<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
</TABLE>
<TABLE>
<C> <S>
AIRNET SYSTEMS, INC.
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
</TABLE>
<PAGE>
AIRNET SYSTEMS, INC.
3939 INTERNATIONAL GATEWAY
COLUMBUS, OHIO 43219
MARCH 29, 2000
------------------------
Dear Fellow Shareholders:
The Annual Meeting of the Shareholders of AirNet Systems, Inc. ("AirNet")
will be held at 10:00 a.m., local time, on Friday, May 12, 2000, at the
Concourse Hotel, 4300 International Gateway, Columbus, Ohio. The enclosed Notice
of Annual Meeting and Proxy Statement contain detailed information about the
business to be conducted at the Annual Meeting.
The Board of Directors has nominated seven directors, each for a term to
expire at the 2001 Annual Meeting. The Board of Directors recommends that you
vote FOR each of the nominees.
In addition to the election of directors, you are being asked to approve an
amendment to Section 1.10 of the Code of Regulations of AirNet to permit the
appointment of shareholder proxies in any manner permitted under Ohio law. The
Board of Directors recommends that you vote FOR this amendment.
On behalf of the Board of Directors and management, we cordially invite you
to attend the Annual Meeting. Whether or not you plan to attend the Annual
Meeting, the prompt return of your proxy card in the enclosed return envelope
will save AirNet additional expenses of solicitation and will help ensure that
as many common shares as possible are represented.
Sincerely,
Gerald G. Mercer
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
[LOGO]
AIRNET SYSTEMS, INC.
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, MAY 12, 2000
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of AirNet
Systems, Inc. ("AirNet") will be held on Friday, May 12, 2000, at the Concourse
Hotel, 4300 International Gateway, Columbus, Ohio, at 10:00 a.m., local time,
for the following purposes:
1. To elect seven directors, each for a term to expire at the 2001 Annual
Meeting.
2. To consider and vote upon a proposed amendment to Section 1.10 of
AirNet's Code of Regulations to permit the appointment of shareholder
proxies in any manner permitted under Ohio law.
3. To transact any other business which properly comes before the Annual
Meeting or any adjournment.
The close of business on March 21, 2000, has been fixed by the Board of
Directors of AirNet as the record date for determining the shareholders entitled
to notice of, and to vote at, the Annual Meeting.
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 AirNet in writing that you wish to vote your common shares in
person, your proxy will not be used.
By Order of the Board of Directors
William R. Sumser,
SECRETARY
AirNet Systems, Inc.
3939 International Gateway
Columbus, Ohio 43219
March 29, 2000
<PAGE>
AIRNET SYSTEMS, INC.
3939 INTERNATIONAL GATEWAY
COLUMBUS, OHIO 43219
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, MAY 12, 2000
This Proxy Statement is furnished to the shareholders of AirNet
Systems, Inc. ("AirNet") in connection with the solicitation on behalf of the
Board of Directors of AirNet of proxies for use at the Annual Meeting of
Shareholders to be held on Friday, May 12, 2000, at the Concourse Hotel, 4300
International Gateway, Columbus, Ohio, at 10:00 a.m., local time, or any
adjournment, for the purposes described in the accompanying Notice of Annual
Meeting of Shareholders.
This Proxy Statement and the accompanying proxy card are first being mailed
on or about March 29, 2000, to all shareholders of AirNet.
GENERAL
Only holders of record of AirNet common shares at the close of business on
March 21, 2000 (the "Record Date"), will be entitled to vote at the Annual
Meeting. As of the Record Date, there were 11,419,862 common shares outstanding.
Each common share entitles the holder to one vote. A quorum for the Annual
Meeting is a majority of the common shares outstanding. There is no cumulative
voting. Other than the common shares, there are no voting securities of AirNet
outstanding.
Common shares represented by signed proxies that are returned to AirNet 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' common
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 those common shares and may vote them on routine matters,
which, under such rules, typically include the election of directors, but
broker/dealers may not vote the common shares on other matters, which typically
include significant corporate transactions such as mergers and acquisitions,
amendments to the charter documents of AirNet and the approval of stock
compensation plans, without specific instructions from the customer who owns the
common 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. Abstentions and broker non-votes will be counted for
quorum purposes.
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
AirNet, submitting a subsequently-dated proxy card or by attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting will not, in and
of itself, constitute revocation of the proxy.
The expense of preparing, printing and mailing proxy materials to the AirNet
shareholders will be borne by AirNet. In addition, proxies may be solicited
personally or by telephone by officers or associates of AirNet, none of whom
will receive additional compensation therefor. AirNet will reimburse brokerage
houses and other nominees for their reasonable expenses in forwarding proxy
materials to beneficial owners of the common shares.
