SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File No. 1-11775
AVIATION SALES COMPANY
----------------------
(Exact name of issuer as specified in its charter)
DELAWARE 65-0665658
-------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3701 FLAMINGO ROAD, MIRAMAR, FLORIDA 33027
---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
(954) 538-2000
--------------
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Exchange Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
----------------------------- -----------------------------------------
Common Stock, par value $.001 New York Stock Exchange
per share
Securities registered pursuant to section 12(g) of the Exchange Act:
None
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter periods that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
<PAGE>
The purpose of this Amendment No. 1 on Form 10-K/A of Aviation Sales
Company (the "Company") is to amend the Company's previously filed Form 10-K for
the year ended December 31, 1999 to add the information required by Items 10,
11, 12 and 13 of Part III of Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT BOARD OF DIRECTORS
The certificate of incorporation and bylaws of the Company presently
provide for a board of directors divided into three classes, as nearly equal in
size as possible, with staggered terms of three years. At the date of this
report, the members of the Company's board of directors and the expiration of
their terms as directors are as follows:
<TABLE>
<CAPTION>
TERM
NAME AGE POSITIONS EXPIRES
- ---- --- --------- -------
<S> <C> <C> <C>
Dale S. Baker.................... 42 Chairman of the Board, President and
Chief Executive Officer 2002
Harold M. Woody.................. 54 Director and Executive Vice President
and President of the Company's leasing
operations 2000
Robert Alpert.................... 50 Director 2001
Sam Humphreys.................... 40 Director 2000
Philip B. Schwartz............... 46 Director and Corporate Secretary 2001
Roy T. Rimmer, Jr................ 58 Director 2001
</TABLE>
BUSINESS EXPERIENCE
DALE S. BAKER has been President and Chief Executive Officer of the
Company and its predecessors since February 1992. Prior to joining the Company,
Mr. Baker was Senior Vice President and Manager of GE Capital's Corporate
Investment Finance Group. Mr. Baker has been a director since June 1996.
HAROLD M. WOODY has been Executive Vice President of the Company and
its predecessors since February 1992 and the President of the Company's leasing
operations since March 1997. Mr. Woody has been a director since June 1996.
ROBERT ALPERT is a private investor. In addition to his investment in
the Company, Mr. Alpert has invested significantly in business ventures in the
steel, environmental, waste and oil service industries. Mr. Alpert has been a
director since June 1996.
SAM HUMPHREYS is engaged in venture capital and private equity
investing. Between January 1996 and January 2000, Mr. Humphreys was a Managing
Director of Main Street Merchant Partners, a merchant banking firm, and its
predecessors. From April 1993 until March 1997, Mr. Humphreys held various
executive positions with U.S. Delivery Systems, Inc., a provider of same-day
local delivery services, and Envirofil, Inc., an environmental services company.
Mr. Humphreys is also a director of IFCO Systems, a provider of round-trip
container services. Mr. Humphreys has been a director since June 1996.
- 2 -
<PAGE>
PHILIP B. SCHWARTZ is a shareholder in the Florida law firm of Akerman,
Senterfitt & Eidson, P.A., practicing in the firm's Miami office. Prior to
joining Akerman Senterfitt in September 1995, Mr. Schwartz was a partner with
Broad and Cassel, Miami, Florida, for five years. Mr. Schwartz is a member of
The Florida Bar and the American Bar Association and a former Chair of the
Business Law Section of The Florida Bar. Akerman Senterfitt performs legal
services for the Company. Mr. Schwartz has been a director since June 1998 and
Corporate Secretary since March 1999.
ROY T. RIMMER, JR. has been a director of the Company since January
2000. Mr. Rimmer is the chairman and CEO of Producers Pipeline Corporation and
Chairman and CEO of Warner Internet Ventures, Inc. Mr. Rimmer is also a director
of Telescan, Inc. and Iteq, Inc.
