##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-13025
 AirNet Systems, Inc.
  Ohio
    
    31-1458309(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)7250 Star Check Drive, Columbus, Ohio
    
    43217(Address of principal executive offices)
    
    (Zip Code)
 (614) 409-4900
  Title of each class
    
    Name of each exchange on which registeredCommon Shares, $0.01 par value
    
    American Stock Exchange LLC
 None
  o þ
  o þ
  þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  o þ
   Class
    
    Outstanding at March 25, 2008Common Shares, $0.01 par value
    
    10,179,671 common shares




---



##### 



INDEX
 EXPLANATORY NOTEPART IIIItem 10: Directors, Executive Officers and Corporate GovernanceItem 11: Executive CompensationItem 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13: Certain Relationships and Related Transactions, and Director IndependenceItem 14: Principal Accountant Fees and ServicesPART IVItem 15:
Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT INDEXEX-31.3EX-31.4




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##### Table of Contents



EXPLANATORY NOTE
    
 PART III
 
 ITEM 10  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Directors of AirNet
   James M. Chadwick
 Gerald Hellerman
 Thomas J. Kiernan
 Robert H. Milbourne
 1




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##### Table of Contents



Bruce D. Parker Item 11-
Executive Compensation Employment Contracts and Other Arrangements Providing for
Payments Upon Termination of Employment or Change in Control  Employment Agreement for Bruce D.
Parker"
 James E. Riddle
 Executive Officers of AirNet
 Directors of AirNet
 Ray L. Druseikis
 Larry M. Glasscock, Jr. ,
 Jeffery B. Harris
 Craig A. Leach
  Audit Committee Matters
  Directors of AirNet
 2




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##### Table of Contents



Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics
   
 ITEM 11  EXECUTIVE COMPENSATION
 Summary Compensation Table
  Summary Compensation Table for 2007
 Non-EquityOption
    
    Incentive Plan
    
    All OtherName and
    
    
    
    
    
    Salary
    
    Bonus
    
    Awards
    
    Compensation
    
    Compensation
    
    TotalPrincipal Position
    
    Year
    
    ($)
    
    ($)
    
    ($)(1)
    
    ($)
    
    ($)
    
    ($)Bruce D. Parker
    
    
    2007
    
    
    $
    360,000
    
    
    
    
    
    
    $
    114,849
    
    
    $
    205,200
    (2)
    
    $
    128,623
    (3)
    
    $
    808,672Chairman of the Board,
    
    
    2006
    
    
    $
    2,769
    
    
    $
    125,000
    (4)
    
    $
    120,997
    
    
    $
    
    (5)
    
    $
    146,576
    (6)
    
    $
    395,342Chief Executive Officer
and PresidentGary W. Qualmann
    
    
    2007
    
    
    $
    178,000
    
    
    
    
    
    
    $
    7,409
    
    
    $
    
    (2)
    
    $
    148,530
    (8)
    
    $
    333,939Former Chief Financial
    
    
    2006
    
    
    $
    215,000
    
    
    
    
    
    
    $
    12,949
    
    
    $
    136,750
    (5)
    
    $
    8,328
    
    
    $
    373,027Officer, Secretary and
Treasurer (7)Jeffery B. Harris
    
    
    2007
    
    
    $
    230,000
    
    
    
    
    
    
    $
    8,765
    
    
    $
    125,600
    (2)
    
    $
    6,134
    (10)
    
    $
    370,499Senior Vice President and
    
    
    2006
    
    
    $
    230,000
    
    
    
    
    
    
    $
    8,227
    
    
    $
    160,000
    (5)
    
    $
    5,092
    
    
    $
    403,319Chief Operating Officer (9)Larry M. Glasscock, Jr.
    
    
    2007
    
    
    $
    215,000
    
    
    
    
    
    
    $
    9,515
    
    
    $
    94,200
    (2)
    
    $
    74,773
    (11)
    
    $
    393,488Senior Vice President,
    
    
    2006
    
    
    $
    215,000
    
    
    
    
    
    
    $
    12,974
    
    
    $
    125,000
    (5)
    
    $
    90,243
    
    
    $
    443,217Express Services
 3




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##### Table of Contents



(1)
    