BENEFICIAL OWNERSHIP OF COMMON SHARES
The following table furnishes information regarding the number and
percentage of outstanding common shares beneficially owned by (i) each current
director of AirNet; (ii) each of the nominees for election as a director;
(iii) each executive officer of AirNet named in the Summary Compensation Table;
(iv) all current directors and executive officers of AirNet as a group; and
(v) each person known by AirNet to own beneficially more than five percent of
the common shares, in each case, as of March 21, 2000
<PAGE>
(except as otherwise noted). The address of each of the current executive
officers and directors is c/o AirNet, 3939 International Gateway, Columbus, Ohio
43219.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
--------------------------------------------------
COMMON
SHARES
WHICH CAN BE
ACQUIRED UPON
EXERCISE OF
OPTIONS
NAME OF COMMON SHARES EXERCISABLE PERCENT OF
BENEFICIAL OWNER PRESENTLY HELD WITHIN 60 DAYS TOTAL CLASS (2)
---------------- -------------- -------------- ---------- ----------
<S> <C> <C> <C> <C>
Gerald G. Mercer (3)................. 3,166,048 106,000 3,272,048 28.4%
Glenn M. Miller (3).................. 314,561 25,000 339,561 3.0%
Guy S. King (3)...................... 91,087 26,120 117,207 1.0%
William R. Sumser (3)................ 63,115(4) 26,720 89,835 (5)
Kendall W. Wright (3)................ 27,381(6) 2,520 29,901 (5)
Roger D. Blackwell................... 12,700 11,600 24,300 (5)
J.F. Keeler, Jr...................... 10,185(7) 11,600 21,785 (5)
Tony C. Canonie, Jr. (8)............. 10,000 11,600 21,600 (5)
Russell M. Gertmenian................ 5,000(9) 11,600 16,600 (5)
James E. Riddle...................... 5,000 4,000 9,000 (5)
Joel E. Biggerstaff.................. 0 22,000 22,000 (5)
David P. Lauer....................... 0 4,800 4,800 (5)
All current directors and executive
officers as a group (15 persons)... 3,706,176 292,980 3,999,156 34.1%
Wellington Management Company, LLP... 984,900(10) -- 984,900(10) 8.6%
75 State Street
Boston, MA 02109
Wanger Asset Management, L.P......... 942,000(11) -- 942,000(11) 8.2%
Wanger Asset Management, Ltd.
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Royce & Associates, Inc.............. 852,500(12) -- 852,500(12) 7.4%
1414 Avenue of the Americas
New York, NY 10019
Fleet Boston Corporation............. 604,995(13) -- 604,995(13) 5.2%
One Federal Street
Boston, MA 02110
</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) 11,419,862 common shares
outstanding on March 21, 2000 and (ii) the number of common shares as to
which the named person has the right to acquire beneficial ownership upon
the exercise of options exercisable within 60 days of March 21, 2000.
(3) Individual named in the Summary Compensation Table.
(4) Of these 63,115 common shares, 5,000 common shares are held by
Mr. Sumser's wife.
(5) Represents ownership of less than 1% of the outstanding common shares.
(6) Of these 27,381 common shares, 4,829 common shares are held by
Mr. Wright's wife.
2
<PAGE>
(7) Of these 10,185 common shares, 7,500 common shares are held by the Keeler
Family Limited Partnership, of which Mr. Keeler is the sole general
partner. Mr. Keeler possesses sole voting and dispositive power as to the
common shares held by the limited partnership.
(8) Mr. Canonie has informed AirNet that he will not stand for re-election at
the Annual Meeting.
(9) Of these 5,000 common shares, 2,100 common shares are held of record by
Mr. Gertmenian's wife and 500 common shares are held by Mr. Gertmenian's
son.
(10) Based on information contained in filings with the SEC (the latest of
which is dated February 9, 2000), Wellington Management Company, LLP, a
registered investment advisor ("Wellington"), may be deemed to
beneficially own, as of December 31, 1999, 984,900 common shares held of
record by Wellington clients. The filing indicates that Wellington has
shared voting power over 716,800 of these 984,900 common shares and shared
dispositive power over all 984,900 common shares.
(11) Based on information contained in filings with the SEC (the latest of
which is dated February 11, 2000), Wanger Asset Management, L.P., a
registered investment advisor ("WAM"), and its general partner Wanger
Asset Management, Ltd. ("WAM LTD") beneficially owned 942,000 common
shares as of December 31, 1999 and had shared voting and dispositive power
with respect to these common shares. All of these common shares were
acquired on behalf of discretionary clients of WAM, including Acorn
Investment Trust, a registered investment company having the same address
as WAM. The filing indicates that Acorn Investment Trust beneficially
owned 860,000 common shares as of December 31, 1999 and has shared voting
and dispositive power with respect to these common shares.
