<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
AAR CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
AAR CORPORATION
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
The accompanying filing was occasioned by a temporary communications problem
that resulted in missing data in the original transmission on August 30, 1994.
[LOGO]
1111 NICHOLAS BOULEVARD
ELK GROVE VILLAGE, ILLINOIS 60007
- - ------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, OCTOBER 12, 1994
To the Stockholders of AAR CORP.:
The Annual Meeting of Stockholders of AAR CORP. for the year 1994 will be held
in the Shareholders Room (21st Floor) of Continental Bank N.A., 231 S. LaSalle
Street, Chicago, Illinois, on Wednesday, October 12, 1994, at 3:00 P.M. (Chicago
time) for the purpose of considering and acting upon the following proposals,
all as described in the accompanying Proxy Statement:
1. To elect three Class I directors for a three-year term expiring at the 1997
Annual Meeting of Stockholders;
2. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Only stockholders of record at the close of business on August 15, 1994, will be
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
Accompanying this notice and the Proxy Statement is a copy of the Annual Report
to Stockholders for the fiscal year ended May 31, 1994.
By Order of the Board of Directors
HOWARD A. PULSIFER,
SECRETARY
August 30, 1994
YOUR VOTE IS IMPORTANT
PLEASE DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT IN THE ENCLOSED
STAMPED, ADDRESSED ENVELOPE, SO THAT IF YOU ARE UNABLE TO ATTEND THE MEETING,
YOUR SHARES MAY NEVERTHELESS BE VOTED. NO POSTAGE IS REQUIRED FOR MAILING IN THE
UNITED STATES.
<PAGE>
[LOGO]
1111 NICHOLAS BOULEVARD
ELK GROVE VILLAGE, ILLINOIS 60007
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
October 12, 1994
SOLICITATION
This Proxy Statement is being furnished to stockholders of AAR CORP., a Delaware
corporation (the "Company" or "AAR"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders of the Company to be held in the Shareholders Room (21st Floor)
of Continental Bank N.A., 231 S. LaSalle Street, Chicago, Illinois, on
Wednesday, October 12, 1994, at 3:00 P.M. (Chicago time), or any adjournment
thereof (the "Annual Meeting"). This Proxy Statement is first being sent to
stockholders on or about August 30, 1994.
Any proxy solicited herewith may be revoked by a stockholder at any time prior
to the voting thereof by sending written notice of revocation to the Secretary
of the Company, or by delivering a later-dated proxy, or by attending the Annual
Meeting and voting in person. Shares of Common Stock represented by proxies that
are properly executed and returned to the Company will be voted as specified
thereon at the Annual Meeting. If no choice is specified, such shares will be
voted FOR the election of the three nominees for director designated by the
Board of Directors, and upon any other matters that may properly come before the
Annual Meeting in the discretion of the named proxies. In the event any nominee
is unavailable for election, which is not presently anticipated, shares
represented by valid proxies will be voted for such other person or persons as
the named proxies shall determine in their discretion.
As provided in the Company's Automatic Dividend Reinvestment and Stock Purchase
Plan, shares held by the Dividend Reinvestment Agent for a participant will be
voted in accordance with the instructions on the proxy card received
representing such shares or otherwise as set forth above.
The cost of the solicitation of proxies will be borne by the Company and will
consist primarily of printing, postage and handling, including reimbursement to
banks, brokers, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred in forwarding proxy material to their respective
principals. The Company has engaged D. F. King & Co., 77 Water Street, New York,
New York, to aid in the solicitation of proxies at a total estimated cost of
$7,000.00. D. F. King & Co. may solicit proxies by mail, personally, or by
telephone or telegraph. In addition to the solicitation of proxies by D. F. King
& Co. and by use of the mails, certain officers, directors and employees of the
Company may solicit proxies personally, or by telephone or telegraph, without
additional compensation.
QUORUM AND VOTING RIGHTS
At the close of business on August 15, 1994, the record date for the
determination of stockholders entitled to vote at the meeting, there were
outstanding 15,906,792 shares of common stock of the Company, $1.00 par value
("Common Stock"). Each stockholder of record is entitled to one vote for every
share held on the record date. Shares cannot be voted at the Annual Meeting
unless the
1
<PAGE>
owner thereof is present in person or by proxy. A quorum of stockholders is
necessary to take action at the Annual Meeting. The holders of a majority of the
shares of Common Stock entitled to vote and present in person or represented by
proxy will constitute a quorum of stockholders at the Annual Meeting. Votes cast
in person or by proxy at the Annual Meeting will be tabulated by the inspectors
of election appointed for the Annual Meeting. The inspectors of election will
treat abstentions and broker non-votes as shares that are present and entitled
to vote for purposes of determining a quorum. Abstentions and broker non-votes
will be disregarded for purposes of determining whether a matter has been
approved.
PROPOSAL 1
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation and By-Laws of the Company provide
that the Board of Directors shall consist of between three and fifteen
directors, with the exact number of directors to be fixed from time to time by
the Board of Directors, and that the directors shall be divided into three
classes as nearly equal in number as possible. The Board of Directors has fixed
the number of directors on the Board at ten.
The ten members of the Board of Directors are divided into three classes: Class
I (3 directors), Class II (3 directors) and Class III (4 directors). Class I, to
be elected at this Annual Meeting, will consist of three directors who are to
serve for a three year term until the 1997 Annual Meeting of Stockholders and
until their successors are duly elected and qualified. The Board of Directors
has designated Messrs. Erwin E. Schulze, Joel D. Spungin, and David P. Storch as
the nominees for election as Class I directors. Each of the nominees is
currently a director of the Company. Under Delaware law, the three nominees for
director who receive the greatest number of votes shall be elected directors of
the Company.
