<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
AIRNET SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
AIRNET SYSTEMS, INC.
3939 International Gateway
Columbus, Ohio 43219
February 4, 1997
Dear Fellow Shareholders:
The Annual Meeting of the Shareholders (the "Annual Meeting") of AirNet
Systems, Inc., an Ohio corporation (the "Company"), will be held at 10:00 a.m.,
local time, on Thursday, March 6, 1997, at the Concourse Hotel, 4300
International Gateway, Columbus, Ohio. The enclosed Notice of Annual Meeting of
Shareholders and Proxy Statement contain detailed information about the business
to be transacted at the Annual Meeting.
The Board of Directors has nominated six directors, each for a term to
expire at the 1998 Annual Meeting. The Board of Directors recommends that you
vote FOR the nominees.
On behalf of the Board of Directors and management, I cordially invite you
to attend the Annual Meeting. Whether or not you plan to attend the Annual
Meeting, the prompt return of your proxy in the enclosed return envelope will
save the Company additional expenses of solicitation and will help ensure that
as many shares as possible are represented.
Sincerely,
Gerald G. Mercer
CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
[LOGO]
<PAGE>
[LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, MARCH 6, 1997
------------------------
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders (the
"Annual Meeting") of AirNet Systems, Inc., an Ohio corporation (the "Company"),
will be held at the Concourse Hotel, 4300 International Gateway, Columbus, Ohio,
on Thursday, March 6, 1997 at 10:00 a.m., local time, for the following
purposes:
1. To elect six directors, each for a term to expire at the 1998 Annual
Meeting of Shareholders; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on January 17, 1997,
as the record date for determining the shareholders entitled to notice of, and
to vote at, the Annual Meeting and at any adjournment or postponement thereof.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to attend the Annual Meeting, you may insure your representation by
completing, signing, dating and promptly returning the enclosed proxy card. A
return envelope, which requires no postage if mailed in the United States, has
been provided for your use. If you attend the Annual Meeting and inform the
Secretary of the Company in writing that you wish to vote your shares in person,
your proxy will not be used.
If your shares are held of record by a broker, bank or other nominee and you
wish to attend the Annual Meeting, you must obtain a letter from the broker,
bank or other nominee confirming your beneficial ownership of the shares and
bring it to the meeting. In order to vote your shares at the Annual Meeting, you
must obtain from the record holder a proxy issued in your name.
By Order of the Board of Directors,
William R. Sumser,
SECRETARY
AirNet Systems, Inc.
3939 International Gateway
Columbus, Ohio 43219
February 4, 1997
<PAGE>
[LOGO]
3939 INTERNATIONAL GATEWAY
COLUMBUS, OHIO 43219
------------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors and management of AirNet Systems, Inc., an Ohio
corporation (the "Company"), of proxies for use at the 1996 Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held at the Concourse
Hotel, 4300 International Gateway, Columbus, Ohio, on Thursday, March 6, 1997,
at 10:00 a.m., local time, and at any and all postponements or adjournments
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Shareholders.
This Proxy Statement and the accompanying form of proxy are first being
mailed to shareholders on or about February 3, 1997.
GENERAL
Only holders of record of the Company's common shares, $.01 par value (the
"Common Shares"), on the record date are entitled to notice of and to vote at
the Annual Meeting or any postponements or adjournments thereof. As of January
17, 1997, there were 12,475,128 Common Shares outstanding. Each Common Share
entitles the holder thereof to one vote. A quorum for the Annual Meeting is a
majority of the voting shares outstanding. There is no cumulative voting. Other
than the Common Shares, there are no other voting securities of the Company
outstanding.
Common Shares represented by signed proxies that are returned to the Company
will be counted toward the quorum in all matters even though they are marked as
"Abstain," "Against" or "Withhold Authority" on one or more or all matters or
they are not marked at all. Broker/dealers who hold their customers' shares in
street name may, under the applicable rules of the exchange and other
self-regulatory organizations of which the broker/dealers are members, sign and
submit proxies for such shares and may vote such shares on routine matters,
which, under such rules, typically include the election of directors, but
broker/dealers may not vote such shares on other matters, which typically
include amendments to the articles of incorporation of the Company and the
approval of stock compensation plans, without specific instructions from the
customer who owns such shares. Proxies signed and submitted by broker/dealers
which have not been voted on certain matters as described in the previous
sentence are referred to as broker non-votes. Such proxies count toward the
establishment of a quorum. THE EFFECT OF AN ABSTENTION OR BROKER NON-VOTE ON
EACH OF THE MATTERS TO BE VOTED UPON AT THE MEETING IS THE SAME AS A "NO" VOTE.
If the accompanying proxy card is properly signed and returned to the
Company prior to the Annual Meeting and not revoked, it will be voted in
accordance with the instructions contained therein. If no instructions are
given, the persons designated as proxies in the accompanying proxy card will
vote FOR the election as directors of those persons named below.
The Board of Directors is not currently aware of any matters other than
those referred to herein which will come before the Annual Meeting. If any other
matter should be presented at the Annual Meeting for action, the persons named
in the accompanying proxy card will vote the proxy in their own discretion.
You may revoke your proxy at any time before it is actually voted at the
Annual Meeting by delivering written notice of revocation to the Secretary of
the Company, by submitting a subsequently dated proxy, or by attending the
Annual Meeting and voting in person. Attendance at the Annual Meeting will not,
in itself, constitute revocation of the proxy.
<PAGE>
The expense of preparing, printing and mailing proxy materials to the
Company's shareholders will be borne by the Company. In addition, proxies may be
solicited personally or by telephone, mail or telegram. Officers or employees of
the Company may assist with personal or telephone solicitation and will receive
no additional compensation therefor. The Company will also reimburse brokerage
houses and other nominees for their reasonable expenses in forwarding proxy
materials to beneficial owners of the Common Shares.