(12) Based on information contained in filings with the SEC (the latest of
which is dated February 9, 2000), Royce & Associates, Inc., a registered
investment advisor ("Royce"), beneficially owned 852,500 common shares and
Royce Management Company, also a registered investment advisor ("RMC"),
beneficially owned 40,000 common shares, in each case as of December 31,
1999. The filing indicates that each of Royce and RMC has sole voting and
dispositive power as to the common shares beneficially owned by it.
Charles M. Royce may be deemed a controlling person of Royce and RMC and
as such, may be deemed to beneficially own the common shares beneficially
owned by Royce and RMC. The filing indicates that Mr. Royce does not own
any common shares outside of Royce and RMC and disclaims beneficial
ownership of the common shares held by Royce and RMC.
(13) Based on information contained in filings with the SEC (the latest of
which is dated February 14, 2000), Fleet Boston Corporation ("Fleet") may
be deemed to beneficially own, as of December 31, 1999, 604,995 common
shares. The filing also indicates that Fleet has sole voting power over
405,395 of these 604,995 common shares and sole dispositive power over all
604,995 common shares. The common shares were acquired by three of Fleet's
subsidiaries, Fleet Trust & Investment Services Company, Fleet Investment
Advisors and Fleet National Bank.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to the Code of Regulations of AirNet, the Board of Directors has
set the authorized number of directors at seven. Each director holds office for
a term expiring at the next annual meeting. The Board of Directors proposes that
the seven nominees identified below be elected as directors, each for a new term
to expire at the 2001 Annual Meeting and until his successor is duly elected and
qualified, or until his 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.
3
<PAGE>
The following information, as of March 21, 2000, concerning the age,
principal occupation or employment, other affiliations and business experience
of each director during the last five years has been furnished to AirNet 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, 52, has served as Chairman of the Board and Chief Executive
Officer of AirNet since founding the company in 1974. He held the position of
President of AirNet from its inception until August 1999. Effective April 1,
2000, Mr. Mercer will step down as Chief Executive Officer but continue as
Chairman of the Board. Mr. Mercer won Ohio's "Entrepreneur of the Year" Award in
1996 and has been a member of the Young Presidents' Organization since 1986.
JOEL E. BIGGERSTAFF
Mr. Biggerstaff, 43, has served as AirNet's President and Chief Operating
Officer since August 1999. He will replace Mr. Mercer as Chief Executive
Officer, effective April 1, 2000. Mr. Biggerstaff will be nominated at the
Annual Meeting for election as a director to serve as the successor to
Mr. Canonie who has decided not to stand for re-election. Prior to joining
AirNet, Mr. Biggerstaff served as President of the Southern Region of Corporate
Express Delivery Systems, a national expedited distribution service, from
February 1998 through July 1999. From September 1996 through February 1998,
Mr. Biggerstaff provided transportation consulting services and prior to
September 1996, he held various positions within Ryder System, Inc., including
Regional Vice President and General Manager.
ROGER D. BLACKWELL
Dr. Blackwell, 59, a Director of AirNet since 1996, is a Professor of
Marketing at The Ohio State University 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 Intimate Brands, Inc.,
Checkpoint Systems, Inc., Anthony and Sylvan, Inc., Max & Erma's
Restaurants, Inc., Applied Industrial Technologies, Inc., Cheryl & Co., The Banc
Stock Group and The Flex-Funds. Dr. Blackwell serves on the Compensation and
Audit Committees of the AirNet Board of Directors.
RUSSELL M. GERTMENIAN
Mr. Gertmenian, 52, a Director of AirNet since 1996, has been a partner with
Vorys, Sater, Seymour and Pease LLP since 1979 and currently serves as a member
of the firm's Executive Committee. Vorys, Sater, Seymour and Pease LLP rendered
legal services to AirNet during the 1999 fiscal year and continues to do so.
Mr. Gertmenian is also a director of Liqui-Box Corporation and Abercrombie &
Fitch Co. Mr. Gertmenian serves on the Audit Committee of the AirNet Board of
Directors.
J.F. KEELER, JR.
Mr. Keeler, 59, a Director of AirNet since 1996, is Chairman and Chief
Executive Officer of The Fishel Company, a national utilities construction firm,
which he first joined in 1967. Mr. Keeler is also a director of Metatec
Corporation and serves on the Bank One of Ohio Board of Advisors. Mr. Keeler
serves on the Compensation and Audit Committees of the AirNet Board of
Directors.
4
<PAGE>
DAVID P. LAUER
Mr. Lauer, 56, a Director of AirNet since 1999, has served as the President
of Bank One Columbus since June 1997. Prior to June 1997, Mr. Lauer was a
partner with Deloitte and Touche LLP for 30 years, serving as the Columbus
Office Managing Partner from July 1995 through June 1997. Mr. Lauer serves on
the Audit Committee of the AirNet Board of Directors.
