Bank Services, primarily consisting of cancelled check delivery, generated approximately 65%, 68% and 68% of AirNets total net revenues for the fiscal years ended December 31, 2006, 2005 and 2004, respectively. AirNets time-critical cancelled check delivery service allows its banking customers to reduce their float costs and related processing fees. AirNet also transports other items, such as proof of deposit transactions and interoffice mail, for many of the same bank customers. The U.S. banking industry, including commercial banks and third-party processors, represents AirNets largest category of customers. AirNets bank customers represent many of the nations largest bank holding companies
EX-10.32 9 l25426aexv10w32.htm EX-10.32 EX-10.32
EXHIBIT 10.32
SUMMARY OF AIRNET SYSTEMS, INC. 2007 INCENTIVE COMPENSATION PLAN
On March 28, 2007, the Board of Directors of AirNet, upon the recommendation of the Compensation Committee, adopted the 2007 Incentive Compensation Plan (the “2007 Incentive Plan”). The purpose of the 2007 Incentive Plan is to promote the following goals of AirNet for the fiscal year ending December 31, 2007 (the “2007 fiscal year”) by providing incentive compensation to certain employees of AirNet:
| • | attaining designated levels of pre-tax income; | ||
| • | achieving designated levels of Express Services revenues and contribution margin; | ||
| • | reducing AirNet’s operating costs; | ||
| • | establishing AirNet as the express air carrier of choice for highly controlled and time sensitive shipments; | ||
| • | leveraging AirNet’s aviation infrastructure to improve contribution margin; | ||
| • | operating in all areas of AirNet’s business in an absolutely safe, highly professional, dependable, efficient and customer focused manner; and | ||
| • | developing AirNet’s leadership team. |
Participants in the 2007 Incentive Plan include AirNet’s executive officers – Bruce D. Parker (Chairman of the Board and Chief Executive Officer), 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), — and certain department managers and department directors. As of the date of this Annual Report on Form 10-K, there were 37 participants in the 2007 Incentive Plan.
The targeted incentive compensation payment a participant may earn under the 2007 Incentive Plan 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 the 2007 fiscal year. The targeted percentage of annual base salary that each of AirNet’s executive officers may earn as incentive compensation under the 2007 Incentive Plan is as follows: Bruce D. Parker, 100%; Gary W. Qualmann, Larry M. Glasscock, Jr., and Jeffery B. Harris, 75%; Ray L. Druseikis and Craig A. Leach, 50%.
Payments under the 2007 Incentive Plan will be based on a combination of AirNet’s (i) pre-tax income for the 2007 fiscal year, (ii) Express Services revenues and contribution margins for the 2007 fiscal year, and (iii) the achievement of personal goals assigned to each participant. The Compensation Committee determines the personal goals of the Chief Executive Officer. The Chief Executive Officer determines the personal goals for the other executive officers, which are reviewed and approved by the Compensation Committee. The personal goals of other participants are approved by the Chief Executive Officer and are reviewed by the Compensation Committee. 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.).
With the exception of Bruce D. Parker, no incentive compensation will be paid under the 2007 Incentive Plan unless AirNet achieves at least 80% of its targeted pre-tax income for the 2007 fiscal year. Mr. Parker will be eligible to receive the portion of his incentive compensation potential allocated to his personal goals without regard to AirNet’s attainment of its financial objectives. Once this designated threshold level of pre-tax income is achieved, potential incentive compensation payouts will increase at predetermined levels until the maximum incentive compensation payout of approximately $1.7 million is reached at approximately 140% of AirNet’s targeted pre-tax income for the 2007 fiscal year.
Once the aggregate potential incentive compensation payout is determined based upon the level of pre-tax income achieved by AirNet during the 2007 fiscal year, each participant’s incentive compensation payment will be determined based upon the following three components of the 2007 Incentive Compensation Plan (i) pre-tax income for the 2007 fiscal year; (ii) Express Services revenues and contribution margins for the 2007 fiscal year, and (iii) the achievement of personal goals. With the exception of Mr. Parker, 20% of each participant’s incentive compensation payout is allocated to the attainment of personal goals. Forty percent of Mr. Parker’s incentive compensation payment is allocated to the attainment of personal goals. The portion of each participant’s incentive compensation potential that is not allocated to the attainment of personal goals will be allocated to the attainment of predetermined levels of pre-tax income and Express Services revenues and contribution margin based upon such participant’s responsibility for achieving such goals.
