Exhibit 10.7
AIRNET SYSTEMS,
INC.
DIRECTOR DEFERRED COMPENSATION
PLAN
(Reflects amendments through
March 17, 2004)
Section 1 . PURPOSE - The Company
desires and intends to recognize the value to the Company and its
Affiliates of the past and present services of the Directors of the
Company and its Affiliates, to encourage their continued service to
the Company and its Affiliates and to be able to attract and retain
superior Directors by adopting and implementing this Plan to
provide such Directors an opportunity to defer compensation
otherwise payable to them from the Company and/or
Affiliate.
Section 2 . CERTAIN DEFINITIONS
- The following terms will have the meanings provided
below.
“Additions” means the
credits applied to Deferred Compensation Accounts as provided in
Section 4 hereof.
“Adjustment Date” means
the last business day of each calendar quarter.
“Affiliate” means any
organization or entity which, together with the Company, is a
member of a controlled group of corporations or of a commonly
controlled group of trades or businesses [as defined in Sections
414(b) and (c) of the Code], or of an affiliated service group [as
defined in Code Section 414(m)] or other organization described in
Code Section 414(o).
“Annual Retainer” means,
with respect to any calendar year or other period, the fixed
retainer which, absent an election to defer hereunder, would be
payable to a Participant during those pay periods beginning in the
given calendar year or other period.
“Beneficiary” means the
person or persons designated in writing as such and filed with the
Plan Administrator at any time by a Participant. Any such
designation may be withdrawn or changed in writing (without the
consent of the Beneficiary), but only the last designation on file
with the Plan Administrator shall be effective.
“Board” means the Board
of Directors of the Company.
“Code” means the
Internal Revenue Code of 1986, as may be amended from time to
time.
“Common Shares” means
the common shares of the Company.
“Company” means AirNet
Systems, Inc. and any successor entity.
“Deferred Compensation
Account” means the separate Deferred Compensation Account
established for each Participant pursuant to Section 4 of the
Plan.
“Director” means any
director of the Company and any director of an Affiliate of the
Company.
“Effective Date” means
May 27, 1998.
“Eligible Compensation”
means, to the extent applicable to any given Participant, the
Annual Retainer and all Meeting Fees. The extent to which a
given Participant may defer a given component of Eligible
Compensation shall be based upon such Participant’s
eligibility to receive the given component of Eligible Compensation
(as determined under applicable agreements and pay practices of the
Company or applicable Affiliate) and the provisions and limitations
applicable to the given component as provided under this
Plan.
“Fair Market Value” of
the Common Shares means the most recent closing price of the Common
Shares on any securities exchange on which the Common Shares are
then listed.
“Meeting Fees” means,
with respect to any calendar year or other period, the fees for
attendance at meetings of the Board of Directors of the Company or
applicable Affiliate or any committees thereof (exclusive of
expenses) which, absent an election to defer hereunder, would be
payable to a Participant during those pay periods beginning in the
given calendar year or other period.
“Participant” has the
meaning specified in Section 3 of the Plan.
“Plan” means the AirNet
Systems, Inc. Director Deferred Compensation Plan, as reflected in
this document, as the same may be amended from time to time after
the Effective Date.
“Plan Administrator”
means the Company.
“Plan Year” means the
calendar year.
Section 3 . PARTICIPANTS
Each Director as of the Effective Date shall be
eligible for participation in the Plan as of such date. Each
Director who first becomes a Director after the Effective Date
shall be eligible for participation in the Plan as of the date on
which he becomes a Director. A Director who is eligible for
participation in the Plan and who elects to make deferral
contributions pursuant to Section 4 shall be designated a
“Participant” in the Plan. A Participant shall
continue to participate in the Plan until his status as a
Participant is terminated by either a complete distribution of his
Deferred Compensation Account pursuant to the terms of the Plan or
by written directive of the Company.
Section 4 . DEFERRED COMPENSATION
ACCOUNTS
A.
