EMPLOYMENT AGREEMENT
Exhibit 10.36
This Employment Agreement (this
"Agreement")
is
made as of this 17th day
of October, 2008, by and between BE Aerospace, Inc., a Delaware corporation (the
"Company")
and Xxxx X. Patch (the
"Executive").
RECITALS
WHEREAS,
the Company wishes to employ the Executive and the Executive wishes to accept
such employment on the terms and conditions hereafter set forth;
and
WHEREAS,
the Company wishes to make secure for itself the experience, abilities and
services of the Executive and to prevent the loss of such experience, services
and abilities; and
WHEREAS,
the Executive has successfully completed drug/substance abuse testing, and the
Company has received the results of such testing;
NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto, each intending to be legally
bound, do hereby agree as follows:
1.
Employment. The
Company shall employ the Executive, and the Executive shall perform services for
and continue in the employment of the Company, for an initial period of three
(3) years commencing on December 22, 2008 and ending on December 21, 2011, provided, however, that the
Executive's employment hereunder shall automatically be extended from year to
year for additional one (1) year periods on and after December 22, 2011, until
either the Company or the Executive gives the other party at least six (6)
months written notice prior to the then-applicable "Expiration Date" (as
hereinafter defined) of its or his desire to terminate this Agreement, unless
the Executive's employment is terminated earlier pursuant to this Agreement. For
purposes of this Agreement (i) the term "Employment
Term" shall mean the initial three (3) year period and all automatic one
(1) year extensions thereof, and (ii) the term "Expiration
Date" shall mean December 21st of either
calendar year 2011 or any subsequent calendar year if the Employment Term is
extended on and after December 22, 2011.
2.
Position and Duties.
The Executive shall serve the Company in the capacity of Vice President-Law,
shall be accountable to, and shall have such other powers, duties and
responsibilities, consistent with this capacity, as may from time to time be
prescribed by the Senior Vice President and Chief Financial Officer of the
Company, or his designee. Effective as of July 1, 2009 the Executive shall serve
in the additional capacity of General Counsel and Corporate Secretary. The
Executive shall perform and discharge, faithfully, diligently and to the best of
his ability, such powers, duties and responsibilities. The Executive shall
devote all of his working time and efforts to the business and affairs of the
Company. The Executive's office shall be located in Wellington, FL or such other
location within a thirty (30) mile radius as determined by the Company at its
discretion.
3.
Compensation.
(a) Salary. During the
Employment Term, the Executive shall receive a salary (the "Salary")
payable at the rate of $365,000 per annum. Such rate shall be subject to
adjustment from time to time by the Compensation Committee of the Board of
Directors (the "Compensation
Committee"); provided, however, that it
shall at no time be adjusted below the Salary then in effect. The Salary shall
be payable biweekly or in accordance with the Company's current payroll
practices, less all required deductions. The Salary shall be pro-rated for any
period of service less than a full year.
(b) Incentive Bonus.
During the Employment Term, the Executive may receive an incentive bonus of up
to 80% of the Salary for each fiscal year or portion thereof during which the
Executive has been employed hereunder, in accordance with the executive bonus
plan then in effect, as determined by the Compensation Committee in its sole
discretion at the end of the applicable fiscal year. The incentive bonus shall
be paid in accordance with Company policy, but in any event, no later than March
15th of
the year following the year in which it shall accrue.
(c) Expenses. During the
Employment Term, the Executive shall be entitled to receive prompt reimbursement
for all reasonable business expenses incurred by him on behalf of the Company in
accordance with the Company's policies in effect from time to time.
(d) Benefits.
(i) During
the Employment Term, the Executive shall be entitled to participate in or
receive benefits under any life or disability insurance, health, pension,
retirement, accident, and other employee benefit plans, programs and
arrangements made generally available by the Company to its executives, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements as in effect from time to time. In
accordance with the Company policies as in effect from time to time, the
Executive shall also be entitled to paid vacation in any fiscal year during the
Employment Term as well as all paid holidays given by the Company to its
employees.
