Document:

Exhibit 10.2
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EXECUTION VERSION

CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT (“Agreement”) is entered into as of September 20, 2022, by and between AAR CORP. a Delaware corporation (the “Company”) and David P. Storch, an individual (“Consultant”).
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WHEREAS, Consultant currently serves as a member of the Company’s Board of Directors (the “Board”) and the Company’s Non-Executive Chairman, and he previously served as the Company’s Chief Executive Officer, and has announced his intention to retire from the Board as of January 10, 2023 (the “Effective Date”);
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WHEREAS, as the Company’s long-tenured member of its Board, non-Executive Chairman and former Chief Executive Officer of the Company, Consultant is uniquely qualified to provide meaningful consulting services to the Company for the benefit of it and its affiliates.  So that Consultant can provide, upon request, advice, counsel and guidance to the Company’s Chief Executive Officer and the Board, the Company desires to retain Consultant to provide certain Services as an independent contractor as further set forth herein; and
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WHEREAS, Consultant is willing to perform the Services for the Company upon the terms and conditions of this Agreement.
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WHEREAS, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
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NOW, THEREFORE BE IT RESOLVED: This Agreement shall become effective upon the Effective Date and remain in full force and effect from the Effective Date through the earlier of (i) the Company’s 2024 annual meeting; (ii) Consultant’s death or Disability; or (iii) the termination of the Agreement pursuant to Section 4 below (with such applicable period referred to herein as the “Term”).
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CONSULTING SERVICES
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1.Services. Consultant agrees to provide, as requested by the Company, the services specified in Schedule A.  Such services are referred to herein as the “Services”.  Any subsequent revisions to Schedule A, if any, when signed by the parties, shall become a part, and subject to the terms, of this Agreement.  Notwithstanding anything to the contrary in this Agreement, it is expressly understood and agreed that the time commitment of Consultant in providing the Services shall take into consideration Consultant’s other outside business and personal commitments.
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2.Consultant Compensation. As full compensation for the Services to be provided by Consultant during the Term pursuant to this Agreement (including Schedule A and any amendments thereto), the Company agrees to pay Consultant an annualized amount of $400,000 ($33,333 per month) per year, payable in arrears in equal monthly installments (with a pro rata payment for any partial month). In addition, the Company will reimburse Consultant for approved
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EXECUTION VERSION

travel and related business expenses in accordance with the Company’s corporate reimbursement policy to the extent there are incurred during the Term. In addition, Consultant will continue to receive Company-provided IT support services provided to him prior to the date hereof for the Term.
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3.Independent Contractor Relationship.
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a.The Company and Consultant acknowledge and agree that during the Term of this Agreement, Consultant is an independent contractor and not an employee of the Company.  Nothing set forth in this Agreement shall be construed as creating a joint venture, partnership or similar association between Consultant and the Company, or as imposing upon either party to this Agreement any partnership or similar duty or obligation or liability to the other party or to any third party.  Consultant shall have no rights to receive any benefits from the Company which are accorded to employees of the Company provided, however, nothing in this Agreement shall impact, reduce or otherwise change any compensation or benefits to which Consultant is entitled to pursuant to his Retirement Agreement dated May 24, 2018 by and between the Company and Consultant or the Post-Retirement Agreement dated May 24, 2018 by and between the Company and Consultant (the “Retirement Agreements”).
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b.During the Term of this Agreement, Consultant is free to and may provide services to any other individual or entity so long as such services do not interfere with the performance of the Services to be provided by Consultant pursuant to this Agreement and such individual or entity does not directly or indirectly compete with the Company (including its affiliated entities) and is not presently adverse to the Company.
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c.Consultant shall be solely responsible for satisfying all federal, state and local taxes, including, but not limited to, wage withholding, social security deductions and other applicable income tax and/or self-employment taxes and payroll deductions, associated with any compensation he receives from the Company pursuant to this Agreement.  Consultant shall have no right to receive any benefits from the Company not provided for herein.
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4.Termination by the Company.
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a.In the event of Consultant’s material breach of this Agreement (including Consultant’s declining to provide future services hereunder), the Company may terminate the Term if Consultant has not cured such breach within fifteen (15) days after the Company provides written notice to Consultant detailing such breach, and upon such termination the Company shall have no further obligations under this Agreement.  This Agreement shall be terminated upon the Consultant’s death or, upon written notice by the Company, upon Consultant’s Disability.  In addition, Consultant may terminate this Agreement upon thirty days’ prior written notice.
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b.Upon termination of this Agreement the Company shall have no further obligations under this Agreement after the termination date.   “Disability” means the inability of the Consultant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
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EXECUTION VERSION