JAMES E. RIDDLE
Mr. Riddle, 58, a Director of AirNet since February 2000, is President of
J.E. Riddle Enterprises, LLC, an investment and consulting firm. Mr. Riddle
served as the Chief Operating Officer and a member of the Board of Directors of
Norrell Corporation and as President of Norrell Services, Inc. from 1997 to
1999. Prior to joining Norrell, Mr. Riddle served Ryder System, Inc. in various
positions, including President of Ryder Logistics International from 1995 to
1997. In addition, Mr. Riddle served 26 years at Xerox Corporation in various
positions including Vice President of Marketing and Vice President of Operations
in the United States and Europe. Mr. Riddle also serves on the Board of
Directors of Danka Business Systems, PLC.
RECOMMENDATION AND VOTE
Under Ohio law and AirNet's Code of Regulations, the seven 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 Board of Director's 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 one or more nominees. Common shares as to which the authority to vote is
withheld and broker non-votes will not be counted toward the election of
directors, or toward the election of the individual nominees specified on the
form of proxy.
THE AIRNET BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF ITS NOMINEES AS DIRECTORS.
COMMITTEES AND MEETINGS OF THE BOARD
The Board of Directors held eight regularly scheduled or special meetings
and six telephonic meetings during the fiscal year ended December 31, 1999. The
Board of Directors has standing Audit and Compensation Committees. There is no
standing nominating committee or committee performing similar functions. In
1999, each incumbent director attended at least 75% of the aggregate of the
total number of meetings held by the Board of Directors during the period he
served as a director, and the total number of meetings held by all committees
during which he served as a committee member.
AUDIT COMMITTEE. The Audit Committee reviews and approves the scope and
results of any outside audit of AirNet 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
held four meetings during 1999.
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 associates of AirNet. The Compensation Committee also
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 AirNet for the benefit of executive officers or other associates.
The Compensation Committee held four meetings and two telephonic meetings during
1999.
5
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are officers or associates of AirNet receive no additional
compensation for serving as members of the Board of Directors or as members of
Board committees. Directors who are not officers or associates of AirNet
("Non-Employee Directors") are paid a quarterly fee of $3,500. Each Non-Employee
Director receives a fee of $1,500 for each board meeting attended and $500 for
each telephonic meeting attended. In addition, each committee member, other than
the committee chairman, receives a fee of $1,000 for each committee meeting
attended and the committee chairman receives $2,000. Each committee member
receives $500 and the committee chairman receives $750 for each telephonic
committee meeting attended. AirNet's directors are reimbursed for out-of-pocket
expenses incurred in connection with their service as directors, including
travel expenses.
Effective May 27, 1998, AirNet established the AirNet Systems, Inc. Director
Deferred Compensation Plan (the "Director Plan"). Voluntary participation in the
Director Plan enables a director of AirNet or its subsidiaries, to defer all or
a part of his director's fees, including federal income tax thereon. Such
deferred fees may be credited to (1) a cash account where the funds will earn
interest at the rate prescribed in the Director Plan or (2) a stock account
where the funds will be converted into common shares. Distribution of the
deferred funds is made in a single lump sum payment or in equal annual
installments over a period of not more than ten years commencing within 30 days
of the earlier of (a) the date specified by a director at the time a deferral
election is made or (b) the date the 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 the plan administrator.
On May 7, 1997, each individual then serving as a Non-Employee Director was
granted an immediately exercisable option to purchase 2,000 common shares. On
August 19, 1998, each individual then serving as a Non-Employee Director was
granted an option to purchase 20,000 common shares. These options vest in five
equal annual installments beginning on the grant date. Each individual serving
as a Non-Employee Director on August 19, 1999, was granted a discretionary
option to purchase 4,000 common shares. These options vest in five equal annual
installments beginning on the grant date.
Any individual becoming a Non-Employee Director after August 19, 1998 is
automatically granted an option to purchase 20,000 common shares effective on
the date of his appointment or election. These options vest in five equal annual
installments.
Each option granted to a Non-Employee Director on or after August 18, 1999,
will become fully exercisable if the Director retires from service, becomes
totally disabled or dies, or upon the occurrence of specified change-in-control
events.
The exercise price of each option granted to a Non-Employee Director is
equal to the fair market value of the underlying common shares on the date of
grant. Each option granted to a Non-Employee Director has a ten-year term. If a
Non-Employee Director ceases to be a member of the Board of Directors of AirNet,
his options must be exercised within three months (12 months in the case of a
Non-Employee Director who becomes disabled or dies) after the date his service
ends. 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.
