<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 10-K/A
(MARK ONE) (AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO .
COMMISSION FILE NUMBER 1-12380
---------------------------------
AVIALL, INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 65-0433083
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2075 DIPLOMAT DRIVE
DALLAS, TEXAS 75234-8999
(Address of principal executive offices) (Zip Code)
(972) 406-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b)of Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- ----------------------------- -----------------------------------------
Common Stock, par value, New York Stock Exchange
$.01 per share
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
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 is not contained herein, and will not be contained
herein, 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. X
---
The aggregate market value of the voting stock held by non-affiliates
of the Registrant as of March 15, 1999 was approximately $282.4 million.
The number of shares of Common Stock outstanding at March 15, 1999
was 18,223,243.
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<PAGE> 2
Aviall, Inc. ("Aviall) hereby amends and restates in their entirety Items 10,
11 and 12 of its Annual Report on Form 10-K for the fiscal year ended December
31, 1998 as set forth below.
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is the name of each director, a description of
positions and offices with Aviall, any other principal occupation, business
experience during at least the last five years, certain directorships presently
held, age and length of service as a director of Aviall.
ERIC E. ANDERSON, 50, has served as a director of Aviall since 1996 and as the
Chairman of the Board of Aviall since December 1997. He has also served as
Aviall's President since June 1996 and as Chief Executive Officer since
December 1996. He was the Company's Chief Operating Officer from June 1996
through December 1996 and was an Executive Vice President of the Company from
February 1996 until June 1996. Mr. Anderson was President of Inventory Locator
Service, Inc. ("ILS"), a wholly owned subsidiary of the Company, from 1993 to
1996, and was an Executive Vice President of ILS from 1991 to 1993.
ROBERT G. LAMBERT, 68, has served as a director of Aviall since 1993. Mr.
Lambert retired as Chairman of the Board of Directors of Aviall in December
1997, a position he had held since December 1993. He served as the Company's
President from December 1995 to June 1996 and as Chief Executive Officer from
December 1995 to December 1996. Mr. Lambert serves on the Audit Committee.
HENRY A. MCKINNELL, 56, has served as a director of Aviall since 1993. Dr.
McKinnell has served as Executive Vice President of Pfizer Inc. since 1992 and
a director of Pfizer Inc. since 1997. He was appointed President of Pfizer's
Worldwide Pharmaceuticals business in January 1997. Pfizer's Worldwide Consumer
Group and Strategic Planning and Policy Group continue to report to him. From
1992 to 1995 he served as Chief Financial Officer of Pfizer Inc. and President
of Pfizer's Hospital Products Group. Dr. McKinnell is also a director of John
Wiley & Sons, Inc. and The Dun & Bradstreet Corporation. Dr. McKinnell is
Chairman of the Compensation and Nominating Committee and serves on the Audit
Committee.
DONALD R. MUZYKA, 60, has served as a director of Aviall since 1994. Dr. Muzyka
has served as President and Chief Executive Officer of Special Metals
Corporation ("SMC") since October 1996. He served as President and Chief
Operating Officer of SMC from January 1990 to October 1996. Dr. Muzyka is also
a director of SMC and CSM Industries, Inc. Dr. Muzyka serves on the Audit
Committee and the Compensation and Nominating Committee.
RICHARD J. SCHNIEDERS, 51, has served as a director of Aviall since 1997. Mr.
Schnieders has served as an Executive Vice President of Sysco Corporation since
1998. From 1992 to 1998 Mr. Schnieders was Senior Vice President
Merchandising/Multi-Unit Sales of Sysco Corporation. Mr. Schnieders has been a
director of Sysco Corporation since 1997. Mr. Schnieders is Chairman of the
Audit Committee and serves on the Compensation and Nominating Committee.
BRUCE N. WHITMAN, 65, has served as a director of Aviall since 1998. Mr.
Whitman has been an Executive Vice President of FlightSafety International,
Inc. since 1962. Mr. Whitman is also a director of FlightSafety Boeing Training
International L.L.C., Petroleum Helicopters, Inc. and Megadata Corporation. Mr.
Whitman serves on the Audit Committee and the Compensation and Nominating
Committee.