5.Representations, Warranties and Covenants of Consultant.
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a.Consultant represents, warrants and covenants to the Company that during the Company’s retention of Consultant, (i) he will comply with the provisions of Sections 6 and 7 of this Agreement and (ii) Consultant has not entered into, and agrees not to enter into, any oral or written agreement in conflict herewith.
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b.Consultant covenants to the Company that during the Company’s retention of Consultant (i) he agrees to continue to be bound by the Company’s Code of Business Conduct and Ethics as currently in effect and as the same may be amended, revised, supplemented or replaced from time to time; and (ii) he will not, directly or indirectly recruit, solicit or induce, or attempt to induce, any employee, consultant or vendor of the Company or its affiliates to terminate employment or any other relationship with the Company or its affiliates, as the case may be.
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6.Confidential Information/Trade Secrets.
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Consultant acknowledges and agrees that the confidentiality provisions of Section 8 of the Employment Agreement between Consultant and the Company dated April 18,  2017 (the “Employment Agreement”) shall continue in effect during the term of this Agreement  and for one year hereafter and shall apply to any Confidential Information (as defined in the Employment Agreement) imparted to or learned by Consultant during his service as a Consultant pursuant to the Post-Termination Agreement between Consultant and the Company dated as of May 24, 2018, as amended, and this Agreement.
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7.Work Made for Hire. Consultant’s services hereunder are work for hire and Consultant hereby grants, conveys and assigns to the Company all rights, title and interest in all inventions, improvements, and Consultant’s discoveries arising out of or in connection with Consultant’s services hereunder, unless otherwise released by the Company.  All such inventions, improvements and discoveries will be deemed Confidential Information.
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GENERAL PROVISIONS
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8.Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and each of their respective successors, heirs and permitted assigns.  This Agreement is personal to Consultant and neither this Agreement nor any rights hereunder may be assigned by Consultant.  No rights, obligations or duties of the Company under this Agreement may be assigned or transferred by the Company, except that such rights, obligations or duties may be assigned and transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or pursuant to a sale of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company contained in this Agreement, whether contractually or as a matter of operation of law.
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9.Choice of Law. This Agreement shall be governed by, construed and enforced in accordance with the internal laws of the State of Illinois.
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EXECUTION VERSION

10.Severability. In the event any provision of this Agreement is held to be invalid, illegal or unenforceable for any reason and in any respect, such invalidity, illegality or unenforceability shall in no event affect, prejudice or disturb the validity of the remainder of this Agreement, which shall be and remain in full force and effect, enforceable in accordance with its terms.
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11.Survival; Parties Bound. All covenants, representations, obligations, warranties and agreements of the parties shall be binding upon their respective successors and permitted assigns.
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12.No Waiver. The waiver by either party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to constitute, a waiver of any subsequent breach of the same or other provision hereof.
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13.Amendment. No changes in or additions to this Agreement shall be recognized unless and until made in writing and signed by both parties.
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14.Notice. Any notice to either party to this Agreement shall be in writing and shall be deemed to be sufficiently given, for all purposes, if the same shall be personally delivered to such party or sent via email (in the case of the Company) Attention: General Counsel, and (in the case of Consultant) his principal residence address as reflected in the Company’s records as of the date of this Agreement.  Either party may change the address to which notices are to be sent to such party by providing written notice of such new address to the other party hereto.  Notices shall be deemed given when received if delivered personally or three (3) days after mailing in accordance with this Section.
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15.Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.  Delivery of copies of an executed document (including by electronic PDF or similar files, DocuSign or other e-signature method) shall be deemed a valid delivery of an executed Agreement.
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(Signature Page follows)
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EXECUTION VERSION

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
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	COMPANY:

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	AAR CORP.

