Exhibit 10.2

 

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May 24, 2018

 

Mr. David P. Storch

1270 Linden Avenue

Highland Park, IL  60035

 

RE:                          Retirement

 

Dear David:

 

This letter agreement sets forth the terms and conditions of your voluntary
retirement from AAR CORP. (“AAR”) on May 31, 2018.

 

In consideration of the mutual promises in this letter agreement, you and we
hereby agree to the following:

 

1.                                      Voluntary Retirement.

 

(a)                                 You will continue to serve as AAR’s Chief
Executive Officer, and you will continue to receive your full salary, benefits
and perquisites, until your retirement as an employee of AAR on May 31, 2018. 
You also will be entitled to a bonus for the fiscal year-ending May 31, 2018, as
determined under AAR’s Fiscal 2018 Short-Term Incentive Plan, regardless of your
employment having terminated prior to the date such annual bonus is paid.

 

(b)                                 You will receive the Supplemental Company
Contributions and Supplemental Profit Sharing Contributions under the SKERP for
the period January 1, 2018 through May 31, 2018.  You will also be eligible to
receive any Additional Supplemental Company Contributions for the period June 1,
2017 through May 31, 2018.  Your SKERP benefit will be paid in accordance with
the terms of the SKERP.

 

(c)                                  You are retirement eligible under AAR’s
stock plans, meaning that you will continue to vest in all currently outstanding
unvested stock awards in accordance with the terms of the awards.  Any stock
options that are vested or become vested following your retirement will remain
exercisable for their full remaining original term.

 

(d)                                 You are entitled to the benefits under three
separate amended and restated split-dollar agreements dated March 1, 2000
relating to the following life insurance policies: (i) Policy No. 56005683 with
New York Life; (ii) Policy No. 968290008U with MetLife; and (iii) Policy
No. 968290009U with Metropolitan Life.

 

(e)                                  Upon your retirement from AAR, you (and
your spouse) will be entitled to participate, for your (and your spouse’s)
lifetime, in AAR’s medical, hospitalization and dental plans, and any executive
health programs then in effect, on the same terms and in amounts and of the same
type(s) generally made available to any actively employed executive officer of
AAR.  Consistent with IRS guidance, AAR will furnish you with an IRS Form that
reflects the portion of the premiums paid by AAR for your continued coverage
under these plans for each year.

 

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2.                                      Termination of Employment Agreement. The
Employment Agreement between you and AAR, dated as of April 18, 2017
(“Employment Agreement”) is terminated effective May 31, 2018 and is replaced by
(a) this letter agreement relating to your retirement and (b) the separate
letter agreement also dated May 24, 2018 relating to your post-retirement;
provided that Section 8 (“Confidential Information and Restriction of
Competition”) and Section 11 (“Legal Fees”) of your Employment Agreement will
survive the termination of the Employment Agreement and are incorporated by
reference into this agreement.

 

3.                                      Mutual Release.

 

(a)                                 AAR does hereby fully, finally and
unconditionally release and forever discharge you, your heirs, executors,
administrators, spouse, children, beneficiaries, legal representatives, agents,
successors and assigns from any and all liabilities, actions, causes of action,
claims, rights, obligations, damages, costs, attorneys’ fees, suits and demands
of any and every kind, known and unknown, liquidated and unliquidated, absolute
or contingent, at law or in equity, enforceable under any local, state or
federal statute or ordinance, or under the common law of the United States or
any state, arising out of or related to your employment or retirement from
employment, including but not limited to claims of breach of implied or express
contract, breach of promise, misrepresentation, negligence, fraud, estoppel,
defamation, infliction of emotional distress, violation of public policy,
wrongful or constructive discharge, or any other employment related tort; except
only AAR’s right to enforce the terms of this letter agreement.  Nothing in this
release requires AAR to release rights or claims that may arise after this
letter agreement is executed.

