##### 



SECURITIES AND EXCHANGE COMMISSION   FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003Commission File No. 1-11775 TIMCO AVIATION SERVICES, INC. (Exact name of registrant as specified in its charter) DELAWARE
(State or other jurisdiction of
incorporation or organization)
623 Radar Road
Greensboro, NC
(Address of principal executive offices)
    
    65-0665658
(I.R.S. Employer Identification No.)
27410 
(Zip Code)
 (336) 668-4410
(Registrants telephone number) Securities registered pursuant to Section 12(b) of the Exchange Act: TITLE OF EACH CLASS
None
    
    NAME OF EACH EXCHANGE
ON WHICH REGISTERED
N/A
 Securities registered pursuant to section 12(g) of the Exchange Act: Common Stock, par value $.001 per share Indicate by check mark whether the registrant (1) 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 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 [  ]




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##### 



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, 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. [  ] Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act, Rule 12b-2). Yes [  ] No [X] Purpose This Form 10-K/A to the 2003 Form 10-K of TIMCO Aviation Services, Inc. (the
Company) is being filed to report the information required by Items 10, 11,
12, 13, and 14 of Part III of Form 10-K. All share information contained in
this Form 10-K/A reflects completion of the one-share-for-ten-shares reverse
stock split that became effective on February 28, 2002. 2




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##### 



PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Board of Directors Our certificate of incorporation and bylaws presently provide for a board of
directors divided into three classes, as equal in size as possible, with
staggered terms of three years. At the date of this report, the current
members of the board and the expiration of their terms as directors are as
follows: Name
    
    Age
    
    Position
    
    Term ExpiresRoy T. Rimmer, Jr.
    
    
    63
    
    
    Chairman of the Board and
Chief Executive Officer
    
    
    2006Stephen E. Gorman
    
    
    49
    
    
    Director
    
    
    2004Steven L. Gerard
    
    
    59
    
    
    Director
    
    
    2005Jack J. Hersch
    
    
    46
    
    
    Director
    
    
    2006Philip B. Schwartz
    
    
    50
    
    
    Director and Corporate Secretary
    
    
    2005
 Business Experience Roy T. Rimmer, Jr. has been our Chairman and Chief Executive Officer since June
2001 and has been a director since January 2000. Prior to becoming our
Chairman and Chief Executive Officer, for more than the last five years Mr.
Rimmer was a private investor and the operator of a private company in the
business of transporting crude oil and natural gas. Mr. Rimmer serves on our
board as a representative of Lacy J. Harber, our principal stockholder. Steven L. Gerard has been the Chairman and Chief Executive Officer of Century
Business Services Inc. (CBIZ), a diversified services company providing
professional outsourced business services, since October 2002. Prior thereto,
from October 2000, Mr. Gerard was CEO and a director of CBIZ. Before joining
CBIZ, from 1997 to October 2000 Mr. Gerard was the Chairman and Chief Executive
Officer of Great Point Capital, Inc., a provider of operational and advisory
services, and from 1991 to 1997 Mr. Gerard was Chairman and Chief Executive
Officer of Triangle Wire and Cable, Inc. and its successor, Ocean View Capital,
Inc., a manufacturer of insulated wire and cable. Mr. Gerards prior
experience includes 16 years in various senior corporate finance and banking
positions with Citibank, N.A. and seven years with the American Stock Exchange.
Mr. Gerard has been a director since September 2000 and also serves on the
boards of directors of Fairchild Corporation, Lennar Corporation and Joy
Global, Inc. Stephen E. Gorman is the President and Chief Executive Officer of Greyhound
Lines, Inc. Prior to joining Greyhound in July 2003, from August 2001 to June
2003 Mr. Gorman was the President, North America for Krispy Kreme Doughnuts,
Inc. responsible for all store operations in North America. Prior to joining
Krispy Kreme, Mr. Gorman spent five years with Northwest Airlines, Inc. at
which he most recently held the position of Executive Vice President of
Technical Operations and Flight Operations, with responsibility for all
aircraft maintenance operations, pilot operations, operations planning and
control, dispatch and flight simulator operations. Prior to joining Northwest
Airlines in 1996, Mr. Gorman held a variety of senior executive positions over
nine years with Aviall, Inc., a major provider of third party aviation
services. Mr. Gorman has been a director since October 2001 and also serves on
the board of directors of Pinnacle Airlines, Inc., a regional airline based in
Memphis, Tennessee. Jack J. Hersch is currently associated with Canyon Capital Advisors, a hedge
fund. He has been associated with Canyon since July 2003. Prior to that, he
was a partner at Cypress Management, LP, a hedge fund. Prior to joining
Cypress, from 1996 to 2000 Mr. Hersch was a partner of Scoggin Capital
Management, LP, and from 1994 to 1996 Mr. Hersch was a Senior Vice President of
Donaldson, Lufkin & Jenrette. Over the last few years, Mr. Hersch has been
actively involved in investing in the securities of several aviation and
aviation services businesses, including TIMCO Aviation Services. Mr. Hersch
joined our board on February 28, 2002 and serves on our board as a
representative of the holders of our 8% senior subordinated convertible PIK
notes due 2006. Philip B. Schwartz is an attorney with the law firm of Akerman Senterfitt. 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 TIMCO Aviation Services. Mr. Schwartz
has been a director since June 1998 and Corporate Secretary since March 1999. 3