PROPOSAL NO. 2
PROPOSED AMENDMENT TO SECTION 1.10 OF AIRNET'S CODE OF
REGULATIONS TO PERMIT APPOINTMENT OF SHAREHOLDER
PROXIES IN ANY MANNER PERMITTED UNDER OHIO LAW
Section 1.10 of AirNet's Code of Regulations presently permits a shareholder
to vote by proxy, if the proxy is in writing and executed by the shareholder.
Effective September 13, 1999, the Ohio General Corporation Law was amended to
expand the methods a shareholder can use to appoint a proxy. The Ohio
6
<PAGE>
General Corporation Law now permits a shareholder to appoint a proxy by any
verifiable communication authorized by the person granting the proxy. Any
transmission that creates a record capable of authentication that appears to
have been transmitted by the person appointing a proxy is permitted, and would
include electronic mail and telephone, as well as traditional written proxies.
AirNet's Code of Regulations currently does not provide for a shareholder to
appoint a proxy by electronic mail, telephone or other electronic media. The
amendment to Section 1.10 would expressly authorize the shareholders to utilize
the more modern forms of proxy appointment now permitted by the Ohio General
Corporation Law.
The Board of Directors has approved, and recommends that the shareholders of
AirNet adopt, an amendment to Section 1.10 of the Code of Regulations to permit
a shareholder to use electronic mail, telephone and other methods to appoint a
proxy. The proposed amendment would provide that a shareholder could appoint a
proxy by any method authorized by Ohio law. The text of Section 1.10 would read
as follows:
SECTION 1.10. PROXIES. At meetings of the shareholders, any
shareholder of record entitled to vote thereat may be represented
and may vote by proxy or proxies appointed by an instrument in
writing signed by such shareholder or appointed in any other
manner permitted by Ohio law. Any such instrument in writing or
record of any such appointment shall be filed with or received by
the secretary of the meeting before the person holding such proxy
shall be allowed to vote thereunder. No appointment of a proxy is
valid after the expiration of eleven months after it is made
unless the writing or other communication which appoints such
proxy specifies the date on which it is to expire or the length of
time it is to continue in force.
Adoption of the proposed amendment is being sought because the Ohio General
Corporation Law and the AirNet Code of Regulations require the adoption by the
shareholders of any amendment to the Code of Regulations. If adopted by the
shareholders, the proposed amendment to the Code of Regulations will become
effective immediately without any additional action by AirNet.
RECOMMENDATION AND VOTE
The affirmative vote of the holders of not less than a majority of AirNet's
outstanding common shares is required to amend the Code of Regulations. Under
Ohio law and AirNet's Code of Regulations, abstentions and broker non-votes are
counted as present; and the effect of an abstention or broker non-vote is the
same as a "no" vote. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF
THE AMENDMENT TO SECTION 1.10 OF AIRNET'S CODE OF REGULATIONS. Unless otherwise
indicated, the persons named in the proxy cards will vote all proxies in favor
of adopting the proposed amendment.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the last three fiscal years, the cash
compensation and other benefits paid or provided by AirNet to its Chief
Executive Officer and the four other most highly compensated executive officers
of AirNet.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION AWARDS
---------------------- -------------
COMMON SHARES ALL OTHER
YEAR ENDED UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION DECEMBER 31, SALARY ($) BONUS ($) OPTIONS (#) ($)
- --------------------------- ------------ ---------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Gerald G. Mercer 1999 $341,200 -- 20,000 $4,800(1)
Chairman of the Board and Chief 1998 421,619 $200,000 100,000 4,800
Executive Officer 1997 410,776 -- 20,000 4,750
William R. Sumser 1999 210,000 25,000 15,000 4,800(1)
Chief Financial Officer, 1998 210,808 30,000 -- 4,800
Treasurer, Vice President, 1997 205,385 -- 8,000 4,750
Finance and Secretary (2)
Guy S. King 1999 210,000 -- 12,000 4,800(1)
Vice President, Express Sales 1998 210,808 -- -- 4,800
1997 205,385 -- 8,000 4,750
Glenn M. Miller 1999 210,000 -- 10,000 4,800(1)
Vice President, Operations 1998 210,808 -- -- 4,800
1997 205,385 -- 8,000 4,750
Kendall W. Wright 1999 210,000 -- 9,000 4,800(1)
Vice President, Bank Sales 1998 210,808 -- -- 4,800
1997 205,385 -- 8,000 4,750
</TABLE>
- ------------------------
(1) "All Other Compensation" consists of amounts contributed by AirNet to their
accounts under the AirNet Systems, Inc. Retirement Savings Plan.
(2) Mr. Sumser became Treasurer in March 1999 and Chief Financial Officer in
January 2000.