 

(b)                                 You do hereby fully, finally and
unconditionally release and forever discharge AAR and all of its affiliated
companies, and all of their former and current directors, officers, employees,
agents, and assigns, in their personal and corporate capacities, from any and
all liabilities, actions, causes of action, claims, rights, obligations,
damages, costs, attorneys’ fees, suits and demands of any and every kind, known
and unknown, liquidated and unliquidated, absolute or contingent, at law or in
equity, enforceable under any local, state or federal statute or ordinance, or
under the common law of the United States or any state, arising out of or
related to your employment or retirement from employment, including but not
limited to claims for benefits under the Company’s policies and procedures or
handbooks, or the Employee Retirement Income Security Act of 1974, as amended,
any claims of harassment or discrimination based upon race, age, color, national
origin, ancestry, religion, marital status, sex, sexual orientation, citizenship
status, medical condition or disability under Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act,
Section 1981 of the Civil Rights Act of 1866, the Worker Adjustment and
Retraining Notification Act, the Age Discrimination in Employment Act of 1967,
as amended, or any other federal state or local law prohibiting discrimination
in employment; claims of breach of implied or express contract, breach of
promise, misrepresentation, negligence, fraud, estoppel, defamation, infliction
of emotional distress, violation of public policy, wrongful or constructive
discharge, or any other employment related tort; except only (i) your right to
enforce the terms of this letter agreement, and (ii) the rights described in
paragraph 9.  This release does not waive your right to file an administrative
charge of discrimination but you agree to waive all claims for damages or other
relief.  Nothing in this release requires you to release rights or claims that
may arise after this letter agreement is executed, including your rights under
the SKERP, the AAR CORP. Retirement Savings Plan or the AAR CORP. Retirement
Plan.  This release does not waive your rights under your Indemnification
Agreement dated August 24, 1989 (the “Indemnification Agreement”).

 

4.                                      Severability.                        If
any provision of this letter agreement is, in whole or in part, illegal or
unenforceable under applicable law or public policy, then only such illegal or
unenforceable part shall be void and of no effect, and the balance of this
letter agreement shall be construed to give effect to the intent of the parties
to the greatest possible extent.

 

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5.                                      Fee Reimbursement.  You will be
reimbursed for the reasonable fees you incur in connection with the negotiation
and documentation of this Agreement and related agreements, with a maximum
reimbursement of $15,000.

 

6.                                      Binding Effect.  This letter agreement
is binding upon you, your heirs, executors, administrators, successors and
assigns.

 

7.                                      Entire Agreement.  This letter agreement
contains the entire understanding of the parties with respect to the matters
addressed herein, and supersedes all other agreements or communications
regarding such matters (except for the letter agreement dated the date of this
letter agreement pertaining to your service as Non-Executive Chairman of the
Board and as a consultant to AAR and the surviving Sections 8 and 11 of the
Employment Agreement and your Indemnification Agreement).

 

8.                                      Choice of Law.  This letter agreement
shall be governed by, and construed in accordance with, the laws of the State of
Illinois, without regard to its conflict of law rules.

 

9.                                      Knowing and Voluntary.  Further, in
consideration of the promises of AAR referred to in this letter agreement, you
intend to waive and release all claims identified in paragraph 4(b), including
claims that you may have under the Age Discrimination in Employment Act of 1967,
as amended, 29 U.S.C. Section 620 et seq. to the fullest extent permitted by law
in accordance with Title II of the Older Workers Benefit Protection Act of 1990,
Public Law 101-433. In furtherance of this intention, you acknowledge and
understand that:

 

(a)                                 You may have until June 14, 2018 to consider
and execute this letter agreement.

 

(b)                                 Within seven (7) days after you execute this
letter agreement, you will have the right, by providing written notice to AAR’s
Vice President, General Counsel and Secretary, to revoke your acceptance of this
letter agreement.  This letter agreement will not become effective until after
this revocation period expires.

 

(c)                                  You are receiving consideration for this
letter agreement in addition to that which you otherwise would be entitled.

 

(d)                                 You are entering into the letter agreement
voluntarily, knowingly and without duress.

 

(e)                                  You are advised to consult with an attorney
prior to executing this letter agreement.

 

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Please indicate your acknowledgment of, and agreement to, the terms and
conditions of this letter agreement by signing and returning a copy of this
letter agreement to AAR.

 

Very truly yours,

 

 

 

 

 

AAR CORP.

 

 

 

 

 

By:

/s/ RONALD B. WOODARD

 

Name:

Ronald B. Woodard

 

Title:

Chairman of the Compensation Committee of the Board of Directors

 

Date:

May 24, 2018

 

 

 

 

 

AAR CORP.

 

 

 

 

 

By:

/s/ JOHN M. HOLMES

 

Name:

John M. Holmes

 

Title:

President and Chief Operating Officer

 

Date:

May 24, 2018

 

 

 

 

 

Acknowledged and Agreed:

 

 

 

 

 

By:

/s/ DAVID P. STORCH

 

Name:

David P. Storch

 

Date:

May 24, 2018

 

 

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