    For each of Mr. Qualmann, Mr. Harris and Mr. Glasscock, the amounts shown in this column
reflect the dollar amount recognized for financial statement reporting purposes (without
reduction for assumed forfeitures) for the fiscal years shown in accordance with FAS 123(R)
for option awards granted under the Amended and Restated 1996 Incentive Stock Plan (the 1996
Incentive Stock Plan) prior to 2006. For Mr. Parker, the amounts shown in this column
reflect the dollar amount recognized for financial statement reporting purposes (without
reduction for assumed forfeitures) for the fiscal years shown in accordance with FAS 123(R)
for (a) options granted to Mr. Parker under the 1996 Incentive Stock Plan prior to 2006 in
his capacity as a non-employee director of AirNet and (b) the options to purchase 150,000
common shares granted to Mr. Parker under the 2004 Stock Incentive Plan on December 28, 2006.
Assumptions used in the calculation of the amounts in this column are included in Note 6.
Incentive Stock Plans of the Notes to Consolidated Financial Statements included in ITEM 8 
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAof AirNets Original Form 10-K.(2)
    
    Represents the amount earned (in respect of 2007 fiscal year performance) under AirNets
2007 Incentive Compensation Plan.(3)
    
    Includes $6,750 for AirNets matching contributions under the AirNet Systems, Inc.
Retirement Savings Plan (the Retirement Savings Plan), $67,024 for AirNets reimbursement
of non-business travel and living expenses incurred by Mr. Parker while in the Columbus, Ohio
metropolitan area and $54,849 in tax gross-up payments related to AirNets payment of
non-business travel and living expenses.(4)
    
    Represents the sign-on bonus received by Mr. Parker under the terms of his employment
agreement.(5)
    
    Represents the amount earned (in respect of 2006 fiscal year performance) under AirNets
2006 Incentive Compensation Plan, in which Mr. Parker did not participate.(6)
    
    The 2006 amount includes $25,767 for AirNets reimbursement of travel expenses incurred by
Mr. Parker as a non-employee director, $120,000 in fees earned or paid in cash to Mr. Parker
as a non-employee director of AirNet for Board and Board committee service and $809 for
AirNets reimbursement of non-business travel and living expenses incurred by Mr. Parker
while serving as Chairman of the Board, Chief Executive Officer and President of AirNet as
contemplated by Mr. Parkers employment agreement.(7)
    
    Mr. Qualmann resigned from his positions as AirNets Chief Financial Officer, Secretary and
Treasurer effective October 3, 2007 and separated from service with AirNet and its
subsidiaries effective as of October 12, 2007.(8)
    
    Includes $6,750 for AirNets matching contributions under the Retirement Savings Plan and
$141,780 representing the amount paid or payable under the terms of Mr. Qualmanns separation
agreement. Please see the description of Mr. Qualmanns separation agreement under the
caption Separation Agreement for Gary W. Qualmann.(9)
    
    Mr. Harris was appointed Senior Vice President and Chief Operating Officer effective May 29,
2007. Prior thereto, he had served as AirNets Senior Vice President, Bank Services since
May 2000.(10)
    
    The amount shown in this column includes $3,900 for AirNets matching contributions under
the Retirement Savings Plan and $1,562 for AirNets reimbursement of life insurance premiums
paid by Mr. Harris and $672 in tax gross-up payments related to AirNets reimbursement of
life insurance premiums.(11)
    
    The amount shown in this column includes $6,750 for AirNets matching contributions under
the Retirement Savings Plan, $1,947 for AirNets reimbursement of life insurance premiums
paid by Mr. Glasscock, $38,006 for AirNets reimbursement and payment of non-business travel
and living expenses incurred by Mr. Glasscock while in the Columbus, Ohio metropolitan area
and $28,070 in tax gross-up payments related to AirNets reimbursement and payment of
non-business travel and living expenses and reimbursement of life insurance premiums. 4




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Outstanding Equity Awards at Fiscal Year-End
  Outstanding Equity Awards at Fiscal Year-End for 2007
 Option Awards(1)Number of
    
    Number of SecuritiesSecurities Underlying
    
    Underlying UnexercisedUnexercised Options(#)
    
    Options (#)
    
    Option Exercise PriceName
    
    Exercisable
    
    Unexercisable
    
    ($)
    
    Option Expiration DateBruce D. Parker
    
    
    20,000
    (2)
    
    
    
    
    
    $
    4.4000
    
    
    
    11/8/20123,200
    (2)
    
    
    
    
    
    $
    3.9000
    
    
    
    1/2/2014150,000
    (3)
    

 800
    (2)


    
    $
    2.9500
    
    
    
    12/28/2016Gary W. Qualmann (4)
    
    
    20,000
    
    
    
    
    
    
    $
    4.2800
    
    
    
    9/2/201316,000
    
    
    
    4,000
    
    
    $
    4.1300
    
    
    
    2/17/2014Jeffery B. Harris
    
    
    1,000
    
    
    
    
    
    
    $
    14.250
    
    
    
    4/11/20073,000
    
    
    