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	By:
	/s/ John M. Holmes

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	John M. Holmes, Chief Executive Officer and

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	President

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	CONSULTANT:

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	/s/ David P. Storch

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	David P. Storch, individually

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5Exhibit 10.3
Fiscal 2023 Form
AAR CORP.
Non-Qualified Stock Option Agreement
(“Agreement”)
Subject to the provisions set forth herein and the terms and conditions of the AAR CORP. 2013 Stock Plan and the Long-Term Incentive Plan for Fiscal 2023 (together, the “Plan”), the terms of which are hereby incorporated by reference, and in consideration of the agreements of the Grantee herein provided, AAR CORP., a Delaware corporation (“Company”), hereby grants to the Grantee an option, effective July 18, 2022  (“Date of Grant”) entitling the Grantee to purchase from the Company common stock of the Company, par value $1.00 per share (“Common Stock”), at an exercise price of $41.88 per share, and in the number of shares set forth in the Company’s notification of option grant letter to the Grantee and incorporated herein by reference (“Option”), subject to the terms and conditions set forth herein:
1.Acceptance by Grantee.  The exercise of the Option is conditioned upon the acceptance by the Grantee of the terms and conditions of the Option as set forth in this Agreement.  The Grantee must confirm acceptance of the Option and this Agreement on Morgan Stanley’s web site (www.stockplanconnect.com).  If the Grantee does not accept the Option and this Agreement within 30 days from the date of the notification of the Option, the Option grant referenced herein shall expire unless the acceptance date is extended in writing signed by the Company.
2.Vesting Provisions.  Subject to the provisions of paragraph 3 below, the Option shall vest 331⁄3% on each of July 31, 2023, July 31, 2024 and July 31, 2025, except as follows:
(a)In General.  If the Grantee’s employment with the Company and all Subsidiaries of the Company is terminated for any reason other than for Retirement, death, Disability or Cause, the unvested portion of the Grantee’s Option shall expire on the date of such termination of employment and the vested portion of the Grantee’s Option shall continue to be exercisable until the earlier of (i) three months after such termination of employment or (ii) the date the Option expires in accordance with its terms.
(b)Retirement.  If the Grantee’s employment with the Company and all Subsidiaries of the Company is terminated by reason of Retirement, the Option shall continue to vest and become exercisable in accordance with its terms and may be exercised by the retired Grantee in the same manner and to the same extent as if the Grantee had continued employment during that period; provided, however, that (i) if the Grantee dies within three months following Retirement but before the Option expires, paragraph 2(c)(ii) shall apply and (ii) if the Grantee dies later than three months following Retirement but before the Option expires, the then unvested portion of the Option shall expire on the date of such death and the vested portion of the Option shall continue to be exercisable by the Grantee’s Successor until the date that the Option expires by its terms.  For this purpose, “Retirement” means the Grantee’s voluntary termination of employment, or his termination of employment by the Company or a Subsidiary without Cause, when he has (i) attained age 65 or (ii) attained age 55 and his age plus the number of his consecutive years of service with the Company and Subsidiaries is at least 75.
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(c)Death.  If (i) the Grantee’s employment with the Company and all Subsidiaries of the Company is terminated by reason of death or (ii) the Grantee dies within three months after the termination of employment with the Company and all Subsidiaries for reasons other than Cause, the unvested portion of the Option shall expire on the date of such death and the vested portion of the Option shall continue to be exercisable until the earlier of (i) one year after the Grantee’s death or (ii) the date the Option expires in accordance with its terms.
(d)Disability.  If the Grantee’s employment with the Company and all Subsidiaries is terminated by reason of Disability, the Option shall continue to vest and become exercisable until the earlier of (i) one year after such termination of employment or (ii) the date the Option expires in accordance with its terms, and during such period the Option may be exercised by the disabled Grantee; provided, however, that if the Grantee dies after termination of employment but prior to the date the Option expires, the unvested portion of the Option shall expire on the date of such death and the vested portion of the Option shall continue to be exercisable as described herein.  For this purpose, “Disability” means the inability of the Grantee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
(e)Cause.  If the Grantee’s employment is terminated by the Company or any Subsidiary of the Company for Cause, the Option shall expire immediately upon such termination of employment and no portion of the Option shall be exercisable thereafter.  For this purpose, “Cause” means (i) the Grantee’s dishonesty, fraud or breach of trust, gross negligence or substantial misconduct in the performance of, or substantial nonperformance of, his assigned duties or willful violation of Company policy, (ii) any act or omission by the Grantee that is a substantial cause for a regulatory body with jurisdiction over the Company to request or recommend the suspension or removal of the participant or to impose sanctions upon the Company or the Grantee, or (iii) a material breach by the Grantee of any applicable employment agreement between him and the Company.  The Company shall have the sole discretion to determine whether a Grantee’s termination of employment is for Cause.
(f)Restrictive Covenant.  If at any time prior to the expiration of the Option, the Grantee, without the Company’s express written consent, directly or indirectly, alone or as a member of a partnership, group or joint stock venture or as an employee, officer, director, or greater than 1% stockholder of any corporation, or in any capacity engages in any activity which is competitive with any of the businesses conducted by the Company or its affiliated companies any time during the Grantee’s term of employment, (i) the Option shall immediately expire and become unexercisable, (ii) the Grantee shall forfeit and return all shares of Common Stock acquired and then held by the Grantee pursuant to the exercise of any portion of this Option, and (iii) the Grantee shall immediately pay to the Company an amount equal to the appreciation realized on any shares of Common Stock acquired and sold or otherwise disposed of in connection with the exercise of this Option, as of the date sold.
3.Change in Control.  In the event a Change in Control occurs, and within two years following such Change in Control, either the Grantee’s employment is terminated by the Company or a Subsidiary of the Company without Cause, or the Grantee terminates his employment with the Company and all Subsidiaries for Good Reason, then notwithstanding any
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AAR NQ Stock Option Agreement
FY2023