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Compensation of Directors Each director who is not an employee of ours receives an annual retainer fee at
the rate of $25,000 per year for serving in such capacity, and meeting fees of
$2,000 for each regular meeting and $1,000 for each special meeting of the
board and committees. Directors also receive quarterly option grants to
purchase 6,250 shares of common stock. Executive Officers The following list reflects our executive officers, as of the date of this Form
10-K/A, the capacity in which they serve us, and when they assumed office: Name
    
    Age
    
    Position
    
    Executive Officer SinceRoy T. Rimmer, Jr.
    
    
    63
    
    
    Chairman and Chief Executive Officer
    
    June 2001Gil West
    
    
    43
    
    
    President and Chief Operating Officer
    
    September 2001C. Robert Campbell
    
    
    60
    
    
    Executive Vice President and Chief Financial Officer
    
    January 2002Jack M. Arehart
    
    
    50
    
    
    Senior Vice President of Business Development
    
    February 2002Don Mitacek
    
    
    41
    
    
    Senior Vice President of Operations
    
    January 2004Fritz Baumgartner
    
    
    42
    
    
    Vice President, Controller and Chief Accounting Officer
    
    February 2002
 Business Experience The business experience of Roy T. Rimmer, Jr. is included above under Business
Experience of the Board of Directors. Gil West is our President and Chief Operating Officer. Mr. West joined us in
September 2001 as our Executive Vice President and Chief Operating Officer, and
in January 2002 Mr. West was appointed to serve as our President. Prior to
joining us, Mr. West served as an executive at Northwest Airlines since 1996.
In his most recent position as Northwests Vice President of Engine and
Component Technical Operations, Mr. West managed over 2,000 Northwest
maintenance employees in Northwests Minneapolis and Atlanta maintenance
facilities, as well as managing outside vendor maintenance operations. Prior
to joining Northwest, Mr. West served in various managerial positions with
United Air Lines, Rohr Industries, Sundstrand Corporation and Boeing Commercial
Aircraft. C. Robert Campbell joined us in January 2002 as our Executive Vice President
and Chief Financial Officer. Mr. Campbell has over 20 years of senior
financial management experience. Most recently, from 1998 to 2000, Mr.
Campbell was the President and Chief Executive Officer of BAX Global, Inc., a
provider of air freight, ocean freight and supply chain management services,
and from 1995 to 1998, Mr. Campbell was the Executive Vice President, Finance
and Chief Financial Officer of Advantica Restaurant Group, Inc., a food
services company. Prior to joining Advantica, Mr. Campbell held various senior
management positions with Ryder System, Inc., a transportation and logistics
company, including CFO of its Vehicle Leasing and Services Division. Jack M. Arehart joined us in February 2002 as our Senior Vice President of
Business Development, responsible for all of our sales, marketing and new
business development efforts. Prior to joining us, Mr. Arehart spent 14 years
with The Nordam Group, a large aviation manufacturing and MR&O services
company, where, since 1996, Mr. Arehart held the position of Vice President,
Program Development. Don Mitacek is our Senior Vice President of Operations. Mr. Mitacek joined us
in September 2001 as the General Manager of our Greensboro,
North Carolina facility and in January 2004 Mr. Mitacek was appointed as our
Senior Vice President of Airframe Maintenance. Prior to joining
us, Mr. Mitacek served in various positions with Northwest Airlines, including
most recently Managing Director of Engine and Component Maintenance at
Northwest Airlines in Minneapolis, directing a workforce of 1,100 maintenance
technicians. Prior to joining Northwest Airlines, from 1986 to 1997, Mr.
Mitacek was employed in various positions by United Airlines. Fritz Baumgartner joined us in February 2002 and is our Vice President,
Controller and Chief Accounting Officer. Mr. Baumgartner was previously the
Chief Financial Officer and Vice President, Finance of Vitafoam, Inc., a
manufacturer of cellular polymers and non-woven fiber products. Prior to
joining Vitafoam, from 1990 to 1999, Mr. Baumgartner held various management
positions including Controller, Treasurer & Director of Reporting, MIS Director
and Vice President of Sales Operations with two Clayton, Dubilier & Rice
holdings (Remington Arms, Inc. and Pilliod Furniture, Inc.). From 1983 to 1990
Mr. Baumgartner was with Ernst & Young LLP, most recently as an audit manager. 4