    
    
    
    $
    9.5000
    
    
    
    6/8/20093,000
    
    
    
    
    
    
    $
    9.5000
    
    
    
    6/8/20093,000
    
    
    
    
    
    
    $
    9.5000
    
    
    
    6/8/20091,500
    
    
    
    
    
    
    $
    9.5000
    
    
    
    6/8/20091,500
    
    
    
    
    
    
    $
    9.5000
    
    
    
    6/8/20093,000
    
    
    
    
    
    
    $
    9.5000
    
    
    
    6/8/20093,600
    
    
    
    
    
    
    $
    6.1250
    
    
    
    1/6/20102,930
    
    
    
    
    
    
    $
    5.2500
    
    
    
    2/4/201017,600
    
    
    
    
    
    
    $
    3.8125
    
    
    
    1/2/20118,000
    
    
    
    
    
    
    $
    8.5800
    
    
    
    1/2/20125,000
    
    
    
    
    
    
    $
    4.9500
    
    
    
    1/24/201316,000
    
    
    
4,000
    (5)

    
    $
    4.1300
    
    
    
    2/17/2014Larry M. Glasscock, Jr.
    
    
    20,000
    
    
    
    
    
    
    $
    4.5100
    
    
    
    2/3/201316,000
    
    
    
    4,000
    (5)
    
    $
    4.1300
    
    
    
    2/17/2014
 
 (1)
    
    With the exception of the options to purchase an aggregate of 150,000 common shares granted
to Mr. Parker as contemplated by his employment agreement, each of the options reported in
this table was granted under the 1996 Incentive Stock Plan and vests (or vested) and becomes
(or became) exercisable in 20% increments on each of the grant date and the first, second,
third and fourth anniversaries of the grant date. Mr. Parkers options to purchase an
aggregate of 150,000 common shares were granted under the 2004 Stock Incentive Plan and
vested and became exercisable as to 75,000 common shares on each of December 28, 2006 and
December 27, 2007. Each of the options reported will expire ten years after the date of
grant (except in the case of Gary W. Qualmann whose options expired on January 12, 2008
(three months after his separation from service with AirNet and its subsidiaries)) in
accordance with the terms of the 1996 Incentive Stock Plan or the 2004 Stock Incentive Plan,
as appropriate.(2)
    
    These options were granted to Mr. Parker in his capacity as a non-employee director of
AirNet. The remaining 800 common shares vested on January 2, 2008.(3)
    
    These options were granted to Mr. Parker as contemplated by his employment agreement. 5




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##### Table of Contents



(4)
    
    All options held by Mr. Qualmann at the end of the 2007 fiscal year expired on January 12,
2008, three months after he separated from service with AirNet and
its subsidiaries.(5)
    
    The remaining 4,000 common shares vested on February 17, 2008. Benefits and Perquisites
 Employee Benefits
 Summary
Compensation Table for 2007
  Reimbursement of Life Insurance Premiums
 Summary Compensation
Table for 2007
 Reimbursement of Travel and Living Expenses
  Summary
Compensation Table for 2007
  6




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Employment Contracts and Other Arrangements Providing for Payments Upon Termination of Employment
or Change in Control
     Employment Agreement for Bruce D. Parker
  Summary Compensation Table for 2007
  7




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8




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Employment Agreement for Jeffery B. Harris
  Summary Compensation Table for 2007
    9




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Employment Agreement for Larry M. Glasscock, Jr.
    Summary Compensation Table for 2007
 10




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Separation Agreement for Gary W. Qualmann
    11




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AirNets 2007 Incentive Compensation Plan
  
    
    attaining designated levels of pre-tax income;
    
    achieving designated levels of Express Services revenues and contribution margin;
    
    reducing AirNets operating costs;
    
    establishing AirNet as the express air carrier of choice for highly controlled and time
sensitive shipments;
    
    leveraging AirNets aviation infrastructure to improve contribution margin;
    
    operating in all areas of AirNets business in an absolutely safe, highly professional,
dependable, efficient and customer focused manner; and
    
    developing AirNets leadership team.
      12




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##### Table of Contents




    
    30% of Mr. Parkers incentive compensation potential was based upon attaining at least
100% of the targeted pre-tax income for the applicable six-month period;
    
    30% of Mr. Parkers incentive compensation potential was based upon attaining at least
100% of the targeted Express Services revenues and contribution margin for the applicable
six-month period; and
    
    40% of Mr. Parkers incentive compensation potential was based upon the attainment of
the personal goals established for Mr. Parker by the Board of Directors.
  