conditions or restrictions contained in this Agreement, the outstanding Option shall become immediately exercisable on the date of such termination of employment with respect to all shares of Common Stock covered thereby, whether vested or not and shall remain exercisable until the Option expires.  For this purpose, (a) “Cause” shall have the meaning set forth in Section 2(e) above and (b) “Good Reason” means (i) a material reduction in the nature or scope of the Grantee’s duties, responsibilities, authority, power or functions from those enjoyed by the Grantee immediately prior to the Change in Control, or a material reduction in the Grantee’s compensation (including benefits), occurring at any time during the two-year period immediately after the Change in Control, or (ii) a relocation of the Grantee’s primary place of employment of at least 100 miles.
4.Change in Outstanding Shares.  Any increase or decrease in the number of outstanding shares of Common Stock of the Company occurring through stock splits, stock dividends, stock consolidations, spin-offs, other distributions of assets to stockholders or assumption or conversion of outstanding Options due to an acquisition after the Date of Grant of the Option shall be reflected proportionately in the number of shares of Common Stock subject to the Option, and a proportionate reduction or increase, as applicable, shall be made in the Option Price Per Share hereunder. Any fractional shares resulting from such adjustment shall be eliminated. If changes in capitalization other than those considered above shall occur, the Board shall make such adjustment in the number or class of shares purchasable upon exercise of the Option and in the Option Price Per Share as the Board in its discretion may consider appropriate, and all such adjustments shall be conclusive upon all persons.
5.Exercise of Option.  Notice of an election to exercise any portion of the Option, specifying the portion thereof being exercised and the exercise date, shall be given by the Grantee, or the Grantee’s personal representative in the event of the Grantee’s death or Disability necessitating a Court approved personal representative, by notifying Morgan Stanley pursuant to the on-line exercise procedures set forth on the AAR 2013 Stock Benefit Plan online exercise web site (www.stockplanconnect.com).
6.Payment of Exercise Price and Withholding.  Upon any exercise of the Option, an amount necessary to pay the exercise price and to satisfy applicable tax withholding requirements, including those arising under federal, state and local income tax laws, will be due and payable at the time of exercise prior to the issuance of any shares of Common Stock pursuant to such exercise.  The Grantee may pay the exercise price and satisfy the minimum withholding requirements by one or more of the following methods:  (a) in cash, (b) in cash received from a broker-dealer to whom the Grantee has submitted an exercise notice and irrevocable instructions to deliver the purchase price and amount of tax withholding to the Company from the proceeds of the sale of shares of Common Stock subject to the Option, (c) by delivery to the Company of other Common Stock owned by the Grantee that is acceptable to the Company, valued at its fair market value on the date of exercise, (d) by certifying to ownership by attestation of such previously owned Common Stock, or (e) by having shares withheld from the Common Stock otherwise distributable to the Grantee upon exercise of the Option. A Grantee’s election pursuant to the preceding sentence must be made at the time of exercise of such Option and must be irrevocable.  Payment shall be made pursuant to the online procedures set forth on the AAR 2013 Stock Benefit Plan online website through Morgan Stanley (www.stockplanconnect.com).
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AAR NQ Stock Option Agreement
FY2023

