Exhibit 10.14

 

SEVERANCE AND CHANGE IN CONTROL AGREEMENT

 

 

This Severance and Change in Control Agreement (“Agreement”) made and entered
into as of the 14th day of January, 2000, by and between AAR CORP., a Delaware
corporation (“Company”), and James J. Clark (“Employee”).

 

 

WHEREAS, the Company currently employs Employee as an employee at will in the
capacity of Vice President; and

 

WHEREAS, Employee desires the Company to pay Employee certain severance payments
upon a Change in Control of AAR CORP. and upon termination of employment prior
to a Change in Control; and

 

WHEREAS, the Company is willing to pay Employee severance payments under certain
circumstances if Employee agrees to confidentiality, non-compete and certain
other covenants.

 

NOW, THEREFORE, in consideration of the mutual agreements herein set forth and
other good and valuable consideration, the parties hereto agree as follows:

 

1.                                       Employment.  Employee will continue
employment with the Company as an at will employee subject to the terms and
conditions hereinafter set forth.

 

2.                                       Duties.  During the continuation of his
employment, Employee shall:

 

(a)                                  well and faithfully serve the Company and
do and perform assigned duties and responsibilities in the ordinary course of
his employment and the business of the Company (within such limits as the
Company may from time to time prescribe), professionally, faithfully and
diligently.

 

(b)                                 devote his full time, energy and skill to
the business of the Company and his assigned duties and responsibilities, and to
the promotion of the best interests of the Company; provided that Employee shall
not (to the extent not inconsistent with Section 4 below) be prevented from (a)
serving as a director of any corporation consented to in advance in writing by
the Company, (b) engaging in charitable, religious, civic or other non-profit
community activities, or (c) investing his personal assets in such form or
manner as will not require any substantial services on his part in the operation
or affairs of the business in which such investments are made or which would
detract from or interfere or cause a conflict of interest with performance of
his duties hereunder.

 

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(c)                                  observe all policies and procedures of the
Company in effect from time to time applicable to employees of the Company
including, without limitation, policies with respect to employee loyalty and
prohibited conflicts of interest.

 

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3.                                       Confidential Information, Assignment of
Inventions.

 

(a)                                  Employee acknowledges that the trade
secrets, confidential information, secret processes and know-how developed and
acquired by AAR CORP. and its affiliates or subsidiaries (together the
“Affiliated Companies”) are among their most valuable assets and that the value
of such information may be destroyed by unauthorized disclosure.  All such trade
secrets, confidential information, secret processes and know-how imparted to or
learned by Employee in the course of his employment with respect to the business
of the Affiliated Companies (whether acquired before or after the date hereof)
will be deemed to be confidential and will not be used or disclosed by Employee,
except to the extent necessary to perform his duties and, in no event, disclosed
to anyone outside the employ of the Affiliated Companies and their authorized
consultants and advisors, unless (i) such information is or has been made
generally available to the public, (ii) disclosure of such information is
required by law in the opinion of Employee’s counsel (provided that written
notice thereof is given to Company as soon as possible but not less than 24
hours prior to such disclosure), or (iii) express written authorization to use
or disclose such information has been given by the Company.  If Employee ceases
to be employed by the Company for any reason, he shall not take with him any
electronically stored data, documents or other papers containing or reflecting
trade secrets, confidential information, secret processes, know-how, or computer
software programs.  Employee acknowledges that his employment hereunder will
place him in a position of utmost confidence and that he will have access to
confidential information concerning the operation of the business of the
Affiliated Companies, including, but not limited to, manufacturing methods,
developments, secret processes, know-how, computer software programs, costs,
prices and pricing methods, sources of supply and customer names and relations. 
All such information is in the nature of a trade secret and is the sole and
exclusive property of the Affiliated Companies and shall be deemed confidential
information for the purposes of this paragraph.