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##### 



Family Relationships There are no family relationships between or among any of the directors and/or
executive officers. Section 16(A) Beneficial Ownership Reporting Compliance Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
us pursuant to Rule 16a-3(e) under the Securities Exchange Act of 1934, as
amended, during our fiscal year ended December 31, 2003, and any Form 5 and
amendments thereto furnished to us with respect to our most recent fiscal year,
and any written representations referred to in subparagraph (b) (2) (i) of Item
405 of Regulation S-K, except as set forth below, to our knowledge, no person
who at any time during the fiscal year ended December 31, 2003 was our
director, officer or, to our knowledge, a beneficial owner of more than 10% of
any class of our equity securities 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, 2003 with the following exception: each filing required
by each director and executive officer relating to 2003 was filed late. 5




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##### 



ITEM 11. EXECUTIVE COMPENSATION. The following Summary Compensation Table sets forth information about the
compensation paid or accrued during 2003, 2002 and 2001 to our Chief Executive
Officer and to each of our four other most highly compensated executive
officers whose 2003 aggregate direct compensation exceeded $100,000: Annual Compensation
    
    Long Term CompensationAwards
    
    PayoutsName and
    
    Fiscal Year
    
    
    
    
    
    
    
    
    
    Other Annual
    
    Restricted Stock
    
    Securities Underlying
    
    LTIPPrincipal Position
    
    Ending
    
    Salary
    
    Bonus
    
    Compensation
    
    Awards
    
    Options/SARs
    
    Payouts
    
    OtherRoy T. Rimmer, Jr.(1)
    
    
    2003
    
    
    
    489,568
    
    
    
    106,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Chairman and CEO
    
    
    2002
    
    
    
    441,346
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    800,000
    (3)
    
    
    
    
    
    
    2001
    
    
    
    156,154
    
    
    
    500,000
    (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C. Robert Campbell (4)
    
    
    2003
    
    
    
    240,000
    
    
    
    30,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Chief Financial Officer
    
    
    2002
    
    
    
    236,365
    
    
    
    201,655
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    Gil West (5)
    
    
    2003
    
    
    
    303,829
    
    
    
    75,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    President and COO
    
    
    2002
    
    
    
    335,422
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    600,000
    
    
    
    
    
    
    
    2001
    
    
    
    114,266
    
    
    
    371,406
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jack M. Arehart (6)
    
    
    2003
    
    
    
    300,000
    
    
    
    75,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sr. VP of Business
    
    
    2002
    
    
    
    302,182
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    
    
    
    
    DevelopmentDon Mitacek (7)
    
    
    2003
    
    
    
    205,000
    
    
    
    51,875
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sr. VP of Airframe Maintenance
    
    
    2002
    
    
    
    175,000
    
    
    
    30,000
    
    
    
    
    
    
    
    
    
    
    
    300,000
    
    
    
    
    
    
    
    2001
    
    
    
    50,481
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1)
    
    Mr. Rimmer became our Chairman and Chief Executive Officer in June
2001. In March 2002, we and Mr. Rimmer entered into a three-year
employment agreement. See Employment Agreements below.(2)
    
    Bonus was granted to Mr. Rimmer in March 2002 for 2001 services
relating to our restructuring.(3)
    
    Mr. Rimmer received this option grant pursuant to his employment
agreement.(4)
    