EXECUTIVE OFFICERS
The following list reflects the executive officers of the Company, as
of the date of this report, the capacity in which they serve the Company, and
when they assumed office:
<TABLE>
<CAPTION>
EXECUTIVE
NAME AGE POSITIONS OFFICER SINCE
- ---- --- --------- -------------
<S> <C> <C> <C>
Dale S. Baker 42 President and Chief Executive Officer February 1992
Harold M. Woody 54 Executive Vice President of the Company and
President of the Company's leasing operations February 1992
Benito Quevedo 46 Senior Vice President of the Company and
President of the Company's distribution and
maintenance and repair operations July 1998
Michael C. Brant 37 Vice President and Chief Financial Officer November 1999
Jerry Horton 48 President of the Company's
manufacturing operations October 1999
Laura DeCespedes 43 Vice President, Human Resources January 1999
Gary Eakins 46 Vice President and Chief Legal Officer July 1998
</TABLE>
BUSINESS EXPERIENCE
DALE S. BAKER. See the biographical information contained in "Board of
Directors" above.
HAROLD M. WOODY. See the biographical information contained in "Board
of Directors" above.
BENITO QUEVEDO has been Senior Vice President of the Company and
President of the Company's maintenance and repair operations since July 1998.
Mr. Quevedo has also been the President of the Company's distribution operations
since March 2000. Prior to joining the Company, Mr. Quevedo was the principal
shareholder and President of Caribe Aviation, Inc. and Aircraft Interior Design,
Inc.
MICHAEL C. BRANT has been Vice President and Chief Financial Officer of
the Company since November 1999. Prior to joining the Company, from April 1999
to December 1999, Mr. Brant was a Vice President at Becker Financial Services.
Prior thereto, for more than five years, Mr. Brant held senior financial
positions at John Alden Life Insurance Company, the principal subsidiary of John
Alden Financial Corporation.
- 3 -
<PAGE>
JERRY HORTON has been President of the Company's manufacturing
operations since October 1999. Prior thereto, from January 1999 to October 1999,
Mr. Horton was President of Aircraft Interior Design, and from October 1997 to
January 1999, Mr. Horton was the Company's Vice President, Quality. Prior to
joining the Company, Mr. Horton was employed in various capacities by General
Electric.
LAURA DECESPEDES has been Vice President, Human Resources of the
Company since January 1999. Prior to joining the Company, from September 1997 to
December 1998, Ms. DeCespedes was the Vice President of Human Resources for
Productivity Point International. From June 1995 to September 1997, Ms.
DeCespedes was Director of Field Human Resources for Sensormatic Electronics
Corp.
GARY EAKINS has been Vice President and Chief Legal Officer of the
Company since July 1998. Prior thereto, for more than five years, Mr. Eakins
served as Vice President, Secretary and General Counsel of Southern Air
Transport. Southern Air Transport filed for bankruptcy on October 1, 1998.
FAMILY RELATIONSHIPS
There are no family relationships between or among any of the Company's
directors and executive officers.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company pursuant to Rule 16a-3(d) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), during the Company's fiscal year
ended December 31, 1998 and any Forms 5 and amendments thereto furnished to the
Company with respect to its most recent fiscal year, and any written
representations referred to in subparagraph (b)(2)(i) of Item 405 of Regulation
S-K, no person who at any time during the fiscal year ended December 31, 1999
was a director, officer or, to the knowledge of the Company, a beneficial owner
of more than 10% of any class of equity securities of the Company registered
pursuant to Section 12 of the Exchange Act failed to file on a timely basis, as
disclosed in Forms 3, 4 and 5, reports required by Section 16(a) of the Exchange
Act during the fiscal year ended December 31, 1999, except as follows: Messrs.
Brant and Horton were late in filing a Form 3 during 1999.