GRANTS OF OPTIONS
The following table summarizes information concerning individual grants of
options under the AirNet Systems, Inc. Amended and Restated 1996 Incentive Stock
Plan (the "Incentive Stock Plan") during the 1999 fiscal year to each of the
named executive officers. AirNet has never granted stock appreciation rights.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF SHARE
COMMON SHARES % OF TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (2)
OPTIONS ASSOCIATES IN PRICE EXPIRATION -----------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- -------------- ------------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gerald G. Mercer......... 9,500 2.2% $10.45 6/8/04 $27,428 $ 60,608
10,500 2.5 9.50 6/8/09 62,732 158,976
William R. Sumser........ 15,000 3.5 9.50 6/8/09 89,617 227,108
Guy S. King.............. 12,000 2.8 9.50 6/8/09 71,694 181,687
Glenn M. Miller.......... 10,000 2.4 9.50 6/8/09 59,745 151,406
Kendall W. Wright........ 9,000 2.1 9.50 6/8/09 53,770 136,265
</TABLE>
- ------------------------
(1) Options were granted on June 8, 1999. Options vest 20% at grant date and 20%
annually thereafter. At the discretion of the Compensation Committee, these
options may have stock-for-stock exercise and tax withholding features,
which allow the holder, in lieu of paying cash for the exercise price and
any tax withholding, to have AirNet commensurably reduce the number of
common shares which the holder would otherwise receive upon exercise of the
options.
(2) The amounts reflected in this table represents the specified assumed rates
of appreciation only. Actual realized values, if any, on option exercises
will depend on the actual appreciation of the AirNet common shares over the
term of each option. There can be no assurances that the potential
realizable values reflected in this table will be achieved.
OPTION EXERCISES AND HOLDINGS
The following table summarizes information concerning unexercised options
held as of December 31, 1999 by each of the named executive officers. None of
these executive officers exercised options during the fiscal 1999 year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF COMMON
SHARES UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
COMMON SHARES AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)
UNDERLYING OPTIONS VALUE --------------------------- ---------------------------
NAME EXERCISED (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gerald G. Mercer..... 0 N/A 104,000 80,000 -- --
William R. Sumser.... 0 N/A 26,000 12,000 -- --
Guy S. King.......... 0 N/A 25,400 9,600 -- --
Glenn M. Miler....... 0 N/A 25,000 8,000 -- --
Kendall W. Wright.... 0 N/A 1,800 7,200 -- --
</TABLE>
9
<PAGE>
PERFORMANCE GRAPH
The following line graph compares the percentage change in the cumulative
total shareholder return on AirNet's common shares with the cumulative return of
the Russell 2000 and the NYSE Combined Transportation Index ("NYSE
Transportation") for the period from May 30, 1996 to December 31, 1999. The
AirNet 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 AirNet common shares and
in each of the foregoing indices and assumes reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANS RUSSELL 2000 NYSE TRANSPORTATION
<S> <C> <C> <C>
31-May-96 100 100 100
31-Dec-96 96.7 100.2 105.5
31-Dec-97 141 120.8 139.6
31-Dec-98 94.3 116.6 144.5
31-Dec-99 46.3 139.5 139.8
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN AIRNET'S PREVIOUS
FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE EXCHANGE ACT THAT MIGHT
INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART,
THIS REPORT AND THE GRAPH INCLUDED UNDER "PERFORMANCE GRAPH" SHALL NOT BE
INCORPORATED BY REFERENCE INTO ANY FILINGS.
The Compensation Committee of the Board of Directors of AirNet (the
"Committee") is comprised of three outside directors, none of whom is or were
formerly an officer of AirNet. The Committee has retained outside legal counsel.
ROLE OF THE COMPENSATION COMMITTEE
In general, AirNet'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 large proportion of the executive officers' total
compensation at risk in order to cause the executive officers to focus on both
the short-term and long-term interests of AirNet's shareholders. Therefore,
bonuses (which permit individual performance to be
10
<PAGE>
recognized on an annual basis, and which are based, in part, on a subjective
evaluation of the contribution made by the executive officer to AirNet
performance) and stock option grants (which directly tie the executive officer's
long-term remuneration to stock price appreciation realized by AirNet's
shareholders) are important components of the overall compensation package.
Although the Committee did not employ outside resources in 1999 in
evaluating AirNet compensation packages, the Committee did continue to utilize
data obtained from a 1998 report by Plante & Moran, which included a
comprehensive review of AirNet's compensation policy.
BASE SALARY
Base salaries are reviewed annually and may be adjusted based on individual
performance, business unit performance and industry analysis and comparisons.
The Committee used information obtained from its compensation consultants, as
mentioned above, in setting base salaries in 1998 and determining not to
increase them in 1999.