    Mr. Campbell joined us in January 2002. Mr. Campbell has an
employment agreement with us. Pursuant thereto, Mr. Campbell received a
signing bonus, which is the bonus reflected in the table. Mr. Campbell
also received an option grant under his employment agreement that,
pursuant to his agreement, was issued at the completion of our
restructuring. See Employment Agreements below.(5)
    
    Mr. West joined us in August 2001. Mr. West has an employment
agreement with us. Pursuant thereto, Mr. West received a signing bonus,
which is the bonus reflected in the table. Mr. West also received an
option grant under his employment agreement that, pursuant to his
agreement, was issued at the completion of our restructuring. See
Employment Agreements below.(6)
    
    Mr. Arehart joined us in February 2002. Mr. Arehart has an
employment agreement with us. Pursuant thereto, Mr. Arehart received an
option grant under his employment agreement that, pursuant to his
agreement, was issued at the completion of our restructuring. See
Employment Agreements below.(7)
    
    Mr. Mitacek joined us in 2001 and became an executive officer in
2004. Mr. Mitacek has an employment agreement with us. Option Grants During Last Fiscal Year No options were granted during the fiscal year ended December 31, 2003 to the
persons named on the Summary Compensation Table. 6




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##### 



Aggregate Option Exercises During Fiscal 2003 and Fiscal Year End Option Values The following table sets forth information concerning the exercise of stock
options to purchase common stock during the 2003 fiscal year and the value of
unexercised stock options to purchase common stock at the end of the 2003
fiscal year for the current employees named in the Summary Compensation Table. Number of Shares
    
    Value of UnexercisedNumber of
    
    Value
    
    Underlying Unexercised
    
    In-The-Money OptionsShares
    
    Realized
    
    Options at Year-End
    
    At Fiscal Year-End ($)Name
    
    Acquired on Exercise
    
    ($)
    
    Vested/Unvested
    
    Exercisable/Unexercisable*Roy T. Rimmer, Jr.
    
    
    
    
    
    
    
    
    
    
    533,333 / 266,667
    
    
    
    0 / 0C. Robert Campbell
    
    
    
    
    
    
    
    
    
    
    133,333 /   66,667
    
    
    
    0 / 0Gil West
    
    
    
    
    
    
    
    
    
    
    600,000 /            0
    
    
    
    0 / 0Jack M. Arehart
    
    
    
    
    
    
    
    
    
    
    333,333 / 166,667
    
    
    
    0 / 0Don Mitacek
    
    
    
    
    
    
    
    
    
    
    200,000 / 100,000

    
    
    
    0 / 0
  * Computed based upon the difference between the closing price of common stock
at December 31, 2003 and the exercise price. All options were out-of-the-money
on December 31, 2003, and no value has been assigned to options that are
out-of-the-money. Does not include options granted to Mr. Rimmer for his services as a director of the Company. Employment Agreements We have employment agreements with most of our executive officers. Each
provides for the payment of a base salary (Rimmer - $425,000; West - $300,000;
Arehart -$300,000; Campbell - $240,000, Mitacek - $225,000) plus bonus
compensation (a percentage of their base compensation) based on performance.
Each employment agreement also contains a change of control severance
arrangement if the employee is not retained in our employment after a change of
control. Stock Option Plans Effective November 13, 2003, our board
of directors adopted a new stock option
plan (the 2003 stock incentive plan). The 2003 stock incentive plan was
approved by our stockholders on January 13, 2004. With the approval of the
2003 stock incentive plan, no new options will be granted under our 2001 stock
option plan, our 1996 stock option plan or our 1996 director stock option plan.
Any shares of common stock reserved for issuance upon the exercise of options
that were not issued under such plans were cancelled, however, the terms of any
option issued under the 2001 stock option plan, the 1996 stock option plan and
the 1996 director stock option plan will continue to be governed by such plans
and by the option agreements currently in effect for such options. Pursuant to the 2003 stock incentive plan, an aggregate amount of 5.8 million
shares of our common stock are reserved for issuance under the 2003 stock incentive
plan (including 800,000 shares reserved for issuance upon the exercise of options previously granted to our Chief Executive
Officer). Grants of stock options, stock appreciation rights, performance
shares, performance units, restricted stock and restricted stock units, or any
combination of the foregoing, may be made under the 2003 stock incentive plan. The maximum
number of securities that can be allocated to any one person in any fiscal year
is 800,000. The compensation committee administers our 2003 stock incentive plan. The
compensation committee determines which persons will receive grants of awards
and the type of award to be granted to such persons. The compensation committee
also interprets the provisions of the 2003 stock incentive plan and makes all
other determinations that it deems necessary or advisable for the
administration of the 2003 stock incentive plan. As of April 30, 2004, options to purchase
1,278,750 shares had been granted
under the 2003 stock incentive plan (1,038,750 of which are currently vested).
Further, options to purchase 2,673,236 shares remain outstanding under previous option
plans and agreements. Compensation Committee Interlocks and Insider Participation During the fiscal 2003, no members of our compensation committee is or was a
current or former employee. Except as set forth in Item 13. Certain
Relationships and Related Transactions, during the last fiscal year there were
no material transactions between the Company and any of the members of the
Compensation Committee. 7