(ii) In
addition, upon the Executive's Separation from Service due to his death or
Incapacity (as defined below), the Executive and his eligible dependents shall
be entitled, on similar terms and conditions as active executives, to
participate in all medical, dental and health benefit plans available to the
Company's executive officers from the Termination Date (as defined below) until
the second (2nd) anniversary
of the Termination Date. To the extent that reimbursable medical and dental care
expenses constitute deferred compensation for purposes of Section 409A of the
Code, the Company shall reimburse the medical and dental care expenses as soon
as practicable consistent with the Company's practice, but in no event later
than the last day of the calendar year next following the calendar year in which
such expenses are incurred.
(e) Automobile. Without
limiting the generality of the foregoing, during the Employment Period, the
Executive shall be furnished with an automobile allowance (the "Automobile
Allowance") of $1,100 per month less applicable taxes payable in
accordance with Company policy; but in no event later than March 15th of the year
following the year in which it will accrue.
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(f) Equity Compensation.
So long as employed, Executive shall be entitled to participate in any
applicable equity compensation program in effect from time to time.
Notwithstanding any provision in the applicable award documents, the Executive's
equity awards will immediately become fully vested and unrestricted and, to the
extent applicable, be settled within thirty (30) days following (i) the
Termination Date (as defined below) in the event of the termination of the
Executive's employment by the Company without Cause or due to the Executive's
death or Incapacity or (ii) upon a Change of Control (as defined
below).
4.
Termination and Compensation
Thereon.
(a) Termination. Subject
to the terms and conditions of this Agreement, the Executive's employment
pursuant to this Agreement may be terminated either by the Executive or the
Company at any time and for any reason. The term "Termination
Date" shall mean the earlier of (i) the Expiration Date; or (ii) if the
Executive's employment is terminated (x) by his death, the date of his death or
(y) for any other reason, the date on which such termination is to be effective
pursuant to the notice of termination given by the party terminating the
employment relationship.
(b) Death. The
Executive's employment hereunder shall terminate upon his death. In such event,
the Company shall, within thirty (30) days following the date of death, pay to
such person as the Executive shall have designated in a notice filed with the
Company, or, if no such person shall have been designated, to his estate, a lump
sum amount equal to:
(i) any
accrued and unpaid Salary through the Termination Date;
(ii) any
bonuses declared to be payable to Executive for any fiscal periods of the
Company prior to the Termination Date;
(iii) the
Salary and Automobile Allowance (at the rate in effect as of the Termination
Date) payable during the period from the Termination Date through the Expiration
Date.
(c) Incapacity. If, in
the reasonable judgment of the Compensation Committee as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from his full-time duties as described hereunder for the entire
period of six (6) consecutive months ("Incapacity"),
the Executive's employment shall terminate at the end of the six
(6)-month period, In such event, upon the Termination Date, the Company shall
pay to the Executive a lump sum payment equal to:
(i) any
accrued and unpaid Salary through the Termination Date;
(ii)
any bonuses declared to be payable to Executive for any fiscal periods of the
Company prior to the Termination Date; and
(iii)
the Salary and Automobile Allowance (at the rate in effect as of the Termination
Date) payable during the period from the Termination Date through the Expiration
Date.
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The lump
sum payment shall be made on the date that is six months and one day following
the Termination Date provided that prior to the payment date the Executive signs
a waiver and release agreement in the form generally utilized by the Company and
such waiver and release becomes effective and irrevocable in its entirety. The
Company's obligation to pay the Executive his Salary and Automobile Allowance
shall terminate if the Executive subsequently takes other employment to the
extent of the Executive's salary and benefits from such other employment. Any
dispute between the Compensation Committee and the Executive with respect to the
Executive's Incapacity shall be settled by reference to a competent medical
authority mutually agreed to by the Compensation Committee and the Executive,
whose decision shall be binding on all parties.
(d) Termination for Cause;
Voluntary Resignation.