 

(b)                                 Employee hereby assigns to the Company all
rights that Employee may have as author, designer, inventor or otherwise as
creator of any written or graphic material, design, invention, improvement, or
any other idea or thing whatever that Employee may write, draw, design,
conceive, perfect, or reduce to practice during employment with the Company or
within 120 days after termination of such employment, whether done during or
outside of normal work hours, and whether done alone or in conjunction with
others (“Intellectual Property”), provided, however, that

 

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Employee reserves all rights in anything done or developed entirely by Employee
on Employee’s own personal time and without the use of any Company equipment,
supplies, facilities or information, or the participation of any other Company
employee, unless it relates to the Company’s business or reasonably anticipated
business, or grows out of any work performed by Employee for the Company. 
Employee will promptly disclose all such Intellectual Property developed by
Employee to the Company, and fully cooperate at the Company’s request and
expense in any efforts by the Company or its assignees to secure protection for
such Intellectual Property by way of domestic or foreign patent, copyright,
trademark or service mark registration or otherwise, including executing
specific assignments or such other documents or taking such further action as
may be considered necessary to vest title in Company or its assignees and obtain
patents or copyrights in any and all countries.

 

4.                                       Non-Compete; Severance.

 

(a)                                  Employee agrees that during his
continuation of employment with the Company and for one (1) year thereafter so
long as the Company makes severance payments to Employee pursuant to subsections
4(b) or 4(c) below, he shall not, without the express written consent of the
Company, either alone or as a consultant to, or partner, employee, officer,
director, or stockholder of any organization, entity or business, (i) take or
convert for Employee’s personal gain or benefit or for the benefit of any third
party, any business opportunities which may be of interest to the Company or any
Affiliated Company which Employee becomes aware of during the term of his
employment; (ii) engage in direct or indirect competition with the Company or
any Affiliated Company within 100 miles of any location within the United States
of America or any other country where the Company or any Affiliated Company does
business from time to time during the term hereof; (iii) solicit in connection
with any activity which is competitive with any of the businesses of the Company
or any Affiliated Company, any customers of the Company or any Affiliated
Company; (iv) solicit for employment any sales, marketing or management employee
of Company or any Affiliated Company or induce or attempt to induce any customer
or supplier of the Company or any Affiliated Company to terminate or materially
change such relationship.  Company and Employee acknowledge the reasonableness
of the foregoing covenants not to compete and non-solicitation, including but
not limited to the geographic area and duration of time which are a part hereof,
and further, that the restrictions stated in this Section 4 are

 

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reasonably necessary for the protection of Employer’s legitimate proprietary
interests.  This covenant not to compete may be enforced with respect to any
geographic area in which the Company or any Affiliated Company does business
during the term hereof.  Nothing herein shall prohibit Employee from being the
legal or equitable holder, solely for investment purposes, of less than 5% of
the capital stock of any publicly held corporation which may be in direct or
indirect competition with the Company or any Affiliated Company.

 

(b)                                 The Company will pay Employee, upon
termination of Employee’s employment by the Company prior to a Change in Control
(as defined in 6(c)(i) below) for any reason other than Cause (as defined in
6(c)(iv) below), severance each month for 12 months, in an amount (subject to
applicable withholding) equal to 1/12 of Employee’s base salary; and, further,
if the Company pays discretionary bonuses to its officers for the fiscal year in
which Employee’s employment is terminated, Employee will be paid a bonus in a
lump sum at the time any such bonuses are paid to other officers or at such time
as the Severance Period is complete, whichever is later (with interest at prime
rate plus one percentage point from the earlier of such dates), (1) for the
completed fiscal year preceding termination if such bonus has not been paid
prior to termination, and (2) for the fiscal year in which employment is
terminated, prorata for the period prior to termination of employment based on
Employee’s performance during such period; provided, however, that (i) all such
monthly payment obligations shall terminate immediately upon Employee obtaining
full time employment in a comparable position in terms of salary level, and (ii)
all such payment obligations shall terminate or lapse immediately upon any
breach by Employee of Section 3 or 4(a) of this Agreement or if Employee shall
commence any action or proceeding in any court or before any regulatory agency
arising out of or in connection with termination of his employment.

 

(c)                                  If Employee terminates his employment or
Employee’s employment is terminated by the Company for Cause (as defined below),
the Company may elect (but is not required to), by written notice thereof to
Employee, within five (5) days of any such termination of Employee’s employment
with the Company prior to a Change in Control (as defined below), to pay
Employee severance as provided in and subject to the provisions of subsection
4(b) above.

