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                                                                    EXHIBIT 10.1

                                INTERSPEED, INC.

           2000 STOCK OPTION AND GRANT PLAN FOR NON-OFFICER EMPLOYEES

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

     The name of the plan is the Interspeed, Inc. 2000 Stock Option and Grant
Plan for Non-Officer Employees(the "Plan"). The purpose of the Plan is to
encourage and enable the employees of Interspeed, Inc. (the "Company") and its
Subsidiaries who are not officers or directors of the Company or any of its
Subsidiaries and upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a
direct stake in the Company's welfare will assure a closer identification of
their interests with those of the Company, thereby stimulating their efforts on
the Company's behalf and strengthening their desire to remain with the Company.

     The following terms shall be defined as set forth below:

     "ACT" means the Securities Exchange Act of 1934, as amended.

     "ADMINISTRATOR" is defined in Section 2(a).

     "AWARD" or "AWARDS," except where referring to a particular category of
grant under the Plan, shall include Stock Options and Restricted Stock Awards.

     "BOARD" means the Board of Directors of the Company.

     "CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

     "COMMITTEE" means the Committee of the Board referred to in Section 2.

     "FAIR MARKET VALUE" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Administrator; provided,
however, that (i) if the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ
National System or a national securities exchange, the determination shall be
made by reference to market quotations. If there are no market quotations for
such date, the determination shall be made by reference to the last date
preceding such date for which there are market quotations.

     "OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.

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     "RESTRICTED STOCK AWARD" means Awards granted pursuant to Section 6.

     "STOCK" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.

     "SUBSIDIARY" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities beginning with the
Company if each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests possessing 50
percent or more of the economic interest or the total combined voting power of
all classes of stock or other interests in one of the other corporations or
entities in the chain.

SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT
           PARTICIPANTS AND DETERMINE AWARDS

     (a) COMMITTEE. The Plan shall be administered by either the Board or a
committee of not less than two Independent Directors (in either case, the
"Administrator").

     (b) POWERS OF ADMINISTRATOR. The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:

          (i) to select the individuals to whom Awards may from time to time be
     granted, provided that under no circumstances may any Award be granted to
     any officer or director of the Company or any of its Subsidiaries;

          (ii) to determine the time or times of grant, and the extent, if any,
     of Stock Options and Restricted Stock Awards, granted to any one or more
     participants;

          (iii) to determine the number of shares of Stock to be covered by any
     Award;

          (iv) to determine and modify from time to time the terms and
     conditions, including restrictions, not inconsistent with the terms of the
     Plan, of any Award, which terms and conditions may differ among individual
     Awards and participants, and to approve the form of written instruments
     evidencing the Awards;

          (v) to accelerate at any time the exercisability or vesting of all or
     any portion of any Award;

          (vi) subject to the provisions of Section 5(a)(ii), to extend at any
     time the period in which Stock Options may be exercised; and

          (vii) at any time to adopt, alter and repeal such rules, guidelines
     and practices for administration of the Plan and for its own acts and
     proceedings as it shall deem

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     advisable; to interpret the terms and provisions of the Plan and any Award
     (including related written instruments); to make all determinations it
     deems advisable for the administration of the Plan; to decide all disputes
     arising in connection with the Plan; and to otherwise supervise the
     administration of the Plan.

     All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan participants.

     (c) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Administrator, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Administrator's authority and duties with respect to the granting of
Awards. Any such delegation by the Administrator shall include a limitation as
to the amount of Awards that may be granted during the period of the delegation
and shall contain guidelines as to the determination of the exercise price of
any Option, the conversion ratio or price of other Awards and the vesting
criteria. The Administrator may revoke or amend the terms of a delegation at any
time but such action shall not invalidate any prior actions of the
Administrator's delegate or delegates that were consistent with the terms of the
Plan.

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

     (a) STOCK ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 500,000 shares of Common Stock.
For purposes of this limitation, the shares of Stock underlying any Awards which
are forfeited, cancelled, reacquired by the Company, satisfied without the
issuance of Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under the Plan. Subject
to such overall limitation, shares of Stock may be issued up to such maximum
number pursuant to any type or types of Award. The shares available for issuance
under the Plan may be authorized but unissued shares of Stock or shares of Stock
reacquired by the Company and held in its treasury.

     (b) CHANGES IN STOCK. If, as a result of any reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Company's capital stock, the outstanding
shares of Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or additional
shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Stock or other
securities, the Administrator shall make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under the
Plan, (ii) the number and kind of shares or other securities subject to any then
outstanding Awards under the Plan, and (iii) the price for each share subject to
any then outstanding Stock Options under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by the number of
Stock Options) as to which such Stock Options remain exercisable. The adjustment
by the Administrator shall be final, binding and conclusive. No fractional
shares of Stock shall be issued under the Plan

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resulting from any such adjustment, but the Administrator in its discretion may
make a cash payment in lieu of fractional shares.