BENEFICIAL OWNERSHIP OF COMPANY SECURITIES
The following table sets forth the number and percentage of outstanding
Common Shares beneficially owned by (i) each director of the Company; (ii) each
executive officer of the Company included in the Summary Compensation Table;
(iii) all directors and executive officers of the Company as a group; and (iv)
each person known by the Company to own beneficially more than five percent of
any class of the Company's voting securities, in each case, as of January 17,
1997. The Company believes that each individual or entity named has sole
investment and voting power with respect to Common Shares indicated as
beneficially owned by such individual or entity, except as otherwise noted. The
address of each of the executive officers and directors is c/o AirNet Systems,
Inc., 3939 International Gateway, Columbus, Ohio 43219.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
<TABLE>
<CAPTION>
COMMON SHARES WHICH
CAN BE ACQUIRED UPON
EXERCISE OF OPTIONS
OR
NAME OF COMMON SHARES WARRANTS EXERCISABLE PERCENT OF
BENEFICIAL OWNER PRESENTLY HELD WITHIN 60 DAYS TOTAL CLASS (2)
- ------------------------------------------------ --------------- --------------------- ---------- -------------
<S> <C> <C> <C> <C>
Gerald G. Mercer (3)(4)......................... 4,333,241 40,000 4,373,241 34.9%
Glenn M. Miller (3)............................. 557,703 15,000 572,703 4.6
Charles A. Renusch (3).......................... 380,250 15,000 395,250 3.2
Eric P. Roy (3)(5).............................. 229,607 20,000 249,607 2.0
Guy S. King (3)................................. 131,087 15,000 146,087 1.2
Roger D. Blackwell.............................. 200 -- 200 (6)
Tony C. Canonie, Jr............................. 5,000 -- 5,000 (6)
Russell M. Gertmenian (7)....................... 3,000 -- 3,000 (6)
J.F. Keeler, Jr. (8)............................ 9,000 -- 9,000 (6)
All directors and executive officers as a group
(13 persons).................................. 5,950,378 160,000 6,110,378 48.4
Aim Capital Management (9)
11 Greenway Plaza, Suite 1919
Houston, Texas 77046.......................... 670,600 -- 670,600 5.4
</TABLE>
- ------------------------
(1) Unless otherwise indicated, the beneficial owner has sole voting and
dispositive power as to all Common Shares reflected in the table.
(2) The percent of class is based upon the sum of (i) 12,475,128 Common Shares
outstanding on January 17, 1997, and (ii) the number of Common Shares as to
which the named person has the right to acquire beneficial ownership upon
conversion of Convertible Preferred Stock or upon the exercise of options or
warrants exercisable within 60 days of January 17, 1997.
(3) Individual named in the Summary Compensation Table.
2
<PAGE>
(4) Of such 4,333,241 Common Shares, 1,000,000 Common Shares are held of record
by Mr. Mercer's wife, and 1,000,000 Common Shares are held in the Gerald G.
Mercer 5/30/96 Grantor Annuity Trust, of which Mr. Mercer is the sole
trustee. Mr. Mercer possesses sole voting and dispositive power with respect
to the Common Shares held in the trust.
(5) Of such 229,607 Common Shares, 1,000 Common Shares are held of record by
each of Mr. Roy's two minor children, 100,000 Common Shares are held in the
Revocable Trust Created by Eric P. Roy and 100,000 Common Shares are held in
the Revocable Trust Created by Carol P. Roy, Mr. Roy's wife. Mr. Roy and his
wife are co-trustees of each of the trusts and share voting and dispositive
power with respect to the Common Shares held in such trusts.
(6) Represents ownership of less than 1% of the outstanding Common Shares of the
Company.
(7) Of such 3,000 Common Shares, 500 Common Shares are held of record by Mr.
Gertmenian's wife.
(8) Of such 9,000 Common Shares, 7,500 Common Shares are held by the Keeler
Family Limited Partnership, of which Mr. Keeler and his wife are the general
partners. Mr. Keeler and his wife possess sole voting and investment power
with respect to the Common Shares held by the limited partnership.
(9) Based on information provided to the Company by Aim Capital Management.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to the Code of Regulations of the Company, the Board of Directors
has set the authorized number of directors at six. Each director holds office
for a term expiring at the next Annual Meeting. The Board of Directors proposes
that the six nominees described below be elected as directors, each for a new
term to expire at the 1998 Annual Meeting and until their successors are duly
elected and qualified, or until their earlier death, resignation or removal. The
Board of Directors has no reason to believe that any of the nominees will not
serve if elected, but if any of them should become unavailable to serve as a
director, and if the Board designates a substitute nominee, the persons named in
the accompanying proxy card will vote for the substitute nominee designated by
the Board of Directors.
The following information, as of December 31, 1996, with respect to the
principal occupation or employment, other affiliations and business experience
of each director during the last five years has been furnished to the Company by
each director. Except where indicated, each director has had the same principal
occupation for the last five years.
NOMINEES STANDING FOR ELECTION TO THE BOARD OF DIRECTORS
GERALD G. MERCER
Mr. Mercer, 49, has served as Chairman of the Board, President and Chief
Executive Officer of the Company since founding the Company in 1974. Mr. Mercer
led the negotiations for the successful acquisitions of Wright International
Express, Inc. ("WIE") and Air Continental, Inc. in 1988 and 1989, respectively.
He served as President of the Michigan Association of Aviation Businesses in
1986, and has been a member of the Young Presidents' Organization since 1986.