NOMINEES AND CONTINUING DIRECTORS
The following sets forth certain information with respect to the nominees as
well as the other current and continuing directors:
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director
and Other Information Since
- - -------------------------------------------------------------------------------------------------------- -----------
<S> <C>
NOMINEES:
CLASS I -- DIRECTORS WHOSE TERMS EXPIRE AT THE 1994 ANNUAL MEETING:
ERWIN E. SCHULZE, 69--Since January 1993, Chairman, Chicago Stock Exchange (formerly Midwest Stock
Exchange). Since January 1991, private investor. From 1981 to 1991, Chairman of the Board, President
and Chief Executive Officer of Ceco Industries, Inc., a manufacturer of building products and provider
of concrete forming services for the construction industry.
Other directorship: The Interlake Corporation 1977
JOEL D. SPUNGIN, 56--Since 1988, Chairman and Chief Executive Officer of United Stationers Inc.; also
President from 1989 to 1991. From 1987 to 1988, Vice Chairman and Chief Executive Officer and from
1981 to 1987, President and Chief Operating Officer.
Other directorship: United Stationers Inc. 1992
DAVID P. STORCH, (1) 41--Since 1989, President and Chief Operating Officer of AAR. From 1988 to 1989,
Vice President of AAR. 1989
</TABLE>
- - ----------
(1) Mr. Storch is Mr. Eichner's son-in-law.
2
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director
and Other Information Since
- - -------------------------------------------------------------------------------------------------------- -----------
<S> <C>
OTHER CURRENT AND CONTINUING DIRECTORS:
CLASS II--DIRECTORS WHOSE TERMS EXPIRE AT THE 1995 ANNUAL MEETING:
EDGAR D. JANNOTTA, 63--Since 1977, Managing Partner of William Blair & Company, an investment banking
firm.
Other directorships: Bandag, Incorporated, Oil-Dri Corporation of America, Safety-Kleen Corp., Molex
Incorporated and New York Stock Exchange, Inc. 1964
LEE B. STERN, 67--Since December 1992, President of LBS Co., and managing partner of LBS Limited
Partnership, a member firm of the Chicago Board of Trade and Futures Commission Merchant since 1992.
From 1967 to December 1992, President and Chief Executive Officer of Lee B. Stern & Company, Ltd., a
Futures Commission Merchant. Mr. Stern has been a member of the Chicago Board of Trade since 1949, a
member of the Chicago Mercantile Exchange since 1963, and an owner-director of the Chicago White Sox
since 1976. 1982
RICHARD D. TABERY, 65--Since December 1993, Consultant. From June 1988, through November 1993, Vice
Chairman of AAR. From 1957 to 1988 Mr. Tabery held various positions with United Air Lines, Inc., most
recently Senior Vice President-Maintenance Operations. 1989
CLASS III--DIRECTORS WHOSE TERMS EXPIRE AT THE 1996 ANNUAL MEETING:
A. ROBERT ABBOUD, 65--Since 1984, President of A. Robert Abboud & Co., an investment business. From 1988
to March 1991, Chairman and Chief Executive Officer of First City Bancorporation of Texas, Inc.,(1) a
banking institution.
Other directorships: Inland Steel Company, Hartmarx Corporation, First City Bancorporation of Texas,
Inc., and Alberto-Culver Company. 1987
HOWARD B. BERNICK, 41--Since 1988, President and Chief Operating Officer of Alberto-Culver Company, a
developer and manufacturer of household and personal products.
Other directorship: Alberto-Culver Company. 1994
IRA A. EICHNER, (2) 63--Since 1973, Chairman of the Board of AAR CORP. Mr. Eichner is the founder of the
Company and has been its Chief Executive Officer since it was founded in 1955.
Other directorship: United Stationers Inc. 1955
ROBERT D. JUDSON, 69--Since 1984, Financial Consultant. Prior to 1980, Senior Vice President, The First
National Bank of Chicago. 1979
</TABLE>
STANDING COMMITTEES OF THE BOARD OF DIRECTORS; MEETINGS
The Board of Directors has an Audit Committee, an Executive Committee, a
Compensation Committee and a Nominating Committee.
AUDIT COMMITTEE
The Audit Committee is composed entirely of independent, outside directors. Its
members are Edgar D. Jannotta (Chairman), Robert D. Judson, Erwin E. Schulze and
Joel D. Spungin. The functions of this committee include maintaining
communication between AAR's Board and its independent auditors, monitoring
performance of the independent auditors, reviewing audit scope
- - ----------
(1) Since November 23, 1992, First City Bancorporation of Texas, Inc. has
been operating as a debtor-in-possession under Chapter 11 of the U.S.
Bankruptcy Code. First City and the FDIC have reached a preliminary
understanding that all depositors and proven creditors will be paid in
full and that the Bank Insurance Fund will suffer no loss as result of
First City's bankruptcy. First City has filed its plan of reorganization
with the Bankruptcy Court.
(2) Mr. Eichner is Mr. Storch's father-in-law.
3
<PAGE>
and results, reviewing the organization and performance of the Company's
internal systems of audit and financial controls, and recommending the retention
or, when appropriate, the replacement of independent auditors. The Audit
Committee held three meetings during the fiscal year ended May 31, 1994.
EXECUTIVE COMMITTEE
The Executive Committee is composed of Ira A. Eichner (Chairman), Edgar D.
Jannotta, Erwin E. Schulze and David P. Storch. The Executive Committee is
authorized to meet between meetings of the Board of Directors and exercise the
powers of the Board, subject to limitations imposed by law and by the Board. The
Executive Committee held two meetings during the fiscal year ended May 31, 1994.