    
    development of an AirNet operating vision, including specific objectives and strategy;
    
    development of a chief executive officer succession plan; and
    
    developing AirNets management into an integrated team working to achieve specific
objectives.
      13




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AirNets 2008 Incentive Compensation Plan
 ITEM 9B  OTHER INFORMATION
 Stock Purchase Program
  Director Compensation
  Director Compensation for 2007
 Fees Earned or
    
    Option
    
    All OtherPaid in Cash
    
    Awards
    
    Compensation
    
    TotalName(1)
    
    ($)(2)
    
    ($)(3)
    
    ($)(4)
    
    ($)James M. Chadwick
    
    $
    69,500
    
    
    $
    10,931
    
    
    $
    3,763
    
    
    $
    84,194Russell M. Gertmenian (5)
    
    $
    24,000
    
    
    $
    1,213
    (6)
    
    
    
    
    
    $
    25,213Gerald Hellerman
    
    $
    70,000
    
    
    $
    10,931
    
    
    $
    2,964
    
    
    $
    83,895Thomas J. Kiernan (7)
    
    $
    15,000
    
    
    $
    6,268
    
    
    $
    675
    
    
    $
    21,943Robert H. Milbourne (7)
    
    $
    15,000
    
    
    $
    6,268
    
    
    $
    412
    
    
    $
    21,680James E. Riddle
    
    $
    105,500
    
    
    $
    4,014
    
    
    $
    12,714
    
    
    $
    122,228
 
 (1)
    
    Bruce D. Parker, AirNets Chief Executive Officer and President, is not included in this
table. The compensation paid to Mr. Parker for the 2007 fiscal year is shown in the Summary
Compensation Table for 2007above.(2)
    
    The amounts shown in this column reflect the amount of cash compensation earned by each
non-employee director in the 2007 fiscal year for Board and Board committee service.(3)
    
    The amounts shown in this column reflect the dollar amount recognized for financial statement
reporting purposes (without reduction for assumed forfeitures) for the 2007 fiscal year in
accordance with FAS 123(R) of option awards granted under the 1996
Incentive Stock Plan and
the 2004 Stock Incentive Plan during the 2007 fiscal year as well as prior to 2007. Assumptions used in the calculation of these
amounts are included in Note 6. Incentive Stock Plans of the Notes to Consolidated
Financial Statements included in ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAof
AirNets Original Form 10-K. 14




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The aggregate number of common shares underlying options outstanding at December 31, 2007 for
each of the individuals included in this table were: (a) James M. Chadwick  24,000 common
shares (12,800 exercisable and 11,200 unexercisable); (b) Gerald Hellerman  24,000 common
shares (12,800 exercisable and 11,200 unexercisable); (c) Thomas J. Kiernan  20,000 common
shares (4,000 exercisable and 16,000 unexercisable); (d) Robert H. Milbourne  20,000 common
shares (4,000 exercisable and 16,000 unexercisable); and (e) James E. Riddle  40,000 common
shares (36,000 exercisable and 4,000 unexercisable).(4)
    
    The amounts shown in this column represent the reimbursement of travel expenses incurred by
each non-employee director during the 2007 fiscal year.(5)
    
    Russell M. Gertmenian served as a director of AirNet during the 2007 fiscal year, until his
resignation from the Board effective August 17, 2007.(6)
    
    Following Mr. Gertmenians resignation from the Board, his vested options (covering an
aggregate of 48,400 common shares) held as of August 17, 2007 remained exercisable until
November 15, 2007; however, he did not exercise any of these vested options. The unvested
options (covering an aggregate of 1,600 common shares) held by Mr. Gertmenian on August 17,
2007 were forfeited in accordance with their respective terms.(7)
    
    Thomas J. Kiernan and Robert H. Milbourne were appointed to the Board on September 25, 2007,
and the amounts shown in the table reflect pro rated amounts for a partial year of service. Cash Compensation
         15




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Director Deferred Compensation Plan
  Options Granted under 1996 Incentive Stock Plan
 
  Options Granted under 2004 Stock Incentive Plan
    16




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##### Table of Contents



ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  Amount and Nature of Beneficial Ownership (1)Common SharesWhich Can BeAcquired UponExercise of OptionsWhich Are CurrentlyExercisable orCommon
    
    Which Will FirstName of Beneficial Owner
    
    Shares
    
    Become Exercisable
    
    
    
    
    
    Percent ofor Number of Persons in Group
    
    Presently Held
    
    Within 60 Days (2)
    
    Total
    
    Class (3)James M. Chadwick
    
    
    34,800
    (4)
    
    
    14,400
    
    
    
    49,200
    
    
    
    (5
    )Gerald Hellerman
    
    
    0
    
    
    