     The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the participant, if it would constitute a modification, extension
or renewal of the Option within the meaning of Section 424(h) of the Code.

     (c) MERGERS AND OTHER SALE EVENTS. In the case of (i) the dissolution or
liquidation of the Company, (ii) the sale of all or substantially all of the
assets of the Company on a consolidated basis to an unrelated person or entity,
(iii) a merger, reorganization or consolidation in which the holders of the
Company's outstanding voting power immediately prior to such transaction do not
own a majority of the outstanding voting power of the surviving or resulting
entity immediately upon completion of such transaction, (iv) the sale of all of
the Stock of the Company to an unrelated person or entity or (v) any other
transaction in which the owners of the Company's outstanding voting power prior
to such transaction do not own at least a majority of the outstanding voting
power of the relevant entity after the transaction, regardless of the form
thereof (in each case, a "Sale Event"), 100% of all unvested Options and other
Awards which are not vested as of the effective date of such Sale Event shall
become vested as of such effective date, except as the Committee may otherwise
specify with respect to particular Awards. Upon the effectiveness of the Sale
Event, the Plan and all outstanding Options granted hereunder shall terminate
(and Restricted Stock Awards may be subject to repurchase), except as the
Committee may otherwise specify with respect to particular Awards, unless
provision is made in connection with the Sale Event for the assumption of
Awards, the continuation of Awards by the Company as survivor or the
substitution of such Awards with new Awards of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and, if
appropriate, the per share exercise prices, as provided in Section 3(b) above.
The Committee may provide with respect to particular Awards that in the event of
such termination, a grantee shall be permitted to exercise for a period of at
least 15 days prior to the date of such termination all outstanding Options held
by such grantee which are then exercisable or become exercisable upon the
effectiveness of the Sale Event. The treatment of Restricted Stock Awards in
connection with any such transaction shall be as specified in the relevant
agreement relating to such Award.

     (d) SUBSTITUTE AWARDS. The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The

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Administrator may direct that the substitute awards be granted on such terms and
conditions as the Administrator considers appropriate in the circumstances. Any
substitute Awards granted under the Plan shall not count against the share
limitation set forth in Section 3(a).

SECTION 4. ELIGIBILITY

     Participants in the Plan will be such full or part-time employees of the
Company and its Subsidiaries who are not officers or directors of the Company as
are selected from time to time by the Administrator in its sole discretion.

SECTION 5. STOCK OPTIONS

     Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve. All Stock Options granted under the
Plan shall be options which are not "incentive stock options" as defined in
Section 422 of the Code ("Non-Qualified Stock Options").

     (a) GRANTS OF STOCK OPTIONS. The Administrator in its discretion may grant
Stock Options to eligible employees of the Company, provided that the grantee is
not an officer or director of the Company or any of its Subsidiaries. Stock
Options granted pursuant to this Section 5(a) shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable. If the Administrator so determines, Stock Options may be granted in
lieu of cash compensation at the participant's election, subject to such terms
and conditions as the Administrator may establish.

          (i) EXERCISE PRICE. The exercise price per share for the Stock covered
     by a Stock Option granted pursuant to this Section 5(a) shall be determined
     by the Administrator at the time of grant but shall not be less than 100
     percent of the Fair Market Value on the date of grant.

          (ii) OPTION TERM. The term of each Stock Option shall be fixed by the
     Administrator, but no Stock Option shall be exercisable more than ten years
     after the date the option is granted.

          (iii) EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Stock Options shall
     become exercisable at such time or times, whether or not in installments,
     as shall be determined by the Administrator at or after the grant date;
     provided, however, that Stock Options granted in lieu of compensation shall
     be exercisable in full as of the grant date. The Administrator may at any
     time accelerate the exercisability of all or any portion of any Stock
     Option. An optionee shall have the rights of a stockholder only as to
     shares acquired upon the exercise of a Stock Option and not as to
     unexercised Stock Options.