COMPENSATION COMMITTEE
The Compensation Committee is composed entirely of independent, outside
directors. Its members are Erwin E. Schulze (Chairman), Edgar D. Jannotta,
Robert D. Judson, A. Robert Abboud and Lee B. Stern. The functions of this
committee include reviewing and approving compensation policies and practices
for all elected corporate officers and fixing the total compensation of the
Chief Executive Officer. The Compensation Committee also administers the
Long-Term Performance Incentive Plan and the AAR CORP. Stock Benefit Plan. The
Compensation Committee held three meetings during the fiscal year ended May 31,
1994.
NOMINATING COMMITTEE
The Nominating Committee is composed of Robert D. Judson (Chairman), Ira A.
Eichner and Lee B. Stern. The functions of this committee include recommending
to the Board qualified candidates for election as directors and considering the
performance of incumbent directors to determine whether they should be
recommended to the Board for nomination for reelection. The Nominating Committee
will consider director candidates recommended by stockholders. Any stockholder
wishing to submit a recommendation to the Nominating Committee with respect to
the 1995 Annual Meeting of Stockholders, should send a signed letter of
recommendation to AAR CORP., 1111 Nicholas Boulevard, Elk Grove Village,
Illinois 60007, Attention: Howard A. Pulsifer, Secretary. To be considered,
recommendation letters must be received prior to May 1, 1995, must state the
reasons for the recommendation and contain the full name and address of each
proposed nominee, as well as a brief biographical history setting forth past and
present directorships, employment and occupations. The recommendation letter
must also include a statement indicating that such nominee has consented to
being named in the proxy statement and to serve if elected. The Nominating
Committee held one meeting during fiscal year ended May 31, 1994.
The Board of Directors held four meetings during the fiscal year ended May 31,
1994. All of the incumbent directors attended 75% or more of the aggregate
number of meetings of the Board and of the Committees on which they serve during
the fiscal year ended May 31, 1994.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following tables show the shares of the Company's Common Stock beneficially
owned, as of July 31, 1994, (i) by each director and nominee for election to the
Board of Directors, by each of the five executive officers named in the Summary
Compensation Table, and by all directors and executive officers as a group and
(ii) by each beneficial owner of 5% or more of the Company's Common Stock.
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
Percent
of Shares
Outstanding
Number of if greater
Name Shares (1) than 1%
- - ------------------------------------------------------- -------------------- -----------------
<S> <C> <C>
A. Robert Abboud....................................... 14,750
Howard B. Bernick...................................... 1,000
Joseph J. Dzurinko..................................... 18,869
Ira A. Eichner......................................... 454,433 2.9%
Edgar D. Jannotta...................................... 20,000
Robert D. Johnson...................................... 2,100
Robert D. Judson....................................... 9,025
Howard A. Pulsifer..................................... 6,889
Erwin E. Schulze....................................... 6,351
Joel D. Spungin........................................ 5,000
Lee B. Stern........................................... 167,700(2) 1.1%
David P. Storch........................................ 132,392(3)
Richard D. Tabery...................................... 31,175
All directors and executive officers as a group
(13 persons)......................................... 869,684(1)(2)(3) 5.5%
<FN>
------------------
(1) Includes the following shares of the identified person that may be
acquired through the exercise of options as of July 31, 1994: Mr.
Abboud, 5,000 shares; Mr. Jannotta, 5,000 shares; Mr. Judson, 5,000
shares; Mr. Schulze, 5,000 shares; Mr. Spungin, 2,500 shares; and Mr.
Stern, 5,000 shares; Mr. Eichner, 27,600 shares; Mr. Storch, 25,360
shares; Mr. Tabery, 12,700 shares; Mr. Dzurinko, 6,300 shares; Mr.
Pulsifer, 6,589 shares; Mr. Johnson, 2,100 shares; and all directors
and executive officers as a group (13 persons), 108,149 shares.
(2) Includes 35,000 shares beneficially owned by Mr. Stern's wife, as to
which Mr. Stern disclaims beneficial ownership.
(3) Includes 18,880 shares beneficially owned by Mr. Storch's wife
(12,540 shares) and minor children (6,340 shares), as to which Mr.
Storch disclaims beneficial ownership.
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
Name and Address Number of Percent of
of Stockholder Shares Shares
- - ------------------------------------------------------------------------------ ------------ -------------
<S> <C> <C>
John Hancock Mutual Life Insurance Company (1)................................ 913,130(1) 5.7%
John Hancock Plaza, P.O. Box 111
Boston, Massachusetts 02117
The Prudential Insurance Company of America (2)............................... 1,261,000(2) 7.8%
751 Broad Street
Newark, New Jersey 07102-3777
<FN>
------------------
(1) In their joint Schedule 13G filing dated February 3, 1994, John
Hancock Mutual Life Insurance Company, John Hancock Subsidiaries,
Inc., The Berkley Financial Group ("TBFG"), and NM Capital
Management, Inc. ("NM"), stated the following:
NM beneficially owns 911,530 shares of common stock in various
advisory accounts. In addition to the shares owned by NM, TBFG
beneficially owns 1,600 shares of common stock through its direct,
wholly-owned subsidiary, John Hancock Advisers, Inc. ("Advisers")
which manages the JH Advisers Special Value Fund under management
contract dated October 1, 1993.