- 4 -
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth information about the compensation paid
or accrued during 1999, 1998 and 1997 to the Company's Chief Executive Officer
and to each of the four other most highly compensated executive officers of the
Company whose aggregate direct compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------------------
NAME AND PRINCIPAL SALARY BONUS OTHER ANNUAL ALL OTHER
POSITION YEAR ($) ($) COMPENSATION COMPENSATION
--------- -------------- ------------ ------------------- ------------------
<S> <C> <C> <C> <C> <C>
Dale S. Baker....................... 1999 550,000 -- (1)
President and CEO 1998 263,797 197,848 (1) --
1997 258,760 212,627 (1) --
Harold M. Woody..................... 1999 249,164 -- -- --
Executive Vice President and 1998 236,029 177,021 -- --
President of the Company's 1997 231,442 116,385 -- --
leasing operation
Benito Quevedo (2).................. 1999 350,000 -- -- --
Senior Vice President and President 1998 149,760 122,511 -- --
of the Company's MR&O operations
James D. Innella (3)................ 1999 350,000 -- -- --
Senior Vice President and President 1998 225,000 168,750 -- --
of the Company's distribution 1997 153,735 126,370 -- --
operation
Michael A. Saso..................... 1999 202,334 -- -- --
Senior Vice President, Purchasing of 1998 186,888 140,166 -- --
the Company's redistribution 1997 186,889 153,613 -- --
operations
- -----------------------
<FN>
(1) Mr. Baker also receives $5,000 per year for life insurance premiums. See "Employment Agreements" below.
(2) Mr. Quevedo joined the Company in March 1998.
(3) Mr. Innella resigned from his position as Senior Vice President and President of the Company's distribution
operations in March 2000.
</FN>
</TABLE>
No long-term compensation awards were made to management during the
three years ended December 31, 1999.
- 5 -
<PAGE>
OPTION GRANTS DURING LAST FISCAL YEAR
The following table sets forth information concerning options to
purchase shares of common stock granted during the fiscal year ended December
31, 1999 to those persons named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SHARES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- ---------------- ------------- -------------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dale S. Baker......... 350,000 35% 40.63 12/31/08 8.9 mil 22.7 mil
Harold M. Woody....... 20,000 3% 20.00 10/07/09 251,558 637,497
Benito Quevedo........ 175,000 17% 40.63 12/31/08 4.5 mil 11.3 mil
James D. Innella...... 175,000 17% 40.63 12/31/08 4.5 mil 11.3 mil
Michael A. Saso....... 7,500 1% 20.00 10/07/09 125,779 318,748
- -----------------------
<FN>
(1) These amounts represent assumed rates of appreciation in the price of common stock during the term of the
options in accordance with rates specified in applicable federal securities regulations. Actual gains, if
any, on stock option exercises will depend on the future price of common stock and overall stock market
conditions. There is no representation that the rates of appreciation reflected in the table will be
achieved. At April 27, 2000, the market price of the Common Stock was 3 15/16.
</FN>
</TABLE>
AGGREGATED OPTIONS EXERCISED DURING LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth information concerning the exercise of
stock options to purchase common stock during the 1999 fiscal year and the value
of unexercised stock options to purchase common stock at the end of the 1999
fiscal year for the persons named in the Summary Compensation Table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF
SHARES NUMBER OF UNEXERCISED
ACQUIRED VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ON REALIZED AT FISCAL YEAR END AT FISCAL YEAR-END($)
NAME EXERCISE ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE*
- ---- ------------ --------- ------------------------------ -------------------------------
<S> <C> <C> <C> <C>
Dale S. Baker......... -- -- 168,334/241,666 0 / 0
Harold M. Woody....... -- -- 45,000/25,000 0 / 0
Benito Quevedo........ -- -- 75,000/125,000 0 / 0
James D. Innella...... -- -- 101,666/138,334 0 / 0
Michael A. Saso....... -- -- 20,000/12,500 0 / 0
<FN>
* Computed based upon the difference between the closing price of common stock at December 31, 1999 and the
exercise price. No value has been assigned to options which are not in-the-money.
</FN>
</TABLE>
- 6 -
<PAGE>
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company receives an annual
retainer fee of $12,000 per year for serving as a director. In addition, each
director who is not an employee of the Company receives $1,000 for each meeting
of the board attended and $1,000 for each committee meeting attended.
All directors receive on an annual basis a mandatory stock option grant
under the 1996 Director Stock Option Plan for serving on the Company's board.