In conjunction with the employment of Mr. Biggerstaff as President and Chief
Operating Officer in 1999, Mr. Mercer's base salary was reduced to reflect the
transfer of the duties of the president to Mr. Biggerstaff. Mr. Biggerstaff's
base salary was set based on information obtained from the Plante & Moran study
and then current industry data. The comparative industry data may not include
the compensation paid by all of the companies that are included in the NYSE
Combined Transportation Index which is used for comparative purposes in the
Performance Graph.
BONUS PLAN
Bonuses are awarded at the discretion of the Committee. Based on AirNet's
1999 operating performance, the Committee determined not to grant a
discretionary bonus to Mr. Mercer or any executive officer other than
Mr. Sumser. In awarding Mr. Sumser's bonus, the Committee focused on his
additional duties, efforts and achievements as Acting Chief Financial Officer, a
role he assumed in January 1999.
As part of the employment arrangement between Mr. Biggerstaff and AirNet,
Mr. Biggerstaff was guaranteed at $30,000 bonus for his 1999 efforts. However,
Mr. Biggerstaff elected to forgo the 1999 cash bonus in light of the AirNet's
operating performance.
STOCK OPTIONS
The purpose of the Incentive Stock Plan is to attract and retain key
personnel and directors of AirNet and to enhance their interest in AirNet's
continued success. The maximum number of AirNet common shares with respect to
which awards may be granted under the Incentive Stock Plan is 1,650,000, and the
maximum number with respect to which any executive officer named in the Summary
Compensation Table may receive stock options in any one year is 200,000.
During 1999, AirNet granted stock options to all of the executive officers,
including those shown in the Summary Compensation Table. These grants were based
upon subjective analyses of each officer's function, salary, performance and
value to AirNet, with no specific weighting given to any specific factor. In
addition, AirNet granted stock options covering 80,000 commons shares to
Mr. Biggerstaff in connection with his employment by AirNet.
11
<PAGE>
SECTION 162(m) COMPLIANCE
Internal Revenue Code Section 162(m) generally prohibits AirNet from
deducting non-performance-based compensation in excess of $1,000,000 per taxable
year paid to the Chief Executive Officer and the other four most highly
compensated executive officers required to be named in the Proxy Statement.
AirNet may continue to deduct compensation paid to these covered executive
officers if the payment of such compensation qualifies for an exception,
including an exception for certain performance-based compensation.
The Committee believes that Section 162(m) should not cause AirNet to be
denied a deduction for 1999 compensation paid to the executive officers of
AirNet. The Committee will continue to work to structure components of its
executive compensation package to achieve maximum deductibility under
Section 162(m) while at the same time considering the goals of its executive
compensation philosophy.
SUBMITTED BY THE COMPENSATION
COMMITTEE OF AIRNET:
TONY C. CANONIE, JR., CHAIRMAN
ROGER D. BLACKWELL
J.F. KEELER, JR.
TRANSACTIONS WITH MANAGEMENT
In connection with AirNet's initial public offering in 1996, the individuals
who were AirNet shareholders prior to that offering, including each of the
executive officers named in the Summary Compensation Table, and certain other
executive officers of AirNet agreed to indemnify AirNet for any corporate level
federal income taxes which might be imposed upon AirNet for any period prior to
the termination of AirNet's S Corporation status at the time of the closing of
the initial public offering in June 1996. As an S Corporation, AirNet was not
subject to federal income taxes at the corporate level, and AirNet 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 AirNet for certain
environmental liabilities related to underground storage tanks on a Michigan
property formerly owned by Mr. Mercer and leased to AirNet. AirNet 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 AirNet to be less than $100,000.
INDEPENDENT AUDITORS
AirNet engaged Ernst & Young LLP as its independent auditors to audit its
consolidated financial statements for the 1999 fiscal year. Ernst & Young LLP
has served as AirNet's independent auditors since 1989. AirNet's Audit Committee
will make its selection of AirNet's independent auditors for the 2000 fiscal
year at its next meeting, which will be held after the Annual Meeting.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting to respond to appropriate questions and to make such statements
as he may desire.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
AirNet shareholders seeking to bring business before the 2001 Annual Meeting
of Shareholders, or to nominate candidates for election as directors at that
Annual Meeting of Shareholders, must provide timely notice thereof in writing.
To be timely, a shareholder's notice must be delivered to or mailed and received
at the principal executive offices of AirNet not less than 60 days nor more than
90 days prior to the
12
<PAGE>
meeting. However, if less than 70 days' notice or prior public disclosure of the
date of the 2001 Annual Meeting is given or made to the shareholders, notice by
the shareholder to be timely must be received no later than the close of
business on the tenth day following the day on which the notice of the date of
the 2001 Annual Meeting was mailed or the public disclosure was made. The AirNet
Code of Regulations specifies certain requirements for a shareholder's notice to
be in proper written form. The foregoing requirements will not, however, prevent
any shareholder from submitting a shareholder proposal in compliance with
Rule 14a-8 of the Exchange Act. Pursuant to Rule 14a-8, proposals by
shareholders intended to be presented at the 2001 Annual Meeting of Shareholders
must be in the form specified in that Rule and received by the Secretary of
AirNet no later than November 29, 2000, to be included in AirNet's proxy card,
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
As of the date of this Proxy Statement, the Board of Directors knows of no
other matter that will be presented for action by the shareholders at the 2000
Annual Meeting. However, if any other matter is properly presented at 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
A copy of AirNet's 1999 Annual Report to Shareholders is being mailed
herewith.
