Exhibit 10.3

 

FIFTH AMENDMENT TO THE
AAR CORP. SUPPLEMENTAL KEY EMPLOYEE RETIREMENT PLAN

 

(As Amended and Restated Effective January 1, 2005)

 

WHEREAS, AAR CORP., a Delaware corporation (the “Company”), maintains the AAR
CORP. Supplemental Key Employee Retirement Plan, as amended and restated
effective January 1, 2005 (the “Plan”); and

 

WHEREAS, pursuant to Section 7.1, the Company has reserved the right to amend
the Plan and now deems it appropriate to do so.

 

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2014, as
follows:

 

1.                                      Section 1.27 of the Plan is amended to
read as follows:

 

1.27                        [Reserved.]

 

2.                                      Section 4.1 of the Plan is amended to
read as follows:

 

4.1                               Supplemental Base Salary and Supplemental
Bonus Deferral Contributions.

 

(a)                                 A Participant may elect to defer a portion
of Base Salary and Bonus otherwise payable to him for a Plan Year by authorizing
Supplemental Base Salary Deferral Contributions and Supplemental Bonus Deferral
Contributions on his behalf.  The amount of the Participant’s Supplemental Base
Salary Deferral Contributions shall be equal to a designated percentage of Base
Salary payable for such Plan Year and the amount of the Participant’s Bonus
Deferral Contributions shall be equal to a designated percentage of the Bonus
payable to him for the fiscal year beginning in such Plan Year.

 

(b)                                 In no event shall the aggregate of the
Qualified Salary Deferral Contributions, Supplemental Base Salary Deferral
Contributions and Supplemental Bonus Deferral Contributions made for any Plan
Year exceed 75% of the Participant’s Compensation for such Plan Year (determined
without giving effect to any limitations imposed by the Code on the Qualified
Profit Sharing Plan).

 

(c)                                  If during a Plan Year a Participant changes
the amount of Qualified Salary Deferral Contributions made on his behalf under
the Qualified Profit Sharing Plan, and such change affects the timing of any
change to the rate of the Participant’s Supplemental Base Salary Deferral
Contributions, the resulting increase or decrease in Supplemental Base Salary
Deferral Contributions made under this Plan for the Plan Year cannot exceed an
amount equal to the limit set forth in Section 402(g)(1) of the Code.

 

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(d)                                 The aggregate Supplemental Base Salary and
Supplemental Bonus Deferral Contributions made for the benefit of a Participant
shall be calculated as of each pay period (based on Base Salary and Bonus paid
for such pay period) and shall be credited to a Supplemental Deferral Account
maintained under the Plan in the name of such Participant at the same time as
Qualified Salary Deferral Contributions are made for such Plan Year.

 

3.                                      The first sentence of Section 4.2 of the
Plan is amended to read as follows:

 

As a condition to the Company’s obligation to make a Supplemental Salary
Deferral Contribution for the benefit of a Participant pursuant to Section 4.1,
the Participant must execute a Supplemental Salary Deferral Agreement in the
form provided by the Committee.

 

4.                                      Section 4.3 of the Plan is amended to
read as follows:

 

4.3                               Supplemental Bonus Deferral Agreement.  As a
condition to the Company’s obligation to make a Supplemental Bonus Deferral
Contribution for the benefit of a Participant pursuant to Section 4.1, the
Participant must execute a Supplemental Bonus Deferral Agreement in the form
provided by the Committee.  A Supplemental Bonus Deferral Agreement related to a
bonus earned by a Participant during a fiscal year of the Company shall be
delivered to the Committee no later than the last day of the preceding fiscal
year of the Company and shall continue in effect until revoked by a Participant
by notice delivered to the Committee no later than the last day of the fiscal
year immediately preceding the first day of the fiscal year for which such
election is to become effective, and as of each May 31 the election shall become
irrevocable with respect to any bonus payable with respect to services performed
by the Participant in the immediately following calendar year.

 

5.                                      Section 4.4 of the Plan is amended to
read as follows:

 

4.4                               Supplemental Company Contributions.  A
Participant who has in effect a Supplemental Base Salary Deferral Agreement or
Supplemental Bonus Deferral Agreement to defer at least 1% of Base Salary or
Bonus during a Plan Year shall be eligible to receive a Supplemental Company
Contribution for such Plan Year.  The Supplemental Company Contribution shall be
equal to an amount resulting from (a) x (b) — c:

 

(a)                                 The average deferral rate, determined by
dividing the sum of the Participant’s Supplemental Base Salary Deferral
Contributions, Supplemental Bonus Deferral Contributions and Qualified Salary
Deferral Contributions by the sum of the Participant’s Salary and Bonus.