Five-year options to purchase 5,000 shares of common stock are automatically
granted to each director on July 1 of each year, at an option exercise price
equal to the closing price of common stock on July 1. All such options are
immediately exercisable on the date of grant. Existing directors, upon the
organization of the Company were granted five-year options to purchase 10,000
shares of common stock, all of which were immediately exercisable, at an option
exercise price equal to the initial public offering price. Additionally,
directors appointed to the Company's board are and will in the future be granted
options to purchase 10,000 shares of common stock at the time they are appointed
to the board, at an option exercise price equal to the closing price of common
stock on the date of their appointment to the board.
EMPLOYMENT AGREEMENTS
On January 1, 1999, the Company entered into an employment agreement
with Dale S. Baker. The employment agreement provides for an annual base salary
of $550,000 (to be increased annually by a cost of living adjustment). In
addition, the Company agreed to provide Mr. Baker with all employee benefits
available under benefit plans established by the Company, and to pay Mr. Baker
an additional sum of $5,000 per year for insurance premiums to maintain a whole
life insurance policy. The employment agreement requires Mr. Baker to use his
best efforts to perform the duties of President and Chief Executive Officer. The
agreement provides for a term expiring on January 1, 2002.
The employment agreement further provides for an option grant to
purchase 350,000 shares of common stock (granted outside of any plan) at $40.625
per share, with one-third of the options granted vesting on January 1, 2000,
one-third of the options granted vesting on January 1, 2001, and one-third of
the options granted vesting on January 1, 2002. The employment agreement also
provides for Mr. Baker's participation in the Aviation Sales Company 1999 EBITDA
Plan which allows him to earn an incentive bonus of between 50% and 125% of his
base salary.
Mr. Woody has an employment agreement with the Company under which he
is entitled to an annual base salary of $249,164 (to be increased annually by a
cost of living adjustment), and all employee benefits available under benefit
plans established by the Company. This employment agreement provides for an
initial term expiring on December 31, 1999. Thereafter, the agreement shall run
for successive one-year periods unless the Company terminates the agreement upon
six months' prior written notice, or Mr. Woody terminates the agreement upon
three months' prior written notice. The agreement currently runs through
December 31, 2000.
On January 1, 1999, the Company entered into an employment agreement
with Benito Quevedo to serve as Senior Vice President and as President of the
Company's maintenance and repair operations, under which he is entitled to an
annual base salary of $350,000 (to be increased annually by a cost of living
adjustment), and all employee benefits available under benefit plans established
by the Company. Mr. Quevedo's agreement provides for a term expiring on January
1, 2002.
The employment agreement with Mr. Quevedo further provides for option
grants to purchase 175,000 shares of common stock (granted outside of any plan)
at $40.625 per share, with one-third of the options granted vesting on January
1, 2000, one-third of the options granted vesting on January 1, 2001, and
one-third of the options granted vesting on January 1, 2002. The employment
agreement also provides for Mr. Quevedo's participation in the Aviation Sales
Company 1999 EBITDA Plan, which provides him the opportunity to earn an
incentive bonus of between 50% and 125% of his base salary.
- 7 -
<PAGE>
The employment agreement with Mr. Woody also provides for his
participation in the Company's 1997 EBITDA Incentive Compensation Plan, which
provides that he has the opportunity to earn an incentive bonus of between 20%
and 250% of his base salary.
Further, each of the Company's employment agreements provides for
certain benefits in the event of a change of control.
Section 162(m) of the Internal Revenue Code generally disallows an
income tax deduction to public companies for compensation over $1.0 million paid
in a year to any one of the chief executive officer or the four most highly
compensated other executive officers, to the extent that this compensation is
not "performance based" within the meaning of Section 162(m). As a result of
this limitation, no assurance can be given that all of the compensation paid to
the Company's executive officers in the future will be deductible.
STOCK OPTION PLANS
The board of directors of the Company and stockholders have adopted two
stock option plans (the "Plans"). Pursuant to the 1996 Director Stock Option
Plan (the "Director Plan"), options to acquire a maximum of the greater of
150,000 shares or 2% of the number of shares of common stock then outstanding
may be granted to directors of the Company. Pursuant to the 1996 Stock Option
Plan (the "1996 Plan"), options to acquire a maximum of the greater of 2,250,000
shares or 15% of the number of shares of common stock then outstanding may
be granted to the executive officers, employees (including employees who are
directors), independent contractors and consultants of the Company.
