SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549


                                 --------------

                                    FORM 8-K

                                 --------------

                                 CURRENT REPORT

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


                Date of Report (Date of Earliest Event Reported):

                                December 26, 2001

                                 --------------

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


                                 --------------


            Delaware                  0-17249                95-4106894
  (State or Other Jurisdiction      (Commission           (I.R.S. Employer
of Incorporation or Organization)  File Number)          Identification No.)



            2335 Alaska Avenue
          El Segundo, California                                 90245
(Address of Principal Executive Offices)                      (Zip Code)



                                 (310) 643-5300
              (Registrant's Telephone Number, Including Area Code)




         (Former Name or Former Address, if Changed Since Last Report.)


<PAGE>





ITEM 5. Other Events.

     On December 26, 2001,  Aura  Systems,  Inc.  (the  "Company")  entered into
agreements  with Zvi  "Harry"  Kurtzman,  the  Chairman  of the  Board and Chief
Executive Officer of the Company,  and five other members of senior  management,
to terminate their existing  employment  contracts and restructure their current
severance benefits.  Pursuant to the new agreements, Mr. Kurtzman and the others
have become at will  employees  and are  expected  to continue in their  current
positions  until February 28, 2002. The original  separation  proposal was first
described  in the  Company's  proxy  statement  filed  with the  Securities  and
Exchange  Commission  ("SEC") on December 15, 2000.  The terms of the separation
agreements were  subsequently  described in the Company's Form 10-K for the year
ended February 28, 2001 and the Company's  proxy statement filed with the SEC on
August 27,  2001.  This  separation  process  will  provide the Company with the
opportunity to make an orderly  transition to a new  management  team. The other
members of the current  management team who will be entering into new agreements
and leaving the Company with Mr.  Kurtzman are Gerald  Papazian,  President  and
COO, Arthur Schwartz,  Executive Vice President,  Cipora Kurtzman-Lavut,  Senior
Vice President,  Corporate Communications,  Neal Kaufman, Senior Vice President,
Management  Information  Systems and Steven Veen,  Senior Vice President,  Chief
Financial Officer. Under the terms of the new agreements, the departing officers
will  relinquish  their  right to any  multi-year  cash  severance  benefits  in
exchange  for a one time grant of stock  options  (or  warrants to the extent no
additional  shares  are  available  for grant of options  under any  shareholder
approved Company option plan),  which will be exercisable at a price of $.55 per
share and will vest over a period of  eighteen  months from the  termination  of
employment. The number of stock options for each person will be determined based
on the underlying total  compensation due to the employee upon termination under
each person's existing  employment  agreement,  multiplied by two and divided by
$0.32 per share. The terms of the existing employment  agreements were described
in the  Company's  Form 10-Q  filed with the SEC on July 15,  1998.  Each of the
officers has agreed to continue as a  consultant  to the Company for a period of
one year at 85% of their current compensation.  In addition, each executive will
receive  continued  medical  benefits for three years  following  termination of
employment. A form of the Agreement Regarding Termination of Employment Contract
is filed as an exhibit to this filing.

     Mr. Kurtzman  co-founded Aura in 1987 and has served as its Chief Executive
Officer since then. He also served as the Company's President from 1987 to 1997.
In his remarks at the Company's annual  shareholders  meeting held on October 2,
2001,  he stated that  "[Aura] is at a point ready to move up to the next stage.
This new stage is in charted territory,  building AuraGens,  improving AuraGens,
adding applications, developing sales channels and sales techniques, controlling
costs  and  generating  profits  for the  Company  and its  shareholders.  These
challenges  are  different  from the  ones we  faced  in the  past  and  require
different types of thinking and abilities." Mr. Kurtzman will work together with
the Board to recruit a new Chief Executive  Officer and other senior  management
to achieve the Company's business goals.

     The Company's Board of Directors has formed a Search Committee,  chaired by
Carl Albert,  and also including  directors  Stephen Talesnick and Harvey Cohen,
for this purpose.  Mr.  Albert,  who has been a director since July 10, 2001, is
presently a member of the Board of Directors of Fairchild Dornier Corporation, a
privately  held company in the  business of  manufacturing  aircraft.  From 1996
through 1999,  following  Fairchild  Aircraft's  purchase of Daimler-Benz's  80%
interest in Dornier,  he was the  Chairman of the Board of  Directors  and Chief
Executive  Officer of Fairchild  Aerospace  Corporation,  now known as Fairchild
Dornier  Corporation.  From 1990 through 1996 Mr. Albert was the Chairman of the
Board and CEO of Fairchild  Aircraft.  Mr. Albert's business experience includes
18 years as an  attorney,  specializing  in business  and  corporate  law in Los
Angeles,  California.  He also serves and has served as a Member of the Board of
Directors of a number of privately  and publicly  held  corporations,  including
Wings West Airlines,  Dr. Pepper Bottling Company of Southern California,  K & K
Properties,  Ozark Airlines and Tulip  Corporation.  Mr.  Talesnick is presently
Vice Chairman of the  Company's  Board of Directors and Mr. Cohen is a member of
the  Board's  Audit  Committee.  The  Search  Committee  is in  the  process  of
considering several resumes of potential candidates.