The information required by this item regarding Aviall's executive
officers is set forth in Item 1 of this report, and incorporated herein by
reference.
1
<PAGE> 3
ITEM 11: EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Directors who are not employees of Aviall are entitled to receive an
annual retainer of $24,375 (the "Annual Retainer"), plus $1,000 for each Board
or committee meeting attended. Directors who are employees of Aviall or any of
its subsidiaries do not receive any fees for their Board or committee service.
Directors are also reimbursed for expenses incurred in attending Board and
Board committee meetings.
Directors who are not employees of Aviall are eligible to participate
in Aviall's Directors Stock Plan. Under the Directors Stock Plan, each eligible
director may make an election to receive shares of common stock in lieu of the
Annual Retainer. The number of shares of common stock granted to a participant
is the nearest number of whole shares of common stock which can be purchased
for $30,000 (the "Share Value"), based on the mean of the highest and lowest
sale price for the common stock on the grant date as reported on the New York
Stock Exchange. In the event that there is an increase or decrease in the
Annual Retainer, the Share Value adjusts automatically so that the ratio
between the Share Value and the Annual Retainer is maintained. Under the
Directors Stock Plan, common stock is granted automatically on the first
business day in July of any calendar year to each eligible director who has
elected to participate in the Directors Stock Plan at least six months prior to
that date. All eligible directors participated in the Directors Stock Plan
during 1998 and elected to participate in 1999.
A director who receives a grant of common stock pursuant to the
Directors Stock Plan is entitled to receive dividends on and to vote such
shares. However, the director's ownership rights in such shares do not vest
until six months after the date of grant and then only if the director
continues to serve on the Board at that date. However, a participating director
who has completed a full term of service prior to the end of such six-month
period, or whose service during such six-month period was interrupted due to
death or disability, will be vested in a pro rata number of such shares.
Notwithstanding the foregoing, all shares of common stock previously granted
under the Directors Stock Plan will become vested in the event of a change in
control of the Company (as defined in the Directors Stock Plan). Further, if a
change in control occurs prior to the grant date and on the grant date Aviall's
common stock is no longer listed on a national securities exchange,
participants in the Directors Stock Plan will receive a cash amount equal to
the Share Value in lieu of shares of common stock.
Under the Directors Stock Plan, non-employee directors are also
eligible to receive options to purchase up to 3,000 shares of Aviall common
stock on the first trading day of July each year. No options were granted to
directors in 1998 under the Directors Stock Plan.
2
<PAGE> 4
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term compensation
paid or accrued for the benefit of Aviall's Chief Executive Officer and the
other four most highly compensated executive officers of Aviall at December 31,
1998, for services rendered to Aviall during Aviall's last three fiscal years.
For the purposes of this report, Eric E. Anderson, Jacqueline K. Collier,
Charles M. Kienzle, Bruce Langsen and Jeffrey J. Murphy are referred to as the
"named executive officers."
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------ ----------------------------------
OTHER ANNUAL RESTRICTED SHARES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) STOCK AWARDS(2) OPTIONS/SARS(3) COMPENSATION(4)
- ---------------------------- ---- -------- -------- --------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Eric E. Anderson 1998 $300,000 $182,398 $ -- $ 76,019 75,000 $ 400
President and 1997 199,615 200,000 31,507 148,750 75,000 25,569
Chief Executive Officer 1996 174,904 247,716 -- 0 250,000 31,088
Jacqueline K. Collier 1998 125,000 65,799 -- 27,421 25,000 400
Vice President and Controller 1997 116,800 93,440 -- 69,496 25,000 400
1996 116,800 113,134 -- 0 10,000 400
Charles M. Kienzle 1998 175,000 23,450 -- 9,778 30,000 400
Senior Vice President, 1997 175,000 175,000 -- 130,156 35,000 400
Operations 1996 171,346 233,019 -- 0 25,000 400
Bruce Langsen 1998 168,269 144,580 -- 60,256 40,000 400
President of ILS 1997 140,769 141,264 -- 105,062 45,000 400
1996 113,800 156,498 -- 0 18,000 400
Jeffrey J. Murphy 1998 177,000 109,739 -- 45,735 30,000 540
Senior Vice President, 1997 177,000 177,000 -- 131,644 35,000 525
Law and Human Resources, 1996 177,000 253,110 -- 0 25,000 511
Secretary and General Counsel
</TABLE>
- -------------
1. Includes amounts reimbursed for the payment of income taxes related to
relocation expenses paid by the Company and taxable to Mr. Anderson. Other
perquisites and personal benefits furnished to the named executive
officers do not meet the disclosure thresholds established under SEC
regulations and are not included in this column.