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          (iv) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
     part, by giving written notice of exercise to the Company, specifying the
     number of shares to be purchased. Payment of the purchase price may be made
     by one or more of the following methods to the extent provided in the
     Option Award agreement:

               (A) In cash, by certified or bank check or other instrument
          acceptable to the Administrator;

               (B) Through the delivery (or attestation to the ownership) of
          shares of Stock that have been purchased by the optionee on the open
          market or that have been beneficially owned by the optionee for at
          least six months and are not then subject to restrictions under any
          Company plan. Such surrendered shares shall be valued at Fair Market
          Value on the exercise date;

               (C) By the optionee delivering to the Company a properly executed
          exercise notice together with irrevocable instructions to a broker to
          promptly deliver to the Company cash or a check payable and acceptable
          to the Company for the purchase price; provided that in the event the
          optionee chooses to pay the purchase price as so provided, the
          optionee and the broker shall comply with such procedures and enter
          into such agreements of indemnity and other agreements as the
          Administrator shall prescribe as a condition of such payment
          procedure; or

               (D) By the optionee delivering to the Company a promissory note
          if the Board has expressly authorized the loan of funds to the
          optionee for the purpose of enabling or assisting the optionee to
          effect the exercise of his Stock Option; provided that at least so
          much of the exercise price as represents the par value of the Stock
          shall be paid other than with a promissory note.

     Payment instruments will be received subject to collection. The delivery of
     certificates representing the shares of Stock to be purchased pursuant to
     the exercise of a Stock Option will be contingent upon receipt from the
     optionee (or a purchaser acting in his stead in accordance with the
     provisions of the Stock Option) by the Company of the full purchase price
     for such shares and the fulfillment of any other requirements contained in
     the Stock Option or applicable provisions of laws. In the event an optionee
     chooses to pay the purchase price by previously-owned shares of Stock
     through the attestation method, the number of shares of Stock transferred
     to the optionee upon the exercise of the Stock Option shall be net of the
     number of shares attested to.

     (b) RELOAD OPTIONS. At the discretion of the Administrator, Options granted
under the Plan may include a "reload" feature pursuant to which an optionee
exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(iv)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair

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Market Value of the Stock on the date the additional Option is granted and with
such other terms as the Administrator may provide) to purchase that number of
shares of Stock equal to the sum of (i) the number delivered to exercise the
original Option and (ii) the number withheld to satisfy tax liabilities, with an
Option term equal to the remainder of the original Option term unless the
Administrator otherwise determines in the Award agreement for the original
Option grant.

     (c) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee, or by the optionee's legal representative or
guardian in the event of the optionee's incapacity. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide in the Award
agreement regarding a given Option that the optionee may transfer his
Non-Qualified Stock Options to members of his immediate family, to trusts for
the benefit of such family members, or to partnerships in which such family
members are the only partners, provided that the transferee agrees in writing
with the Company to be bound by all of the terms and conditions of this Plan and
the applicable Option.

SECTION 6. RESTRICTED STOCK AWARDS

     (a) NATURE OF RESTRICTED STOCK AWARDS. A Restricted Stock Award is an Award
entitling the recipient to acquire, at par value or such other higher purchase
price determined by the Administrator, shares of Stock subject to such
restrictions and conditions as the Administrator may determine at the time of
grant ("Restricted Stock"). Conditions may be based on continuing employment (or
other business relationship) and/or achievement of pre-established performance
goals and objectives. The grant of a Restricted Stock Award is contingent on the
participant executing the Restricted Stock Award agreement. The terms and
conditions of each such agreement shall be determined by the Administrator, and
such terms and conditions may differ among individual Awards and participants.

     (b) RIGHTS AS A STOCKHOLDER. Upon execution of a written instrument setting
forth the Restricted Stock Award and payment of any applicable purchase price, a
participant shall have the rights of a stockholder with respect to the voting of
the Restricted Stock, subject to such conditions contained in the written
instrument evidencing the Restricted Stock Award. Unless the Administrator shall
otherwise determine, certificates evidencing the Restricted Stock shall remain
in the possession of the Company until such Restricted Stock is vested as
provided in Section 7(d) below, and the participant shall be required, as a
condition of the grant, to deliver to the Company a stock power endorsed in
blank.

     (c) RESTRICTIONS. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock Award agreement. If a participant's employment
with the Company and its Subsidiaries terminates for any reason, the Company
shall have the right to repurchase

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Restricted Stock that has not vested at the time of termination at its original
purchase price, from the participant or the participant's legal representative.

     (d) VESTING OF RESTRICTED STOCK. The Administrator at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." Except as may otherwise be
provided by the Administrator either in the Award agreement or, subject to
Section 9 below, in writing after the Award agreement is issued, a participant's
rights in any shares of Restricted Stock that have not vested shall
automatically terminate upon the participant's termination of employment (or
other business relationship) with the Company and its Subsidiaries and such
shares shall be subject to the Company's right of repurchase as provided in
Section 6(c) above.

     (e) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The Restricted Stock
Award agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends paid on the Restricted Stock.

SECTION 7. TAX WITHHOLDING

     (a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant. The Company's obligation to deliver stock certificates
to any participant is subject to and conditioned on tax obligations being
satisfied by the participant.