     The  Company  has been  informed by the Staff of the SEC that it intends to
recommend  that the  Commission  bring a civil action  against  Aura,  NewCom (a
former  subsidiary of Aura), Mr.  Kurtzman,  Steven Veen and Gerald Papazian for
violations of the antifraud and books and records  provisions of the  securities
laws. This grew out of an investigation into the Company's financial  statements
for various  transactions  during  fiscal years 1996 through  1999.  The Company
originally  disclosed the  investigation  by press release in January 1999.  The
Staff  advised  the  Company  that it would  recommend  that the SEC seek  civil
penalties and enjoin the companies and the individuals  from future  violations.
In  addition,  the SEC staff would  recommend  that the SEC impose  director and
officer  bars  against  Messrs.  Kurtzman and Veen and a bar against Mr. Veen to
prohibit his practicing as an accountant before the SEC. The Company is informed
that in order to avoid potential  lengthy and costly  litigation the individuals
have agreed to propose to settle with the SEC without  admitting  or denying any
of the staff's  allegations.  The Company has engaged in conversations  with the
Staff of the SEC regarding  settlement of the matter, but no agreements have yet
been reached. Although Aura believes that it will reach a settlement in a manner
that will not have a  material  adverse  effect on the  Company's  business,  it
cannot predict with  certainty  when or if such a settlement  will occur or what
the actual  effects of such a  settlement  would be. The Audit  Committee of the
Board  will  conduct a full  review of the  Company's  accounting  controls  and
procedures.


ITEM 7. Financial Statements and Exhibits.

(c) Exhibits

10.1 Form of Agreement Regarding Termination of Employment Contract



                                    SIGNATURE

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.


                                         AURA SYSTEMS, INC.


 Date:  December 26, 2001    By:
                                        ----------------------------------------
                                                        Steven C. Veen
                                                        Chief Financial Officer


<PAGE>


Exhibit 10.1      Form of Agreement Regarding Termination of Employment Contract

[insert form of agreement]
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SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549

                                 --------------

                                    FORM 8-K

                                 --------------

                                 CURRENT REPORT

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

                Date of Report (Date of Earliest Event Reported):

                                December 26, 2001

                                 --------------

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

                                 --------------

            Delaware                  0-17249                95-4106894
  (State or Other Jurisdiction      (Commission           (I.R.S. Employer
of Incorporation or Organization)  File Number)          Identification No.)

            2335 Alaska Avenue
          El Segundo, California                                 90245
(Address of Principal Executive Offices)                      (Zip Code)

                                 (310) 643-5300
              (Registrant's Telephone Number, Including Area Code)

         (Former Name or Former Address, if Changed Since Last Report.)
ITEM 5. Other Events.

     On December 26, 2001,  Aura  Systems,  Inc.  (the  "Company")  entered into
agreements  with Zvi  "Harry"  Kurtzman,  the  Chairman  of the  Board and Chief
Executive Officer of the Company,  and five other members of senior  management,
to terminate their existing  employment  contracts and restructure their current
severance benefits.  Pursuant to the new agreements, Mr. Kurtzman and the others
have become at will  employees  and are  expected  to continue in their  current
positions  until February 28, 2002. The original  separation  proposal was first
described  in the  Company's  proxy  statement  filed  with the  Securities  and
Exchange  Commission  ("SEC") on December 15, 2000.  The terms of the separation
agreements were  subsequently  described in the Company's Form 10-K for the year
ended February 28, 2001 and the Company's  proxy statement filed with the SEC on
August 27,  2001.  This  separation  process  will  provide the Company with the
opportunity to make an orderly  transition to a new  management  team. The other
members of the current  management team who will be entering into new agreements
and leaving the Company with Mr.  Kurtzman are Gerald  Papazian,  President  and
COO, Arthur Schwartz,  Executive Vice President,  Cipora Kurtzman-Lavut,  Senior
Vice President,  Corporate Communications,  Neal Kaufman, Senior Vice President,
Management  Information  Systems and Steven Veen,  Senior Vice President,  Chief
Financial Officer. Under the terms of the new agreements, the departing officers
will  relinquish  their  right to any  multi-year  cash  severance  benefits  in
exchange  for a one time grant of stock  options  (or  warrants to the extent no
additional  shares  are  available  for grant of options  under any  shareholder
approved Company option plan),  which will be exercisable at a price of $.55 per
share and will vest over a period of  eighteen  months from the  termination  of
employment. The number of stock options for each person will be determined based
on the underlying total  compensation due to the employee upon termination under
each person's existing  employment  agreement,  multiplied by two and divided by
$0.32 per share. The terms of the existing employment  agreements were described
in the  Company's  Form 10-Q  filed with the SEC on July 15,  1998.  Each of the
officers has agreed to continue as a  consultant  to the Company for a period of
one year at 85% of their current compensation.  In addition, each executive will
receive  continued  medical  benefits for three years  following  termination of
employment. A form of the Agreement Regarding Termination of Employment Contract
is filed as an exhibit to this filing.