2. Grants of restricted stock vest on the third anniversary of the grant
date. Recipients of restricted stock awards are entitled to receive any
dividends paid with respect to these shares. The dollar amounts shown for
1998 in the table above were determined based upon a price of $11.1875 per
share, the closing price of the common stock on January 26, 1999, the
grant date. The dollar amounts shown for 1997 were based upon a price of
$14.875 per share, the closing price of the common stock on January 2,
1998, the first trading day following the grant date. As of December 31,
1998, the aggregate number of shares of restricted stock and their value
(based upon a price of $11.75, the closing price of common stock on
December 31, 1998) held by each named executive officer was as follows:
Mr. Anderson, 16,795 restricted shares and $197,341; Ms. Collier, 7,123
restricted shares and $83,695; Mr. Kienzle, 9,624 restricted shares and
$113,082; Mr. Langsen, 12,449 restricted shares and $146,276; and Mr.
Murphy, 12,938 restricted shares and $152,022.
3. Grants of stock options in 1997 and 1998 vest one-third each year
commencing on the first anniversary of the grant. Grants of stock options
in 1996 vest at annual percentages of 33% or 25% beginning on either the
first or second anniversary of the date of grant. No named executive
officer received stock options granted in tandem with SARs in 1997 or
1998. All options granted to the named executive officers in 1996 were
granted in tandem with a limited SAR.
4. For 1998 this column includes (a) contributions to Aviall's Employees'
Savings Plan in the amount of $400 for each named executive and (b)
premiums for compensatory split-dollar insurance payments in the amount of
$140 for Mr. Murphy.
3
<PAGE> 5
SEVERANCE AGREEMENTS
Aviall is a party to Severance Agreements with its executive
officers, including each of the named executive officers, that become operative
only upon a change of control. The Severance Agreements provide that if, within
a two-year period following a change of control, Aviall terminates the
employment of such executive for reasons other than death, disability or cause,
or the executive terminates employment with Aviall for good reason, the
executive is entitled to receive a severance payment in an amount equal to a
multiple of his or her (a) then-current base salary, and (b) an amount equal to
the greater of the executive's (1) incentive compensation for the current
fiscal year (assuming the Company had reached target performance for that
year), or (2) incentive compensation paid or payable to the executive for the
most recently completed fiscal year. The multiple of base salary and incentive
compensation is two or three times for each of the named executive officers.
The executive is also entitled to continue to receive health and life insurance
benefits for a period of one year following his or her termination following a
change of control. The Severance Agreements further provide that if any amount
payable thereunder or otherwise to the executive is determined to be an "excess
parachute payment" under the Internal Revenue Code, the executive would be
entitled to receive an additional payment (net of income taxes) to compensate
the executive for the excise tax imposed by the Code on this payment.