(i) sole voting power: NM 142,020 shares; Advisers 1,600 shares
(ii) shared voting power: -0-
(iii) sole dispositive power: NM 911,530 shares; Advisers 1,600
shares
(iv) shared dispositive power: -0-
(2) In its Schedule 13G filing dated January 31, 1994, The Prudential
Insurance Company disclaimed beneficial ownership of 1,257,500 of
these shares and stated the following:
(i) sole voting power: 10,100 shares
(ii) shared voting power: 1,251,600 shares
(iii) sole dispositive power: 10,100 shares
(iv) shared dispositive power: 1,251,600 shares
</TABLE>
5
<PAGE>
To the Company's knowledge, no person beneficially owned more than 5% of the
Company's outstanding Common Stock except as set forth above.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of Securities and Exchange Commission Forms 3, 4 and
5 and upon related written representations furnished to the Company with respect
to its most recent fiscal year, no person who, at any time during the fiscal
year, was a director, officer or beneficial owner of more than ten percent of
any class of equity securities of the Company registered pursuant to Section 12
of the Securities Exchange Act of 1934 ("Exchange Act"), failed to file on a
timely basis, as disclosed in the above Forms, reports required by Section 16(a)
of the Exchange Act during the most recent fiscal year or prior fiscal years.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Company's executive compensation program is structured and administered by
the Compensation Committee of the Board of Directors ("Committee"), which is
composed of the five individuals listed below, all of whom are independent,
outside directors of the Company.
The executive compensation program is designed to enable the Company to attract,
motivate and retain talented executives capable of achieving strategic business
initiatives and to reward them for their achievement. The program consists of
three elements: base salaries which reflect individual capabilities and
responsibilities; annual variable cash incentive opportunities based on
individual contribution and performance; and long-term incentive opportunities,
which include a three-year cash incentive plan and a stock option/restricted
stock plan.
Total compensation opportunities for each executive are intended to be
competitive with those offered by other companies competing for their talent in
the Company's employment market. In designing and administering the individual
elements of the executive compensation program for each executive, the Committee
strives to balance short and long-term incentive objectives and employ prudent
judgment in establishing base salary levels and performance criteria, evaluating
performance and determining actual incentive payments. To ensure competitiveness
and reasonableness of the Committee's compensation decisions, independent
compensation consulting firms are retained periodically to advise the Committee
in connection with both the design and implementation of the various elements of
the program and the level of individual executive participation. Generally, as
an executive's level of responsibility increases, a greater percentage of total
compensation is based on performance, and the mix of total compensation shifts
toward stock, thereby aligning the long-term interest of senior executives with
those of stockholders.
Base salary levels of all executives, including the Chief Executive Officer, are
reviewed annually and may be adjusted depending upon the executive's
responsibilities, assessed performance contribution, qualifications and tenure
in the Company and in the position held, and competitive salary considerations
relative to similar positions at selected companies in the employment market
from which the Company draws its executives.
The Chief Executive Officer and Chief Operating Officer have an annual
performance-based incentive opportunity of 0-80% of base salary. The percentage
opportunity for other executive positions varies depending on their
responsibility level. As pertains to the Chief Executive Officer and Chief
Operating Officer, three-fourths of their incentive opportunity is based upon
operating profit results and the remainder is based on asset management results.
The long-term incentive program consists of (i) stock option and/or restricted
stock awards granted under the Company's Stock Benefit Plan approved by
shareholders in 1992, and (ii) cash incentive performance awards vesting at the
end of a three-year performance award cycle subject to
6
<PAGE>
achievement of three-year cumulative financial performance goals approved by the
Compensation Committee and continued employment through the award cycle. An
executive's participation in the various elements of the long-term incentive
program is determined by the Committee annually.
Stock option awards typically expire 10 years from the date of grant or earlier
upon termination of employment, become exercisable in five equal increments on
successive grant anniversary dates at the NYSE closing stock price on the date
of grant, and are accompanied by reload features and, for certain individuals,
stock rights exercisable in the event of a change in control of the Company. In
determining stock option and restricted stock awards, the Compensation Committee
considers the recipient's position and responsibilities in the Company,
performance and contributions made during the preceding year, capabilities and
potential for future contribution to the Company and the number of options
previously granted to the recipient.
Restrictions imposed on restricted stock awards are designed, among other
things, to encourage executives to stay with the Company and to maintain a focus
on long term objectives of the Company. While restrictions may vary, typically,
they lapse as to twenty percent (20%) of the shares awarded on each successive
anniversary date of the award, and the awards are subject to forfeiture if
employment terminates for any reason during the award cycle. During the award
cycle the participant receives dividends for the shares and also has the right
to vote the awarded shares.
CHIEF EXECUTIVE OFFICER COMPENSATION
The base salary level of the Chief Executive Officer has been increased
progressively since 1951 to reflect his performance, leadership and
responsibilities for increasingly complex and diversified domestic and
international operations as the Company has expanded into new product lines and
markets. Competitive compensation analyses by independent consultants are used
by the Committee to confirm that the Chief Executive Officer's base salary is at
an appropriate competitive level relative to base salaries of chief executive
officers at other companies in the relevant employment market.
In making its compensation decisions for fiscal year 1994, the Committee took
into consideration the continuing difficult and recessionary economic
environment which has for the past three years had an extraordinarily adverse
effect on the aerospace and airline/aviation industry. The Committee's action
with respect to the Chief Executive Officer's total fiscal year 1994
compensation reflects consideration of the base salary factors discussed
earlier, the existence of a company-wide salary freeze for the prior 18 month
period as well as their perception of his past and expected future
contributions, particularly the leadership role he played in the Company's
significant improvement in fiscal year 1994 performance results and in
maintaining the financial strength and liquidity of the Company.
- The Chief Executive Officer's base salary was increased 3% on
January 1, 1994, as were management salaries generally
following an 18 month pay freeze.
- The Chief Executive Officer was awarded an incentive bonus
equal to 51% of his base salary reflecting achievement of (i) a
31% incentive opportunity benefit for operating performance
based on a comparison with plan and a substantial improvement
over the prior year in consolidated net sales (up 6.5%) and net
income (up 27% without fiscal 1993 restructuring expenses of
$11,000,000), and (ii) a 20% incentive opportunity benefit for
asset management, based on maintaining a strong balance sheet
performance.
