Exhibit
10.17


 


AAR
CORP.


 


Performance Restricted Stock
Agreement


(“Agreement”)


 


Subject to the provisions
of the AAR CORP. Stock Benefit Plan (“Plan”), the terms of which are hereby
incorporated by reference herein, and in consideration of the agreements of the
Grantee herein provided, AAR CORP., a Delaware corporation (“Company”), hereby
grants to the Grantee a performance restricted stock award (“Award”), effective
                              
(“Date of Award”), in the number of shares of common stock (“Common Stock”) of
the Company, $1.00 par value (“Award Shares”) set forth in the Company’s
notification of Award letter dated                               
subject to the forfeiture and nontransferability provisions hereof and the
other terms and conditions set forth herein:


 


1.                                       The Award is conditioned upon the
acceptance by the Grantee of the terms hereof by confirming acceptance of the
Award on Smith Barney’s web site (www.benefitaccess.com).  If such acceptance has not occurred within 30
days from the date of the notification of award letter, the Award referenced
herein shall expire unless the acceptance date is extended in writing signed by
the Company.


 


2.                                       Restrictions. 
The Grantee represents that he is accepting the Award Shares without a
view toward distribution of said Shares and that he will not sell, assign,
transfer, pledge or otherwise encumber the Award Shares during the period
commencing on the Date of Award and ending with respect to any specific shares
of stock on the date restrictions applicable to such shares are released
pursuant to this Agreement (“Restrictive Period”).


 


3.                                       Release of Restrictions. 
Subject to the provisions of paragraph 3 below, the restrictions
described in 1 above shall be released with respect to 20% of the Award shares
on                               ,
40% of the Award shares on                               
and the 


 

















 


balance of the unreleased
Award shares on                              ,
except as follows (the first two releases to be rounded down to the nearest
whole share):


 


(a)                                  If the Grantee’s employment with the
Company terminates by reason of death or Disability occurring on or after the
Date of Award and on or before the third anniversary date thereof, the
Restrictive Period shall terminate as to the difference between half the total
number of Award Shares and those Shares previously released.  The remaining shares shall be forfeited and
returned to the Company.


 


(b)                                 If the Grantee’s employment with the
Company is terminated by reason of death or Disability after the third
anniversary of the Date of Award, the Restrictive Period shall immediately
terminate as to all of the Award Shares not previously released.


 


(c)                                  If the Grantee’s employment is terminated
by reason of Retirement prior to the last day of the Restrictive Period, the
Restrictive Period shall terminate in accordance with the restriction release
schedule set forth above as to the Award Shares not previously released.


 


(d)                                 If the Grantee’s employment with the
Company terminates prior to the last day of the Restrictive Period for any
reason other than death, Disability or Retirement, the Grantee shall forfeit
and return to the Company all Award Shares not previously released from the
restrictions of Section 2 hereof.


 


(e)                                  If at any time prior to release from
restrictions hereunder, Grantee, without the Company’s express written consent,
directly or indirectly, alone or as a member of a partnership, group, or joint
venture or as an employee, officer, director, or stockholder of any
corporation, or in any capacity engages in any activity which is 


 


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competitive with any of
the businesses conducted by the Company or its Affiliated Companies from time
to time or at any time during the Grantee’s term of employment, the Grantee
shall forfeit and return all Award Shares not previously released from the
restrictions of Section 2 hereof.


 


4.                                       Change in Control. 
In the event of a Change in Control of the Company, whether or not such
change has the prior written approval of the Continuing Directors, the
Restrictive Period shall terminate as to all Award Shares not previously
released.


 


5.                                       Change in Outstanding Shares. 
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
combination or exchange of shares or other similar corporate change, the Award
Shares shall be treated in the same manner in any such transaction as other
shares of Common Stock.  Any additional
shares of stock received by Grantee with respect to the Award Shares in any
such transaction shall be subject to the same restrictions as are then
applicable to those Award Shares for which the additional shares have been
issued.


 


6.                                       Rights of Grantee. 
As the holder of the Award Shares, Grantee is entitled to all of the
rights of a stockholder of AAR CORP. with respect to any of the Award Shares,
when issued, including, but not limited to, the right to receive dividends
declared and payable since the Date of Award.


