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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 33-90722
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A. Full title of the plan and the address of the plan if different from that
of the issuer named below:
AVIALL, INC. EMPLOYEE STOCK PURCHASE PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Aviall, Inc.
2075 Diplomat Drive
Dallas, Texas 75234-8999
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Page 1 of 10
Exhibit Index appears on page 9
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REQUIRED INFORMATION
The financial statements listed in the accompanying table of contents on page 3
are filed as part of this Form 11-K.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Benefits Administration Committee of the Plan has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
AVIALL, INC. EMPLOYEE STOCK PURCHASE PLAN
By: /s/ Jeffrey J. Murphy
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Jeffrey J. Murphy
Chairman, Aviall, Inc.
Employee Stock Purchase Plan
By: /s/ Jacqueline K. Collier
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Jacqueline K. Collier
Vice President and Controller,
Aviall, Inc.
Date: March 26, 1998
Page 2 of 10
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AVIALL, INC. EMPLOYEE STOCK PURCHASE PLAN
Table of Contents
December 31, 1997
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants........................................ 4
Statements of Net Assets................................................. 5
Statements of Changes in Net Assets...................................... 6
Notes to Financial Statements............................................ 7
</TABLE>
Schedules not filed herewith are omitted because of the absence of conditions
under which they are required.
Page 3 of 10
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REPORT OF INDEPENDENT ACCOUNTANTS
March 25, 1998
To the Participants and Benefits Administration Committee
of the Aviall, Inc.
Employee Stock Purchase Plan
In our opinion, the accompanying statements of net assets and the related
statements of changes in net assets present fairly, in all material respects,
the net assets of the Aviall, Inc. Employee Stock Purchase Plan (the "Plan") at
December 31, 1997 and 1996, and the changes in net assets for each of the two
years in the period ended December 31, 1997 and for the period April 1, 1995
(inception) to December 31, 1995, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
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PRICE WATERHOUSE LLP
Dallas, Texas
Page 4 of 10
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AVIALL, INC. EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS
<TABLE>
<CAPTION>
December 31,
1997 1996
---------- ----------
Assets
- ----------
<S> <C> <C>
Aviall, Inc. common stock at market value ($.01 par value;
15,029 shares and $102,262 cost at December 31, 1997;
34,093 shares and $236,879 cost at December 31, 1996) $ 223,560 313,233
---------- ----------
Total Assets 223,560 313,233
Liabilities -- --
---------- ----------
Net Assets $ 223,560 313,233
========== ==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
Page 5 of 10
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AVIALL, INC. EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
April 1, 1995
(Inception) to
Year ended December 31, December 31,
1997 1996 1995
---------- ---------- ------------
Additions
<S> <C> <C> <C>
Employee contributions $ -- 237,932 298,335
Dividends reinvested -- 192 114
Unrealized appreciation in fair value
of investments 87,555 36,219 81,736
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Total additions 87,555 274,343 380,185
Deductions
Employee withdrawals 177,228 265,492 75,803
---------- ---------- ----------
Net increase (decrease) (89,673) 8,851 304,382
Net assets, beginning of period 313,233 304,382 --
---------- ---------- ----------
Net assets, end of period $ 223,560 313,233 304,382
========== ========== ==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
Page 6 of 10
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AVIALL, INC. EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. DISCONTINUANCE OF PLAN
In 1996, the Benefits Administration Committee of the Board of Directors
of Aviall, Inc. (the "Plan Administrator") elected to discontinue the
Aviall, Inc. Employee Stock Purchase Plan (the "Plan") effective January
1, 1997. Participants were permitted to continue contributions to the Plan
through December 31, 1996 and the Plan will continue to hold shares on
behalf of the participants until participants elect to withdraw from the
Plan.
2. PLAN DESCRIPTION
The Plan was established effective April 1, 1995 to promote the interests
of Aviall, Inc. and its subsidiaries (collectively, the "Company") by
providing eligible employees of the Company with additional incentive to
continue their employment and to increase efforts to promote the Company.
Prior to discontinuance, eligible employees could purchase shares of the
Company's common stock through payroll deductions at a discount from
market price. While the Company does not presently anticipate further
share issuance under the Plan, as of December 31, 1997, 171,519 shares of
the Company's $.01 par value common stock are reserved for issuance in the
event the Plan is reactivated. The Plan Administrator has appointed Smith
Barney as the Plan's trustee to keep record of, among other things,
individual participant accounts. Reference should be made to the Plan for
more complete information.
Until such time that the Plan was discontinued, substantially all full
time employees of the Company were eligible to participate in the Plan if
such employees had been employed by the Company for the entire three
consecutive months immediately preceding the beginning of a calendar
quarter (the "Plan Quarter"). Participants were allowed to authorize
payroll deductions in an amount not less than 1% and not more than 15% of
their gross earnings. No employee could acquire common stock under the
Plan if such acquisition would result in ownership of 5% or more of the
total combined voting power or value of all classes of stock of the
Company.
Payroll deductions were credited to the contribution account of each
participant. At the end of each Plan Quarter, the amount in each
participant's contribution account was applied to purchase shares of the
Company's common stock. The purchase price per share of common stock for
each Plan Quarter was equal to the lesser of 85% of the closing market
price on the first or the last day of the Plan Quarter. Common stock
purchased by each participant is considered to be issued and outstanding
as of the close of business on the last day of business of each Plan
Quarter. Stock certificates for such shares are registered in the name of
and held by the plan trustee. Upon direction by a participant, the plan
trustee will sell the shares of common stock credited to the participant's
account and deliver such proceeds, net of sales commission, to the
participants.
Page 7 of 10
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AVIALL, INC. EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting records of the Plan are maintained on the accrual basis.
Investments are valued at quoted market value. The Company pays all of the
Plan's administrative expenses except those incurred incident to the sale
of participant stock.
Unrealized appreciation/(depreciation) in fair value of investments is
determined based on the change in market values from the beginning to the
end of the year for shares held at the beginning and end of the year, and
the difference between cost and end of year market value for shares
purchased during the year that remain in the plan at year end. In
determining cost, shares are assumed to be sold on a first-in-first-out
basis.
Employee withdrawals are recorded at beginning of the year market value
for shares held at the beginning of the year or cost for shares purchased
and sold during the year.
At December 31, 1996, Aviall, Inc. common stock at market value as shown
on the accompanying Statement of Net Assets includes 5,506 shares issuable
by the Company based on participant contributions for the Plan Quarter
ended December 31, 1996. Such shares were issued on January 2, 1997.
4. INCOME TAX STATUS
Management believes the Plan qualifies as an employee stock purchase plan
under Section 423 of the Internal Revenue Code and therefore the Plan is
exempt from taxation under Section 501(a).
Participants are liable for income taxes on withdrawals from the Plan in
accordance with the Internal Revenue Code. Participants' tax liability is
more fully described in the Aviall, Inc. Employee Stock Purchase Plan
Prospectus.
Page 8 of 10
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INDEX TO EXHIBITS
Exhibit # Description Page
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23 Consent of Independent Accountants 10
Page 9 of 10
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EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-90722) of our report dated March 25, 1998
appearing on page 4 of the Annual Report on Form 11-K of the Aviall, Inc.
Employee Stock Purchase Plan for the year ended December 31, 1997.
/s/ Price Waterhouse LLP
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Price Waterhouse LLP
Dallas, Texas
March 27, 1998
Page 10 of 10