- The Chief Executive Officer and the other executive officers
named in the Summary Compensation Table below received the
stock options reflected in the table. The number of shares
covered by each grant reflects individual contributions and
performance, as well as competitive industry practices, in the
7
<PAGE>
view of the Committee. In the case of the Chief Executive
Officer, the number of shares granted times their fair market
exercise price equaled approximately 42% of his annual cash
compensation.
- The Chief Executive Officer did not receive any restricted
stock award or long-term incentive award in fiscal year 1994.
The tables which follow and accompanying footnotes and narrative reflect the
decisions covered by the above discussion.
FEDERAL INCOME TAX CONSIDERATIONS
The Internal Revenue Code places a $1 million cap on the deductibility of
compensation, subject to certain exceptions, paid to certain executives of
publicly held corporations. Since the current levels of compensation subject to
the cap will not exceed $1 million for any executives of the Company, the
Committee did not take into consideration the deductibility of compensation for
federal income tax purposes in establishing compensation of the named executives
during the present review cycle. The Committee continues to recognize, however,
that compensation should meet standards of reasonableness and necessity, which
have been part of the Internal Revenue Code for many years.
COMPENSATION COMMITTEE
Erwin E. Schulze, Chairman
A. Robert Abboud
Edgar D. Jannotta
Robert D. Judson
Lee B. Stern
8
<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ending May 31, 1992, 1993, and
1994, the cash compensation paid by the Company, as well as certain other
compensation paid or accrued for those years, to each of the five most highly
compensated executive officers of the Company in all capacities in which they
served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
-------------------------------- -----------------------------------------
Awards Payouts
Other ----------------------------- ---------
Annual Securities Long-term
Compen- Underlying Incentive All Other
sation Restricted Stock Options Payouts Compen-
Name and Principal Position Year Salary ($) Bonus ($) ($)(1) Award(s) ($)(2) (#) ($) sation ($)(3)
- - ---------------------------- ---- ---------- --------- ------- ---------------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EICHNER, IRA A. 1994 474,200 240,000 -- -- 20,000 -- 7,500
CHAIRMAN AND CHIEF 1993 460,400 92,080 -- -- 20,000 -- 4,100
EXECUTIVE OFFICER 1992 446,900 223,450 -- -- 20,000 -- 7,200
STORCH, DAVID P. 1994 332,000 175,000 -- 102,988 30,400 -- 3,200
PRESIDENT 1993 322,300 64,460 -- 83,038 24,700 -- 4,200
1992 312,900 156,450 -- 70,125 20,900 -- 7,700
PULSIFER, HOWARD A. 1994 163,900 57,500 -- -- 4,000 -- 3,500
VICE PRESIDENT, GENERAL 1993 159,100 31,820 -- -- 3,500 -- 2,300
COUNSEL AND SECRETARY 1992 154,400 52,500 -- -- 3,000 -- 4,800
JOHNSON, ROBERT D. 1994 175,000 -- 6,700 -- 10,500 -- 1,300
VICE PRESIDENT-SERVICES & 1993 -- -- -- -- -- -- --
MANUFACTURING GROUP (1) 1992 -- -- -- -- -- -- --
DZURINKO, JOSEPH J. 1994 160,000 15,000 -- -- -- -- 2,300
VICE PRESIDENT AND CHIEF 1993 160,000 24,000 -- -- 4,000 -- 3,200
FINANCIAL OFFICER (4) 1992 149,100 59,300 -- -- 4,000 -- 6,200
<FN>
- - ------------
(1) Mr. Johnson joined the Company as Vice President-Services and
Manufacturing Group in June 1993. He resigned from the Company July 6,
1994. "Other Annual Compensation" represents a relocation tax
reimbursement for Mr. Johnson.
(2) As of the last day of the 1994 fiscal year, Mr. Storch held 31,738
restricted shares with a May 31, 1994 market value of $456,234. Dividends
are paid on all restricted shares to the same extent as any other shares
of the Company's Common Stock.
(3) "All Other Compensation" includes the following: (i) contributions to the
Company's 401(k) Plan on behalf of each of the named executives as a 1%
match of pre-tax elective deferred contributions for 1994 (Mr. Eichner
$1,900, Mr. Storch $2,400, Mr. Pulsifer $1,900, Mr. Johnson $800 and Mr.
Dzurinko $1,300), and (ii) premium payment for each of the named
executives under the Company's standard health plan for 1994 (Mr. Eichner
$5,600, Mr. Storch $800, Mr. Pulsifer $1,600, Mr. Johnson $500 and Mr.
Dzurinko $1,000).
(4) Mr. Dzurinko resigned as chief financial officer and an executive officer
of the Company February 23, 1994.
</TABLE>
STOCK OPTIONS
The following table sets forth certain information regarding stock options
granted to the named executive officers in fiscal 1994 (the Company does not
grant stock appreciation rights). In addition, hypothetical gains or "option
spreads" that would exist for the respective options are shown based on assumed
rates of annual compound stock price appreciation of 0%, 5% and 10% required (in
the case of the 5% and 10% rates) by applicable regulations of the Securities
and Exchange Commission; these rates are for illustration purposes only and are
not a forecast of future appreciation. The Company did not use an alternative
formula for a grant date valuation, as the Company is not aware of any formula
which will determine, with reasonable accuracy, a present value based on future
unknown or volatile factors. The table also shows the increase in potential
realizable value of such options, if any, will be less than 1% of the increase
in potential realizable value to the other stockholders.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------- Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock Price
Underlying Granted to Exercise Appreciation for Option Term(3)
Options Employees in Price Expiration -------------------------------
Name Granted (#)(1) Fiscal Year ($/Sh) Date (2) 0% 5% 10%
- - ------------------------------------ -------------- ------------ ------- ---------- --- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
I. A. Eichner....................... 20,000 12.4% $15.00 1/11/04 $ 0 $ 188,668 $ 478,120
D. P. Storch........................ 15,400 18.8% 13.375 10/13/03 0 129,537 328,266
15,000 15.00 1/11/04 0 141,501 358,590
H. A. Pulsifer...................... 4,000 2.5% 15.00 1/11/04 0 37,734 95,624
R. D. Johnson....................... 10,500 6.5% 13.25 6/14/03 0 87,495 221,728
J. J. Dzurinko...................... -- -- -- -- -- -- --
All Stockholders.................... N/A N/A N/A N/A 0 147,348,600 373,413,763
All Employee Optionees.............. 161,400 100% 14.73(4) 1/11/04(5) 0 1,495,145 3,789,026
Total Optionee Gain as % of all
Stockholder Gain................... N/A N/A N/A N/A 0 1.0 1.0
<FN>
- - ------------
(1) 10 year options subject to reload and rights provisions; 20% of option
shares become exercisable on the 1st, 2nd, 3rd, 4th and 5th anniversary
dates of the grant.
