Document:

Exhibit 10.11

 

2010 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. Stock Benefit Plan and the Long-Term Incentive Plan for Fiscal
20     (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 entitling the Grantee to purchase from the
Company common stock of the Company, par value $1.00 per share (“Common Stock”),
in the number of shares at the purchase price per share, and on the schedule,
set forth in the Company’s notification of option grant letter to the Grantee
dated
                    
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 Smith Barney’s web
site (www.benefitaccess.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.             Termination of Employment.

 

(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 3(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.

 

(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 until the Option
expires 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.

 

2

 

3.             Change in Control.  In the event a Change in Control occurs,
whether or not such Change in Control has the prior written approval of a
majority of the Continuing Directors, and notwithstanding any conditions or
restrictions contained in this Agreement, the outstanding Option shall become
immediately exercisable on the date of such Change in Control with respect to
all shares of Common Stock covered thereby, whether vested or not and shall
remain exercisable until the Option expires.

 

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 Smith Barney pursuant to the
on-line exercise procedures set forth on the AAR Stock Benefit Plan online
exercise web site (www.benefitaccess.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: 
(i) in cash, (ii) 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, (iii) 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, (iv) by certifying to ownership by attestation of such
previously owned Common Stock, or (v) 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

 

3

 

irrevocable.  Payment shall be made pursuant to the online
procedures set forth on the AAR Stock Benefit Plan online website through Smith
Barney (www.benefitaccess.com).

 

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 Section 11 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.             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.

 

4

 

(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. 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: 630/227-2050; fax 630/227-2059.

 

**************

 

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

 

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

 

Step 2:    Read and review
the documentation.

 

Step 3:    Confirm the
review/acceptance of your Option and this Agreement.

 

Step 4:    Receive an
online confirmation of your acceptance.

 

5Exhibit 10.12

 

2010
Form

 

AAR
CORP.

 

Restricted Stock Agreement

(“Agreement”)

 

Subject to the provisions of the AAR CORP. Stock Benefit Plan and the
Long-Term Incentive Plan for Fiscal 20     (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 Grantee a restricted stock award (“Award”),
effective     , 20       (“Date
of Award”), for 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 grant letter to the Grantee dated
    , 20     and incorporated herein by
reference, subject to the forfeiture and nontransferability provisions hereof
and the other terms and conditions set forth herein:

 

1.         Acceptance by
Grantee.  The Award is
conditioned upon the acceptance by the Grantee of the terms and conditions of
the Award as set forth in this Agreement. 
The Grantee must confirm acceptance of the Award and this Agreement on
Smith Barney’s web site (www.benefitaccess.com).  If the Grantee does not accept the Award and
this Agreement within 30 days from the date of the notification of the Award,
the Award referenced herein shall expire unless the acceptance date is extended
in writing by the Company.

 

2.         Restrictions.  The Grantee represents that he is accepting
the Award Shares without a view to the 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 on the date
restrictions applicable to such Award Shares are released pursuant to this
Agreement (“Restrictive Period”).

 

3.         Release of
Restrictions.  Subject to
the provisions of paragraph 4 below, the restrictions described in paragraph 2
above shall be released with respect to 50% of the Award Shares on May 31,
20     and 50% of the Award Shares on May 31,
20    , except as follows:

 

(a)           In General.  If the Grantee’s employment with the Company
and all subsidiaries of 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 to the Company all Award Shares not previously
released from the restrictions of paragraph 2 hereof.

 

(b)           Retirement.  If the Grantee’s employment with the Company
and all subsidiaries of the Company terminates 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 in the
first clause of this paragraph 3 as to all Award Shares not  previously released; provided, however, that
if the Grantee dies after Retirement and prior to the last day of the
Restrictive Period, the Grantee’s date of death will be treated as the  date on which

 

 

his
employment with the Company and all subsidiaries of the Company has  terminated, 
and the provisions of paragraph 3(c) shall apply in determining
the  release of restrictions as to the
Award Shares not previously released. 
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 (as defined in the Plan), 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.

 

(c)           Death
or Disability.

 

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

 

(ii)       If the Grantee’s employment
with the Company and all subsidiaries of the Company terminates by reason of
death or Disability after the fourth anniversary of the Date of Award, the
Restrictive Period shall terminate as to all Award Shares not previously
released.

 

(d)           Restrictive
Covenant.  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
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 at any time during the Grantee’s term of
employment, the Grantee shall forfeit to the Company all Award Shares not
previously released from the restrictions of paragraph 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.

 

2

 

6.         Rights of
Grantee.  As the holder of the Award
Shares, the 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, the Grantee will be required to execute a stock power in favor of
the Company, which will be cancelled upon release of restrictions with respect
to Award Shares released.  Award Shares
shall be held by the Company in electronic book entry form on the records of
the Company’s Transfer Agent, together with the executed stock power, for the
account of the Grantee until such restrictions are released pursuant to the
terms hereof, or such Award Shares are forfeited to the Company as provided by
the Plan or this Agreement.  The Grantee
shall be entitled to the Award Shares as to which such restrictions have been
released, and the Company agrees to issue such Award Shares in electronic form
on the records of the Transfer Agent. 
Upon request by the Grantee, the Transfer Agent will transfer such
released Award 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.  The Grantee shall pay to the Company
an amount sufficient to satisfy all minimum tax withholding requirements,
including those arising under federal, state and local income tax laws, prior
to the delivery of any Award Shares. 
Payment of the minimum withholding requirement may be made by one or
more of the following methods:  (i) in
cash, (ii) in cash received from a broker-dealer to whom the Grantee has
submitted irrevocable instructions to deliver the amount of withholding tax to
the Company from the proceeds of the sale of shares of Common Stock subject to
the Award, (iii) 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 payment, (iv) by certifying to ownership by attestation of
such previously owned Common Stock, or (v) by having shares of Common
Stock withheld from the Award Shares otherwise distributable to the
Grantee.  Payment shall be made pursuant
to the on-line procedures set forth on the AAR Stock Benefit Plan online web
site through Smith Barney (www.benefitacess.com).

 

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

 

3

 

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 Award and
this Agreement shall be construed, administered and governed in all respects
under and by the laws of the State of Illinois.

 

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

 

(c)         Nothing in the
Award 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.

 

(d)         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.

 

(e)         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.

 

4

 

(f)          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: 
630/227-2050; fax 630/227-2059.

 

***************

 

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 and
review/acceptance of your Award and this Agreement.

 

Step 4:    Receive an
online confirmation of your acceptance.

 

5

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