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##### 



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. At April 30, 2004, we had 31,640,994 shares of our common stock outstanding.
The following table sets forth certain information regarding the shares of
common stock owned of record or beneficially by (i) each person who owns
beneficially more then 5% of our outstanding common stock; (ii) each of our
directors and current executive officers; and (iii) all directors and executive
officers as a group. Shares Beneficially Owned (1)Name
    
    Number (in 000s)
    
    PercentageLacy J. Harber (2)
    
    
    34,068,354
    
    
    
    72.2
    %Roy T. Rimmer, Jr. (3)
    
    
    35,055,354
    
    
    
    73.0
    %Steven L. Gerard (4)
    
    
    57,750
    
    
    
    *Stephen E. Gorman (4)
    
    
    57,250
    
    
    
    *Jack Hersch (5)
    
    
    60,250
    
    
    
    *Philip B. Schwartz (6)
    
    
    77,900
    
    
    
    *Gil West (7)
    
    
    600,000
    
    
    
    1.9
    %Jack Arehart (8)
    
    
    500,000
    
    
    
    1.5
    %C. Robert Campbell (9)
    
    
    200,000
    
    
    
    *Don Mitacek (10)
    
    
    300,000
    
    
    
    *All directors and executive officers as a group -
10 persons (11)
    
    
    36,968,504
    
    
    
    74.0
    %
 * 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. Further, unless otherwise noted, the
address for each person named in this table is c/o TIMCO Aviation
Services, Inc.(2)
    
    LJH Corporation, which is wholly-owned by Mr. Harber, currently owns
18,553,464 shares of our outstanding common stock, constituting 58.6% of
our currently outstanding common stock. LJH has granted a proxy with
respect to the voting of these shares to Roy T. Rimmer, Jr., and as a
result Mr. Rimmer is also deemed to beneficially own these shares for
U.S. securities law purposes. Also includes warrants to purchase: (i)
2,500 shares at an exercise price of $36.25 per share, (ii) 25,000 shares
at an exercise price of $40.00 per share, (iii) 5,000 shares at an
exercise price of $17.50 per share, (iv) 33,333 shares at an exercise
price of $14.00 per share, (v) 1,138,631 shares at an exercise price of
$5.16 per share, (vi) 750,000 shares at an exercise price of $1.05, and
(vii) the shares underlying a warrant to acquire, at an exercise price of
$0.001 per share, 30% of the outstanding common stock (on a fully diluted
basis) on or before January 31, 2007 (which if exercised today, would
equate to 13,560,426 shares). LJH also holds approximately $19.5 million
of our Senior Notes and $163,103 of our Junior Notes. Our Senior Notes
and Junior Notes will convert into shares of common stock if not redeemed
prior to their maturity.(3)
    
    Mr. Rimmer shares the power to vote the securities owned by LJH
Corporation (by virtue of a proxy) and has certain
rights to participate in the proceeds of certain sales of LJHs shares.
Also includes 106,250 shares owned by an entity controlled by Mr.
Rimmer and vested warrants and options to purchase an aggregate of 880,750
shares (800,000 shares at an exercise price of $1.02 per share, 56,250 at
exercise prices ranging from $0.35 per share to $1.83 per share, 12,500
shares at an exercise price of $5.16 per share and 12,000 shares at
exercise prices ranging from $17.00 per share to $153.13 per share).(4)
    
    Consists of vested options to purchase shares of common stock.(5)
    
    Mr. Hersch owns 4,000 shares individually and holds warrants to
purchase an additional 56,250 shares at an exercise
price ranging from $0.35 per share to $1.83 per share.(6)
    