(2) These options are subject to earlier expiration in the event of
termination of employment.
(3) Data shows appreciation in value of stock from market value on the date
of option grant.
(4) Average exercise price.
(5) Options with respect to 10,500 shares expire 6/14/03, with respect to
15,400 shares expire 10/13/03; all others expire 1/11/04.
</TABLE>
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
The following table shows stock options exercised by named executive officers
during fiscal 1994, including the aggregate value of gains on the date of
exercise. In addition, this table includes the number of shares covered by both
exercisable and non-exercisable stock options as of May 31, 1994. Also reported
are the number and value of "in-the-money" unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options In-the-Money Options
Value at Fiscal Year End (#) at Fiscal Year End ($)(2)
Shares Acquired Realized --------------------------- ---------------------------
Name on Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- - ------------------------------------------- ---------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
I. A. Eichner.............................. 0 0 27,600 58,400 83,250 90,500
D. P. Storch............................... 0 0 25,360 70,740 76,168 118,983
H. A. Pulsifer............................. 0 0 6,589 11,726 22,989 21,326
R. D.Johnson............................... 0 0 2,100 8,400 -- 11,813
J. J. Dzurinko............................. 0 0 6,300 8,200 20,063 20,375
<FN>
- - ------------
(1) Value realized equals the fair market value on the date of exercise, less
the exercise price, times the number of shares acquired.
(2) Value of unexercised in-the-money options equals the fair market value of
the Company's Common Stock at May 31, 1994, less the exercise price,
times the number of option shares outstanding. The closing price of the
Company's Common Stock at May 31, 1994 was 14 3/8.
</TABLE>
10
<PAGE>
PENSION PLANS
The following table indicates a straight life annuity pension benefit payable
annually under the AAR CORP. Retirement Plan ("Retirement Plan") commencing at
age 65 (in excess of social security benefits) at various combinations of
average compensation and years of service.
PENSION BENEFIT TABLE (1)
<TABLE>
<CAPTION>
Years of Service
--------------------
Compensation 15 20
- - -------------------------------------------------------------------------- --------- ---------
<S> <C> <C>
$100,000.................................................................. $ 22,500 $ 30,000
125,000.................................................................. 28,100 37,500
150,000.................................................................. 33,750 45,000
175,000.................................................................. 39,400 52,500
200,000.................................................................. 45,000 60,000
225,000.................................................................. 50,600 67,500
250,000.................................................................. 56,250 75,000
<FN>
--------------------
(1) Compensation level in the pension benefit calculation under the
Retirement Plan is capped at the U.S. Internal Revenue Service
maximum under Internal Revenue Code section 401(a)(17).
</TABLE>
The Company's Retirement Plan covers all named executive officers. Benefits
under the Retirement Plan are determined pursuant to a formula set forth in the
Retirement Plan and take into consideration years of credited service, a
percentage of the participant's final average compensation (the five highest
consecutive calendar years of compensation out of the employee's last ten
calendar years of employment) and adjustments for social security "covered
compensation" which is an "offset" under the Retirement Plan. The term
"compensation" means cash compensation shown as income on an employee's Form
W-2, plus amounts contributed by a participant to the Profit Sharing Plan
pursuant to Section 401(k) of the Internal Revenue Code, and reduced by certain
items specified in the Retirement Plan. Notwithstanding the preceding sentence,
compensation for purposes of the Retirement Plan is subject to an annual
limitation in accordance with applicable provisions of the Internal Revenue
Code.
The aggregate salary and bonus compensation shown for the executive officers
named in the Summary Compensation Table above is the compensation currently
included for purposes of determining benefits under the Retirement Plan. The
number of years of credited service under the Plan (effective maximum is 20
years), is as follows: Mr. Eichner, 20 years; Mr. Storch, 16 years; Mr.
Pulsifer, 7 years; Mr. Johnson, 1 year; and Mr. Dzurinko, 16 years. Benefits
under the Retirement Plan may be limited by applicable laws or regulations.
SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFITS
In addition to the benefits earned under the Retirement Plan, the Chief
Executive Officer is the beneficiary of a Supplemental Executive Retirement Plan
("SERP"). Annual retirement benefits under the SERP are equal to 60% of the
Chief Executive Officer's aggregate average of annual salary, bonus and long
term incentive cash payments ("cash compensation") for the three fiscal years
during the ten fiscal years preceding the date of his termination of active
employment during which his cash compensation was highest, subject to certain
reductions. In the case of his "involuntary retirement" prior to age 65, the
Chief Executive Officer is entitled to receive his base salary for the three
years following termination and, thereafter, to receive the retirement benefits
described above. "Involuntary retirement" means termination of the Chief
Executive Officer's employment by action of the Company (other than due to
disability), or a voluntary termination of his employment within two years
following a takeover of the Company. The Company funds the benefits through an
irrevocable trust arrangement with a bank. The level of funding is based on
actuarial computations determined by an independent actuary.
