the Company shall also enter into a trust agreement with a bank or trust

 

                                                                  Exhibit 10.3

                              AMENDMENT NO. 4 TO
                        FURTHER RESTATED AND AMENDED
                  EMPLOYMENT AGREEMENT DATED AUGUST 1, 1985
                  BY AND BETWEEN AAR CORP. AND IRA A. EICHNER

     This AMENDMENT NO. 4 made this 9th day of October, 1996 by and between 
AAR CORP., a Delaware corporation (the "Company") and Ira A. Eichner 
("Employee").

     WHEREAS, the Company and Employee entered into the Further Restated and 
Amended Employment Agreement dated August 1, 1985 (the "Employment 
Agreement"); and

     WHEREAS, the Company and Employee further amended the Employment 
Agreement by amendments dated August 12, 1988, May 25, 1990 and July 13, 
1994; and

     WHEREAS, the Company and Employee desire to further amend the Employment 
Agreement as hereinafter set forth to reflect certain mutually agreed upon 
changes to the terms and conditions thereof;

     NOW THEREFORE, in consideration of the premises and mutual covenants 
herein contained, the Company and Employee do hereby covenant and agree as 
follows:

     1.  Subparagraph (d) of paragraph 11 of the Employment Agreement is 
deleted and the following is inserted in lieu thereof.

         (d)  In addition to the Trust referred to in subparagraph (a) above, 
     the Company shall also enter into a trust agreement with a bank or trust 
     company (with a combined capital and surplus in excess of $100 million 
     dollars) located in 

     the continental United States as trustee, whereby the Company shall agree
     to establish and contribute to, a trust ("Trust No. 2") for the purpose of
     accumulating additional assets to assist it in fulfilling its obligations
     to Employee hereunder.  The Company shall make an aggregate contribution
     to Trust No. 2 in calendar year 1996 in the amount of $1,652,000, plus an
     estimated amount for trust expenses, which shall be used by the trustee 
     of Trust No. 2 to provide the Retirement Benefit payable to Employee
     hereunder and trust expenses.  From time to time, the Company shall make
     additional contributions to Trust No. 2 as shall be necessary to provide
     for the Retirement Benefit payable to Employee hereunder and estimated 
     trust expenses.  At the time set forth in Trust No. 2, the trustee 
     thereof shall transfer all of the assets of Trust No. 2 to the trustee 
     of the Trust referred to in subparagraph (a) and thereafter Trust No. 2
     shall terminate.

          (e)  Each contribution to the Trust and to Trust No. 2 to be made by
     the Company pursuant to this paragraph 11 shall be in an amount or 
     amounts determined by the independent actuary, or firm of independent
     actuaries, regularly employed to provide actuarial services for the
     Company.

     2.  The first sentence of subparagraph (h) of paragraph 14 of the 
Employment Agreement is amended to read as follows:

         "(h)  `Retirement Benefit' shall mean an annual amount equal (subject
     to adjustment as hereinafter provided) to 80% of Employee's Average 
     Annual Total Cash Compensation, reduced by (1) the Income Tax Offset, 
     and (2) the Defined Benefit Plan Offset."

     3.  Clause (ii) of subparagraph (h) of paragraph 14 of the Employment 
Agreement is amended to read as follows:

         "(ii)  `Income Tax Offset' with respect to any annual Retirement 
Benefit payment made to Employee from the Trust shall mean an assumed 
aggregate federal, state and local income tax rate of 31.87%.

     IN WITNESS WHEREOF, the Company has caused this Amendment No. 4 to be 
executed in its name by its duly authorized officer and Employee has hereunto 
set his hand on this 31st day of October, 1996.

                                        AAR CORP.

                                        By:  /s/  Howard A. Pulsifer
                                           -----------------------------------
                                           Howard A. Pulsifer, Vice President

                                           /s/ Ira A. Eichner
                                           -----------------------------------
                                           Ira A. Eichner

                               AMENDMENT NO. 5 TO
                          FURTHER RESTATED AND AMENDED
                  EMPLOYMENT AGREEMENT DATED AUGUST 1, 1985
                 BY AND BETWEEN AAR CORP. AND IRA A. EICHNER
                                       

     This AMENDMENT NO. 5 made this 8th day of October, 1997 by and between 
AAR CORP., a Delaware corporation (the "Company") and Ira A. Eichner 
("Employee").

     WHEREAS, the Company and Employee entered into the Further Restated and 
Amended Employment Agreement dated August 1, 1985 (the "Employment 
Agreement"); and

     WHEREAS, the Company and Employee further amended the Employment 
Agreement by amendments dated August 12, 1988, May 25, 1990, July 13, 1994, 
and October 9, 1996; and

     WHEREAS, the Company and Employee desire to further amend the Employment 
Agreement as hereinafter set forth to reflect certain mutually agreed upon 
changes to the terms and conditions thereof;

     NOW THEREFORE, in consideration of the premises and mutual covenants 
herein contained, the Company and Employee do hereby covenant and agree as 
follows:

     1.  Paragraph 14(h)(i) of the Employment Agreement is hereby amended to 
read as follows:

        "(i)  "Average Annual Total Cash Compensation" shall mean the 
Employee's average annual total cash compensation, including salary (salary 
being measured prior to any salary deferrals made pursuant to the Profit 
Sharing Plan), bonuses and other similar items paid or accrued by the Company 
for the three

complete fiscal years of employment with the Company, whether or not 
consecutive, during which such total cash compensation was highest."

     IN WITNESS WHEREOF, the Company has caused this Amendment No. 5 to be 
executed in its name by its duly authorized officer and Employee has hereunto 
set his hand on this 31st day of October, 1997.

                                            AAR CORP.

                                            By: /s/ Howard A. Pulsifer
                                                -----------------------------
                                                 Howard A. Pulsifer, 
                                                 Vice President

                                                /s/ Ira A. Eichner
                                                -----------------------------
                                                Ira A. Eichner 

Basic Info X:

Name: the Company shall also enter into a trust agreement with a bank or trust
Type: Trust Agreement
Date: Jan. 13, 1998
Company: AAR CORP
State: Delaware

Other info:

Date:

  • 9th day of October , 1996
  • 31st day of October , 1996
  • 8th day of October , 1997
  • August 1 , 1985
  • August 12 , 1988
  • May 25 , 1990
  • July 13 , 1994
  • October 9 , 1996
  • 31st day of October , 1997

Organization:

  • Average Annual Total Cash Compensation
  • Company and Employee

Location:

  • United States
  • Delaware

Money:

  • $ 100 million dollars
  • $ 1,652,000

Person:

  • Howard A. Pulsifer
  • Ira A. Eichner

Percent:

  • 80 %
  • 31.87 %