The compensation committee administers the Plans. Prior to the
formation of the compensation committee, the board administered both plans. The
compensation committee determines which persons will receive options and the
number of options to be granted to such persons. The Director Plan also provides
for annual mandatory grants of options to directors. The compensation committee
also interprets the provisions of the Plans and makes all other determinations
that it deems necessary or advisable for the administration of the Plans.
Pursuant to both of the Plans, the Company may grant incentive stock
options as defined in Section 422(b) of the Internal Revenue Code and
non-qualified stock options, not intended to qualify under Section 422(b). The
price at which the Company's common stock may be purchased upon the exercise of
options granted under the Plans will be required to be at least equal to the per
share fair market value of common stock on the date the particular options are
granted. Options granted under either of the Plans may have maximum terms of not
more than ten years and are not transferable, except by will or the laws of
descent and distribution. None of the incentive stock options under the Plans
may be granted to an individual owning more than 10% of the total combined
voting power of all classes of stock issued by the Company unless the purchase
price of common stock under such option is at least 110% of the fair market
value of the shares issuable on exercise of the option determined as of the date
the option is granted, and such option is not exercisable more than five years
after the grant date.
Generally, options granted under the Plans may remain outstanding and
may be exercised at any time up to three months after the person to whom such
options were granted is no longer employed or retained by the Company or serving
on the Company's board.
Pursuant to the Plans, unless otherwise determined by the compensation
committee, one-third of the options granted to an individual are exercisable
upon grant, one-third are exercisable on the first anniversary of such grant and
the final one-third are exercisable on the second anniversary of such grant.
However, options granted under the Plans become immediately exercisable if the
Company terminates the holder of such options or if the holder is no longer a
director of the Company, as the case may be, or subsequent to certain events
which are deemed to be a "change in control" of the Company. A "change in
control" of the Company generally is deemed to occur when (a) any person becomes
the
- 8 -
<PAGE>
beneficial owner of or acquires voting control with respect to more than 20% of
common stock (or 35% if such person was a holder of common stock on July 2,
1996, the date of the Company's initial public offering); (b) a change occurs in
the composition of a majority of the Company's board of directors during a
two-year period, provided that a change with respect to a member of the
Company's board shall be deemed not to have occurred if the appointment of a
member of the Company's board is approved by a vote of at least 75% of the
individuals who constitute the then existing board; or (c) the Company's
stockholders approve the sale of all or substantially all of the assets of the
Company.
Incentive stock options granted under the Plans are subject to the
restriction that the aggregate fair market value (determined as of the date of
grant) of options which first become exercisable in any calendar year cannot
exceed $100,000.
The Plans provide for appropriate adjustments in the number and type of
shares covered by the Plans and options granted under the Plans in the event of
any reorganization, merger, recapitalization or certain other transactions
involving the Company.
As of the date of this Form 10-K/A, the following options to purchase
shares of the Company's common stock were outstanding: (i) options to purchase
1,252,359 shares at prices ranging from $11.00 to $39.50 per share, 873,600 of
which are currently vested and all of which were issued under the Company's
stock option plans, and (ii) options to purchase 750,000 shares at prices
ranging from $20.00 to $40.63 per share, 233,333 of which are currently vested
and all of which were issued outside of any plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the past fiscal year, none of the Company's directors or
executive officers served as a member of the compensation committee or similar
committee of another entity, one of whose executive officers served on the
Company's board or served as a director of another entity, one of whose
executive officers served on the Company's board, or served as a member of the
compensation committee or similar committee of any other entity, one of whose
executive officers served as the Company's director.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's board of directors is responsible for establishing broad
corporate policies and for the overall performance of the Company. Standing
committees of the Board are the audit committee and the compensation committee.
The Board of Directors has no executive committee or nominating committee, or
any committee performing such functions.