     Mr. Kurtzman  co-founded Aura in 1987 and has served as its Chief Executive
Officer since then. He also served as the Company's President from 1987 to 1997.
In his remarks at the Company's annual  shareholders  meeting held on October 2,
2001,  he stated that  "[Aura] is at a point ready to move up to the next stage.
This new stage is in charted territory,  building AuraGens,  improving AuraGens,
adding applications, developing sales channels and sales techniques, controlling
costs  and  generating  profits  for the  Company  and its  shareholders.  These
challenges  are  different  from the  ones we  faced  in the  past  and  require
different types of thinking and abilities." Mr. Kurtzman will work together with
the Board to recruit a new Chief Executive  Officer and other senior  management
to achieve the Company's business goals.

     The Company's Board of Directors has formed a Search Committee,  chaired by
Carl Albert,  and also including  directors  Stephen Talesnick and Harvey Cohen,
for this purpose.  Mr.  Albert,  who has been a director since July 10, 2001, is
presently a member of the Board of Directors of Fairchild Dornier Corporation, a
privately  held company in the  business of  manufacturing  aircraft.  From 1996
through 1999,  following  Fairchild  Aircraft's  purchase of Daimler-Benz's  80%
interest in Dornier,  he was the  Chairman of the Board of  Directors  and Chief
Executive  Officer of Fairchild  Aerospace  Corporation,  now known as Fairchild
Dornier  Corporation.  From 1990 through 1996 Mr. Albert was the Chairman of the
Board and CEO of Fairchild  Aircraft.  Mr. Albert's business experience includes
18 years as an  attorney,  specializing  in business  and  corporate  law in Los
Angeles,  California.  He also serves and has served as a Member of the Board of
Directors of a number of privately  and publicly  held  corporations,  including
Wings West Airlines,  Dr. Pepper Bottling Company of Southern California,  K & K
Properties,  Ozark Airlines and Tulip  Corporation.  Mr.  Talesnick is presently
Vice Chairman of the  Company's  Board of Directors and Mr. Cohen is a member of
the  Board's  Audit  Committee.  The  Search  Committee  is in  the  process  of
considering several resumes of potential candidates.

     The  Company  has been  informed by the Staff of the SEC that it intends to
recommend  that the  Commission  bring a civil action  against  Aura,  NewCom (a
former  subsidiary of Aura), Mr.  Kurtzman,  Steven Veen and Gerald Papazian for
violations of the antifraud and books and records  provisions of the  securities
laws. This grew out of an investigation into the Company's financial  statements
for various  transactions  during  fiscal years 1996 through  1999.  The Company
originally  disclosed the  investigation  by press release in January 1999.  The
Staff  advised  the  Company  that it would  recommend  that the SEC seek  civil
penalties and enjoin the companies and the individuals  from future  violations.
In  addition,  the SEC staff would  recommend  that the SEC impose  director and
officer  bars  against  Messrs.  Kurtzman and Veen and a bar against Mr. Veen to
prohibit his practicing as an accountant before the SEC. The Company is informed
that in order to avoid potential  lengthy and costly  litigation the individuals
have agreed to propose to settle with the SEC without  admitting  or denying any
of the staff's  allegations.  The Company has engaged in conversations  with the
Staff of the SEC regarding  settlement of the matter, but no agreements have yet
been reached. Although Aura believes that it will reach a settlement in a manner
that will not have a  material  adverse  effect on the  Company's  business,  it
cannot predict with  certainty  when or if such a settlement  will occur or what
the actual  effects of such a  settlement  would be. The Audit  Committee of the
Board  will  conduct a full  review of the  Company's  accounting  controls  and
procedures.

ITEM 7. Financial Statements and Exhibits.

(c) Exhibits

10.1 Form of Agreement Regarding Termination of Employment Contract

                                    SIGNATURE

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

                                         AURA SYSTEMS, INC.

 Date:  December 26, 2001    By:
                                        ----------------------------------------
                                                        Steven C. Veen
                                                        Chief Financial Officer
Exhibit 10.1      Form of Agreement Regarding Termination of Employment Contract

[insert form of agreement]