Mr. Mercer has been a guest speaker at several major universities throughout the
country.
3
<PAGE>
ERIC P. ROY
Mr. Roy, 41, has been a Director of the Company since 1994 and has served as
Chief Financial Officer of the Company since 1986. Mr. Roy was named Executive
Vice President and Chief Operating Officer in 1991. Prior to 1986, Mr. Roy
served as Controller, Treasurer and President of Air Freight Services, Inc., a
controlled group of 12 aviation-related companies. Mr. Roy assisted in
negotiating and arranged financing for the acquisitions of WIE and Air
Continental, Inc. Mr. Roy is a member of the Audit Committee.
ROGER D. BLACKWELL
Dr. Blackwell, 56, has been a Director of the Company since December 1996.
Dr. Blackwell has been a Professor of Marketing at The Ohio State University for
more than five years and is also President and Chief Executive Officer of Roger
D. Blackwell Associates, Inc., a marketing consulting firm in Columbus, Ohio.
Dr. Blackwell is also a director of Abercrombie & Fitch Co., Applied Industrial
Technologies, Checkpoint Systems, Inc., The Flex-Funds, Intimate Brands, Inc.,
Max & Erma's Restaurants, Inc., and Worthington Foods, Inc.. Mr. Blackwell is a
member of the Compensation Committee.
TONY C. CANONIE, JR.
Mr. Canonie, 50, has been a Director of the Company since June 1996. Since
1990, Mr. Canonie has served as Chief Executive Officer of Canonie Ventures
Inc., a venture capital and advisory services firm specializing in the waste
industry. From 1989 to 1990, Mr. Canonie served as Chief Executive Officer of
Grace Environmental Inc., a subsidiary of W.R. Grace & Co. Mr. Canonie is a
member of the Compensation Committee.
RUSSELL M. GERTMENIAN
Mr. Gertmenian, 49, has been a Director of the Company since June 1996. Mr.
Gertmenian has been a partner of Vorys, Sater, Seymour and Pease since 1979 and
currently serves as a member of such firm's Executive Committee. Mr. Gertmenian
is a director of Liqui-Box Corporation, a manufacturer of flexible plastic
packaging systems. Mr. Gertmenian is a member of the Audit Committee.
J.F. KEELER, JR.
Mr. Keeler, 56, has been a Director of the Company since June 1996. Mr.
Keeler is President, Chief Executive Officer and Chairman of the Board of The
Fishel Company, a national utilities construction firm, which he first joined in
1967. Mr. Keeler is a director of Bank One, N.A. and serves on the Board of
Directors of the Columbus Chamber of Commerce. Mr. Keeler is a member of the
Audit and Compensation Committees.
RECOMMENDATION AND VOTE
Under Ohio law and the Company's Code of Regulations, the six nominees for
election to the Board of Directors receiving the greatest number of votes will
be elected.
Common Shares represented by the accompanying proxy card will be voted FOR
the election of the above nominees unless authority to vote for one or more
nominees is withheld. Shareholders may withhold authority to vote for the entire
slate as nominated or, by writing the name of one or more nominees in the space
provided in the proxy card, withhold the authority to vote for such nominee or
nominees. Common Shares as to which the authority to vote is withheld will be
counted for quorum purposes but will not be counted toward the election of
directors, or toward the election of the individual nominees specified on the
form of proxy.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF ITS NOMINEES FOR DIRECTORS, WHICH IS DESIGNATED AS PROPOSAL NO. 1 ON THE
ENCLOSED PROXY CARD.
4
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD
The Board of Directors held one regularly scheduled or special meeting
during the fiscal year ended September 30, 1996 (the "1996 fiscal year"). The
Board of Directors has two standing committees: the Audit Committee and the
Compensation Committee. Each current member of the Board attended at least 75%
of the aggregate of the total number of meetings of the Board of Directors and
of the committees on which he or she served during the 1996 fiscal year or, in
the case of Messrs. Blackwell, Canonie, Gertmenian and Keeler, during the period
in which each was a director.
AUDIT COMMITTEE. The Audit Committee reviews and approves the scope and
results of any outside audit of the Company and the fees therefor and makes
recommendations to the Board of Directors or management concerning auditing and
accounting matters and the selection of outside auditors. The Audit Committee
did not meet during the 1996 fiscal year.
COMPENSATION COMMITTEE. The Compensation Committee reviews, considers and
acts upon matters of salary and other compensation and benefits of all executive
officers and certain other employees of the Company, as well as acts upon all
matters concerning, and exercises such authority as is delegated to it under the
provisions of, any benefit, retirement or pension plan maintained by the Company
for the benefit of such executive officers or other employees. The Compensation
Committee met once during the 1996 fiscal year.