The audit committee maintains communications between the Company's
board and the Company's independent auditors, monitors performance of the
independent auditors, reviews audit scope and results, reviews the organization
and performance of the Company's internal systems of audit and financial
controls, and recommends the retention or, where appropriate, the replacement of
independent auditors. The members of the audit committee are Philip B. Schwartz
and Sam Humphreys. The audit committee held one meeting during the fiscal year
ended December 31, 1999.
The compensation committee reviews and approves compensation policies
and practices for all elected corporate executive officers and fixes the total
compensation of the Chief Executive Officer. The compensation committee also
administers the Company's 1996 Stock Option Plan and the 1996 Director Stock
Option Plan. The members of the compensation committee are Robert Alpert and Sam
Humphreys. The compensation committee acted by written consent on five occasions
during the fiscal year ended December 31, 1999.
The Board of Directors of the Company held a total of seven meetings
and acted six times by written consent in lieu of a meeting during the fiscal
year ended December 31, 1999. Each of the directors attended at least 75% of the
aggregate number of meetings of the Board of Directors except Sam Humphreys, who
attended five of the seven meetings.
- 9 -
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this Form 10-K/A,
certain information regarding the Company's common stock owned of record or
beneficially by: (1) each person who owns more than 5% of the outstanding common
stock, (2) each director of the Company, and (3) all directors and executive
officers as a group.
Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes generally voting power and/or
investment power with respect to securities. Shares of common stock subject to
options currently exercisable or exercisable within 60 days of the date of this
report are deemed outstanding for purposes of computing the percentage
beneficially owned by the person holding the options but are not deemed
outstanding for purposes of computing the percentage beneficially owned by any
other person.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1)
--------------------------------------------------------------
APPROXIMATE
NAME NUMBER PERCENT OF CLASS
- ---- --------------------------------------------------------------
<S> <C> <C>
Robert Alpert (2) (3)............................ 2,663,500 17.7%
Dale S. Baker (4)................................ 334,334 2.2%
Harold M. Woody (5).............................. 245,000 1.6%
Sam Humphreys (6)................................ 25,000 *
Philip B. Schwartz (7)........................... 23,900 *
Roy T. Rimmer, Jr (8)............................ 55,000 *
All directors and executive officers as a group (12
persons) (9) 3,539,872 23.0%
Lacy Harber (10)................................. 3,358,500 22.4%
George F. Baker (10)............................. 973,774 6.5%
Richard Nye (10)................................. 973,774 6.5%
- ----------------------------
<FN>
* Less than one percent.
(1) Unless otherwise indicated, each person named in the table has the sole voting and investment power with
respect to the shares beneficially owned.
(2) Shares are primarily owned of record by corporate entities controlled by Mr. Alpert.
(3) Includes vested options to purchase 25,000 shares at prices ranging from $19.00 to $39.50 per share.
(4) Includes vested options to purchase 168,334 shares at prices ranging from $19.00 to $40.63 per share.
(5) Includes vested options to purchase 45,000 shares at prices ranging from $19.00 to $39.50 per share.
(6) Vested options to purchase 25,000 shares at prices ranging from $19.00 to $39.50 per share.
(7) Includes vested options to purchase 20,000 shares at prices ranging from $37.00 to $39.50 per share.
(8) Includes vested options to purchase 10,000 shares at $15.31 per share.
(9) Includes vested options to purchase 393,333 shares at prices ranging from $15.31 to $40.63 per share.
(10) Information based upon the most recent filing by the reporting person with the SEC.
</FN>
</TABLE>
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<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of December 2, 1994, the Company entered into a 20-year lease with
Aviation Properties, a Delaware general partnership ("Aviation Properties"),
pursuant to which the Company leases its corporate headquarters and warehouse in
Miami, Florida (the "Miami Property"). The Company makes annual payments under
such lease in the amount of approximately $892,990. The sole partners of
Aviation Properties are (a) ALBA Corporation ("ALBA") and (b) J/T Aviation
Partners ("J/T"). The sole stockholder and president of ALBA is Robert Alpert, a
principal stockholder and director of the Company, and J/T was previously a
principal stockholder of the Company.