 

(b)                                 20% multiplied by the lesser of the amount
calculated in (a) or 5% of the sum of the Participant’s Salary and Bonus.

 

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(c)                                  The Qualified Company Contribution made on
behalf of the Participant.

 

A Supplemental Company Contribution made for the benefit of a Participant shall
be calculated on a pay period basis (based on deferrals made for such pay period
and Base Salary and Bonus paid for such pay period) and shall be credited to a
Supplemental Company Account maintained under the Plan in the name of such
Participant at the same time as Qualified Company Contributions are made for
such Plan Year.

 

As soon as practicable after the end of each Plan Year, the Company shall make
an additional Supplemental Company Contribution to the extent necessary so that
the Participant’s Supplemental Company Contributions for the Plan Year are not
less than the amount that would be credited if the calculation described above
were performed as of the end of the Plan Year rather than the end of each pay
period.

 

6.                                      The last two sentences of Section 4.5 of
the Plan are amended to read as follows:

 

Such Additional Supplemental Company Contributions shall be held, administered
and invested hereunder in the same manner as regular Supplemental Contributions;
provided that additional or different terms and conditions that apply to any
such Additional Supplemental Company Contributions are reflected in the Appendix
to the Plan.

 

7.                                      Section 4.6 of the Plan is amended to
read as follows:

 

4.6                               Supplemental Profit Sharing Contributions.  A
Participant who has in effect a Supplemental Base Salary Deferral Agreement or
Supplemental Bonus Deferral Agreement to defer at least 1% of Base Salary or
Bonus during a Plan Year shall be eligible to receive a Supplemental Profit
Sharing Contribution for the fiscal year ending in such Plan Year.  The
Supplemental Profit Sharing Contribution shall be equal to an amount resulting
from (a) — (b):

 

(a)                                 The Qualified Profit Sharing Contribution
that would have been allocated to the Qualified Profit Sharing Account of the
Participant for such fiscal year using a Basic Salary Deferral rate equal to the
lesser of 5% or the percentage determined by dividing the sum of the
Participant’s Supplemental Base Salary Deferral Contributions, Supplemental
Bonus Deferral Contributions and Qualified Salary Deferral Contributions by the
sum of the Participant’s Salary and Bonus.

 

(b)                                 The amount of the Qualified Profit Sharing
Plan Contribution actually allocated to the Qualified Profit Sharing Account of
the Participant for such fiscal year.

 

A Supplemental Profit Sharing Contribution made for the benefit of a Participant
for any fiscal year shall be credited to a Supplemental Profit Sharing

 

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Account maintained under the Plan in the name of such Participant at the same
time as Qualified Profit Sharing Contributions are made for such Plan Year.

 

8.                                      Section 4.9(b) of the Plan is amended to
add a final sentence to read as follows:

 

Distributions to a beneficiary shall be in the same form and at the same time as
elected by the Participant.

 

9.                                      Section 4.9(d) of the Plan is amended to
read as follows:

 

(d)                                 Time and Form of Payment of Supplemental
Accounts.  Payment of the balance of a Participant’s Supplemental Deferral
Account shall be paid or commence to be paid to him on the first day of a
calendar month and year elected by the Participant (which shall be no earlier
than the first day of the seventh month following the date of the Participant’s
separation from service and no later than 15 years after the date of his
separation from service).  Such distribution shall be paid or commence to be
paid to the Participant in either (1) a single lump sum, or (2) installments
over a number of years (not to exceed 15) payable in monthly, quarterly or
annual installments, as elected by the Participant.  If a Participant does not
make timely elections with respect to the time or form of payment pursuant to
the preceding sentences, payment of his Supplemental Deferral Account shall be
made to him in a lump sum on the first day of the seventh month following his
separation from service.  Payment of the balance of a Participant’s Supplemental
Accounts other than his Supplemental Deferral Account shall be paid to the
Participant on the first day of the seventh month following the date of his
separation from service with the Company and all Affiliated Companies.