 

(d)                                 Employee may terminate this Severance and
Change in Control Agreement effective immediately upon notice thereof in writing
to

 

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Company at any time while still employed within a sixty (60) calendar day period
immediately following the effective date of any reduction by Company in (i)
Employee’s level of responsibility or position from that held by Employee as
Vice President on the effective date of this Agreement, or (ii) Employee’s level
of compensation, including retirement benefits in effect immediately prior to
any such change.

 

(e)                                  If at any time, any clause or portion of
this Section 4 shall be deemed invalid or unenforceable by the laws of the
jurisdiction in which it is to be enforced by reason of being vague or
unreasonable as to duration, geographic scope, nature of activities restricted,
or for any other reason, this provision shall be considered divisible as to such
portions and the foregoing restrictions set forth in 4(a) shall become and be
immediately amended to include only such duration, scope or restriction and such
event as shall be deemed reasonable and enforceable by the court or other body
having jurisdiction to enforce this Agreement; and the parties hereto agree that
the restrictions, as so amended, shall be valid and binding as though the
invalid or unenforceable portion had not been involved herein.

 

(f)                                    The Employee acknowledges and agrees that
the Company would be irreparably harmed by violations of Section 3 or Section
4(a) above, and in recognition thereof, the Company shall be entitled to an
injunction or other decree of specific performance with respect to any violation
thereof (without any bond or other security being required) in addition to other
available legal and equitable remedies.

 

5.                                       Termination of Employment.

 

(a)                                  Upon and after termination of employment
howsoever arising, Employee shall, upon request by Company:

 

(1)                                  immediately return to the Company all
correspondence, documents, business calendars/diaries, or other property
belonging to the Company which is in his possession,

 

(2)                                  immediately resign from any office Employee
holds with the Company or any Affiliated Company; and

 

(3)                                  cooperate fully and in good faith with the
Company in the resolution of all matters Employee worked on or was involved in
during Employee’s employment with the Company.  Employee’s

 

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cooperation will include reasonable consultation by telephone.  Further, in
connection therewith, Employee will, at Company’s request upon reasonable
advance notice and subject to Employee’s availability, make himself available to
Company in person at Company’s premises, for testimony in court, or elsewhere;
provided, however, that in such event, Company shall reimburse all Employee’s
reasonable expenses and pay Employee a reasonable per diem or hourly stipend.

 

6.                                       Change in Control.

 

(a)                                  In the event (i) a Change in Control of AAR
CORP. occurs and (ii) (A) at any time during the 24 month period commencing on
the date of the Change in Control the Company terminates Employee’s employment
for other than Cause or Disability, or Employee terminates his employment for
Good Reason, in either case by written notice to the other party (including the
particulars thereof), and having given the other party the opportunity to be
heard with respect thereto, or (B) Employee’s employment with the Company
terminates for any reason other than Disability or death during the 30 day
period commencing on the expiration of the aforementioned 24 month period, then:

 

(1)                                  The Company shall promptly pay to Employee,
in a lump sum, a cash payment in an amount equal to the sum of (A) all base
salary earned through the date of termination, (B) any annual cash bonus earned
by Employee for the fiscal year of the Company most recently ended prior to the
date of termination to the extend unpaid on the date of termination, (C) a
prorata portion of the annual cash bonus, including the value of any restricted
stock grant in lieu of annual cash bonus, Employee would have earned had he been
employed by the Company on the last day of the fiscal year in which the date of
termination occurs (as if all performance targets have been met or, in the event
the bonus is of the “discretionary” type, the bonus shall be based on a
percentage of base salary which is not less than percentage of base salary
received as bonus for the preceding fiscal year) that is applicable to the
period commencing on the first day of such fiscal year and ending on the date of
termination, and (D) any and all other benefits and amounts earned by Employee
prior to the date of termination to the extent unpaid, all subject to applicable
withholding.

 

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(2)                                  The Company shall promptly pay to Employee
in a lump sum, a cash payment in an amount equal to three times Employee’s total
compensation (base salary plus annual cash bonus) for either the fiscal year of
the Company most recently ended prior to the date of termination, or the
preceding fiscal year, whichever is the highest total compensation, subject to
applicable withholding.  Employee may elect to take payment of any amounts on a
schedule of his own choosing; provided that such schedule shall be completed no
later than three years from the date of Employee’s termination of employment.