(i) If the
Company terminates the Executive's employment for Cause or the Executive resigns
his employment for any reason (other than pursuant to Section 4(f)), the Company
shall have no further obligations to the Executive hereunder after the
Termination Date, except for unpaid Salary and benefits accrued through the
Termination Date.
(ii) For
purposes of the Agreement, "Cause"
shall mean (i) after receipt of written notice of such Cause and
reasonable opportunity to cure, the Executive's material failure, refusal or
neglect to perform and discharge his powers, duties and responsibilities
hereunder (including duties prescribed by the Compensation Committee pursuant to
Section 2 above), other material breach of the terms hereof, or breach of any
fiduciary duties Executive may have because of any position Executive holds with
the Company or any subsidiary or affiliate thereof; or (ii) the conviction of
Executive of a felony by a court of competent jurisdiction in a judgment which
has become final and non-appealable.
(e) Termination Without
Cause. The Company may terminate the Executive's employment hereunder at
any time without Cause upon six (6) months advance written notice to Executive
of such termination. In such event, upon the Termination Date, the Company shall
pay to the Executive a lump sum payment equal to:
(i)
any accrued and unpaid Salary through the Termination Date;
(ii)
any bonuses declared to be payable to Executive for any fiscal periods of the
Company prior to the Termination Date;
(iii)
the Salary payable during the period from the Termination Date through the
Expiration Date;
(iv)
one (1) times the Salary in effect as of the Termination Date, which sum amount
shall not be pro-rated and shall be paid in addition to the Salary due and
payable under (i) and (iii) above; and
(v)
a lump sum equal to his target incentive bonus for the year in which the
Termination Date occurs.
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The lump
sum payment shall be made on the date that is six months and one day following
the Termination Date provided that prior to the payment date the Executive signs
a waiver and release agreement in the form generally utilized by the Company and
such waiver and release becomes effective and irrevocable in its
entirety.
(f) Change of
Control.
(i) If a
"Change of Control" occurs during the Employment Period and following, or in
connection with, such Change of Control, the Executive's employment is
terminated by the Company without Cause, or the Executive resigns his employment
due to (i) a material adverse change in the Executive's position, location,
powers, duties or responsibilities under Section 2 above without his agreement,
or (ii) the elimination or reduction in any compensation or benefit payable or
otherwise extended to the Executive hereunder (including as set forth in Section
3 above), the Company or its successor in interest shall give prompt notice to
the Executive of any such termination, change, elimination or reduction and pay
to the Executive a lump sum payment equal to:
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a.
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any
accrued and unpaid Salary through the Termination
Date;
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b.
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any
bonuses declared to be payable to Executive for any fiscal periods of the
Company prior to the Termination
Date;
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c.
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a
lump sum amount equal to the Executive's Salary in effect as of the
Termination Date, which lump sum amount shall not be pro-rated and shall
be paid in addition to the Salary due and payable under (a) above and (d)
below;
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d.
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the
Salary and Automobile Allowance (in effect as of the date of the Change of
Control) payable during the period from the Termination Date through the
Expiration Date; and
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e.
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a
lump sum equal to his target incentive bonus for the year in which the
Termination Date occurs.
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The lump
sum payment shall be made on the date that is six months and one day following
the Termination Date provided that prior to the payment date the Executive signs
a waiver and release agreement in the form generally utilized by the Company and
such waiver and release becomes effective and irrevocable in its
entirety.
(ii) In
addition, the Company shall provide the Executive and his eligible dependents
with continued participation in medical, dental and health benefit plans
available to the Company's executive officers on similar terms and conditions as
active executives, from the Termination Date until the Expiration Date; provided, however, that the
continuation of such benefits shall be subject to the respective terms of the
applicable plan, as in effect from time to time, and the timely payment by the
Executive of his applicable share of the applicable premiums in effect from time
to time. To the extent that reimbursable medical and dental care expenses
constitute deferred compensation for purposes of Section 409A of the Code, the
Company shall reimburse the medical and dental care expenses as soon as
practicable consistent with the Company's practice, but in no event later than
the last day of the calendar year next following the calendar year in which such
expenses are incurred.