OPTION/SAR GRANTS IN 1998
The following table provides information regarding the grant of stock
options to the named executive officers in 1998. In addition, hypothetical
gains of 5% and 10%, along with a third column representing a 0% gain (listed
in the table under "Potential Realizable Value at Assumed Annual Rates of Stock
Price Appreciation for Option Term"), are shown for these stock options. These
hypothetical gains are based on assumed rate of annual compound stock price
appreciation of 0%, 5% and 10% from the date the stock options were granted
over the full option term of ten years.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENTAGE OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL OPTIONS/ OF STOCK PRICE
UNDERLYING SARS APPRECIATION
OPTIONS/ GRANTED TO EXERCISE FOR OPTION TERM
SARS EMPLOYEES PRICE PER EXPIRATION ---------------------------------
NAME GRANTED(1) IN 1998 SHARE(2) DATE 0% 5% 10%
-------------- ---------------- ------------ ------------------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Eric E. Anderson 75,000 18.3% $ 14.7813 March 16, 2008 $ 0 $ 697,191 $1,766,819
Jacqueline K. Collier 25,000 6.1% 14.7813 March 16, 2008 0 232,397 588,940
Charles M. Kienzle 30,000 7.3% 14.7813 March 16, 2008 0 278,876 706,728
Bruce Langsen 40,000 9.7% 14.7813 March 16, 2008 0 371,835 942,303
Jeffrey J. Murphy 30,000 7.3% 14.7813 March 16, 2008 0 278,876 706,728
</TABLE>
- ------------
1. Each of the options shown in the table above vest one third each year,
beginning on the first anniversary of the date of the grant. Of the
options granted in 1998 (a) to Ms. Collier, 7,900 options are incentive
stock options and (b) to all other named executive officers, 6,964 options
are incentive stock options. All other options granted in 1998 to the
named executive officers are non-qualified stock options. No options
granted to the named executive officers in 1998 were granted in tandem
with SARs.
2. The fair market value of the shares using the average of the high and low
trading prices on the date of grant.
4
<PAGE> 6
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND DECEMBER 31, 1998 OPTION/SAR VALUES
The following table provides information regarding the exercise of Aviall
options during 1998 and unexercised options held as of December 31, 1998 by
each of the named executive officers.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT DECEMBER 31, 1998(1) DECEMBER 31, 1998(2)
SHARES ACQUIRED VALUE ----------------------------------------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Eric E. Anderson 7,266 $ 13,316 155,999 292,251 $ 195,718 $ 154,751
Jacqueline K. Collier 0 -- 37,289 45,150 45,684 24,675
Charles M. Kienzle 0 -- 86,643 61,951 103,060 36,713
Bruce Langsen 0 -- 34,969 76,271 58,652 44,416
Jeffrey J. Murphy 0 -- 128,859 61,951 194,453 40,963
</TABLE>
- ----------------
1. The number of unexercised options includes shares of common stock that may
be issued upon the exercise of replacement options that were granted in
December 1993 pursuant to an agreement entered into by Ryder System, Inc.
and Aviall in connection with the spin-off distribution by Ryder of all of
Aviall's common stock to the stockholders of Ryder (which agreement was
approved by the Board prior to the spin-off, at which time a majority of
Aviall's directors were executive officers of Ryder). The number of Aviall
options that were granted to replace the Ryder options was determined by
reference to the market value of Ryder's shares and Aviall's common stock
in order to preserve the economic value of the optionee's Ryder options.
Each replacement option has the same vesting status and remaining time
period for exercise as the corresponding Ryder options.
2. Based on a price of $11.6875 per share of Aviall's common stock, using the
average of the high and low trading prices on December 31, 1998.
5
<PAGE> 7
RETIREMENT BENEFITS
Aviall and certain of its subsidiaries maintain certain pension plans
in which Aviall's executive officers participate.
Aviall covers substantially all regular domestic full-time employees
under the Aviall, Inc. Retirement Plan. Benefits payable under the Retirement
Plan are based on an employee's career earnings with Aviall and its
subsidiaries. At normal retirement age of 65, a participant is entitled to a
monthly pension benefit payable for life. The annual pension benefit, when paid
in the form of a life annuity with no survivor's benefits, is generally equal
to the sum of 1.45% of the first $15,600 of compensation and bonus received,
plus 1.85% of the portion of the compensation and bonus in excess of $15,600
during each such year while a Retirement Plan member.
Retirement Plan benefits vest at the earlier of the completion of
five years of credited service or upon reaching age 65. However, in the event
of a change of control of Aviall, all participants will be fully vested and the
term "accrued benefit" will include the value of early retirement benefits for
any participant age 45 or above or with 10 or more years of service. In
addition, in the event of a change of control, severance payments related to
the change of control will be counted in a participant's Retirement Plan
compensation for the year in which the severance is paid. These benefits are
not subject to any reduction for Social Security benefits or other offset
amounts. An employee's pension benefits may be paid in certain alternative
forms having actuarially equivalent values.