     (b) PAYMENT IN STOCK. Subject to approval by the Administrator, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.

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SECTION 8. TRANSFER, LEAVE OF ABSENCE, ETC.

     For purposes of the Plan, the following events shall not be deemed a
termination of employment:

     (a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or

     (b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.

SECTION 9. AMENDMENTS AND TERMINATION

     The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent.

SECTION 10. STATUS OF PLAN

     With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.

SECTION 11. GENERAL PROVISIONS

     (a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Administrator
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.

     No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Awards as
it deems appropriate.

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     (b) DELIVERY OF STOCK CERTIFICATES. Stock certificates to participants
under this Plan shall be deemed delivered for all purposes when the Company or a
stock transfer agent of the Company shall have mailed such certificates in the
United States mail, addressed to the participant, at the participant's last
known address on file with the Company.

     (c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

     (d) TRADING POLICY RESTRICTIONS. Option exercises and other Awards under
the Plan shall be subject to such Company's insider trading policy, as in effect
from time to time.

SECTION 12. EFFECTIVE DATE OF PLAN

     This Plan was adopted by the Board of Directors of the Company on May 11,
2000, and is effective on such date.

SECTION 13. GOVERNING LAW

     This Plan and all Awards and actions taken thereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.

DATE APPROVED BY BOARD OF DIRECTORS:                             May 11, 2000

                                       10<PAGE>

                               Amendment No. 1 to
                      AAR CORP. Directors' Retirement Plan

         WHEREAS, AAR CORP. ("Company") adopted the AAR CORP. Directors'
Retirement Plan ("Plan") effective April 14, 1992; and

         WHEREAS, the Company now desires to amend the Plan in certain respects;

         NOW, THEREFORE, the Company hereby amends the Plan as follows:

         1.       A new subsection 1.03.5 is added as follows:

                           "1.03.05   "Change in Control" means the earliest of:

                           (a)      any person (as such term is used in Section
                  13(d) of the Securities Exchange Act of 1934, as amended
                  ("Exchange Act")), has acquired (other than directly from the
                  Company) beneficial ownership (as that term is defined in Rule
                  13d-3 under the Exchange Act), of more than 20% of the
                  outstanding capital stock of the Company entitled to vote for
                  the election of directors;

                           (b)      the effective time of (i) a merger or
                  consolidation or other business combination of the Company
                  with one or more other corporations as a result of which the
                  holders of the outstanding voting stock of the Company
                  immediately prior to such business combination hold less than
                  60% of the voting stock of the surviving or resulting
                  corporation, or (ii) a transfer of substantially all of the
                  assets of the Company other than to an entity of which the
                  Company owns at least 80% of the voting stock; or

                           (c)      the election, over any period of time, to
                  the Board of Directors of the Company without the
                  recommendation or approval of the incumbent Board of Directors
                  of the Company, of the lesser of (i) three directors, or (ii)
                  directors constituting a majority of the number of directors
                  of the Company then in office."

         2.       A new subsection 3.01(b) is added as follows:

                           "3.01(b) Notwithstanding the provisions of Section
                  3.01(a) above, the Company shall enter into a trust agreement
                  ("Trust Agreement") with a bank or trust company (with a
                  combined capital and surplus in excess of $100 million
                  dollars), located in the Continental United States, as
                  trustee, whereby the Company shall agree to contribute to a
                  trust ("Trust") initially and annually thereafter, for the
                  purpose of accumulating assets actuarially sufficient to
                  satisfy accrued obligations to Participants under Article II
                  hereof, in the event of a Change in Control of the Company.
                  The Trust

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                  Agreement shall obligate the Company to make contributions
                  sufficient to satisfy the obligations to Participants, under
                  Article II hereof; provided, however, that such initial
                  contribution shall be made on the earlier to occur of (i)
                  within 10 days after the date the Board, in its discretion,
                  deems a Change in Control of the Company likely to occur and
                  (ii) the date a Change in Control actually occurs. The
                  discretion of the Board shall be binding and conclusive with
                  respect to the likelihood of a Change in Control of the
                  Company to occur. Such Trust Agreement shall be substantially
                  in the form of the model trust agreement set forth in Internal
                  Revenue Service Revenue Procedure 92-64, or any subsequent
                  Internal Revenue Service Revenue Procedure, and shall include
                  provisions required in such model trust agreement that all
                  assets of the Trust shall be subject to the creditors of the
                  Company in the event of insolvency. The Trust provided for
                  herein may be the same trust as the Company establishes for
                  funding of benefits under the Company's AAR CORP. Supplemental
                  Key Employee Retirement Plan ("SKERP").

                                            AAR CORP.

                                            By /s/ David P. Storch
                                              ----------------------------------

Dated: May 26, 2000

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