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EXHIBIT 10.1
FIRST AMENDMENT TO
AAR CORP. STOCK BENEFIT PLAN
WHEREAS, AAR CORP., a Delaware corporation (the "Company") maintains the
AAR CORP. Stock Benefit Plan as amended and restated effective October 1, 2001
(the "Plan"); and
WHEREAS, the Company has reserved the right to amend the Plan and now deems
it desirable to do so to discontinue the automatic, non-discretionary award of
non-qualified stock options to Non-Employee Directors and replace it with a
discretionary award.
NOW THEREFORE, the Plan is hereby amended, effective June 26, 2003, as
follows:
1. The second paragraph of Section 1 shall be amended to read as
follows:
"Non-Employee Directors shall participate in the Plan through
discretionary grants of NSOs pursuant to Section 5 hereof. Key Employees
who have been selected by the Committee to receive an Award shall
participate in the Plan. The Committee shall determine, within the limits
of the express provisions of the Plan, those Key Employees and Non-Employee
Directors whom, and the time or times at which, Awards shall be granted. In
making a determination concerning the granting of Awards, the Committee may
take into account the nature of the services the Key Employees and
Non-Employee Directors have rendered or that the Committee expects they
will render, their present and potential contributions to the success of
the business, the number of years of effective service they are expected to
have and such other factors as the Committee in its sole discretion shall
deem relevant. The Committee shall also determine, with respect to Awards
to Non-Employee Directors and Key Employees, the number of Shares to be
subject to each Award; with respect to Key Employees, the type of Awards
(Restricted Stock, Options or Stock Appreciation Rights (SAR)); the type of
Options for Key Employees (ISO or NSO); the duration of each Option; the
exercise price under each Option; the time or times within which (during
the Term of the Option) all or portions of each Option may be exercised;
whether cash, Shares, Options or other property may be accepted in full or
partial payment upon exercise of an Option; the restrictions to be imposed
on shares of Restricted Stock; and any other terms and conditions of such
Awards."
2. Section 5 shall be deleted and Sections 6 through 29 renumbered
accordingly.
3. Current Section 6, renumbered as new Section 5, shall be amended
to read as follows:
"5. Grants of Options
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5.1 Subject to the terms of the Plan, the Committee may from time to
time grant Options, which may be Non-Qualified Stock Options, or Incentive
Stock Options if granted to Key Employees, and must be Non-Qualified Stock
Options if granted to Non-Employee Directors. Unless otherwise expressly
provided at the time of the grant, Options granted to Key Employees under
the Plan will not be ISOs. Notwithstanding the foregoing, outstanding NSOs
granted to Key Employees may be converted to ISOs at the discretion of the
Committee in accordance with, and to the extent, allowed by law.
5.2 Each Option shall be evidenced by a written Option Agreement
specifying the type of Option granted, the Option exercise price, the terms
for payment of the exercise price, the duration of the Option, the number
of Shares to which the Option pertains and, in the case of grants to Key
Employees, the terms of any related Stock Appreciation Right Award or
Restricted Stock Award. An Option Agreement may, in the sole discretion of
the Committee, also contain a vesting schedule, a non-competition
agreement, a confidentiality provision, provisions for forfeiture and such
restrictions, conditions and other terms as the Committee shall determine
in its sold discretion. Option Agreements need not be identical.
5.3 Each Option shall expire and all rights to purchase Shares
thereunder shall cease on the date fixed by the Committee in the Option
Agreement, which shall not be later than the tenth anniversary of the date
on which the Option was granted, except as otherwise required under Section
6.4 hereof. Further, if provided in the Option Agreement, any Option
granted pursuant to the Plan shall expire and all rights to purchase Shares
thereunder shall cease, if (a) the Non-Employee Director or the Key
Employee violates a non-competition or confidentiality agreement, any
Company policy, or any other conditions set forth in the Option Agreement
or in a separate document, (b) the Key Employee violates an employment
agreement, (c) the Non-Employee Director's service on the Board terminates
as provided in Section 12, or (d) the Key Employee's employment terminates
as provided in Section 12.
5.4 Each Option shall become exercisable at the time, and for the
number of Shares, fixed by the Committee in the Option Agreement. Except to
the extent otherwise provided in or pursuant to Section 13, or in the
proviso to this sentence, no Option shall become exercisable as to any
Shares prior to the first anniversary of the date on which the Option was
granted; provided that (a) the Committee may provide, at the time of grant
or subsequently that an Option granted to a person who is or becomes
subject to taxation under any applicable law that would tax such person
upon the grant of such Option, shall be exercisable from and after the date
of grant or (b) the Committee, in its discretion, shall have the power at
any time to accelerate the dates for exercise of any or all Options, or any
part thereof, granted to a Non-Employee Director or a Key Employee under
the Plan."
4. The first sentence of current Section 8, renumbered as new
Section 7, shall be amended to read as follows:
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"Each NSO granted to a Grantee shall be in such form and subject to
such restrictions and conditions and other terms as the Committee may
determine at the time of grant, subject to the general provisions of the
Plan, the applicable Option Agreement, and the following specific rules:"
5. Clause (e) of current Section 15.2, renumbered 14.2, shall be
amended to read as follows:
"(e) in the case of a Grantee, by such other medium of payment as the
Committee, in its discretion, shall authorize at the time of grant, or"
IN WITNESS WHEREOF, this First Amendment has been executed on this 27th day
of June, 2003.
AAR CORP.
By: /s/ DAVID P. STORCH
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David P. Storch, President