentive compensation payments
could be achieved, AirNet did not attain its pre-determined goal for contribution margin for
Passenger Charter Services. Accordingly, Mr. Biggerstaff was not entitled to the 20% of his
incentive compensation potential based upon the performance of AirNet’s Passenger Charter Services
business. Mr. Biggerstaff was paid 60% of his remaining 80% incentive compensation potential, or
$156,000, after applying the 60% limitation described above.

After reviewing AirNet’s pre-tax income, the operating performance of AirNet’s various business
components and the level of achievement of the personal goals assigned to each executive officer,
at a meeting of the Compensation Committee held on February 27, 2007, the Compensation Committee
asked Mr. Parker, AirNet’s Chairman of the Board and Chief Executive Officer, to recommend
additional discretionary awards to officers, other participants in the 2006 Incentive Plan, and
certain other employees who were not participants in the 2006 Incentive Compensation Plan. The
Compensation Committee met again on March 5, 2007 and approved discretionary awards recommended by
Mr. Parker in the amount of $283,000. The amounts of such
discretionary awards were based upon the
contributions such officers, participants and other employees made to the operating performance of
AirNet during fiscal year 2006, as determined by Mr. Parker. Because of such discretionary
incentive compensation awards, the total incentive compensation payments made to certain executive
officers of AirNet exceeded the amounts that otherwise would have been paid given the 60%
limitation described above.

During the 2006 fiscal year and the fiscal quarter ending March 31, 2007, AirNet made payments
under the terms of the 2006 Incentive Plan in the aggregate amount of approximately $1.5 million,
which included $156,000 paid to Mr. Biggerstaff as described above. In March of 2007, the
following executive officers of AirNet were paid the following amounts under the 2006 Incentive
Plan: Jeffery B. Harris- $160,000; Gary W. Qualmann — $136,750; Larry M. Glasscock, Jr. — $125,000;
Craig A. Leach — $66,464; and Ray L. Druseikis -$46,550.

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