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(iii) For
purposes of the Agreement, a "Change of
Control" shall mean a "change in control event"
within the meaning of the default rules under Section 409A of the U.S.
Internal Revenue Code of 1986, as amended, and the regulations and guidance
promulgated thereunder (the "Code").
The obligations of the Company pursuant to this Section 4(f) shall
survive any termination of this Agreement or the Executive's employment or any
resignation of such employment by the Executive pursuant to this Section
4(f).
5. Amendments. No
amendment to this Agreement or any schedule hereto shall be effective unless it
shall be in writing and signed by each party hereto.
6.
Notices.
All notices and other communications hereunder shall be in writing and shall be
deemed given when delivered personally or sent by telecopy or three days after
being mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If
to the Company, to it at:
BE
Aerospace, Inc.
0000
Xxxxxxxxx Xxxxxx Xxx
Xxxxxxxxxx,
XX 00000
Attention:
Senior Vice President and Chief Financial Officer
with a
copy to:
BE
Aerospace, Inc.
0000
Xxxxxxxxx Xxxxxx Xxx Xxxxxxxxxx, XX 00000
Attention:
General Counsel
If
to the Executive, to him at:
Xxxx X.
Patch
00000
Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxxxx, XX 00000-0000
7.
Entire
Agreement. This Agreement, the Proprietary Rights Agreement attached
hereto as Exhibit
A, and the Letter of Employment Offer constitute the entire agreement
among the parties hereto pertaining to the subject matter hereof and supersede
all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties.
8. Headings. The
headings in this Agreement are for convenience of reference only and shall not
alter or otherwise affect the meaning hereof.
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9. Counterparts. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument.
10. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws (other
than the conflict of laws rules) of the State of Florida.
11.
Withholding.
All payments made by the Company under this Agreement shall be reduced by any
tax or other amounts required to be withheld by the Company under applicable
law.
12. Section
409A.
(a) If any
amounts that become due under Sections 3(f) or 4 of this Agreement constitute
"nonqualified deferred compensation" within the meaning of Section 409A of the
Code and the regulations promulgated thereunder ("Section 409A"),
payment of such amounts shall not commence until the Executive incurs a
"Separation from Service" (as defined below) if and only if necessary to avoid
accelerated taxation or tax penalties in respect of such amounts.
(b) Notwithstanding
any provision of this Agreement to the contrary, if Executive is a "Specified
Employee" (as defined below) he shall not be entitled to any payments upon a
Separation from Service until the earlier of (i) the date which is the first
business day following the date that is six months after the Executive's
Separation from Service for any reason other than death or (ii) the Executive's
date of death. The provisions of this Section 12(b) shall only apply if required
to comply with Section 409A of the Code.
(c) For
purposes of this Agreement, "Separation from
Service" shall have the meaning set forth in Section 409A(a)(2)(A)(i) of
the Code and determined in accordance with the default rules under Section 409A.
"Specified
Employee" shall have the meaning set forth in Section 409A(a)(2)(B)(i) of
the Code, as determined in accordance with the uniform methodology and
procedures adopted by the Company and then in effect.
(d) If any
provision of this Agreement contravenes any regulations or Treasury guidance
promulgated under Section 409A of the Code, or could cause any amounts or
benefits hereunder to be subject to taxes, interest and penalties under Section
409A of the Code, the Company may, in its sole discretion and without the
Executive's consent, modify the Agreement to: (i) comply with, or avoid being
subject to, Section 409A of the Code, (ii) avoid the imposition of taxes,
interest and penalties under Section 409A of the Code, and/or (iii) maintain, to
the maximum extent practicable, the original intent of the applicable provision
without contravening the provisions of Section 409A of the Code. This Section
12(d) does not create an obligation on the part of the Company to modify this
Agreement and does not guarantee that the amounts or benefits owed under this
Agreement will not be subject to interest and penalties under Section 409A of
the Code.