    Mr. Schwartz owns 12,870 shares and holds options and warrants to
purchase an additional 65,030 shares (56,250 shares at
exercise prices ranging from $0.35 to $1.83 and the balance at exercise
prices ranging from $5.16 per share to $395 per share).(7)
    
    Vested options to purchase 600,000 shares at an exercise price of
$.8325 per share.(8)
    
    Vested options to purchase 500,000 shares at an exercise price of
$.8325 per share.(9)
    
    Vested options to purchase 200,000 shares at an exercise price of
$.8325 per share.(10)
    
    Vested options to purchase 300,000 shares at an exercise price of
$.8325 per share.(11)
    
    Includes vested options to purchase an aggregate of 18,291,920 shares.   8




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##### 



Equity Compensation Plans The
following table summarizes information relating to our equity compensation
plans pursuant to which grants of options, restricted stock, restricted stock
units or other rights to acquire shares may be granted from time to time. Number ofsecuritiesremaining availablefor future issuanceunder equityNumber of securities to
    
    Weighted-average
    
    compensation plansbe issued upon exercise
    
    exercise price of
    
    (excludingof outstanding
options,warrants and rights
    
    outstanding options,warrants and rights
    
    securitiesreflected in column (a))Plan category
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    3,560,736
    
    
    $
    21.86
    
    
    
    4,912,500Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3,560,736
    
    
    $
    21.86
    
    
    
    4,912,500
 9




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##### 



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. On April 8, 2004, we refinanced (effective March 31, 2004) all of our
previously outstanding debt (principal plus accrued and unpaid interest) due to
our principal stockholder with a new $14.4 million term loan due on January 31,
2008 (the LJH Term Loan). The LJH Term Loan combines a $5.0 million loan
from our principal stockholder (that, in turn, replaced a term loan to us from
Bank of America that was credit supported by two persons, including our principal stockholder), a $6.1
million term loan made in May 2003, a $1.3 million term loan relating to our
acquisition of Brice Manufacturing Company in October 2002, $900,000 relating
to inventory purchases, and PIK interest previously paid on certain of these
obligations. The LJH Term Loan bears interest at 18% per annum, 6% of which is
payable in cash and the balance of which will be PIK. In connection with the $6.1 million term loan made
to us in May 2003 by our principal stockholder, we issued a warrant to our principal
stockholder to acquire, for nominal consideration, 30% of our outstanding
common stock, on a fully-diluted basis (13.8 million shares if the warrant were
to be exercised today and 140.0 million shares if the warrant were to be
exercised after our New Notes and Junior Notes mature), as of the day the
warrant is exercised. The warrant is exercisable until January 31, 2007. An entity controlled by our principal stockholder purchases aircraft for resale
and lease, and we provide aircraft maintenance service work to that entity.
Services provided to that entity are charged at not less then the rates that
would be charged for such services to an unaffiliated third party. During
2003, the billings related to the services that were provided to such entity
were approximately $588,000. The Company did not provide these services
during 2002 or 2001. During December 2002, an entity controlled by our principal stockholder
acquired the operating assets of Aviation Management Systems, Inc. (AMS)
located in Phoenix, Arizona. Additionally, this entity assumed a lease with the
City of Phoenix for facilities previously leased by AMS at the Goodyear
Airport. During 2003, we entered into an operating sublease agreement with the
principal stockholder to operate the business in the facilities that were
previously leased to AMS. The term of the sublease is for three years with
rental payments of $432,000 annually. Under the sublease agreement, we are also
responsible for insurance, taxes and charges levied by the City of Phoenix
under the lease. In addition, we agreed to increase the amount of the debt
due to our principal stockholder by $900,000 (included in the refinanced amount
described above) reflecting the purchase from our principal stockholder of the
aircraft parts inventory located at the Goodyear facility (which inventory was
acquired by our principal stockholder in the AMS bankruptcy proceedings).
Further, in April 2004, we entered into a lease with our principal stockholder
with respect to certain equipment and tooling used at the Goodyear facility.
The lease, which will be recorded as a capital lease, is for a three-year term
and requires monthly payments of $74,100. During October 2002, we sold the real estate and fixtures located at our
Aircraft Interior Design, Inc. (AID) operation in Dallas, Texas, to our
principal stockholder. The gross sale price for these assets was approximately
$2.4 million, which was the estimated fair market value, based on a third party
appraisal, on the sale date. Simultaneous with this sale, we entered into a
lease agreement with our principal stockholder for substantially all of these
assets. The term of this lease is ten years. Annual rental payments are
approximately $300,000 per year. Additionally, we are responsible for, among
other things, taxes, insurance and utilities. We previously leased our former corporate headquarters and warehouse in Miami,
Florida (the Miami Property) from an entity controlled by a former director
and former principal stockholder. The lease on the Miami Property called for
annual payments in the amount of $893,000 expiring on December 2, 2014. In
connection with the purchase of the Miami Property by the related party, we
made an unsecured $2.5 million loan to the related party, which bore interest
at 8% per annum. The loan was being repaid in monthly installments with any
remaining outstanding principal and interest due on December 2, 2004. In
January 2001, the loan was sold to our current principal stockholder for 90% of
the then outstanding principal balance of $2.0 million. In March 2001,
the Miami Property was sold and we were relieved of our remaining obligations
under the lease agreement. During 2003, 2002, and 2001, we leased certain real property from entities
controlled by one of our former directors and executive officers. These
facilities were previously utilized as the headquarters of two of our MR&O
operations. We have subsequently moved out of these facilities and currently
are liable on only one of the facility lease agreements. We have subleased
this facility to a third party. Prior to fiscal 2003, this sublease
arrangement was for only a portion of our lease term. During 2003, however,
this sublease arrangement was extended through the full original lease term.
Additionally, during 2001 and 2002, we utilized aircraft owned by an entity
controlled by this former director and executive officer. Payments for all of
these items were approximately $350,000, $400,000, and $300,000 in 2003, 2002,
and 2001, respectively. 10




