Exhibit 10.23
AAR
CORP.
NON-EMPLOYEE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
(“Agreement”)
1.
Subject to the provisions set forth herein and the terms and
conditions of the AAR CORP. Stock Benefit Plan
(“Plan”), the terms of which are hereby incorporated by
reference, and in consideration of the agreements of
«Name» (“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 $1.00 per
share (“Common Stock”), in the number of shares at the
purchase price per share, and on the schedule, set forth below
(“Option”).
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Number of
Shares
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Subject to Option:
(subject to adjustment pursuant to the terms of this
Agreement.)
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3,500
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Option Price Per
Share:
(subject to adjustment pursuant to the terms of this
Agreement.)
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$
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«Price»
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Date of Grant:
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«Date»
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Option
Vesting Schedule :
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Number of Shares Becoming
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Date First
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Subject to Exercise
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Exercisable
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First 875 shares of Grant
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«IncrDate1»
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Second 875 shares of Grant
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«IncrDate2»
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Third 875 shares of Grant
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«IncrDate3»
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Fourth 875 shares of Grant
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«IncrDate4»
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Each of the above option
increments shall expire on «Expiry» (“Expiration
Date” of the Option) or upon the earlier expiration of the
Option as provided in this Agreement.
In the event
the Grantee’s membership on the Board terminates within one
year following a Change in Control 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 Option shall become
immediately exercisable on the date of such termination with
respect to all shares of Common Stock covered thereby, whether
vested or not, and not previously purchased upon exercise of the
Option and shall remain so exercisable until the Option expires as
provided in paragraph 1 or 3 herein.
For purposes
of this Agreement, the following terms have the meaning set forth
below:
(a)
“Permitted
Assignment” means an assignment in writing approved by the
Company, and otherwise meeting the requirements of the Plan
document, of all or any portion of this award to (i)
Grantee’s spouse or lineal descendent(s), (ii) the trustee of
a trust for the primary benefit of Grantee’s spouse or lineal
descendent(s), (iii) a partnership of which the Grantee’s
spouse or lineal descendent(s) are the only partners, or (iv) a tax
exempt organization as defined in Section 501(c)(3) of the Internal
Revenue Code, for which the Grantee does not receive any
consideration.
(b)
“Retirement”
means the voluntary termination of membership on the Board at or
after age 65 with not less than five (5) consecutive years of
service as a non-employee director of the Company.
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2.
The exercise
of the Option is conditioned upon the acceptance by the Grantee of
the terms hereof as evidenced by the Grantee’s execution of
this Agreement and return of an executed copy to the Secretary of
the Company within thirty (30) days from the date of the cover
letter from the Secretary transmitting original copies to the
Grantee for execution.
3.
(a)
If the
Grantee’s service on the Board is terminated for any reason,
other than for Retirement, death or Disability, the Option of
Grantee shall terminate on the earlier to occur of (i) three months
after termination of service on the Board or (ii) the date that the
Option expires in accordance with its terms.
(b)
If the
Grantee’s service on the Board is terminated by reason of
Retirement, the Option shall remain exercisable by the retired
Grantee until the Option expires by its terms and may be exercised
by the retired Grantee in the same manner and to the same extent as
if he had continued service on the Board during that period;
provided, however, that if the Grantee dies before the Option
expires, the Option shall be exercisable only by the Successor of
the deceased Grantee (as defined in the Plan) to the extent that
the deceased Grantee was entitled at the date of the
Grantee’s death.
(c)
If (i) the
Grantee’s service on the Board is terminated by reason of
death or (ii) the Grantee dies within three months after the
termination of his service on the Board, the Option shall expire on
the earlier to occur of one year after Grantee’s death or the
Expiration Date of the Option; provided, however, that during such
period, the Option shall be exercisable only by the Successor of
the deceased Grantee to
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the extent, if any, that
the deceased Grantee was entitled at the date of the
Grantee’s death.
(d)
If the
Grantee’s service on the Board is terminated by reason of
Disability, the Option shall expire on the earlier to occur of one
year after termination of service on the Board or the date the
Option expires in accordance with its terms, and during said period
the Option may be exercised by the disabled Grantee with respect to
the same number of shares, in the same manner and to the same
extent as if the Grantee had continued service on the Board during
such period.
(e)
If at any time
prior to expiration of this 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 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 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 1 hereof.
4.
Written 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 delivering such notice to the Secretary of the Company,
accompanying such notice with (i) payment in full of the purchase
price of any shares to be purchased, which may be made in cash, or
in
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the form of a certified
check or a cashier’s check issued by a federally insured bank
or federally insured savings and loan association
