AMENDMENT NO. 1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amendment ("Amendment"), dated as of November 12, 1998 is
between BE Aerospace, Inc., a Delaware corporation (the "Company"), and Xxxxxx
X. XxXxxxxxx ("the Executive"). The parties agree as follows:
1. Reference to Agreement: Definitions. Reference is made to
an Employment Agreement dated as of May 29, 1998, between the Company
and the Executive (the "Agreement"). Terms defined in the Agreement and
not otherwise defined herein are used herein with the meanings so
defined.
2. Amendments to Agreement. The Agreement is amended as
follows, effective upon the date first written above:
2.1 Amendment to Section 5(e). Section 5(e) of the
Agreement is amended by adding a new paragraph (vi) as
follows:
"(vi) pay the amount of any Gross-Up Payment
payable (as defined below) by the Company to the
Executive under Section 5(h) hereof."
2.3 Amendment to Section 5. Section 5 of the
Agreement is amended by adding a new paragraph 5(h) as
follows:
"(h) Certain Additional Payments by the
Company.
(i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
payment, distribution or other action by the Company to or for
the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise (including without limitation any
additional payments required under this Section 5(h)) (a
"Payment") would be subject to an excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), or any interest or penalties are incurred by the
Executive with respect to any such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), the
Company shall make a payment to the Executive (a "Gross-Up
Payment") in an amount such that after payment by the
Executive of all taxes (including any Excise Tax) imposed upon
the Gross-Up Payment, the Executive retains (or has had paid
to the Internal Revenue Service on his behalf) an amount of
the Gross-Up Payment equal to the sum of (x) the Excise Tax
imposed upon the Payments and (y) the product of any
deductions disallowed because of the inclusion of the Gross-Up
Payment in the Executive's adjusted gross income and the
highest applicable marginal rate of
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federal income taxation for the calendar year in which the
Gross-Up Payment is to be made. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be
deemed to (i) pay federal income taxes at the highest marginal
rates of federal income taxation for the calendar year in
which the Gross-Up Payment is to be made, and (ii) pay
applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the
Gross-Up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction
of such state and local taxes.
(ii) Subject to the provisions of paragraph (iii) of
this Section 5(h), all determinations required to be made
under this Section 5(h), including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such
determination, shall be made by Deloitte & Touche LLP (the
"Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested
by the Company. In the even that the Accounting Firm is
serving as accountant or auditor for the individual, entity or
group effecting the Change of Control, the Executive appoint
another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment, as determined pursuant
to this Section 5(h), shall be paid by the Company to the
Executive within five days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, it shall furnish
the Executive with a written opinion that failure to report
the Excise Tax on the Executive's applicable federal income
tax return would not result in the imposition of a negligence
or similar penalty. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should
have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that
the Company exhausts its remedies pursuant to Section 5(h) and
the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of
the Executive.
(iii) The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the
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Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but not later than ten business
days after the Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(A) give the Company any information
reasonably requested by the Company relating to such
claim,
(B) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation
with respect to such claim by an attorney reasonably
selected by the Company,
(C) cooperate with the Company in good faith
in order effectively to contest such claim, and
(D) permit the Company to participate in any
proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly
all costs and expenses (including additional interest
and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax
or income tax (including interest and penalties with
respect thereto) imposed as a result of such
representation and payment of costs and expenses.
Without limitation on the foregoing provisions of
this Section 5(h)(iii), the Company shall control all
proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and
all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a
refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such
contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall
determine; provided, however, that if the Company
directs the Executive to pay such claim and xxx for a
refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless,
on an after-tax basis, from any Excise Tax or income
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tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such
advance; and further provided that any extension of
the statute of limitations relating to payment of
taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to
be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest
shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the
Internal Revenue Service or any other taxing
authority.
(iv) If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 5(h)(iii),
the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section
5(h)(iii)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to
Section 5(h)(iii), a determination is made that the Executive
shall not be entitled to any refund with respect to such claim
and the Company does not notify the Executive in writing of
its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be
paid.
3. Miscellaneous. Except as amended by this Amendment, all
terms and conditions of the Agreement shall remain in full force and
effect. This Amendment may be executed in any number of counterparts
which together shall constitute one instrument, shall be governed by
and construed in accordance with the laws (other than the conflict of
laws rules) of the State of Florida and shall bind and inure to the
benefit of the parties hereto and their respective successors, assigns
and heirs.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands, as of the date first written above.
XXXXXX X. XxXXXXXXX
/S/ Xxxxxx X. XxXxxxxxx
BE AEROSPACE, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Vice Chairman of the Board and
Chief Executive Officer