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During 2003 and 2002, we utilized an aircraft owned by our Chief Executive
Officer. All usage fees were no greater than would be charged by unaffiliated
third parties and the fees for services on the aircraft were at our normal
hourly rates. Expense associated with this use were $51,000 in 2003 and
$272,000, net of services provided on the aircraft totaling $39,000, in 2002.
This aircraft was sold by our Chief Executive Officer during 2003. Mr. Schwartz is a stockholder in Akerman, Senterfitt & Eidson, P.A., which has
in the past and continues to perform significant legal services for us. The
fees paid by us to Akerman, Senterfitt & Eidson, P.A. for legal services
rendered are no greater than those that would be charged to us by an unrelated
third party law firm. We believe that the terms of the above-described related party transactions
were no less favorable than could be obtained from unaffiliated third parties. ITEM 14. PRINCIPAL ACCOUNTING FEES AND PROCEDURES. Audit and Other Fees The following table sets forth the fees
for professional audit services rendered by KPMG LLP for the audit of the Companys
annual financial statements for 2002 and 2003, as well as the fees billed for other
services rendered by KPMG LLP. 2002
    
    2003Audit fees
    
    $
    494,025
    
    
    $
    427,997Audit related fees
    
    
    25,000
    
    
    
    Audit and audit related fees
    
    
    519,025
    
    
    
    427,997Tax consultation
    
    
    27,402
    
    
    
    9,263All other fees
    
    
    
    
    
    
    Total fees
    
    $
    546,427
    
    
    $
    437,260
 All of the services described above for fiscal years 2002 and 2003 were
approved by our Audit Committee pursuant to its policies and procedures. 11




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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. TIMCO AVIATION SERVICES, INC.
(Registrant) BY: /s/ Roy T. Rimmer, Jr.
    
    April 30, 2004Roy T. Rimmer, Jr.,  Chairman and Chief ExecutiveOfficer
 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/ Roy T. Rimmer, Jr.
Roy T. Rimmer, Jr.
    
    April 30, 2004Chairman and Chief Executive Officer
(Principal Executive Officer)/s/ Gil WestGil West
    
    April 30, 2004President (Principal Operating Officer)/s/ C. Robert Campbell
C. Robert Campbell
    
    April 30, 2004Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)/s/ Jack HerschJack Hersch
    
    April 30, 2004Director/s/ Philip B. Schwartz
Philip B. Schwartz
    
    April 30, 2004Director
 12




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##### 



SIGNATURE AND TITLE:
    
    DATE:/s/ Steven L. Gerard
Steven L. Gerard
    
    April 30, 2004Director/s/ Stephen E. Gorman
    
    April 30, 2004Stephen E. GormanDirector
 13