(e) Anything
in this Agreement to the contrary notwithstanding, no reimbursement payable to
the Executive pursuant to any provisions of this Agreement or pursuant to any
plan or arrangement of the Company Group covered by this Agreement shall be paid
later than the last day of the calendar year following the calendar year in
which the related expense was incurred, except to the extent that the right to
reimbursement does not provide for a "deferral of compensation"
within the meaning of Section 409A. No amount reimbursed during any calendar
year shall affect the amounts eligible for reimbursement in any other calendar
year.
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13. Certain Additional
Payments.
(a) In the
event that any amount or benefit paid, distributed or otherwise provided to the
Executive by the Company pursuant to this Agreement determined without regard to
any additional payment required under this Section 13 (the "Covered
Payments"), would be subject to the excise tax imposed by Section 409A of
the Code or any interest or penalties payable with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise
Tax"), then the Executive shall be entitled to receive from the Company
an additional payment (the "Gross-Up
Payment,") in an amount that shall fund the payment by the Executive of
any Excise Tax on the Covered Payments, as well as all income and employment
taxes on the Gross-Up Payment, any Excise Tax imposed on the Gross-Up Payment
and any interest or penalties imposed with respect to income and employment
taxes imposed on the Gross-Up Payment. For this purpose, all income taxes will
be assumed to apply to the Executive at the highest marginal rate.
(b) A
nationally recognized firm of independent accountants, selected by the Company
shall perform the foregoing calculations. The Company shall bear all expenses
with respect to the determinations by such accounting firm required to be made
hereunder. Such accounting firm shall apply the provisions of this Section 13 in
a reasonable manner and in good faith in accordance with then prevailing
practices in the interpretation and application of Section 409A of the Code. For
purposes of applying the provisions of this Section 13, the Company shall be
entitled to rely on the written advice of legal counsel or such accounting firm
as to whether one or more Covered Payments is subject to the provisions of
Section 409A of the Code.
(c) The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and the Executive within thirty (30) calendar days after the date that such
accounting firm has been engaged to make such determinations or such other time
as requested by the Company or the Executive. If the accounting firm determines
that no Excise Tax is payable with respect to a Covered Payment, it shall
furnish the Company and the Executive with an opinion reasonably acceptable to
the Executive that no Excise Tax will be imposed with respect to such Covered
Payment. Any good faith determinations of the accounting firm made hereunder
shall be final, binding, and conclusive upon the Company and the
Executive.
(d) The
Gross-Up Payment shall be paid within thirty (30) days after such amount is
determined by the Company in accordance with the provisions of this Section 8,
but in no event later than the last day of the calendar year following the
calendar year in which the Executive remits the Excise Tax.
14.
Enforceability;
Waiver. The invalidity and unenforceability of any term or provision
hereof shall not affect the validity or enforceability of any other term or
provision hereof. The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right that the Executive or the Company may have
hereunder, shall not be deemed to be a waiver of such provision or right
or any
other provision or right of this Agreement. Similarly, the waiver by any party
hereto of a breach of any provision of this Agreement by the other party will
not operate or be construed as a waiver of any other or subsequent breach by
such other party.
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15.
Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and permitted assigns. This
Agreement may be assigned by the Company. The Executive may not assign or
delegate his duties under this Agreement without the Company's prior written
approval.
16.
Survival. The
entitlement of the Executive and the obligations of the Company pursuant to
Sections 3 and 4 hereof shall each survive any termination or expiration of this
Agreement, or any termination or resignation of the Executive's employment, as
the case may be.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
| EXECUTIVE | ||
| /s/ Xxxx X. Patch | ||
| Xxxx X. Patch | ||
| BE AEROSPACE, INC. | ||
| /s/ Xxxxxx X. XxXxxxxxx | ||
| Xxxxxx X. XxXxxxxxx | ||
| Senior Vice President and Chief Financial Officer |
9
Exhibit
A
Proprietary
Rights Agreement
