Exhibit 10(b)

 

April 11, 2003

 

Mr. Bruce E. Grout

c/o Airborne Express, Inc.

Post Office Box 662

Seattle, WA 98111

 

Dear Mr. Grout:

 

The purpose of this letter is to amend the letter agreement by and among you,
Airborne, Inc. and Airborne Express, Inc. dated August 7, 2001 (the “Agreement”)
to establish your current base pay and bonus payable for 2002 as the floor for
calculating the multiple of base pay and bonus portions of the benefits payable
under the Agreement. Accordingly, your Agreement is hereby amended as follows:

 

  1.   Section 7(b)(i) is amended in its entirety to read as follows:

 

“(i) The sum of A and B, multiplied by the number set forth in paragraph (b)(ii)
below, where

 

A is the highest of the following: (1) your annual base salary at the rate in
effect as of your termination, (2) your annual base salary at the highest rate
in effect during the two-year period prior to the date of termination, and (3)
$260,000, and

 

B is the amount of any additional compensation, including any sums awarded under
the Executive Incentive Compensation Plan (“EICP”), the Executive Group
Incentive Compensation Plan (“EGICP”) and the Management Incentive Compensation
Plan (“MICP”) (or any replacement or successor plans), awarded you for the year
most recently ended, whether or not fully paid, or, if higher, such additional
compensation for the year in which your termination occurred, determined in
accordance with the following principles: the additional compensation under such
plans for the year in which your termination occurred shall be (1) for the
period up until the end of the most recent quarter-end prior to termination, a
pro rata amount of the annual award that would have been made assuming (i) to
the extent such award is based on an objective performance measure, the actual
performance for that period, expressed as a percentage of target for that
measure during the period, continued the entire year, and (ii) to the extent the
award is based on other factors or if the target performance was not established
prior to the applicable quarter-end, the award shall be made by assuming
performance for the year equaled the weighted average of percentages of target
performance achieved for the objective measures for such period, and (2) for the
remaining period, a pro rata amount of the annual award that would

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Mr. Bruce E. Grout

Page Two

April 11, 2003

 

have been made assuming performance for each measure for the year equaled the
targets.1 The additional compensation for such year under any replacement or
successor to such plans shall be based on comparable principles. Notwithstanding
the foregoing, in no event shall B be less than $218,215.”

 

If you agree that this letter correctly sets forth our agreement regarding the
amendment of the Agreement, sign and return to the Company the enclosed copy of
this letter and retain your copy for your files.

 

AIRBORNE, INC.

By

 

/s/ Carl D. Donaway

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Its

 

Chairman and Chief Executive Officer

 

AIRBORNE EXPRESS, INC.

By

 

/s/ David C. Anderson

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Its

 

Vice President, General Counsel

       

and Corporate Secretary

 

/s/ Bruce E. Grout

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Bruce E. Grout