The maximum annual benefit under a qualified pension plan is
currently $130,000 beginning at the Social Security retirement age (currently
age 65). The maximum compensation and bonus that may be taken into account in
determining annual retirement accruals is currently $160,000. Aviall maintains
a non-qualified, unfunded benefit plan, called the Benefit Restoration Plan,
which covers those participants of the Retirement Plan, including those
described below, whose benefits are reduced by the Internal Revenue Code or
other United States laws. A participant in the Benefit Restoration Plan is
entitled to a benefit equaling the difference between the amount of benefits
the participant is entitled to without reduction and the amount of benefits the
participant is entitled to after the reductions. Participant's benefits under
the Benefit Restoration Plan are payable in a lump sum upon a change of control
of Aviall.
Except as described below, the following table sets forth estimated
annual pension benefits (in the form of a single life annuity) assuming each
named executive officer remains continuously employed at current compensation
levels until retirement at the normal retirement date (age 65).
<TABLE>
<CAPTION>
NAME AMOUNT(1)
- ---- ----------
<S> <C>
Eric E. Anderson.............................................................. $ 114,128
Jacqueline K. Collier......................................................... 60,780
Charles M. Kienzle............................................................ 83,814
Bruce Langsen................................................................. 58,302
Jeffrey J. Murphy............................................................. 72,484
</TABLE>
- ------------------------
1. These amounts include benefits under the Retirement Plan and the Benefit
Restoration Plan combined.
6
<PAGE> 8
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of April 20, 1999, the directors of Aviall, the named executive
officers and all current directors and executive officers of Aviall as a group,
beneficially owned common stock as set forth in the following table.
<TABLE>
<CAPTION>
TOTAL SHARES
NAME OWNED SHARES(1) OPTION SHARES(2) BENEFICIALLY OWNED(3)
- ---- --------------- ---------------- ---------------------
<S> <C> <C> <C>
Eric E. Anderson(4)............................... 25,468 222,749 248,217
Robert G. Lambert(5).............................. 17,765 140,000 157,765
Henry A. McKinnell................................ 10,523 - 10,523
Donald R. Muzyka.................................. 8,142 - 8,142
Richard J. Schnieders............................. 4,196 - 4,196
Bruce N. Whitman.................................. 12,196 - 12,196
Jacqueline K. Collier(6).......................... 7,707 57,272 64,979
Charles M. Kienzle(7)............................. 10,449 108,193 118,642
Bruce Langsen(8).................................. 10,702 69,272 79,974
Jeffrey J. Murphy(9).............................. 24,557 158,909 183,466
All current directors and executive officers
as a group (14 persons)......................... 149,971 900,415 1,050,386
</TABLE>
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1. Represents shares of common stock owned by such individuals, including
shares owned pursuant to the Aviall's Employees' Savings Plan and the
Directors Stock Plan.
2. Represents shares that may be acquired within 60 days of April 20, 1999,
through the exercise of stock options.
3. Unless otherwise noted, the holders of the shares of common stock included
in this table have sole voting and investment power with respect to all
such shares. As of April 20, 1999, Mr. Anderson beneficially owned 1.3% of
Aviall's outstanding common stock. As of this date, no other director or
named executive officer beneficially owned one percent or more of the
outstanding common stock. All current directors and executive officers as
a group beneficially owned approximately 5.5% of the outstanding common
stock as of April 20, 1999.
4. Includes 14,266 shares of common stock held jointly by Mr. Anderson and
his spouse and 200 shares held by Mr. Anderson's children. Mr. Anderson
has shared voting and investment power with respect to the shares held
jointly with his spouse. Mr. Anderson disclaims beneficial ownership of
his children's shares. Also includes 6,795 shares of restricted common
stock for which Mr. Anderson has sole voting power and no investment
power.
5. Excludes 225 shares of common stock held in trust for the benefit of Mr.
Lambert's children. Mr. Lambert is a co-trustee of such trust and has
shared voting and investment power with respect to such shares. Mr.
Lambert disclaims beneficial ownership of the 225 shares held in trust.
6. Includes 2,451 shares of restricted common stock for which Ms. Collier has
sole voting power and no investment power.