11
<PAGE>
The following table indicates a straight life annuity pension benefit payable
under the SERP at various compensation levels.
SERP BENEFIT TABLE
<TABLE>
<CAPTION>
Average Compensation Annual Benefit
- - ----------------------------------------------------------------------------- ---------------
<S> <C>
$ 600,000................................................................... $ 296,664
700,000................................................................... 356,664
800,000................................................................... 416,664
900,000................................................................... 476,664
1,000,000................................................................... 536,664
1,100,000................................................................... 596,664
1,200,000................................................................... 656,664
1,300,000................................................................... 716,664
1,400,000................................................................... 776,664
1,500,000................................................................... 836,664
1,600,000................................................................... 896,664
</TABLE>
STOCKHOLDER RETURN PERFORMANCE GRAPHS
The following graphs compare the five and ten year cumulative total stockholder
return (including reinvestment of dividends) of the Company, the S&P (Standard &
Poor's) Composite--500 Stock Index, and a peer group index selected by the
Company; also included in the graphs, for transition purposes as is required by
SEC regulations, is the Value Line Aerospace/Defense Index used by the Company
in its proxy statement for fiscal 1993.
The S&P Composite--500 Stock Index is composed of domestic industry leaders in
four major sectors: Industrials, Financials, Utilities and Transportation, and
serves as a broad indicator of the U.S. equity market. The peer group index
selected by the Company is composed of companies engaged in trading, overhaul
and/or manufacturing activities in support of the aviation/aerospace aftermarket
similar to those conducted by the Company. The peer group selected by the
Company is composed of the following companies: Aviall, Inc., Banner Aerospace,
Inc., Greenwich Air Services, Inc., Hi-Shear Industries, Inc., Sequa Corp., SPS
Technologies Inc., UNC, Inc., and Wyman Gordan Co. The Value Line
Aerospace/Defense Industry Index is a broad-based industry line of business
index composed of 38 companies, including some with very large capitalizations,
from various segments of the aerospace/defense industry, in many of which the
Company does not conduct business. The Company changed to a peer group index
this year from the Value Line Aerospace/Defense Industry Index because it
believes the lines of business activities conducted by the peer group companies
more closely reflect its lines of business activities in the aviation/ aerospace
market.
The indices relate only to stock prices; they do not purport to afford a direct
comparison of the business or financial performance of the companies comprising
such indices with the Company nor with each other.
12
<PAGE>
COMPARISON OF 5 YEAR CUMULATIVE STOCKHOLDER
TOTAL RETURN (1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AAR CORP. S&P 500 Peer Group ValueLine
<S> <C> <C> <C> <C>
May-89 100 100 100 100
May-90 69.08 116.61 88.53 103.89
May-91 47.6 130.36 67.22 112.37
May-92 44.82 143.21 52.18 109.85
May-93 48.87 159.84 44.07 135.49
May-94 53.76 165.99 48.12 159.68
</TABLE>
<TABLE>
<CAPTION>
MAY MAY MAY MAY MAY MAY
1989 1990 1991 1992 1993 1994
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
AAR CORP.......................................... 100 69.08 47.60 44.82 48.87 53.76
S&P 500........................................... 100 116.61 130.36 143.21 159.84 165.99
Peer Group........................................ 100 88.53 67.22 52.18 44.07 48.12
ValueLine......................................... 100 103.89 112.37 109.85 135.49 159.68
</TABLE>
COMPARISON OF 10 YEAR CUMULATIVE STOCKHOLDER
TOTAL RETURN (1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AAR CORP S&P 500 Peer Group ValueLine
<S> <C> <C> <C> <C>
May 1984 100 100 100 100
May 1985 98.46 131.74 112.20 147.23
May 1986 190.38 178.72 143.23 173.84
May 1987 249.30 216.53 144.54 170.71
May 1988 314.91 202.48 124.26 162.45
May 1989 397.80 256.74 141.29 193.67
May 1990 274.80 299.40 125.08 201.20
May 1991 189.36 334.69 94.98 217.62
May 1992 178.30 367.66 73.73 212.74
May 1993 194.40 410.35 62.27 262.42
May 1994 213.85 426.15 67.99 309.26
</TABLE>
<TABLE>
<CAPTION>
MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY MAY
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
---- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AAR CORP...................... 100 98.46 190.38 249.30 314.91 397.80 274.80 189.36 178.30 194.40 213.85
S&P 500....................... 100 131.74 178.72 216.53 202.48 256.74 299.40 334.69 367.66 410.35 426.15
Peer Group.................... 100 112.20 143.23 144.54 124.26 141.29 125.08 94.98 73.73 62.27 67.99
ValueLine..................... 100 147.23 173.84 170.71 162.45 193.67 201.20 217.62 212.74 262.42 309.26
</TABLE>
- - ----------
(1) Assumes $100 invested on June 1, 1989 and 1984 in 5 and 10 year graphs,
respectively, and reinvestment of dividends in the Company's Common
Stock, S&P Composite--500 Stock Index, Peer Group Index and Value Line
Aerospace/ Defense Index.
13
<PAGE>
EMPLOYMENT AND OTHER AGREEMENTS
Mr. Eichner has an agreement with the Company providing for employment in his
present capacity at a base compensation of $474,212 per year, effective January
1, 1994, or such increased amount as the Board may determine, and for retirement
benefits following termination of his full-time employment with the Company
pursuant to the Retirement Plan and the SERP described under "Pension Plans"
above. His term of employment is continuously extended so as to have a remaining
term of three years, but shall expire on the first to occur of his death,
disability, voluntary termination or attainment of age 68.
