Exhibit
10.18


 


CONSULTING
AGREEMENT


 


This Consulting Agreement
is entered into this 1st day of June, 1999, by and between AAR CORP.
(“Company”), a Delaware corporation, and Ira A. Eichner, having his principal
place of business at 301 Polmer Park, Palm Beach, Florida 33480 (“Consultant”).


 


WHEREAS, Consultant
recently retired from active employment as a senior executive officer of the
Company, pursuant to the terms of Consultant’s Employment Agreement having
founded the Company and served as its Chairman and Chief Executive Officer for
over 40 years, and is presently continuing to serve the Company as a
non-executive, elected director and Chairman of the Board; and


 


WHEREAS, Consultant and
the Company mutually desire Consultant to provide consulting services to senior
management of the Company on operational and strategic planning issues and
other projects, in addition to and beyond Consultant’s duties as Chairman of
the Board.


 


NOW, THEREFORE, the
parties agree as follows:


 


1.                                       Company
hereby retains Consultant to provide consulting services to Company in
connection with operational and strategic issues and other projects relating to
AAR’s business activities as may be requested from time to time, at times
convenient to Consultant, by Company’s Chief Executive Officer, or his
designee, subject to the terms and conditions below.


 


2.                                       This
Agreement will commence as of June 1, 1999 and continue thereafter for
four years and shall be governed by the laws of the State of Illinois.


 


3.a.                              AAR
will pay Consultant a retainer in the amount of Four Hundred Thousand dollars
($400,000).  The retainer will be
payable in 16 quarterly payments of $25,000 each, irrespective of whether any
services are requested and provided.


 


   b.                             The
foregoing retainer will be the only remuneration paid to Consultant for any
services provided hereunder and no other compensation or benefits will be paid
or payable; provided, however, Company will reimburse Consultant for business
expenses reasonably incurred by Consultant in connection with the performance
of services hereunder; and provided further Company will indemnify and hold
Consultant harmless from all liabilities (including attorneys’ fees,
judgements, fines, and amounts paid in settlement) in connection with any
threatened, pending or completed action, suit, or proceeding whether civil,
criminal, administrative, or investigative as a result of consulting services
provided to Company hereunder to the same extent and on the same terms and
conditions as Consultant is indemnified by Company pursuant to that certain
Indemnification Agreement between the parties dated the 7th day of
January, 1988.


 

















 


4.                                       Consultant
will provide the services contemplated hereunder as an independent contractor
and not as an employee of Company.  As
such, Consultant is responsible for filing all required tax returns and reports
and payment of all applicable taxes in connection with Consultant’s business,
including with respect to all mounts paid Consultant hereunder.  Company will furnish Consultant with an IRS
Form 1099 in accordance with applicable law.


 


5.                                       Consultant
may have access to reports, records, data, information, or other material
which, in Company’s opinion, will have a bearing on Consultant’s services
performed under this Agreement. 
Consultant expressly agrees that all such reports, records, data,
information, or other material disclosed to him by Company and all information
developed by Consultant in connection herewith, including but not limited to
any of Consultant’s reports or notes, will be and remain the property of
Company and will be preserved by Consultant as confidential and will not be
published, released or otherwise communicated in any manner to any third party
without the prior written consent of Company.


 


6.                                       In
the event of a change in control of the Company (as defined in Addendum 1),
either party may terminate this Agreement upon written notice to the other, in
which case the Company shall immediately pay to Consultant any retainer that
would have been payable for the remaining term of this Consulting Agreement.


 


7.                                       Consultant
agrees that during the term hereof or May 31, 2003, whichever is later, he will
not provide consulting services of any nature to any other company, entity or
person engaged in business activities of the kind or type engaged in by the
Company or any of its subsidiaries or affiliated companies, without the prior
written consent of the Company.


 


IN WITNESS WHEREOF, each
party has executed this Agreement as of the day and year first above written.


 


	
  AAR CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ HOWARD
  A. PULSIFER

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
    /s/ IRA A.
  EICHNER

  	
   

  	
   

  
	
  Ira A. Eichner,
  Consultant

  	
   

  
						



 

















 


ADDENDUM 1


 


“Change in Control” means
the earliest of:


 


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


 


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


 


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


 

















 


Amendment to Consulting
Agreement


 


This Amendment to Consulting Agreement is entered into
as of the 1st day of June, 2003, by and between AAR CORP.
(“Company”), a Delaware corporation, and Ira A. Eichner, having his principal
place of business at 301 Polmer Park, Palm Beach, Florida 33480 (“Consultant”).


 


WHEREAS, the Company and Consultant entered
into a Consulting Agreement dated June 1, 1999, which expired by its terms on
May 31, 2003 (AAR Contract No. 04426) (“Agreement”); and


 


WHEREAS, Company and Consultant desire to
renew and extend the term of said Agreement for the period June 1, 2003 through
May 31, 2006; and


 


WHEREAS, the Board of Directors of the
Company has determined that it is in the best interest of the Company to extend
the Consulting Agreement to provide consulting services in connection with
operational and strategic issues and other projects relating to AAR’s business
activities as may be requested from time to time, by Company’s Chief Executive
Officer, or his designee, in addition to and beyond Consultant’s duties as a
director and Chairman of the Board of the Company, and has duly approved such
extension.


 


NOW, THEREFORE, the parties agree as follows:


 


1.                                       Section
2 of the Agreement is hereby amended to extend the term of the Agreement from
and after June 1, 2003 through May 31, 2006.


 


2.                                       Section
3.a. of the Agreement is amended to provide for payment of a quarterly retainer
in the amount of $25,000 through the term of the Agreement.


 


3.                                       Except
as provided for in this amendment, all other terms of the Agreement shall
continue in effect.


 


IN WITNESS WHEREOF, each party has executed
this Agreement as of the day and year first above written.


 


 


	
  AAR CORP.

  
	
   

  
	
   

  
	
  By

  	
  /s/ HOWARD A.
  PULSIFER

  	
   

  
	
   

  	
   

  
	
  Title

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ IRA A. EICHNER

  	
   

  
	
  Ira A. Eichner, Consultant

  	
   

  
				



 


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