COMPENSATION OF DIRECTORS
Directors who are officers or associates of the Company receive no
additional compensation for their services as members of the Board of Directors
or as members of Board committees. Directors who are not officers or associates
of the Company are paid a quarterly fee of $1,500, as well as additional fees of
$1,000 for each meeting of the Board or of a Board committee attended by such
Director. The Company's Directors are reimbursed for their out-of-pocket
expenses incurred in connection with their service as directors, including
travel expenses. In addition, pursuant to the Company's 1996 Incentive Stock
Plan, each Director receives an annual option to purchase 2,000 Common Shares.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended September 30, 1996 and
1995, compensation awarded or paid to, or earned by, the Company's Chief
Executive Officer during the 1996 fiscal year and the four other most highly
compensated executive officers of the Company (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL SECURITIES
COMPENSATION UNDERLYING
------------------------ OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS SARS (1) COMPENSATION (2)
- ---------------------------------------------- ----------- ---------- ------------ ------------- ----------------
<S> <C> <C> <C> <C> <C>
Gerald G. Mercer ............................. 1996 $ 706,667 $ 593,424 40,000 $ 4,499
Chairman of the Board, 1995 826,376 1,161,333 -- 6,022
President and Chief
Executive Officer
Eric P. Roy .................................. 1996 181,333 157,630 20,000 56,615
Executive Vice President, 1995 129,332 167,646 -- 59,363
Chief Financial Officer and
Chief Operating Officer
Glenn M. Miller .............................. 1996 156,333 168,823 15,000 145,107
Vice President, Operations 1995 129,332 235,681 -- 146,787
Charles A. Renusch (3) ....................... 1996 156,333 155,331 15,000 143,884
Vice President, Sales 1995 129,332 201,232 -- 147,173
Guy S. King .................................. 1996 156,333 133,114 15,000 27,895
Vice President, Sales 1995 129,332 144,857 -- 31,380
</TABLE>
- ------------------------
(1) These numbers represent options for Common Shares granted pursuant to the
Company's 1996 Incentive Stock Plan. See the table under "OPTION GRANTS IN
LAST FISCAL YEAR" for more detailed information on such options.
(2) "All Other Compensation" for the Named Executive Officers consists of
amounts contributed by the Company to the accounts of the Named Executive
Officers under the Savings Plan (as defined below) and, except with respect
to Mr. Mercer, amounts paid pursuant to certain deferred compensation
agreements, which were terminated in connection with the Company's initial
public offering in June 1996. See "--Section 401(k) Savings Plan" and
"Certain Relationships and Related Party Transactions--Deferred Compensation
Agreements."
(3) Mr. Renusch retired from the Company effective as of December 1, 1996.
6
<PAGE>
GRANTS OF OPTIONS
The following table sets forth information concerning individual grants of
options made during the 1996 fiscal year to each of the Named Executive
Officers. The Company has never granted stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF STOCK
NUMBER OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS FOR OPTION TERM
UNDERLYING GRANTED TO EXERCISE (1)
OPTIONS EMPLOYEES IN PRICE ------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) EXPIRATION DATE 5% ($) 10% ($)
- ---------------------------------------- ----------- ------------ --------- ----------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Gerald G. Mercer........................ 6,300(2) 1.2% $15.95 July 11, 2001 $ 27,762 $ 61,347
33,700(2) 6.4 14.50 July 11, 2006 307,309 778,782
Eric P. Roy............................. 20,000(2) 3.8 14.50 July 11, 2006 182,379 462,185
Glenn M. Miller......................... 15,000(2) 2.8 14.50 July 11, 2006 136,785 346,639
Charles A. Renusch...................... 15,000(2) 2.8 14.50 March 1, 1997(3) 6,344 12,688
Guy S. King............................. 15,000(2) 2.8 14.50 July 11, 2006 136,785 346,639
</TABLE>
- ------------------------
(1) The amounts reflected in this table represent certain assumed rates of
appreciation only. Actual realized values, if any, on option exercises will
be dependent on the actual appreciation of the Common Shares of the Company
over the term of the options. There can be no assurances that the Potential
Realizable Values reflected in this table will be achieved.
(2) These options were granted under the Company's 1996 Incentive Stock Plan.
All of such options are fully vested. At the discretion of the Compensation
Committee, such options may have stock-for-stock exercise and tax
withholding features, which allow the holders, in lieu of paying cash for
the exercise price and any tax withholding, to have the Company
commensurably reduce the number of Common Shares to which the holders would
otherwise be entitled upon exercise of such options.
(3) Expires March 1, 1997 which is 90 days after Mr. Renusch's retirement date.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to options exercised
during the 1996 fiscal year and unexercised options held as of the end of the
1996 fiscal year by each of the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
NUMBER OF NUMBER OF SECURITIES OPTIONS
SECURITIES UNDERLYING OPTIONS AT FISCAL YEAR
UNDERLYING AT FISCAL YEAR END (#) END ($)(1)
OPTIONS VALUE REALIZED ------------------------------ ---------------
NAME EXERCISED (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE
- ------------------------------ ----------------- ----------------- ----------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Gerald G. Mercer.............. -- -- 40,000 -- --
Eric P. Roy................... -- -- 20,000 -- --
Glenn M. Miller............... -- -- 15,000 -- --
Charles A. Renusch............ -- -- 15,000 -- --
Guy S. King................... -- -- 15,000 -- --
<CAPTION>
NAME UNEXERCISABLE
- ------------------------------ -----------------
<S> <C>
Gerald G. Mercer.............. --
Eric P. Roy................... --
Glenn M. Miller............... --
Charles A. Renusch............ --
Guy S. King................... --
</TABLE>
- ------------------------
(1) "Value of Unexercised In-the-Money Options at Fiscal Year End" is based upon
the fair market value of the Company's Common Shares on September 30, 1996
($14.25) less the exercise price of in-the-money options at the end of the
1996 fiscal year. None of such options was in-the-money at fiscal year end.
