SECURITIES  AND EXCHANGE COMMISSION  Washington, D.C. 20549

**Form  10-K/A**  (Mark One)

 ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934

For the  fiscal year ended......................................February 28, 2003

 OR

 TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the  transition period from to.............................................  Commission File Number...................................................0-17249

**AURA SYSTEMS, INC.**  (Exact Name of Registrant as Specified in its Charter)

**Delaware  95-4106894**  (State or Other (I.R.S. Employer Incorporation  Jurisdiction of Organization) or Identification No.)

**2335 Alaska Ave.  El Segundo, California 90245**  (Address of principal executive offices)

**(310)  643-5300**  Registrant's telephone number

 Name of  each exchange on which registered

 None

 Securities  registered pursuant to Section 12(b) of the Act:

 None

 Securities  registered pursuant to Section 12(g) of the Act:

 Common  Stock

 Indicate by check mark  whether the registrant (1) has 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 period 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 []

 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. |_|

 On July 25, 2003 the aggregate  market value of the voting stock held by non-affiliates of the Registrant was  approximately $20 million. The aggregate market value has been computed by reference  to the last trading price of the stock on July 25, 2003. On such date the Registrant  had 430,923,150 shares of common stock outstanding.

 When used in this report,  the word "expects," "believes," "anticipates,"  and similar expressions are intended to identify forward-looking statements.  Such forward-looking statements include, but are not limited to, statements  regarding future events and the Company's plans and expectations. The Company's  actual results may differ significantly from the results discussed in forward-looking  statements as a result of certain factors, including those discussed in this  report. The Company expressly disclaims any obligations or undertaking to release  publicly any updates or revisions to any forward-looking statements contained  herein to reflect any change in the Company's expectations or any events, conditions  or circumstances on which any such statement is based. This Report includes  product names, trade names and marks of companies other than the Company. All  such company or product names are trademarks, registered trademarks, trade names  or marks of their respective owners and are not the property of the Company.

PART III

The purpose of this filing is to include  items 11, 12 and 13 in the registrant's Form 10-K for the year ended February  28, 2003.

ITEM 11.                EXECUTIVE COMPENSATION

**Executive Compensation**

The following table summarizes all compensation  paid during the three fiscal years ended February 28, 2003, to the Company's  Chief Executive Officer and the four most highly compensated executive officers  of the Company during fiscal 2003 other than the Chief Executive Officer (together,  the "Named Executive Officers").   Information is presented only for  years in which an individual served as an officer of the Company.

SUMMARY COMPENSATION  TABLE

| Name      and Principal                                                                               | Fiscal Year        ended | Annual Compensation | Long Term         Compensation | Other                   |
|-------------------------------------------------------------------------------------------------------|--------------------------|---------------------|--------------------------------|-------------------------|
| Position                                                                                              | February 28              | Salary              | Other                          | Options/SARs        (1) | Compensation |
| Neal Meehan (2)        Chairman, Chief Executive Officer and President                                | 2003                     | $105,000            | $0                             | 6,389,100               | $45,584 (7) |
|                                                                                                       |                          |                     |                                |                         |
|                                                                                                       |                          |                     |                                |                         |
|                                                                                                       |                          |                     |                                |                         |
| Jacob Mail        Senior Vice President - Operations and Chief Operating Officer                      | 2003                     | $173,753            | $0                             | 514,100                 | $0 |
| 2002                                                                                                  | $176,327                 | $0                  | 300,000                        | $0                      |
| 2001                                                                                                  | $164,287                 | $0                  | 1,500,000                      | $0                      |
|                                                                                                       |                          |                     |                                |                         |
|                                                                                                       |                          |                     |                                |                         |
| Joshua Hauser (6)        Chief Executive Officer and President                                        | 2003                     | $142,624            | $25,000                        | 1,600,000               | $175,000(5) |
|                                                                                                       |                          |                     |                                |                         |
|                                                                                                       |                          |                     |                                |                         |
|                                                                                                       |                          |                     |                                |                         |
| Michael Froch (3)        Senior Vice President, General Counsel and Secretary                         | 2003                     | $185,233            | $0                             | 506,800                 | $0 |
| 2002                                                                                                  | $232,446                 | $26,065             | 300,000                        | $0                      |
| 2001                                                                                                  | $138,989                 | $0                  | 1,000,000                      | $0                      |
|                                                                                                       |                          |                     |                                |                         |
| Steven Burdick (4)        Senior Vice President -         Finance and Chief         Financial Officer | 2003                     | $123,054            | $0                             | 250,000                 | $0 |

|     |                                                                                                                                                                                    |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Amounts      indicated are number of options granted during the fiscal year and, with      respect to Messrs. Hauser and Burdick, options granted as part of employment      agreement. |
| (2) | Mr. Meehan was elected      Chairman, Chief Executive Officer and President effective July 2002.                                                                                        |
| (3) | Salary amounts include      a car allowance of $6,750 in 2001, $19,500 in 2002 and $19,500 in 2003.                                                                                     |
| (4) | Mr. Burdick was Chief      Financial Officer from March 2002 to October 2002.                                                                                                           |
| (5) | Represents severance      accrual pursuant to agreement regarding termination of employment.                                                                                            |
| (6) | Mr. Hauser was Chief      Executive Officer and President from March 2002 to July 2002.                                                                                                 |
| (7) | Represents travel and      living expenses away from home                                                                                                                               |