The form of proxy card and the Proxy Statement have been approved by the
Board of Directors of AirNet and are being mailed and delivered to shareholders
by its authority.
13
<PAGE>
REVOCABLE PROXY
AIRNET SYSTEMS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 12, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of AirNet Systems, Inc., an Ohio
corporation (the "Company"), hereby constitutes and appoints Gerald G.
Mercer, the Proxy of the undersigned, with full power of substitution, to
attend the Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held on May 12, 2000, at the Concourse Hotel, 4300
International Gateway, Columbus, Ohio, at 10:00 a.m., local time, and any
adjournment(s) thereof, and to vote all of the common shares of the Company
which the undersigned is entitled to vote at such Annual Meeting or at any
adjournment(s) thereof:
(change of address/comments)
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
ANNUAL MEETING OF SHAREHOLDERS
OF
AIRNET SYSTEMS, INC.
MAY 12, 2000
10:00 A.M.
CONCOURSE HOTEL
4300 INTERNATIONAL GATEWAY
COLUMBUS, OHIO
<PAGE>
PLEASE MARK
/X/ VOTES AS IN | 7713
THIS EXAMPLE -----
THE COMMON SHARES REPRESENTED BY THIS PROXY CARD, WHEN PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO ELECTION IS MADE, THE
COMMON SHARES PRESENTED BY THIS PROXY CARD WILL BE VOTED FOR PROPOSAL 1 AND
FOR PROPOSAL 2. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE ANNUAL
MEETING OR ANY ADJOURNMENT OR IF A NOMINEE FOR ELECTION AS A DIRECTOR NAMED
IN THE PROXY STATEMENT IS UNABLE TO SERVE OR FOR GOOD CAUSE, WILL NOT SERVE,
THE COMMON SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED IN THE
DISCRETION OF THE PROXY ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEE(S) AS
THE DIRECTORS MAY RECOMMEND.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
- -------------------------------------------------------------------------------
1. TO ELECT AS DIRECTORS OF THE COMPANY ALL OF THE NOMINEES LISTED TO SERVE
FOR TERMS OF ONE YEAR EACH (EXCEPT AS MARKED TO THE CONTRARY BELOW.)*
FOR WITHHOLD EXCEPTIONS Gerald G. Mercer J.F. Keeler, Jr.
AUTHORITY Joel E. Biggerstaff David P. Lauer
/ / / / / / Roger D. Blackwell James E. Riddle
Russell M. Gertmenian
*INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW:
- ---------------------------------------
FOR AGAINST ABSTAIN
/ / / / / /
2. TO ADOPT AN AMENDMENT TO AIRNET'S
CODE OF REGULATION TO PERMIT SHAREHOLDERS
TO APPOINT PROXIES BY ANY METHOD
PERMITTED BY OHIO LAW.
3. IN HIS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS
(NONE KNOWN AT THE TIME OF SOLICITATION OF THIS PROXY) AS MAY PROPERLY COME
BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT(S) THEREOF.
COMMENTS/ ADDRESS CHANGE / /
ALL PROXIES PREVIOUSLY GIVEN OR EXECUTED BY THE ABOVE SIGNED ARE HEREBY
REVOKED. The above signed acknowledges receipt of the accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement for the May 12, 2000
meeting and the Annual Report to Shareholders for the fiscal year ended
December 31, 1999.
Please sign exactly as your name appears hereon. When common shares are
registered in two names, both shareholders should sign. When signing as
executor, administrator, trustee, guardian, attorney or agent, please give
full title as such. If shareholder is a corporation, please sign in full
corporate name by President or other authorized officer. If shareholder is a
partnership or other entity, please sign in entity name by an authorized
person. (Please note any change of address on this proxy card.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AIRNET
SYSTEMS, INC. PLEASE ACT PROMPTLY -- SIGN, DATE AND MAIL YOUR PROXY CARD TODAY
______________________________________________________________ DATE __________
SHAREHOLDER SIGN ABOVE -- CO-HOLDER (IF ANY) SIGN ABOVE
PLEASE BE SURE TO SIGN AND DATE THIS PROXY IN THE SPACE ABOVE.
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
AIRNET SYSTEMS, INC
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD IN THE
ENCLOSED ENVELOPE.