 

(3)                                  Employee and his dependents shall continue
to be covered by, and receive benefits, in accordance with the terms of, all of
the Company’s medical, dental and life insurance plans for three years following
the date of termination, and at no less than the levels he and his dependents
were receiving immediately prior to the Change in Control.  Employee’s
dependents shall be entitled to continued coverage pursuant to the preceding
sentence for the balance of such three year period in the event of Employee’s
death during such period.  The period during which Employee and his dependents
are entitled to continuation of group health plan coverage pursuant to Section
4980B of the Internal Revenue Code of 1986, as amended, and Part 6 of Title I of
the Employee Retirement Income Security Act of 1974, as amended, shall commence
on the date next following the expiration of the aforementioned three year
period.

 

(4)                                  Employee shall receive an additional
retirement benefit, over and above that which Employee would normally be
entitled to under the Company’s retirement plans or programs applicable to
Employee, equal to the actuarial equivalent of the additional amount that
Employee would have earned under such retirement plans or programs had he
accumulated three additional continuous years of service.  Such amount shall be
paid to Employee in a cash lump sum payment on the Employee’s Retirement Date.

 

(5)                                  The Company, at its expense, shall provide
Employee with outplacement services of a nationally recognized outplacement firm
until the earlier of (a) the Employee’s attainment of employment, or (b) the
date eighteen (18) months from the date of Employee’s termination of employment;
provided, however, that

 

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the cost of such outplacement services shall not exceed 3.5% of the cash payment
due to Employee pursuant to subsection 6(a)(2) above.

 

(6)                                  The amounts paid to Employee under this
Change in Control provision applicable to Employee shall be considered severance
pay in consideration of past service Employee has rendered to the Company and in
consideration of Employee’s continued service from the date hereof to
entitlement of those payments.

 

(b)                                 In the event that a Change in Control
occurs, whether or not such Change in Control has the prior written approval of
a majority of the Continuing Directors (as defined in the AAR CORP. Stock
Benefit Plan), and notwithstanding any conditions or restrictions contained in
any agreement between the Company and Employee related to any Award granted to
Employee under the Plan, all Options or Limited Rights, or both, granted to
Employee under the Plan will become immediately exercisable, and all
restrictions on Restricted Stock granted to Employee under the Plan will
immediately lapse.

 

(c)                                  For purposes of this Agreement

 

(i)                                     “Change in Control” means the earliest
of:

 

(1)                                  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; or

 

(2)                                  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

 

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(3)                                  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.

 

(ii)                                  “Good Reason” means:

 

(1)                                  a material reduction in the nature or scope
of Employee’s duties, responsibilities, authority, power or functions from those
enjoyed by Employee immediately prior to the Change in Control, or a material
reduction in Employee’s compensation (including benefits), occurring at any time
during the two-year period immediately after the Change in Control; or

 

(2)                                  if the incumbent in the position of
President and CEO of the Company on August 8, 1997 is not the President and CEO
of the Company at the time of termination, a good faith determination by
Employee that as the result of a Change in Control and a material change in
employment circumstances at any time during the immediate two year period after
the Change in Control, he is unable to carry out his assigned duties and
responsibilities in a manner consistent with the practices, standards, values or
philosophy of the Company immediately prior to the Change in Control; or

 

(3)                                  a relocation of the primary place of
employment of at least 100 miles.

 

(iii)                               “Disability” means:

 

(1)                                  a physical or mental condition which has
prevented Employee from substantially performing his assigned duties for a
period of 180 consecutive days and which is expected to continue to render
Employee unable to substantially perform his duties on a full-time basis and
otherwise meets the benefit eligibility requirements of the Company’s Long Term
Disability Welfare Benefit Plan.  The Company will make reasonable accommodation
for any

 

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handicap of Employee as may be required by applicable law.

 

In the event of termination by the Company for Disability after a Change in
Control, a good faith determination of the existence of a Disability shall be
made by resolution of the Compensation Committee of the Board of Directors of
the Company, in its sole discretion, setting forth the particulars of the
Disability which shall be final and binding upon the Employee.  The Company may
require the submission of such medical evidence as to the condition of the
Employee as it may deem necessary in order to arrive at its determination of the
occurrence of a Disability, and Employee will cooperate in providing any such
information.  Employee will be provided with reasonable opportunity to present
additional medical evidence as to the medical condition of Employee for
consideration prior to the Board making its determination of the occurrence of a
Disability.