    14,400
    
    
    
    14,400
    
    
    
    (5
    )Thomas J. Kiernan
    
    
    0
    
    
    
    4,000
    
    
    
    4,000
    
    
    
    (5
    )Robert H. Milbourne
    
    
    0
    
    
    
    4,000
    
    
    
    4,000
    
    
    
    (5
    )Bruce D. Parker (6)
    
    
    0
    
    
    
    174,000
    
    
    
    174,000
    
    
    
    (5
    )James E. Riddle
    
    
    5,000
    
    
    
    38,400
    
    
    
    43,400
    
    
    
    (5
    )Larry M. Glasscock, Jr. (6)
    
    
    10,000
    
    
    
    40,000
    
    
    
    50,000
    
    
    
    (5
    )Jeffery B. Harris (6)
    
    
    4,719
    
    
    
    72,130
    
    
    
    76,849
    
    
    
    (5
    )Gary W. Qualmann (6)(7)
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    (5
    )All current directors and
executive officers as a
group (10 individuals) (8)
    
    
    54,519
    
    
    
    393,330
    
    
    
    447,849
    
    
    
    3.6
    %
 17




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##### Table of Contents



(1)
    
    Unless otherwise indicated in the footnotes to this table, each beneficial owner has sole
voting and dispositive power with respect to all of the common shares reflected in this table
for such beneficial owner. All fractional shares have been rounded down to the nearest whole
common share.(2)
    
    Does not include options which are not currently exercisable and which will not first become
exercisable within 60 days of April 25, 2008, as to the following number of common shares: (a)
Mr. Chadwick  13,600 common shares; (b) Mr. Hellerman  13,600 common shares; (c) Mr.
Kiernan  16,000 common shares; (d) Mr. Milbourne  16,000 common shares; (e) Mr. Riddle 
5,600 common shares; and (f) all current directors and executive officers as a group  64,800
common shares.(3)
    
    The Percent of Class computation is based upon the total number of common shares
beneficially owned by the named person or group divided by the sum of (i) 12,113,808 common
shares outstanding on April 25, 2008, and (ii) the number of common shares, if any, as to
which the named person or group has the right to acquire beneficial ownership upon the
exercise of options which are currently exercisable or which will first become exercisable
within 60 days of April 25, 2008.(4)
    
    These 34,800 common shares are owned of record by Nadel and Gussman Combined Funds LLC. Mr.
Chadwick has sole dispositive power as to the 34,800 common shares owned by Nadel and Gussman
Combined Funds LLC.(5)
    
    Represents ownership of less than 1% of the outstanding common shares.(6)
    
    Individual who qualifies as a named executive officer of AirNet as defined in Item 402(m)(2)
of SEC Regulation S-K. Mr. Parker also serves as a director of AirNet.(7)
    
    Mr. Qualmann resigned from his positions as AirNets Chief Financial Officer, Secretary and
Treasurer effective October 3, 2007 and separated from service with AirNet and its
subsidiaries effective as of October 12, 2007.(8)
    
    Includes the six directors identified in this table and Messrs. Ray L. Druseikis  Vice
President of Finance and Controller; Interim Chief Financial Officer, Treasurer and Secretary;
Larry M. Glasscock, Jr.  Senior Vice President, Express Services; Jeffery B. Harris 
Senior Vice President and Chief Operating Officer; and Craig A. Leach  Vice President,
Information Systems.  Amount and Nature of Beneficial Ownership (1)Common SharesWhich Can BeAcquired UponExercise of OptionsWhich Are CurrentlyExercisable orCommon
    
    Which Will FirstName and Address
    
    Shares
    
    Become Exercisable
    
    
    
    
    
    Percent ofof Beneficial Owner
    
    Presently Held
    
    Within 60 Days
    
    Total
    
    Class (2)AirNet Holdings, Inc.(3)
    
    
    1,934,197
    
    
    
    0
    
    
    
    1,934,197
    
    
    
    16.0
    %AirNet Acquisition, LLC
Bayside AirNet Holdings, Inc.1001 Brickell Bay Drive, 26th Floor
Miami, FL 33131Heartland Advisors, Inc. (4)
    
    
    1,325,000
    (4)
    
    
    0
    
    
    
    1,325,000
 (4)
    

    
    10.9
    %William J. Nasgovitz789 North Water Street
Milwaukee, WI 53202Bulldog
Investors;
Phillip Goldstein; Andrew Dakos (5)
60 Heritage Drive
Pleasantville, NY 10570
    
    
    932,943
    (5)
    
    
    0
    
    
    
    932,943
    (5)
    