7
<PAGE>
SECTION 401(K) SAVINGS PLAN
The Company maintains a defined contribution savings plan which is intended
to qualify under Section 401(k) of the Code (the "Savings Plan"). Under the
terms of the Savings Plan, all associates who have worked a minimum of six
months for the Company may contribute up to 15% of their annual earnings to the
Savings Plan. The Company may elect, in its discretion, to make a matching
contribution to the Savings Plan. Currently, the Company's annual matching
contributions under the Savings Plan do not exceed 3% of total compensation. In
addition, the Company may elect, in its discretion, to make profit-sharing
contributions on behalf of eligible associates.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
LEASE OF COMPANY HEADQUARTERS
The Company subleases approximately 85,000 square feet of office, warehouse
and hangar space in Columbus, Ohio (including the Company's headquarters)
pursuant to a sublease agreement dated July 1, 1996 with Mr. Mercer. The Company
utilizes 73,000 square feet and subleases the remainder to unaffiliated third
parties. Pursuant to the sublease agreement, the Company pays base rent of
$75,000 per month and makes additional payments, on behalf of Mr. Mercer, to the
Columbus Airport Authority of approximately $9,500 for use of the land upon
which the facility is located. The sublease expires on July 30, 2004. Prior to
the effective date of the current lease, the Company leased the facility from
Mr. Mercer under a previous lease agreement dated June 29, 1988, pursuant to
which the Company paid annual base rent of $10.28 per square foot plus operating
expenses which were approximately an additional $2.41 per square foot. The
Company paid rent of approximately $887,000 in fiscal year 1996 to Mr. Mercer.
The Company believes that the terms of this sublease are no less favorable to
the Company than those reasonably available from unrelated third parties for
comparable space.
STOCK PURCHASE AGREEMENTS
On April 1, 1994, the Company entered into Stock Purchase Agreements with
seven executive officers, including each of the Named Executive Officers other
than Mr. Mercer, pursuant to which the executive officers purchased an aggregate
of 1,484,908 Common Shares for an aggregate purchase price of approximately
$364,000, which was paid by the delivery of promissory notes from the executive
officers. Pursuant to the terms of the Stock Purchase Agreements, the executive
officers could not sell their respective Common Shares to any party other than
the Company. In the event of certain triggering events, such as termination,
death or disability, the Company was obligated to purchase the Common Shares
held by a particular executive officer at a price ranging from the net book
value of the Common Shares held, if less than the original amount paid, to the
appreciation in the book value of the Company from the date the Common Shares
were issued to the date of such triggering event. The Stock Purchase Agreements
provided that in the event the Company were to sell all or substantially all of
its assets, or if a majority of its voting stock were to be sold or otherwise
disposed of by its shareholders, prior to such a triggering event, the executive
officer would receive the fair market value of his Common Shares. As amended,
the Stock Purchase Agreements provided that upon the initial public offering of
the Common Shares the redemption provisions would become inapplicable, and the
executive officers would be able to sell their Common Shares without limitation,
subject to the certain restrictions imposed by the Securities Act of 1933, as
amended (the "Securities Act"), and by the underwriters of the initial public
offering.
Upon the closing of the Company's initial public offering on June 5, 1996,
the Stock Purchase Agreements were terminated, and the promissory notes were
fully repaid.
8
<PAGE>
DEFERRED COMPENSATION AGREEMENTS
Between 1986 and 1991, the Company entered into Deferred Compensation
Agreements with seven executive officers, including all of the Named Executive
Officers other than Mr. Mercer. Pursuant to the Deferred Compensation
Agreements, the Company was obligated to pay these executive officers a certain
percentage of the increase in the Company's net book value. The accrual of
benefits under the Deferred Compensation Agreements was frozen as of March 31,
1994, in connection with the execution of the Stock Purchase Agreements.
Distributions since such date were based on the net book value of the Company as
of March 31, 1994.
In connection with the Company's initial public offering, the seven
executive officers agreed to forego their remaining deferred compensation
payments in the aggregate amount of $3.7 million. The Deferred Compensation
Agreements were terminated as of June 5, 1996 upon the closing of the initial
public offering.
FLOAT CONTROL, INC./CHEXS PARTNERSHIP
On October 24, 1996, the Company acquired Float Control, Inc., which was a
company owned by eight executive officers of the Company and two other
individuals of the Company and which owned an interest in The Check Exchange
System Company (the "CHEXS Partnership"), in a merger transaction. Following
such merger, the Company currently owns 19% of the CHEXS Partnership,
Littlewood, Shain and Company, an unaffiliated third party, owns 11%, and
affiliates of The Huntington National Bank own the remaining interests. The
CHEXS Partnership operates a national net settlement switch utilized by members
of the National Clearing House Association (the "NCHA"), which the CHEXS
Partnership helped to found. The national net settlement switch operates as a
clearinghouse for NCHA member banks, pursuant to which such banks are able to
settle transactions with other NCHA members by utilizing the switch rather than
having to maintain a separate account with each such member. Canceled bank
checks which are settled through the NCHA typically are routed through the
Company's air transportation system.
Pursuant to the merger agreement, Messrs. Mercer, Roy, Miller, Renusch and
King and Messrs. Lincoln L. Rutter, Kendall W. Wright and William R. Sumser, all
of whom are executive officers of the Company, received Common Shares of the
Company having a fair market value at the time of the merger of $1,424,994,
$74,089, $176,690, $122,550, $42,743, $42,743, $42,743 and $19,949,
respectively, in exchange for their shares of Float Control, Inc. In determining
the value of the shares of Float Control, Inc., the Company utilized an
evaluation of the value of the CHEXS Partnership prepared by an unaffiliated
third party evaluation firm. The Company believes that the terms of the merger
were fair to the Company and were no less favorable to the Company than those
reasonably available from unrelated third parties.
COMPANY GUARANTY OF PERSONAL DEBT
Prior to its initial public offering, the Company guaranteed a five-year
bank loan from NBD Bank to Mr. Mercer, the Company's Chairman, President and
Chief Executive Officer, and his wife Adele Mercer, which loan was
collateralized by the Company's facilities in Columbus, which Mr. Mercer owns
and leases to the Company. The highest outstanding balance guaranteed by the
Company during the 1996 fiscal year was $800,000. The Company's guaranty was
terminated prior to the closing of the initial public offering on June 5, 1996.