 

10.                               Section 4.9(e) of the Plan is amended to read
as follows:

 

(e)                                  Notwithstanding any provision in the Plan
to the contrary, a Participant may elect a distribution of all or any portion of
his Pre-2005 Benefit applicable to the amounts credited to his Supplemental
Deferral Account, his Supplemental Company Account, and his Supplemental Profit
Sharing Account, including gains and losses credited to the date of distribution
in accordance with Section 4.8, to be paid or commence to be paid at any time
following his separation from service if he elects such distribution by written
instrument delivered to the Committee prior to the date of his separation from
service.  Such distribution shall be made in a method described in
Section 4.9(d), as elected by the Participant.

 

11.                               The first paragraph of Section 4.9(f) of the
Plan is amended by (a) deleting “all or any portion of his Post-2004 Benefit”
and replacing with “his Post-2004 Benefit” and (b) adding a final sentence
thereto to read as follows:

 

Any such election shall apply to the entire portion of the Post-2004 Benefit
that is not subject to an election previously made pursuant to this
Section 4.9(f).

 

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12.                               Section 4.9(h) of the Plan is amended to read
as follows:

 

4.9(h)                [Reserved.]

 

13.                               Section 8.1 of the Plan is amended to read as
follows:

 

8.1                               [Reserved.]

 

14.                               The contribution table in the Appendix to the
Plan, and the paragraphs immediately preceding and following the table, are
amended to read as follows:

 

The Compensation Committee in its sole discretion may provide for a particular
Plan Year an Additional Supplemental Company Contribution under Section 4.5. 
The amount of any Additional Supplemental Company Contribution that is to be
made for a particular Plan Year shall be determined by the Compensation
Committee in its sole discretion based on the following percentages of a
Participant’s base salary and bonus:

 

Participant Type

 

Contribution

 

Chief Executive Officer

 

Up to 22%

 

President

 

Up to 16%

 

Other Executive Officers designated from time to time by the Compensation
Committee

 

Up to 10%

 

Key Employees designated from time to time by the Compensation Committee

 

Up to 5%

 

 

Addition Supplemental Company Contributions made pursuant to this Appendix for a
particular Plan Year shall be made prior to the end of such Plan Year based on
base salary and bonus payable during such Plan Year.

 

IN WITNESS WHEREOF, the Company has caused this Fifth Amendment to be executed
on its behalf, by its officer, duly authorized, on this 18th day of November
2014.

 

 

AAR CORP.

 

 

 

 

 

 

By:

/s/ Timothy O. Skelly

 

 

Timothy O. Skelly, Vice President

 

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EXHIBIT A

 

FOURTH AMENDMENT TO
AAR CORP. SUPPLEMENTAL KEY EMPLOYEE RETIREMENT PLAN

 

(As Amended and Restated Effective January 1, 2005)

 

WHEREAS, AAR CORP., a Delaware corporation (the “Company”), maintains the AAR
CORP. Supplemental Key Employee Retirement Plan, as amended and restated
effective January 1, 2005 (the “Plan”); and

 

WHEREAS, pursuant to Section 7.1, the Company has reserved the right to amend
the Plan and now deems it appropriate to do so.

 

NOW, THEREFORE, Section 4.9(b) of the Plan is hereby amended, effective as of
January 1, 2012, to read as follows:

 

“(b)                           Distribution Due to Death.   Each Participant
shall have a right to designate, by giving a written designation to the
Committee, a beneficiary or beneficiaries to receive any amount remaining to be
distributed to such Participant in the event that he dies before distribution of
the full amount of his Supplemental Accounts.  Successive beneficiary
designations may be made, and the last designation received by the Committee
prior to the death of the Participant shall be effective and shall revoke all
prior designations.  If a designated beneficiary shall die before the
Participant, his interest shall terminate and, unless otherwise provided in the
Participant’s designation, such interest shall be paid in equal shares to those
beneficiaries, if any, who survive the Participant.  If a Participant has not
designated a beneficiary, or if no designated beneficiary is living on the date
of distribution hereunder, amounts distributable pursuant to this paragraph
shall be distributed to those persons or entities entitled to receive
distributions of the Participant’s accounts under the Qualified Profit Sharing
Plan.”

 

IN WITNESS WHEREOF, the Company has caused this Fourth Amendment to be executed
on its behalf, by its officers, duly authorized, on this 26th day of April 2013.

 

 

AAR CORP.

 

 

 

 

 

 

By:

/s/ Timothy O. Skelly

 

 

Timothy O. Skelly, Vice President

 

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