 


7.                                       Shares.  In aid of the
restrictions set forth in paragraph 2, electronic book shares on the records of
the Transfer Agent, together with a suitably executed stock power signed by the
Grantee, shall be held by a nominee of the Company for the account of Grantee
until such restrictions lapse pursuant to the terms hereof, or such 


 


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Shares are forfeited to
the nominee of the Company as provided by the Plan or this Agreement.  The Grantee shall be entitled to shares
representing the Award Shares as to which such restrictions have terminated,
and the Company agrees to issue such shares in electronic form on the records
of the Transfer Agent.  Upon request by Grantee,
the Transfer Agent will transfer such shares in electronic form to the Grantee’s
broker for the Grantee’s account or issue certificates in the name of the
Grantee representing the Award shares for which restrictions have been
released.


 


8.                                       Legend.  The Company
may, in its discretion, place a legend or legends on any electronic shares or
certificates representing Award Shares issued to the Grantee that the Company
believes is required to comply with any law or regulation.


 


9.                                       Committee Powers. 
The Committee may subject the Award Shares to such conditions,
limitations or restrictions as the Committee determines to be necessary or
desirable to comply with any law or regulation or with the requirements of any
securities exchange.  At any time during
the Restrictive Period, the Committee may reduce or terminate the Restrictive
Period otherwise applicable to all or any portion of the Award Shares.


 


10.                                 Withholding Taxes. 
Upon the Taxable Date(s) applicable to the release of Award share
restrictions, Smith Barney will automatically withhold the appropriate number
of shares (based on the NYSE closing price on the date of release) from the
Award shares being released to satisfy applicable withholding requirements,
including those arising under state and federal income tax laws prior to any
unlegended shares being released into the Grantee’s account at the Transfer
Agent.


 


 


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11.                                 Postponement of Distribution. 
Notwithstanding anything herein to the contrary, the distribution of any
portion of the Award Shares shall be subject to action by the Board taken at
any time in its sole discretion (i) to effect, amend or maintain any
necessary registration of the Plan or the Award Shares distributable in
satisfaction of this Award under the Securities Act of 1933, as amended, or the
securities laws of any applicable jurisdiction, (ii) to permit any action
to be taken in order to (a) list such Award Shares on a stock exchange if
the Common Stock is then listed on such exchange or (b) comply with
restrictions or regulations incident to the maintenance of a public market for
its Shares of Common Stock, including any rules or regulations of any
stock exchange on which the Award Shares are listed, or (iii) to determine
that such Award Shares and the Plan are exempt from such registration or that
no action of the kind referred to in (ii)(b) above needs to be taken; and
the Company shall not be obligated by virtue of any terms and conditions of
this Award or any provision of this Agreement or the Plan to issue or release the
Award Shares in violation of the Securities Act of 1933 or the law of any
government having jurisdiction thereof. 
Any such postponement shall not shorten the term of any restriction
attached to the Award Shares and neither the Company nor its directors or
officers shall have any obligation or liability to the Grantee or to any other
person as to which issuance under the Award Shares was delayed.


 


12.                                 Miscellaneous.


 


(a)                                  This Agreement shall be continued,
administered and governed in all respects under and by the laws of the State of
Illinois.


 


 


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(b)                                 Capitalized terms used herein and not
defined herein will have the meaning set forth in the Plan.


 


(c)                                  This Agreement has been examined by the
parties hereto, and accordingly the rule of construction that ambiguities
be construed against a party which causes a document to be drafted shall have
no application in the construction or interpretation hereof.  If any part of this Agreement is held invalid
for any reason, the remainder hereof shall nevertheless remain in full force
and effect.


 


(d)                                 This Agreement constitutes the entire
agreement between the parties concerning the subject matter hereof and any
prior understanding or representation of any kind antedating this Agreement
concerning such subject matter shall not be binding upon either party except to
the extent incorporated herein.  No
consent, waiver, modification or amendment hereof, or additional obligation
assumed by either party in connection herewith, shall be binding unless
evidenced by a writing signed by both parties and referring specifically
hereto.  No consent, waiver, modification
or amendment with respect hereto shall be construed as applicable to any past
or future events other than the one in respect of which it was specifically
made.


 


(e)                                  This Agreement shall be construed
consistent with the provisions of the Plan and in the event of any conflict
between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall control and any terms of this Agreement which conflict with Plan
terms shall be void.


 


Questions
concerning the provisions of this Agreement should be directed to the Company’s
Corporate Secretary:  

630/227-2040; fax 630/227-2059.


 


 


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By accepting this
Agreement, you irrevocably agree to be bound by the terms hereof.  To accept this Agreement, please follow the
procedures set forth below:


 


Step 1:                            View your Award Summary (confirm that the number of
shares awarded matches that shown in the Award grant letter you received from
the Company).


 


Step 2:                            Read and review the documentation.


 


Step 3:                            Confirm the review/acceptance of your Award.


 


Step 4:                            Receive an online confirmation of your Award
acknowledgment.


 


 


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