 

Upon termination of Employment by Company for Disability after a Change in
Control, Employee will receive Disability payments pursuant to the Company’s
short and long term Disability welfare benefit plans then in effect according to
the terms of such plans and continue to be eligible to participate in the
Company’s medical, dental and life insurance programs then in effect and
available to officers of the Company in accordance with their terms for a period
of 3 years from the date of such termination of this Agreement.

 

(iv)                              “Cause” means:

 

(1)                                  Employee engages, during the performance of
his duties hereunder, in acts or omissions constituting dishonesty, intentional
breach of fiduciary obligation or intentional wrongdoing or malfeasance;

 

(2)                                  Employee intentionally disobeys or
disregards a lawful and proper direction of the Board or the Company; or

 

(3)                                  Employee materially breaches the Agreement
and such breach by its nature, is incapable of being cured, or such breach
remains uncured for more than 10 days following receipt by Employee of written
notice from the Company

 

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specifying the nature of the breach and demanding the cure thereof.  For
purposes of his clause (3), a material breach of the Agreement that involves
inattention by Employee to his duties under the Agreement shall be deemed a
breach capable of cure.

 

Without limiting the generality of the foregoing, the following shall not
constitute Cause for the termination of employment of Employee or the
modification or diminution of any of his authority hereunder:

 

(1)           any personal or policy disagreement between Employee and the
Company or any member of the Board; or

 

(2)           any action taken by Employee in connection with his duties
hereunder, or any failure to act, if Employee acted or failed to act in good
faith and in a manner he reasonably believed to be in and not opposed to the
best interest of the Company and he had no reasonable cause to believe his
conduct was unlawful; or

 

(3)           termination of Employee’s employment for overall unsatisfactory
performance (including, but not limited to, failure to meet financial goals).

 

Termination for Cause shall be limited to a good faith finding by resolution of
the Compensation Committee of the Board,. setting forth the particulars
thereof.  Any such action shall be taken at a regular or specially called
meeting of the Compensation Committee of the Board, after a minimum 10 days
notice thereof to Employee, with termination of Employee’s employment with the
Company for Cause listed as an agenda item.  Employee will be given a reasonable
opportunity to be heard at such meeting with counsel present if Employee
desires.  Any such resolution shall be final and binding.

 

Upon termination of employment by Company for Cause, no further compensation or
benefits shall accrue or be payable to Employee by the Company, except for any
compensation, bonus or other benefits which have accrued to Employee prior to
the date of any such termination.

 

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Nothing herein shall be construed to prevent the Company from terminating
Employee’s employment at any time for any reason or for no reason.

 

(d)                                 The Company will pay reasonable
legal/attorney’s fees incurred by Employee in connection with enforcement of any
right or benefit under this Section 6.

 

(e)                                  The Company shall promptly pay Employee a
gross-up bonus in an amount equal to (i) all excise taxes payable under Section
280G of the Internal Revenue Code on any amounts constituting “golden parachute”
payments, plus (ii) any federal, state, and local income taxes and excise taxes
(including FICA) payable by Employee on such gross-up bonus in order to put
Employee in the same position he would have been in if the excise tax provision
(Section 280G) did not apply.

 

7.                                       Changes in Business.  The Company,
acting through its Board of Directors, will at all times have complete control
over the Company’s business and retirement and other employee health and welfare
benefit plans (“Plans”).  Without limiting the generality of the foregoing, the
Company may at any time or times change or discontinue any or all of its present
or future operations or Plans (subject to their terms), may close or move any
one or more of its divisions or offices, may undertake any new servicing or
sales operation, may sell any one or more of its divisions or offices to any
company not controlled, directly or indirectly, by the Company or may take any
and all other steps which its Board of Directors, in its exclusive judgment,
shall deem desirable, and Employee shall have no claim or recourse against the
Company, its officers, directors or employees by reason of such action except
for enforcement of the provisions of Sections 4 and 6 of this Agreement.

 

8.                                       Severance Payment as Sole Obligation. 
Except as expressly provided in Sections 4 and 6 above, no further compensation,
payments, liabilities or benefits shall accrue or be payable to Employee upon or
as a result of termination of Employee’s employment for any reason whatsoever
except for any compensation, bonus or other benefits which accrued to Employee
prior to the date of employment termination.