Upon Mr. Eichner's death, under certain circumstances, his designated
beneficiary is entitled to receive a death benefit equal to the present value of
the right of a 60 year old male to receive an annual annuity of $125,000,
subject to certain reductions.
The Company has entered into an irrevocable trust agreement with The Northern
Trust Company as trustee to fund at certain dates the Company's obligations to
Mr. Eichner and his widow or other beneficiary as described above under the
SERP. The Company will pay bonuses to Mr. Eichner (or his widow or other
beneficiary) to provide for federal, state and local income taxes incurred as a
result of contributions to the trust and income earned by trust assets. Mr.
Eichner's estate or designated beneficiary(ies) will receive any residual
amounts in the trust after payment of all retirement, death benefit and other
obligations under the Trust Agreement.
DIRECTORS' COMPENSATION
Directors who are not officers or employees of the Company or any subsidiary
each receive an annual retainer of $20,000, a fee of $1,250 for attendance at
each meeting of the Board or of any Board committee and reimbursement of
expenses. The chairman of each committee receives an additional $1,000 per
fiscal year. The Company also provides its directors with group term life
insurance coverage of $200,000. In addition, under the AAR CORP. Stock Benefit
Plan, each outside director, upon becoming a director, automatically receives
stock options for 10,000 shares of the Company's common stock which can be
exercised in 25% increments each anniversary grant date at the closing NYSE
price on the date of grant. Directors who are officers or employees of the
Company or any subsidiary receive no additional compensation for service on the
Board of Directors or any of its committees.
The Company also has a Directors' Retirement Plan for its outside directors. The
Plan provides for a benefit to outside directors upon retirement on or after age
65, provided they have completed at least five years of service as a director.
Benefits are payable as a quarterly annuity in an amount equal to 25% of the
annual retainer fee payable by the Company to an active outside director.
Payment of benefits commences upon retirement and continues for a period equal
to the total number of years of the retired director's service as a director to
a maximum of ten years or death, whichever first occurs. The Directors'
Retirement Plan is unfunded. As of May 31, 1994, one former director was
receiving benefits under the Directors' Retirement Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Jannotta, a director of the company, is a Managing Partner of William Blair
& Company, which from time to time has rendered investment banking services to
the company, for which it has received customary compensation.
OTHER MATTERS
Management knows of no other matters which are to be brought before this Annual
Meeting. However, if any other matters properly come before the Annual Meeting,
it is intended that the persons voting the proxies will vote them in accordance
with their judgment on such other matters.
14
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Board of Directors, upon recommendation of its Audit Committee,
has selected KPMG Peat Marwick LLP as its independent public accountants for the
fiscal year ending May 31, 1995. Representatives of that firm are expected to be
present at the Annual Meeting, with the opportunity to make a statement if they
so desire and to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Any stockholder who wishes to present a proposal for consideration at the Annual
Meeting of Stockholders to be held in 1995 must submit such proposal in
accordance with the rules promulgated by the Securities and Exchange Commission.
In order for a proposal to be eligible for inclusion in the Company's Proxy
Statement and form of proxy relating to the 1995 Annual Meeting, the stockholder
must submit such proposal to the Company, in writing, to be received by the
Secretary of the Company, AAR CORP., 1111 Nicholas Boulevard, Elk Grove Village,
Illinois 60007, no later than May 1, 1995.
By Order of the Board of Directors
Howard A. Pulsifer
SECRETARY
August 30, 1994
UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL OWNER OF COMMON
STOCK OF AAR CORP., THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS
ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR
THE FISCAL YEAR ENDED MAY 31, 1994. REQUESTS SHOULD BE MADE TO MR. HOWARD A.
PULSIFER, SECRETARY, AAR CORP., 1111 NICHOLAS BOULEVARD, ELK GROVE VILLAGE,
ILLINOIS 60007, (708) 439-3939.
15
<PAGE>
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. 6019
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 1
DESCRIBED IN THE PROXY STATEMENT:
- - --------------------------------------------------------------------------------
FOR WITHHOLD AUTHORITY
ALL NOMINEES* TO VOTE FOR ALL NOMINEES
/ / / /
1. Election of three
Class I directors
(nominees: Erwin E. Schulze, David P. Storch
and Joel D. Spungin).
*(Instructions: to withhold authority to vote for any individual
nominee, write that nominee's name(s) in the space below)
----------------------------------------------------------------
(Please sign exactly as name appears above. Joint owners should all sign.
Executors, administrators, trustees, etc. should so indicate when signing.
If signer is a corporation, sign full corporate name by duly authorized
officer who adds his or her name and title.)
----------------------------------------------------------------------
----------------------------------------------------------------------
SIGNATURE(S)
FOLD AND DETACH HERE
<PAGE>
PROXY
AAR CORP. PROXY
- - --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE OCTOBER 12,
1994 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints IRA A. EICHNER, DAVID P. STORCH and HOWARD A.
PULSIFER, or any of them, with full power of substitution, as Proxies, and
hereby authorizes them to represent the undersigned at the 1994 Annual Meeting
of Stockholders of AAR CORP. to be held on October 12, 1994, or any adjournment
thereof, and to vote all shares of AAR CORP. Common Stock which the undersigned
would be entitled to vote if personally present.
1. Election of three Class I directors, nominees: Erwin E. Schulze, Joel D.
Spungin and David P. Storch (see reverse side).
AS TO EACH ITEM SET FORTH ON THE REVERSE HEREOF, THIS PROXY WILL BE VOTED IN THE
MANNER DIRECTED ON THE REVERSE SIDE AND, IF NO DIRECTION IS GIVEN, WILL BE VOTED
FOR ITEM 1. As to any other business that may come before the Annual Meeting, or
any adjournment thereof, this Proxy will be voted in the discretion of the
proxies.
(Continued and to be dated and signed on reverse side.)
FOLD AND DETACH HERE