No incentive compensation will be earned with respect to the Express Services component of the 2007 Incentive Plan unless AirNet achieves at least 100% of its targeted Express Services revenues and contribution margin. Once the designated threshold levels of Express Services revenues and contribution margin are achieved, potential incentive compensation payouts under the Express Services component of the 2007 Incentive Plan will increase at predetermined levels until the maximum Express Services compensation payout level is achieved.
Mr. Parker’s incentive compensation payments under the 2007 Incentive Plan will be based upon the achievement of certain pre-determined financial objectives and personal goals for the first six months of the 2007 fiscal year and the last six months of the 2007 fiscal year. Mr. Parker will be eligible to receive up to 50% of his annual base salary in each six-month period, subject to the attainment of Mr. Parker’s predetermined financial objectives and personal goals. In each six-month incentive compensation period, Mr. Parker’s incentive compensation potential will be allocated among Mr. Parker’s financial objectives and personal goals as follows:
| • | 30% of Mr. Parker’s incentive compensation potential will be based upon attaining at least 100% of the targeted pre-tax income for the applicable six-month period; | ||
| • | 30% of Mr. Parker’s incentive compensation potential will be based upon attaining at least 100% of the targeted Express Services revenues and contribution margin for the applicable six-month period; and | ||
| • | 40% of Mr. Parker’s incentive compensation potential in will be based upon the attainment of the personal goals established for Mr. Parker by the Board of Directors. |
The Board of Directors established the following personal goals for Mr. Parker for the 2007 fiscal year:
| • | development of an AirNet operating vision, including specific objectives and strategy; |
| • | development of a chief executive officer succession plan; and |
| • | developing AirNet’s management into an integrated team working to achieve specific objectives. |
The Board of Directors will evaluate Mr. Parker’s performance at the end of each six month incentive compensation period and determine his incentive compensation payment based upon AirNet’s financial performance and achievement of Mr. Parker’s personal goals during such period. In the event the Board of Directors approves a strategic alternative that is completed based upon Mr. Parker’s efforts, Mr. Parker will be deemed to have met all his financial objectives and personal goals for the six month incentive compensation period in which the strategic alternative is completed. In such event, Mr. Parker will be entitled to receive his maximum incentive compensation for such six month period, prorated from the first day of such six month period to the date the strategic alternative is completed.
Except for payments to Mr. Parker and AirNet’s other executive officers, payments under the 2007 Incentive Plan will be paid in quarterly payments commencing with the first quarter of the 2007 fiscal year based upon AirNet’s year to date financial performance. With the exception of Mr. Parker, payments of incentive compensation to
AirNet’s executive officers will be made in the first quarter of the fiscal year ending December 31, 2008 based upon AirNet’s performance and each executive officer’s performance for the 2007 fiscal year. Mr. Parker’s incentive compensation payments will be made in two installments no later than July 31, 2007 and March 15, 2008. In order to receive a payment, a participant must be actively employed by AirNet at the time the payment is made. New employees who qualify for the 2007 Incentive Compensation Plan will be eligible to participate on the first day of the calendar quarter following their date of hire.
AirNet’s executive officers will be made in the first quarter of the fiscal year ending December 31, 2008 based upon AirNet’s performance and each executive officer’s performance for the 2007 fiscal year. Mr. Parker’s incentive compensation payments will be made in two installments no later than July 31, 2007 and March 15, 2008. In order to receive a payment, a participant must be actively employed by AirNet at the time the payment is made. New employees who qualify for the 2007 Incentive Compensation Plan will be eligible to participate on the first day of the calendar quarter following their date of hire.
In the event the incentive compensation payments otherwise available for payment under the 2007 Incentive Plan based upon AirNet’s level of pre-tax income are not to be paid to certain participants as a result of such participants’ failure to attain their personal goals or AirNet’s failure to attain the predetermined levels of Express Services revenues or contribution margin, such unpaid amounts may be awarded at the discretion of the Compensation Committee to participants in the 2007 Incentive Plan or to other employees of AirNet not participating in the 2007 Incentive Plan. In the event such discretionary awards are made to any participant, including AirNet’s executive officers, the total incentive compensation payment to any such participant may exceed the targeted incentive compensation payment to such participant as described above.
The Compensation Committee may amend, modify or terminate the 2007 Incentive Plan at any time.