    
    7.7
    %Dimensional Fund Advisors LP (6)
1299 Ocean Avenue
Santa Monica, CA 90401
    
    
    882,767
    (6)
    
    
    0
    
    
    
    882,767
    (6)
    
    
    7.3
    %
 18




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Amount and Nature of Beneficial Ownership (1)Common SharesWhich Can BeAcquired UponExercise of OptionsWhich Are CurrentlyExercisable orCommon
    
    Which Will FirstName and Address
    
    Shares
    
    Become Exercisable
    
    
    
    
    
    Percent ofof Beneficial Owner
    
    Presently Held
    
    Within 60 Days
    
    Total
    
    Class (2)Clam Partners, LLC (7)

Clam Manager, LLC

Gregory A. Carlin
    
    
    430,000
    (7)
    
    
    0
    
    
    
    430,000
    (7)
    
    
    3.5
    %900 N. Michigan Avenue
Suite 1900
Chicago, IL 60611BCB Consultants, LLC (7) 

Black Sheep Partners, LLCBlack Sheep Partners II, LLC
Brian C. Black
    
    
    220,000
    (7)
    
    
    0
    
    
    
    220,000
    (7)
    
    
    1.8
    %900 N. Michigan Avenue
Suite 1900
Chicago, IL 60611
 
 (1)
    
    Unless otherwise indicated in the footnotes to this table, each beneficial owner has sole
voting and dispositive power with respect to all of the common shares reflected in this table
for such beneficial owner.(2)
    
    Except as otherwise noted, the Percent of Class computation is based upon the total number
of common shares beneficially owned by the named person divided by 12,113,808 common shares
outstanding on April 25, 2008.(3)
    
    On March 31, 2008, AirNet Holdings, Inc. (AirNet Holdings) purchased 1,934,197 common
shares from AirNet at a price of $2.81 per share. AirNet Holdings is a subsidiary of AirNet
Acquisition, LLC, a Delaware limited liability company (AirNet Acquisition LLC). Bayside
AirNet Holdings, Inc., a Delaware corporation (Bayside AirNet Holdings), owns all of the
voting equity of AirNet Acquisition LLC and, therefore, Bayside AirNet Holdings may be deemed
to have sole voting and investment power with respect to securities held by AirNet Acquisition
LLC, which has sole voting and investment power with respect to securities held by AirNet
Acquisition. Accordingly, Bayside AirNet Holdings and AirNet Acquisition LLC may be deemed,
for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, the
beneficial owner of AirNet common shares held by AirNet Holdings. Although Bayside AirNet
Holdings has sole voting and investment power with respect to the securities held by AirNet
Acquisition LLC, Bayside Opportunity Fund, L.P. (Bayside Opportunity Fund) provided the
funding necessary to complete the acquisition of the AirNet common shares and owns a nonvoting
interest in AirNet Acquisition LLC. Bayside AirNet Holdings and AirNet Acquisition LLC
disclaim beneficial ownership of the common shares of AirNet beneficially owned by them,
except to the extent of their pecuniary interest in such common shares.(4)
    
    Based on information contained in a Schedule 13G amendment filed with the SEC on February 8,
2008, Heartland Advisors, Inc., a registered investment adviser (HAI), and William J.
Nasgovitz, President and principal shareholder of HAI, were reported to have beneficially
owned 1,325,000 common shares as of December 31, 2007 (10.9% of the outstanding common shares
on April 25, 2008), with shared voting power as to 1,225,000 common shares and shared
dispositive power as to 1,325,000 common shares. The Heartland Value Fund, a series of the
Heartland Group, Inc., a registered investment company, was reported to own 903,000 of the
common shares reported (or 7.5% of the outstanding common shares on April 25, 2008). The
remaining common shares reported were owned by various other accounts managed by HAI on a
discretionary basis. HAI may be deemed to have beneficially owned the 1,325,000 common shares
reported by virtue of its investment discretion and voting authority granted by certain
clients, which may be revoked at any time. Mr. Nasgovitz may be deemed to have beneficially
owned the 1,325,000 common shares reported as a result of his ownership interest in HAI. HAI
and Mr. Nasgovitz specifically disclaimed beneficial ownership of the common shares reported
and did not admit that they constitute a group.(5)
    
    Based on information contained in a Schedule 13D amendment filed with the SEC on April 17,
2008 by Bulldog Investors, Phillip Goldstein and Andrew Dakos, which reported that Bulldog
Investors, Phillip Goldstein and Andrew Dakos were deemed to be the beneficial owners of
932,943 common shares. Phillip Goldstein, whose business address is 60 Heritage Drive,
Pleasantville, NY 10570, and Andrew Dakos, whose business address is 43 Waterford Drive,
Montville, NJ 07045, were reported to have sole power to vote and dispose of the 932,943
common shares.(6)
    