Establishment of Deferred
Compensation Accounts . The Plan Administrator will establish a
Deferred Compensation Account for each Participant. A
Participant’s Deferred Compensation Account shall have two
subaccounts— a Cash Account to record amounts allocated under
Section 4.D.(ii) and a Stock Account to record amounts allocated
under Section 4.D.(iii). Such Deferred Compensation Account
shall be a bookkeeping account only, maintained as part of the
books and records of the Company or applicable
Affiliate.
B.
Election of
Participant . With
respect to each Plan Year, a Participant may elect to have a
percentage or a flat dollar amount of his Eligible Compensation
which is to be paid to him by the Company or applicable Affiliate
for the Plan Year in question allocated to his Deferred
Compensation Account and paid on a deferred basis pursuant to the
terms of the Plan. To exercise such an election for any Plan
Year, within thirty (30) days prior to the commencement of the Plan
Year, the Participant must advise the Plan Administrator of his
election, in writing, on a form prescribed by the Plan
Administrator (each, a “Deferral Notice”).
Notwithstanding the preceding sentence, in the first year of the
Plan, or in the case of a Director who first becomes eligible to
participate in the Plan after the Effective Date, a Participant may
complete a Deferral Notice at any time within thirty (30) days
following the date on which he is first eligible to participate in
the Plan. Such Deferral Notice shall apply only to Eligible
Compensation payable to, or earned by, the Participant after the
date on which the Deferral Notice is received by the Plan
Administrator. To the extent that a Participant completes a
Deferral Notice in accordance with the provisions of this
paragraph, such Deferral Notice shall remain in effect for future
Plan Years until changed or revoked by the Participant.
C.
Company Contributions
. Each time a Deferral Notice
is submitted to the Plan Administrator in accordance with Section
4.B. above, during the next Plan Year (or, if applicable, the
remaining Plan Year), the Company or applicable Affiliate will
allocate to the Participant’s Deferred Compensation Account
the percentage or dollar amount of Eligible Compensation specified
in the Deferral Notice. Any amounts allocated by the Company
or Affiliate under this Section 4.C. are called “Company
Contributions.”
D.
Adjustment of Account
Balances .
(i)
Participant Election
. At the time that a
Participant submits a Deferral Notice, he shall elect the
percentage of his deferred amounts to be allocated to his Cash
Account (to be adjusted pursuant to Paragraph (ii) of this Section
4.D.) and his Stock Account (to be adjusted pursuant to Paragraph
(iii) of this Section 4.D.). Any election made pursuant to
this Paragraph (i) shall be irrevocable with respect to the
affected amounts.
(ii)
As of each Adjustment Date, the Plan
Administrator shall credit the balance in the Participant’s
Cash Account with Additions which shall mirror a specific interest
rate. For this purpose, the interest rate to be used shall be
equal to the rate of return on
[designate investment (e.g. 3-year Treasury Bill)] as of the
applicable Adjustment Date. The crediting of Additions shall
be determined by multiplying the Participant’s Cash Account
balance as of the previous Adjustment Date by the applicable rate
of interest determined under the preceding sentence. The
crediting of Additions shall occur so long as there is a balance in
the Participant’s Cash Account regardless of whether the
Participant has terminated service as a Director or has died.
The Plan Administrator may prescribe any reasonable method or
procedure for the accounting of Additions.
(iii)
As of each Adjustment Date, the
amount credited to the Stock Account of each Participant shall be
divided by the then Fair Market Value of the Common Shares.
Upon completion of this calculation, each Stock Account shall be
credited with the resulting number of whole Common Shares; and any
remaining amounts shall continue to be credited to the Stock
Account until converted to whole Common Shares at a future
Adjustment Date. The Stock Account of each Participant shall
be credited with cash dividends on the Common Shares on and after
the date credited to the Stock Account.
2
At the following Adjustment Date, the amount of
cash dividends credited to each Stock Account (and any other
amounts then credited to such account) shall be divided by the then
Fair Market Value of the Common Shares; and the Stock Account of
each Participant shall be credited with the resulting number of
whole Common S