INDEMNIFICATION AGREEMENTS
In connection with the Company's initial public offering, the Company's
pre-existing shareholders, including each of the Named Executive Officers and
certain other executive officers of the Company, agreed to indemnify the Company
for any corporate level federal income taxes which might be imposed
9
<PAGE>
upon the Company for any period prior to the termination of the Company's S
Corporation status at the time of the closing of the initial public offering in
June 1996. As an S Corporation, the Company was not subject to federal income
taxes at the corporate level, and the Company has no reason to believe that any
such corporate level federal taxes will be imposed for any such period.
In addition, Mr. Mercer has agreed to indemnify the Company with respect to
certain environmental liabilities with respect to underground storage tanks on a
Michigan property formerly owned by Mr. Mercer and leased to the Company. The
Company ceased its operations at this property in 1988, at which time Mr. Mercer
sold the property to an unaffiliated third party. The aggregate amount of any
such liabilities is estimated by the Company to be less than $100,000.
DWARF LEASING
Between January 1992 and February 1996, the Company leased four light twin
engine aircraft from Dwarf Leasing, Inc., a corporation owned by Glenn M.
Miller, Eric P. Roy, Guy S. King, Kendall W. Wright and William R. Sumser, who
are executive officers of the Company. In fiscal 1995, the Company purchased two
of such aircraft and, in February 1996, purchased the remaining aircraft. The
total purchase price of such aircraft was $455,000. The Company believes that
the terms of such leases and such purchases were no less favorable than those
reasonably available from unaffiliated third parties.
PEDIA PALS, INC.
Pedia Pals, Inc. is a company which is engaged in the development of
children-friendly medical devices for use in pediatrics and which is owned, in
part, by certain of the Company's executive officers. In fiscal 1996, the
Company loaned Pedia Pals, Inc. an aggregate of $300,000 for general working
capital purposes, which amount bore interest at the prime rate set by NBD Bank
and which amount was repaid in full prior to the closing of the Company's
initial public offering on June 5, 1996.
LOANS TO CERTAIN EXECUTIVE OFFICERS
Prior to the Company's initial public offering, the Company provided Mr.
Mercer a revolving credit facility to cover personal items paid on behalf of Mr.
Mercer by the Company, including charges for fuel, maintenance and insurance for
personal aircraft. The facility bore interest equal to the Company's cost of
funds. In fiscal 1996, the highest balance outstanding with respect to this
credit facility was $1,052,000. Mr. Mercer repaid the outstanding balance in
full upon the closing of the initial public offering.
In addition, during the 1996 fiscal year the Company paid for certain
renovations of the Columbus, Ohio facility, which is owned by Mr. Mercer and
leased to the Company. The total amount of such renovations was $775,000, which
was included as part of the revolving credit facility described above. Mr.
Mercer reimbursed the Company for such expenditures, plus interest at a floating
rate approximately equal to the Company's borrowing costs, upon the closing of
the Company's initial public offering. Following such renovations, the Company's
lease payments to Mr. Mercer were increased to reflect the expansion of and
improvements to the Company's facility. See "--Lease of Company Headquarters."
The Company loaned Glenn M. Miller $150,000 on December 11, 1995 in
connection with Mr. Miller's purchase of a piece of property for private use.
The loan to Mr. Miller, which was unsecured, matured on December 31, 1997 and
bore interest at the prime rate, as determined by NBD Bank. Mr. Miller repaid
$75,000 of such loan on December 29, 1995 and repaid the balance in connection
with the closing of the Company's initial public offering in June 1996.
NCI PARTNERS
NCI Partners is a partnership of all of the Company's executive officers
except Messrs. Mercer and Strench. The partnership was formed pursuant to a
succession plan to assure that the Company would
10
<PAGE>
continue under current management in the event of the deaths of Mr. Mercer and
his wife, Adele Mercer. Therefore, on December 7, 1992, the partnership acquired
life insurance policies on Mr. Mercer and his wife in the aggregate amount of
$40.0 million, with the partnership as the sole beneficiary. Proceeds from the
life insurance policies would be used to acquire the Common Shares owned by Mr.
Mercer from the Mercers' estate. Premiums for these life insurance policies in
the aggregate amount of approximately $65,000 per year have been paid by the
Company and subsequently reimbursed by NCI Partners. In connection with the
Company's initial public offering, NCI Partners reimbursed the Company for all
such premiums, NCI Partners was dissolved and the policies were canceled.
PERFORMANCE GRAPH
The following line graph compares the percentage change in the Company's
cumulative total shareholder return (as measured by dividing (i) the sum of (A)
the cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the price of the Company's Common
Shares at the end and the beginning of the measurement period; by (ii) the price
of the Company's Common Shares at the beginning of the measurement period)
against the cumulative return of the Russell 2000 and of the NASDAQ Combined
Transportation Index for the period from May 30, 1996 to September 30, 1996. The
Company's Common Shares became registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on May 30, 1996. The
comparison assumes $100 was invested on May 30, 1996 in the Company's Common
Shares and in each of the foregoing indices and assumes reinvestment of
dividends.
RETURN TO SHAREHOLDERS
REINVESTMENT OF DIVIDENDS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AIRNET SYSTEMS, INC. RUSSELL 2000 NASDAQ COMBINED TRANSPORTATION INDEX
<S> <C> <C> <C>
5/30/1996 100 100 100
9/30/1996 101.8 96.1 93.1
</TABLE>
REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THE COMPANY'S PREVIOUS
FILINGS UNDER THE SECURITIES ACT OR THE EXCHANGE ACT THAT MIGHT INCORPORATE
FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THIS REPORT
AND THE GRAPH SET FORTH ABOVE UNDER "ELECTION OF DIRECTORS--PERFORMANCE GRAPH"
SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
11
<PAGE>
The Compensation Committee of the Board of Directors of the Company (the
"Committee") is comprised of three outside directors, none of whom is or was
formerly an officer of the Company. During the 1996 fiscal year, none of the
Company's executive officers served on the board of any entity of which a
Committee member was an executive officer or on the compensation committee of
any entity of which any director of the Company was an executive officer. The
Committee has retained outside legal counsel.