    Based on information contained in a Schedule 13G amendment filed with the SEC on February 6,
2008, Dimensional Fund Advisors LP, a registered investment adviser (Dimensional), was
reported to have beneficially owned 882,767 common shares as of December 31, 2007, all of
which were held in portfolios of four registered investment companies to which Dimensional
furnishes investment advice and of other commingled group trusts and separate accounts for 19




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##### Table of Contents



which Dimensional serves as investment manager. Dimensional reported sole voting and
dispositive
power over the reported common shares. The common shares reported were owned by these
investment companies, trusts and accounts. In its role as investment adviser or investment
manager, Dimensional was reported to possess both sole voting power and sole dispositive power
as to the common shares held in the portfolios of these investment companies, trusts and
accounts. Dimensional disclaimed beneficial ownership of the reported common shares.(7)
    
    Based on information contained in a Schedule 13G jointly filed by the persons identified in
this footnote (7) [but without affirming the existence of a group] with the SEC with a filing
date of March 1, 2007 (the Clam Partners  Black Sheep Schedule 13G), which has not been
further amended as of the date of this Amendment, as of February 2, 2007, Clam Partners, LLC
(Clam Partners) was reported to have beneficially owned 430,000 common shares (or 3.5% of
the outstanding common shares on April 25, 2008). Clam Manager, LLC (Clam Manager), the
manager of Clam Partners, was reported to have the power to direct the vote and disposition of
the common shares held by Clam Partners and to have beneficially owned the 430,000 common
shares owned by Clam Partners. Gregory A. Carlin, as Managing Member of Clam Manager, was
reported to have beneficially owned the same number of common shares (430,000 common shares)
reported by Clam Manager. Each of Clam Manager and Gregory A. Carlin disclaimed beneficial
ownership of the 430,000 common shares owned by Clam Partners except to the extent of their
respective pecuniary interests therein.Based on information contained in the Clam Partners  Black Sheep Schedule 13G, as of
February 2, 2007, Black Sheep Partners, LLC (Black Sheep) was reported to have beneficially
owned 142,900 common shares (or 1.2% of the outstanding common shares on April 25, 2008) and
Black Sheep Partners II, LLC (Black Sheep II) was reported to have beneficially owned 77,100
common shares (or 0.6% of the outstanding common shares on April 25, 2008). BCB Consultants,
LLC (BCB Consultants), the manager of each of Black Sheep and Black Sheep II, was reported
to have the power to direct the vote and disposition of the common shares held by each of
Black Sheep and Black Sheep II and to have beneficially owned an aggregate amount of 220,000
common shares (or 1.8% of the outstanding common shares on April 25, 2008), consisting of the
common shares owned by Black Sheep and the common shares owned by Black Sheep II. Brian C.
Black, as Managing Member of BCB Consultants, was reported to have beneficially owned the same
number of common shares (220,000 common share) reported by BCB Consultants. Each of BCB
Consultants and Brian C. Black disclaimed beneficial ownership of the 142,900 common shares
owned by Black Sheep and the 77,100 common shares owned by Black Sheep II, except to the
extent of their respective pecuniary interests therein. Equity Compensation Plan Information
   Number of common sharesremaining available forNumber of common
    
    
    
    
    
    future issuance undershares to be issued
    
    Weighted-average
    
    equity compensation plansupon exercise of
    
    exercise price of
    
    (excluding common sharesoutstanding options
    
    outstanding options
    
    reflected in column (a))Plan Category
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
    
    
    570,180
    (1)
    
    $
    4.86
    (2)
    
    
    514,180
    (3)shareholders
Equity compensation
plans not approved
by shareholders
    
    
    
    (4)
    
    
    n/a
    
    
    
    
    (5)Total
    
    
    570,180
    
    
    $
    4.86
    
    
    
    514,180
 20




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##### Table of Contents



(1)
    
    Includes 328,180 common shares issuable upon the exercise of options granted under the 1996
Incentive Stock Plan and 242,000 common shares issuable upon the exercise of options granted
under the 2004 Stock Incentive Plan.(2)
    
    Represents the weighted-average exercise price of outstanding options granted under the 1996
Incentive Stock Plan and the 2004 Stock Incentive Plan. Rights to purchase common shares
under the stock purchase program portion of the 2004 Stock Incentive Plan are priced based on
the lesser of 85% of the fair market value of AirNets common shares on the first business
day of the offering period or 85% of the fair market value of AirNets common shares on the
last business day of the offering period. There were no rights to purchase common shares
outstanding as of December 31, 2007 under the stock purchase program portion of the 2004
Stock Incentive Plan.(3)
    