 

The amounts paid to the Employee under Section 4 and 6 of this Agreement shall
be considered severance pay in consideration of past services Employee

 

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has rendered to the Company and in consideration of Employee’s continued service
from the date hereof to entitlement to those payments.

 

9.                                       Notices.  Any notice or other
instrument or thing required or permitted to be given, served or delivered to
any of the parties hereto shall be delivered personally or deposited in the
United States mail, with proper postage prepaid, telegram, teletype, cable or
facsimile transmission to the addresses listed below:

 

(a)

 

If to the Company, to:

 

 

 

 

 

AAR CORP.

 

 

1100 N. Wood Dale Road

 

 

Wood Dale, Illinois 60191

 

 

Attention:  Chairman

 

 

 

With a copy to:

 

 

 

 

 

AAR CORP.

 

 

1100 N. Wood Dale Road

 

 

Wood Dale, Illinois 60191

 

 

Attention:  General Counsel

 

 

 

(b)

 

If to Employee, to:

 

 

 

 

 

James J. Clark

 

 

Singel 326, 1016 AE

 

 

Amsterdam, The Netherlands

 

or to such other address as either party may from time to time designate by
notice to the other.  Each notice shall be effective when such notice and any
required copy are delivered to the applicable address.

 

10.                                 Non-Assignment.

 

(a)                                  The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of
Employee, and any attempted unpermitted assignment shall be null and void and
without further effect; provided, however, that, upon the sale or transfer of
all or substantially all of the assets of the Company, or upon the merger by the
Company into or the combination with another corporation or other business
entity, or upon the liquidation or

 

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dissolution of the Company, this Agreement will inure to the benefit of and be
binding upon the person, firm or corporation purchasing such assets, or the
corporation surviving such merger or consolidation, or the shareholder effecting
such liquidation or dissolution, as the case may be.  After any such
transaction, the term Company in this Agreement shall refer to the entity which
conducts the business now conducted by the Company.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the estate and
beneficiaries of Employee and upon and to the benefit of the permitted
successors and assigns of the parties hereto.

 

(b)                                 The Employee agrees on behalf of himself,
his heirs, executors and administrators, and any other person or person claiming
any benefit under him by virtue of this Agreement, that this Agreement and all
rights, interests and benefits hereunder shall not be assigned, transferred,
pledged or hypothecated in any way by the Employee or by any beneficiary, heir,
executor, administrator or other person claiming under the Employee by virtue of
this Agreement and shall not be subject to execution, attachment or similar
process.  Any attempted assigned, transfer, pledge or hypothecation or any other
disposition of this Agreement or of such rights, interests and benefits contrary
to the foregoing provisions or the levy or any execution, attachment or similar
process thereon shall be null and void and without further effect.

 

11.                                 Severability. If any term, clause or
provision contained herein is declared or held invalid by any court of competent
jurisdiction, such declaration or holding shall not affect the validity of any
other term, clause or provision herein contained.

 

12.                                 Construction. Careful scrutiny has been
given to this Agreement by the Company, Employee, and their respective legal
counsel.  Accordingly, the rule of construction that the ambiguities of the
contract shall be resolved against the party which caused the contract to be
drafted shall have no application in the construction or interpretation of this
Agreement or any clause or provision hereof.

 

13.                                 Entire Agreement. This Agreement and the
other agreements referred to herein set forth the entire understanding of the
parties and supersede all prior agreements, arrangements and communications,
whether oral or written, pertaining to the subject matter hereof.

 

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14.                                 Waiver.  No provision of this Agreement may
be amended, modified, waived or discharged unless such amendment, modification,
waiver or discharge is agreed to in writing signed by Employee and an authorized
officer of the Company.  No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

 

15.                                 Governing Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without regard to
its conflicts of law principles.

 

16.                                 Execution.  This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original and which
shall constitute but one and the same Agreement.

 

WITNESS the due execution of this Agreement by the parties hereto as of the day
and year first above written.

 

Employer:

 

AAR CORP.

 

 

By:

 /s/ HOWARD A. PULSIFER

 

 

Title:  Vice President

 

Employee:

 

 

/s/ JAMES J. CLARK

 

 

James J. Clark

 

 

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