ROLE OF THE COMPENSATION COMMITTEE
Prior to the Company's initial public offering, which was consummated on
June 5, 1996, the Company had no Compensation Committee, and decisions
concerning compensation of executive officers of the Company were made by the
Company's Chief Executive Officer. Following the initial public offering, the
Committee undertook the oversight responsibility for the Company's executive
compensation program. However, with respect to the 1996 fiscal year a
significant portion of the executive compensation packages of the Company's
executive officers were subject to arrangements and understandings made prior to
the Company's initial public offering.
In general, the Company's compensation program for executive officers
consists of three main elements: a base salary, a discretionary bonus and
periodic grants of stock options. The Committee believes that it is important to
pay competitive salaries but also to make a high proportion of the executive
officers' total compensation at risk in order to cause the executive officers to
focus on both the short and long-term interests of the Company's shareholders.
Therefore, the bonus (which permits individual performance to be recognized on
an annual basis, and which is based, in part, on an evaluation of the
contribution made by the executive officer to Company performance) and stock
option grants (which directly tie the executive officer's long-term remuneration
to stock price appreciation realized by the Company's shareholders) are
important components of the overall compensation package.
BASE SALARY
Base salary is reviewed annually and may be adjusted on individual
performance, business unit performance and industry analysis and comparisons. To
date, the Committee has not utilized compensation consultants, but it may do so
in future years to assist the Committee with respect to industry analysis and
comparisons. With respect to the 1996 fiscal year, no specific weight was
assigned to any of the factors mentioned above in determining 1996 base salaries
for the Chief Executive Officer and the other executive officers.
Prior to the Company's initial public offering, the Company had elected to
be treated as an S Corporation under subchapter S of the Internal Revenue Code
of 1986, as amended (the "Code"), for federal tax purposes and comparable state
tax laws. As a result of the S Corporation election, the Company's pre-existing
shareholders were taxed directly on the Company's income, whether or not such
income was distributed, and the Company was not subject to federal income tax at
the corporate level. As a result of the S Corporation status, the Company's
executive officers, and particularly Mr. Mercer, received significant cash
distributions in addition to sizable salaries and bonuses, as reflected in the
Summary Compensation Table for the 1995 fiscal year.
In connection with the Company's initial public offering, which occurred
with only four months remaining in the Company's 1996 fiscal year, the Company's
compensation arrangements with its executive officers were restructured to
reduce the amount of cash compensation, particularly with respect to Mr. Mercer.
In addition, the Company's S Corporation status terminated in connection with
the initial public offering and the income distributions to the pre-existing
shareholders therefore also ceased. Mr. Mercer, as the Company's Chief Executive
Officer, recommended the base salaries for the executive officers for the
remainder of the 1996 fiscal year, including a reduction of more than 50% for
himself, at the time of the initial public offering, and the Compensation
Committee accepted Mr. Mercer's recommendation.
12
<PAGE>
BONUS PLAN
As described above, at the time of the initial public offering, the
Company's compensation arrangements with its executive officers were
restructured. At such time, it was determined that bonuses payable with respect
to the 1996 fiscal year would not exceed 60% of annual base salaries based on
the four months remaining in the Company's 1996 fiscal year upon the completion
of the initial public offering.
Based upon the considerations set forth below, none of which was assigned
specific weight, the Compensation Committee determined to award bonuses to the
Chief Executive Officer and each of the other executive officers, other than Mr.
Strench, equal to the full 60% of annualized base salary for the remaining four
months in the 1996 fiscal year. Mr. Strench joined the Company in April 1996,
shortly before the initial public offering, and therefore did not participate in
the significant pre-offering compensation package. For that reason and because
of his superior performance since joining the Company, the Committee awarded Mr.
Strench a bonus equal to the full 60% of his base salary for the entire period
of his employment during the 1996 fiscal year.
In awarding the full 60% bonuses, the Committee was persuaded by the
following factors: (i) the Company successfully completed its initial public
offering at $14 per share, the top end of the range, and the underwriters
exercised their over-allotment option in full, thereby providing an additional
$11.8 million in capital to the Company; (ii) simultaneously with the initial
public offering, the Company was able to negotiate a new $50.0 million,
unsecured credit facility with NBD Bank with a LIBOR funding option; (iii) the
Company's stock price has remained steady following the initial public offering
and the Company has met or exceeded published analyst projections since going
public; and (iv) the Committee believes that the Company has developed and, to
date, is successfully implementing a growth strategy which includes making
acquisitions and developing the Company's small package division.
STOCK OPTIONS
The purpose of the Company's 1996 Incentive Stock Plan is to attract and
retain key personnel and directors of the Company and to enhance their interest
in the Company's continued success.