7. Includes 874 shares of restricted common stock for which Mr. Kienzle has
sole voting power and no investment power.
8. Includes 5,386 shares of restricted common stock for which Mr. Langsen has
sole voting power and no investment power.
9. Includes 9,769 shares of common stock held jointly by Mr. Murphy and his
spouse. Mr. Murphy has shared voting and investment power with respect to
these shares. Also includes 4,088 shares of restricted common stock for
which Mr. Murphy has sole voting power and no investment power.
7
<PAGE> 9
The following table sets forth information regarding the number and
percentage of shares of common stock held by all persons and entities who are
known by Aviall to beneficially own five percent or more of Aviall's
outstanding common stock. The information regarding beneficial ownership of
common stock by the entities identified below is included in reliance on a
report filed with the SEC by such entity, except that the percentage is based
upon Aviall's calculations made in reliance upon the number of shares reported
to be beneficially owned by such entity in such report and the number of shares
of common stock outstanding on April 20, 1999.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- ----------------------------------- ----------------------- --------
<S> <C> <C>
Neuberger & Berman, LLC 2,790,900 15.3%(1)
Nolan Acquisition Partners and 1,589,329 8.7%(2)
AeroGroup I, Ltd. Co.
</TABLE>
- ------------------
1. According to a Schedule 13G filed by Neuberger & Berman, LLC on February
9, 1999, Neuberger & Berman has sole voting power with respect to
1,511,800 shares of common stock, shared voting power with respect to
1,244,900 shares of common stock and shared dispositive power with respect
to 2,790,900 shares of common stock. In the Schedule 13G, Neuberger &
Berman reported that it acts as an investment manager for various funds
which hold the shares in the ordinary course of business, that it does not
have any economic interest in the shares, that the actual owners of such
shares are its clients and its clients have the sole right to receive and
the power to direct the receipt of dividends or proceeds from the sale of
the shares. The business address of Neuberger & Berman, LLC is 605 Third
Avenue, New York, New York 10158-3698.
2. According to a Schedule 13D filed on March 12, 1999 by Nolan Acquisition
Partners, Nolan Acquisition Group, L.P., Kincaid Capital Group, Thomas R.
Kincaid, Dan Komnenovich, Richard Jones, Conese Capital, L.L.C., Conese
Family Partnership (Nevada), L.P., Conese General Partner (Nevada), Inc.,
Eugene P. Conese (collectively, the "Nolan Group"), and Brian H. Rowe,
AeroGroup I, Ltd. Co. and AeroEquity, Inc. (collectively, the "Rowe
Group"), Nolan Acquisition Partners has sole voting and dispositive power
with respect to 1,452,900 shares of common stock and AeroGroup I, Ltd. Co.
has sole voting and dispositive power with respect to 136,429 shares of
common stock. The other members of the Nolan Group share voting and
dispositive power with respect to 1,452,900 shares and the other members
of the Rowe Group share voting and dispositive power with respect to
136,429 shares. The business address of Nolan Acquisition Partners, Nolan
Acquisition Group, L.P., Kincaid Capital Group, Mr. Kincaid, Mr.
Komnenovich and Mr. Jones is 125 East John Carpenter Freeway, Suite 190,
Irving, Texas 75062. The business address of Conese Capital, L.L.C.,
Conese Family Partnership (Nevada), L.P. and Conese General Partner
(Nevada), Inc. is 101 Convention Center Drive, Suite 850, Las Vegas,
Nevada 89109. The business address of Mr. Conese is 55 Alhambra Plaza,
Suite 600, Coral Cables, Florida 33134. The business address of Brian H.
Rowe, AeroGroup I, Ltd. Co. and AeroEquity, Inc. is 7414 Hodgson Memorial
Drive, Suite B, Savannah, Georgia 31406.
8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to
its Annual Report on Form 10-K for the fiscal year ended December 31, 1998 to
be signed on its behalf by the undersigned, thereunto duly authorized.
AVIALL, INC.
April 29, 1999 By /s/ ERIC E. ANDERSON
----------------------------------
Eric E. Anderson
Chairman, President and Chief
Executive Officer
9