7.Option Not Transferable.  The Option may be exercised only by the Grantee during the Grantee’s lifetime and may not be transferred other than by will, the applicable laws of descent or distribution, or an assignment subject to and meeting the requirements of the Plan and made in accordance with Company procedures in effect from time to time for approval by the Company and consummation of the assignment (copies of procedures and forms are available from the Corporate Secretary upon request). The Option shall not otherwise be transferred, assigned, pledged or hypothecated for any purpose whatsoever and is not subject, in whole or in part, to execution, attachment, or similar process. Any attempted assignment, transfer, pledge or hypothecation or other disposition of the Option, other than in accordance with the terms set forth herein, shall be void and of no effect.
8.No Rights as a Stockholder.  Neither the Grantee nor any other person entitled to exercise the Option under the terms hereof shall be, or have any of the rights or privileges of, a stockholder of the Company in respect of any of the shares of Common Stock issuable on exercise of the Option, unless and until such shares shall have been actually issued.
9.Recoupment.  Notwithstanding any other provision of this Agreement, to the extent required by applicable law, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, or pursuant to the Company’s policy as may be in effect, the Company shall have the right to seek recoupment of all or any portion of an Option (including by forfeiture of the then outstanding and unexercised portion of the Option (whether vested or unvested) or by the Grantee’s remittance to the Company of Common Stock acquired on exercise of the Option or of a cash payment for the value thereof).  The value with respect to which such recoupment is sought shall be determined by the Company.  The Company shall be entitled, as permitted by applicable law, to deduct the amount of such payment from any amounts the Company may owe to the Grantee.
10.Miscellaneous.
(a)In the event the Option shall be exercised in whole or in part, the number of Shares of Common Stock subject to the Option shall be reduced accordingly.
(b)When the Option expires, such expiration shall occur at the Company’s close of business on the date of expiration.
(c)The Option shall be exercised only in accordance with such Company administrative procedures as may be in effect from time to time.
(d)The Option and this Agreement shall be construed, administered and governed in all respects under and by the laws of the State of Illinois.
(e)Capitalized terms used herein and not defined herein will have the meanings set forth in the Plan or the notification of grant letter.
(f)Nothing in the Option shall confer on the Grantee any right to be or to continue in the employ of the Company or any of its Subsidiaries or shall interfere in any way with the right of the Company or any of its Subsidiaries to terminate the employment of the Grantee at any time for any reason or no reason.
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AAR NQ Stock Option Agreement
FY2023

(g)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.
(h)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; provided, however, that this Agreement, including paragraph 2, shall be subject to the provisions of any written employment or severance agreement that has been or may be executed by the Grantee and the Company, and the provisions in such employment or severance agreement concerning the Option shall supercede any inconsistent or contrary provision of this Agreement.  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.
(i)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 General Counsel: 630/227-2060; fax 630/227-2058.

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AAR NQ Stock Option Agreement
FY2023

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