In connection with Aviation Properties' purchase of the Miami Property,
the Company and Aviation Properties entered into a loan agreement (the "Loan
Agreement") whereby the Company made a $2,465,519 loan to Aviation Properties,
which loan bears interest at 8% per annum. The loan is being repaid in monthly
installments, with any remaining outstanding principal and interest due on
December 2, 2004. The remaining outstanding balance as of December 31, 1999 was
$2,099,000.
As of December 2, 1994, the Company entered into a six-year lease with
Aviation Properties of Texas, a Delaware general partnership ("AVTEX"), pursuant
to which the Company leases a warehouse in Pearland, Texas. The Company make
annual payments under such lease in the amount of $114,468. The sole partners of
AVTEX are ALBA and J/T.
In March 1998, Aviation Sales Distribution Services Company ("ASDS"), a
wholly-owned subsidiary of AVS, acquired the Pearland Property from AVTEX in
exchange for (i) ASDS 's cancellation of all outstanding principal balance and
unpaid accrued interest on a promissory note of AVTEX held by ASDS in the
principal amount of $434,244 and (ii) ASDS's assumption of indebtedness in the
principal amount of $1,128,855 which was secured by a deed of trust in favor of
a third party.
In July 1998, the Company entered into an approximately 19 month lease
for the 30,000 square foot office and manufacturing facility in Miami, Florida
used by its subsidiary Caribe Aviation, Inc. (the "Caribe Facility Lease"). The
lessor under the Caribe Facility Lease is Ben Quevedo, No. 1, Ltd., a limited
partnership controlled by Benito Quevedo (the "Quevedo Partnership"), an
executive officer of the Company. The Company made monthly payments to the
lessor under the Caribe Facility Lease of approximately $21,515 in rent and
$2,500 in pass through operating costs. Such lease has now been extended on a
month-to-month basis as Caribe prepares to move its operations into a new
facility in June 2000. During this extended period, Caribe is paying rent of
approximately $43,000 per month in accordance with the terms of the lease.
The Company believes the terms of the Loan Agreement, the terms of the
leases with Aviation Properties, AVTEX and the Quevedo Partnership and the terms
of the purchase of the Pearland Property are no less favorable than could be
obtained from an unaffiliated third party.
In January 2000, the Company loaned Mr. Baker $250,000, payable over an
eighteen month period with interest equal to the rate of interest being paid by
the Company from time to time on its senior loan. The loan is unsecured.
In April 2000, the Company loaned Mr. Woody $250,000, payable in one
year or upon the sale of certain shares of Japan Fleet Services Singapore (PTE)
LTD which have been pledged to secure the loan. The note bears interest equal to
the rate of interest being paid by the Company from time to time on its senior
loan.
Mr. Schwartz is a shareholder in Akerman, Senterfitt & Eidson, P.A.,
which has in the past and continues to perform legal services for the Company.
The fees paid by the Company to Akerman, Senterfitt & Eidson, P.A. for legal
services rendered are no greater than those that would be charged to the Company
by an unrelated third party law firm.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AVIATION SALES COMPANY
(Registrant)
BY: /s/ Dale S. Baker May 1, 2000
-----------------------------
Dale S. Baker, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE AND TITLE DATE:
------------------- ----
/s/ Dale S. Baker May 1, 2000
- ----------------------------------------------
Dale S. Baker
President, Chief Executive Officer and
Chairman of the Board (Principal Executive Officer)
/s/ Harold M. Woody May 1, 2000
- ----------------------------------------------
Harold M. Woody
Executive Vice President and Director
/s/ Robert Alpert May 1, 2000
- ----------------------------------------------
Robert Alpert
Director
/s/ Sam Humphreys May 1, 2000
- ----------------------------------------------
Sam Humphreys
Director
/s/ Philip B. Schwartz May 1, 2000
- ----------------------------------------------
Philip B. Schwartz
Director
/s/ Roy T. Rimmer, Jr. May 1, 2000
- ----------------------------------------------
Roy T. Rimmer, Jr.
Director
/s/ Michael C. Brant May 1, 2000
- ----------------------------------------------
Michael C. Brant
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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