No long term incentive  payments or restricted stock awards were granted to the above individuals during  the three fiscal years ended February 28, 2003.

The following table summarizes  certain information regarding option grants to purchase common stock of the  Company to the Named Executive Officers.  

OPTIONS/SAR GRANTS  IN LAST FISCAL YEAR

| Individual        Grants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Number        of | %        of |  |  | Potential |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Securities | Total |  |  | Realizable        Value at |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Under- | Options/ |  |  | Assumed        Annual |
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | lying | SARs |  |  | Rates        of Stock Price |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Options/ | Granted        to | Exercise |  | Appreciation |
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | SARs | Employees | Or        Base |  | For        Option Term* |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Granted | In        fiscal | Price | Expiration |  |  |
| Name                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (#) | Year        (1) | ($/Sh) | Date | 5%        ($) | 10%        ($) |
| Neal        Meehan

6,389,100

40.2%

$0.097-0.50

7/23/12        - 1/30/13

$346,608

$896,677

Jacob        Mail

514,100

3.2%

$0.125-.09

7/9/12        - 1/30/13

$34,662

$87,480

Joshua        Hauser (1)

1,600,000

10.1%

$0.50

(2)

$164,96

$733,280

Michael        Froch

506,800

3.2%

$0.125-0.9

7/9/12        - 1/30/13

$34,398

$86,814

Steven        Burdick (1)

250,000

1.6%

--

(2)

$57,025

$145,825
 (1) Includes      options granted as part of employment agreement.(2) Term was ten years      from date of grant but the options expired unexercised in connection with      termination of employment.
The following table summarizes  certain information regarding the number and value of all options to   purchase common stock of the Company held by the Named Executive Officers as  of February 28, 2003.

AGGREGATED OPTION/SAR  EXERCISES IN LAST FISCAL YEAR  AND FISCAL YEAR-END OPTION/SAR VALUES

Name 

Number of Unexercised        Options/SARs at Fiscal        Year End

Value of Unexercised        In-the Money Options/        SARs at Fiscal Year End*

Exercisable

Unexercisable

Exercisable

Unexercisable

Neal        Meehan

3,375,000

3,264,100

$0

$69,697

Jacob        Mail

1,825,000

489,100

$0

$3,697

Joshua        Hauser

--

--

--

--

Michael        Froch

1,366,667

440,133

$0

$3,595

Steven        Burdick

--

--

--

--
 *      Based on the average high and low reported prices of the Company's common      stock on February 28, 2003.
No options were exercised  by the above individuals during the fiscal year ended February 28, 2003.

 

**Termination and Change in Control  Agreements**

The Company does not currently have any  change in control or severance agreements with its executive officers except  for Mr. Mail, who has an employment contract providing for salary continuation  for six months upon a termination of his employment without cause.

Mr. Hauser's employment contract provided  for an 18-month term and 90 days notice to terminate following expiration of  such term.  Effective July 23, 2003, Mr. Hauser entered an agreement with the  Company terminating his employment and providing him a severance payment of  $175,000 to be paid over time.  The Company is in default of such payments.

**Compensation of Directors**

 Effective fiscal 2002, the Company's  director compensation policy is to provide each new Director an initial membership  grant of 250,000 stock options and each non-employee Director an annual grant  of 100,000 stock options (125,000 for members of the Audit Committee), with  the exercise price set at or above market as of the date of grant and all grants  vesting six months plus one day from the date of grant.  During fiscal 2003,  all grants under this policy were priced at $.50 per share, approximately 30%  above market.

During fiscal 2003, Mr. Albert received  an additional grant of 3,000,000 options, priced at $.50 per share, approximately  30% above market, for serving as Chairman of the Board during the transition  to a new management team following the termination of employment of Mr. Kurtzman  and five other officers of the Company.

Directors are reimbursed for travel expenses  incident to their service as a director but do not receive cash compensation.