    No further grants may be made under the 1996 Incentive Stock Plan. Of the 514,180 common
shares remaining available for issuance under the 2004 Stock Incentive Plan as of December
31, 2007, 82,194 common shares are reserved for issuance under the stock purchase program
portion of the 2004 Stock Incentive Plan.(4)
    
    As of December 31, 2007, none of AirNets directors participated in the Director Deferred
Plan.(5)
    
    The number of common share equivalents attributable to participants accounts under the
Director Deferred Plan will depend upon the number of Non-Employee Directors of AirNet
electing to defer their fees, the amount deferred by each Non-Employee Director and whether
the deferred fees are allocated to a stock account or a cash account under the Director
Deferred Plan. The Director Deferred Plan does not specify a limit as to the number of
common shares which may be issued thereunder. Please see the description of the Director
Deferred Plan under the caption ITEM 11  EXECUTIVE COMPENSATION  Director Compensation -
Director Deferred Compensation Plan. 
 ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 Review, Approval or Ratification of Transactions with Related Persons
  
    
    the benefits to AirNet or one of its subsidiaries of the transaction;
    
    the terms of the transaction;
    
    the interest of the officer or director (or a member of his family) in the
transaction;
    
    the alternatives to entering into the transaction;
    
    whether the transaction is on terms comparable to those available to third parties;
and
    
    the overall fairness of the transaction.
  Transactions with Related Persons since January 1, 2007
  21




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##### Table of Contents



Director Independence
   
    
    the relationships (including employment, commercial, industrial, consulting, legal,
accounting, charitable and family relationships) of each director (and the immediate
family members of each director) with AirNet and/or any of AirNets subsidiaries
(either directly or as a partner, manager, director, trustee, controlling shareholder,
officer, employee or member of any organization that has any such relationship) since
January 1, 2005;
    
    the compensation and other payments each director (and the immediate family members
of each director):
 
    
    has received from or made to AirNet and/or any of AirNets subsidiaries (either
directly or as a partner, manager, director, trustee, controlling shareholder,
officer, employee or member of an organization which has received compensation or
payments from or made payments to AirNet and/or any of AirNets subsidiaries) since
January 1, 2005; and
    
    presently expects to receive or make to AirNet and/or any of AirNets
subsidiaries (either directly or as a partner, manager, director, trustee,
controlling shareholder, officer, employee or member of an organization);
 
    
    the relationship, if any, between each director (and the immediate family members of
each director) and AirNets independent registered public accounting firm since January
1, 2005;
    
    whether any director (or any immediate family member of any director) is employed as
an executive officer of another entity where at any time since January 1, 2005, any of
AirNets executive officers served or presently serve on the compensation committee of
such other entity; and
    
    whether any director has participated in the preparation of the financial statements
of AirNet or any of AirNets current subsidiaries at any time since January 1, 2005.
    
 ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES
 22




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##### Table of Contents



Pre-Approval of Services Performed by Independent Registered Public Accounting Firm
    Fees of Independent Registered Public Accounting Firm
  2007
    
    
    2006Fiscal Year
    
    
    Fiscal YearAudit Fees
    
    $
    360,000
    
    
    $
    348,217Audit-Related Fees
    
    $
    40,500
    
    
    $
    Tax Fees
    
    $
    50,900
    
    
    $
    123,325All Other Fees
    
    $
    
    
    
    $
    Total
    
    $
    451,400
    
    
    $
    471,542
   
 PART IV
 
 ITEM 15  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    Documents filed as a part of this Amendment:
 1.
    
    None2.
    
    None3.
    
    Exhibits
 23




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##### Table of Contents



ExhibitNo.
    
    Description
    
    Location31.3
    
    Rule 13a-14(a)/15d-14(a) Certification
(Principal Executive Officer)
    
    Filed herewith31.4
    
    Rule 13a-14(a)/15d-14(a) Certification
(Principal Financial Officer)
    
    Filed herewith
 24




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##### Table of Contents



SIGNATURES
  AIRNET SYSTEMS, INC.Dated: April 29, 2008
    
    By:
    
    /s/ Bruce D. ParkerBruce D. Parker, Chairman of the Board,Chief Executive Officer and President
 25




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNo.
    
    Description
    
    Location31.3
    
    Rule 13a-14(a)/15d-14(a) Certification
(Principal Executive Officer)
    
    Filed herewith31.4
    
    Rule 13a-14(a)/15d-14(a) Certification
(Principal Financial Officer)
    
    Filed herewith
 26