The maximum number of Common Shares with respect to which awards may be
granted under the 1996 Incentive Stock Plan is 1,150,000, and the maximum number
which any of the Named Executive Officers may receive is 50,000. In connection
with the initial public offering, the Committee granted 160,000 stock options to
key employees, including the Named Executive Officers, as set forth in the
Options Grants in Last Fiscal Year table. Of the 160,000 options granted, 98,900
were non-qualified stock options and 61,100 were incentive stock options. All of
the options were granted at the closing sale price on the date of grant, as
reported by the Nasdaq National Market, except for 6,300 incentive stock options
granted to the Company's Chief Executive Officer, which were granted at 110% of
the closing sale price on the date of grant, as reported by the Nasdaq National
Market. These grants were based upon subjective analyses of each such key
employee's function, salary, length of service, performance and value to the
Company, as well as the recommendations of the Company's Chief Executive
Officer, with no specific weighting given to any of such factors. With respect
to Mr. Mercer and the other executive officers who were employed by the Company
prior to the initial public offering and who, for the most part, took
significant reductions in the cash portion of their compensation package as a
result of the restructuring in connection with the initial public offering, the
Committee believed that it was important to keep such executives incentivized to
continue their performance on behalf of the Company and its shareholders.
13
<PAGE>
SECTION 162(M) COMPLIANCE
Section 162(m) of the Code places certain restrictions on the amount of
compensation in excess of $1,000,000 which may deducted for each executive
officer. The Company intends to satisfy the requirements of Section 162(m)
should the need arise.
Submitted by the Compensation
Committee
of the Company:
TONY C. CANONIE, JR., CHAIRMAN
ROGER D. BLACKWELL
J.F. KEELER, JR.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Ownership of and transactions in the Common Shares of the Company by
executive officers, directors and persons who own more than 10% of the Common
Shares are required to be reported to the SEC pursuant to Section 16 of the
Securities Exchange Act of 1934. Based solely on a review of the copies of
reports furnished to the Company and representations of certain executive
officers and directors, the Company believes that during fiscal 1996 its
officers, directors and greater than 10% beneficial owners complied with such
filing requirements, except that Mr. Mercer inadvertently filed one report,
relating to one transaction, after its due date.
INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Ernst & Young LLP as the
Company's independent auditors for the 1997 fiscal year. Ernst & Young LLP, a
certified public accounting firm, has served as the Company's independent
auditors since 1989.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting to respond to appropriate questions and to make such statements
as they may desire.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals by shareholders intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Secretary of the Company no
later than October 6, 1997, to be included in the Company's proxy, notice of
meeting and proxy statement relating to such meeting and should be mailed to
AirNet Systems, Inc., 3939 International Gateway, Columbus, Ohio 43219,
Attention: Secretary.
OTHER BUSINESS
The Board of Directors is aware of no other matter that will be presented
for action at the 1997 Annual Meeting. If any other matter requiring a vote of
the shareholders properly comes before the Annual Meeting, the persons
authorized under management proxies will vote and act according to their best
judgments in light of the conditions then prevailing.
ANNUAL REPORT
The Company's 1996 Annual Report to Shareholders containing audited
financial statements for the 1996 fiscal year is being mailed to all
shareholders of record with this Proxy Statement.
14
<PAGE>
[LOGO]
1997 ANNUAL MEETING OF SHAREHOLDERS
THE CONCOURSE HOTEL
4300 INTERNATIONAL GATEWAY
COLUMBUS, OHIO
(614) 237-2515
MARCH 6, 1997 AT 10:00 A.M.
[LOGO]
<PAGE>
AIRNET SYSTEMS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD MARCH 6, 1997
Gerald G. Mercer and Eric P. Roy, or either of them, are hereby appointed
proxies for the undersigned, with full power of substitution, to vote all the
Common Shares of AirNet Systems, Inc. (the "Company") which the undersigned
is entitled to vote, at the Annual Meeting of Shareholders of the Company to
be held on March 6, 1997, and at any adjournment thereof, as directed on the
reverse side of this proxy card and, in their discretion, on any other
matters (none known at the time of solicitation of this proxy) which may
properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS and will be voted
as specified on the reverse side hereof. If not specified, the shares
represented by this proxy will be voted FOR proposal 1.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE HEREOF AND
RETURN IT IN THE ENCLOSED ENVELOPE.
-----------
SEE REVERSE
SIDE
-----------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
ANNUAL MEETING OF SHAREHOLDERS
OF
AIRNET SYSTEMS, INC.
MARCH 6, 1997
10:00 A.M.
CONCOURSE HOTEL
4300 INTERNATIONAL GATEWAY
COLUMBUS, OHIO 43219
<PAGE>
PLEASE MARK YOUR
/X/ VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1 AS DIRECTORS OF THE
COMPANY.
- ------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
- ------------------------------------------------------------------------------
FOR WITHHELD
1. Election of / / / / Nominees: Roger D. Blackwell
Directors. Tony C. Canonie, Jr.
Russell M. Gertmenian
J. F. Keeler, Jr.
For, except vote withheld from the following Gerald G. Mercer
nominee(s): Eric P. Roy
- --------------------------------------------
YES NO
2. I plan to attend the Annual Meeting. / / / /
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS
SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF SIGNER IS A CORPORATION, PLEASE SIGN
THE FULL CORPORATE NAME BY AUTHORIZED OFFICERS. JOINT
OWNERS SHOULD SIGN INDIVIDUALLY.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS, DATED
FEBRUARY 4, 1997, THE PROXY STATEMENT FURNISHED
THEREWITH, AND THE ANNUAL REPORT OF THE COMPANY FOR
THE FISCAL YEAR ENDED SEPTEMBER 30, 1996. ANY PROXY
HERETOFORE GIVEN TO VOTE THE COMMON SHARES WHICH THE
UNDERSIGNED IS ENTITLED TO VOTE AT THE ANNUAL MEETING OF
SHAREHOLDERS IS HEREBY REVOKED.
---------------------------------------------------------
---------------------------------------------------------
SIGNATURE(S) DATE
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
AirNet Systems, Inc.
Please sign, date and return your proxy in the
enclosed envelope.