**Compensation Committee Report**

The report of the Company's Compensation  Committee is:

The Company's compensation strategy evolved  during 2002 and 2003.  As a result of the Company's historical losses, the Securities  and Exchange Commission investigation that culminated in the resignation of  the Company's prior senior management under Zvi (Harry) Kurtzman, and other  causes discussed in management's discussion and analysis of results of operation  and financial condition found in its various periodic reports ("Management's  Discussion"), the Company faced 2002 and 2003 - and faces 2004 - in an  extremely weak financial condition.  

In order to conserve cash, the Company  has significantly reduced its senior management staff, with the result that  the Company currently has only five such officers.  In fiscal 2001, the Company  had fourteen officers at the level of vice president or above. This consolidation  of functions in a very limited staffing has required the Company to seek out  individuals who can assume broad areas of responsibility and perform many levels  of duties, all at affordable levels of compensation.

The Company's current chief executive  officer, as well as its current interim financial officer, were selected as  individuals who can work in this environment and address the Company's primary  needs to increase sales and obtain financing.  Mr. Meehan has a strong track  record in marketing advanced technology products and Mr. Rescino has a strong  track record in serving troubled companies engaged in repetitive financing efforts.  Neither Mr. Meehan nor Mr. Rescino received signing bonuses or employment contracts  providing severance protection and each is engaged at a salary which the Compensation  Committee believes is significantly below competitive levels.   For instance,  the annual salary for the Company's Chief Executive Officer is currently $153,000,  which includes a 15% voluntary cut in pay effective January 20, 2003, as compared  to the $385,000 annual salary earned by the Company's former chief executive  in fiscal 2002 under a multi-year contract with significant severance provisions.  As the Company's financial condition improves, the Committee would expect to  return to more standard executive compensation arrangements.

Mr. Meehan and Mr. Rescino commute to  the Company's principal place of business.  Such commuting involves both physical  travel and extensive use of wire communications.  The Compensation Committee  believes these arrangements are reasonable under the circumstances and more  advantageous to the Company than other alternatives.

The Company's weak financial condition,  historical losses, and other factors discussed in Management's Discussion have  also caused an extremely soft market for the Company's equity securities.  The  market price of the Company's common stock has declined substantially and the  Company has stated the need to increase its authorized shares and/or implement  a reverse stock split.  In addition, the Company has stated the need to attract  additional investment and that the issuance of shares in exchange for any such  investment may dilute the interests of stockholders and such dilution may be  substantial.  For these reasons, stock compensation packages comparable to stock  packages previously offered by the Company do not provide the incentive necessary  to attracting and retaining qualified management.  In order to provide a meaningful  stock-based incentive to its senior management, the Company has increased the  number of shares offered as stock incentives and offered short vesting provisions.  The amounts and terms of these grants are disclosed elsewhere in this Item 11.

The Compensation Committee believes that  it is in the best interest of the Company to offer further and possibly significant  stock-based compensation to its senior management (including the Board of Directors)  in order to attract and retain qualified management.  Such compensation may  take the form of stock option awards, stock grants, grants as bonuses, grants  as incentive compensation, or other forms.  However, other than as set forth  in this Item 11, the Company currently has no commitments to provide additional  stock-based compensation to its senior management.  

The Company has no severance provisions  with its senior management - including provisions triggered by a change in control  - except Mr. Mail has a contract providing for six months of severance if he  is terminated without cause.

*Section 162(m) Policy*

Section 162(m) of the Internal Revenue  Code of 1986, as amended, generally provides that publicly held companies may  not deduct compensation paid to certain of its top executive officers to the  extent such compensation exceeds $1 million per officer in any year. The Company  will monitor the applicability of Section 162(m) to its ongoing compensation  arrangements as circumstances warrant.  

Salvador  Diaz-Verson, Jr. and Lawrence A. Diamant

Aura  Systems, Inc. Compensation Committee

**Compensation Committee Interlocks  and Insider Participation**

The Compensation Committee for the fiscal  year ended February 28, 2003 comprised Salvador Diaz-Verson, Jr. and Lawrence  Diamant.  Decisions regarding compensation of executive officers for the fiscal  year ended February 28, 2003 were made unanimously by the outside, disinterested  Directors of the Board of Directors, after reviewing recommendations of the  Compensation Committee and discussing the matter with the executive officer.

**Performance Graph**

The following graph compares  the cumulative total stockholder return of the Company with the cumulative total  return on the NASDAQ Stock Market Index (U.S.) and the S&P Industrial Index.  The Comparisons in the graph are required by the Securities and Exchange Commission  and are not intended to forecast or be indicative of possible future performance  of the Company's Common Stock.  Total returns for the noted indexes for the  year ended February 28, 2003, have been estimated.  The Company has substantially  underperformed the comparable indexes.

COMPARISON  OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG AURA SYSTEMS, INC.,  THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE S & P INDUSTRIAL INDEX |