EMPLOYMENT AGREEMENT
EXHIBIT
10.12
This
Employment Agreement (this “Agreement”)
is made as of this 1st day of January, 2009, by and between BE Aerospace, Inc.,
a Delaware corporation (the “Company”)
and Xxxxxx X. Xxxxxxxxx (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 a period of two (2) years
(the “Employment
Period”) commencing on January 1, 2009, and ending on December 31, 2010
(the “Expiration
Date”).
2. Position and
Duties. The Executive shall serve the Company in the capacity
of Vice President and General Manager, Distribution Segment, and 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
President and Chief Operating Officer of the Company, or his
designee. 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.
3. Compensation.
(a) Salary. During
the Employment Period, the Executive shall receive a salary (the “Salary”)
payable at the rate of $415,000 per annum. Such rate may be adjusted
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 $415,000. 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 Period, the Executive may receive
an incentive performance bonus in accordance with the Company’s executive bonus
plan then in effect from time to time, as determined by the Compensation
Committee in its sole discretion. The incentive bonus shall be paid
in accordance with Company policy but in no event later than March 15th of the
year following the year in which it shall accrue.
(c) Expenses. During
the Employment Period, 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. During
the Employment Period, 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 employees, 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’s policies as in effect from time to time, the Executive shall
also be entitled to paid vacation in any fiscal year during the Employment
Period as well as all paid holidays given by the Company to its
employees.
(e) Automobile. During
the Employment Period, the Executive shall be furnished with an 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 the Automobile Allowance will
accrue.
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 with or without Cause. 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 the Executive incurs a Separation
from Service (as defined below).
(b) Death. The
Executive’s employment hereunder shall terminate upon his death. In
such event, the Company shall within thirty (30) days following his 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 the Salary (at the rate in effect as of the
Termination Date) that would have been due to the Executive had this Agreement
been in effect and he remained employed from the date of his death until the
Expiration Date.
(c) Incapacity. If,
in the reasonable judgment of the President and Chief Operating Officer, 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 the Salary (at the rate in
effect as of the Termination Date) payable during the period from the
Termination Date through the Expiration Date. The lump sum payment
shall be made within sixty (60) days following the Termination Date provided that prior
to the payment date the Executive signs a waiver and release agreement in the
form provided by the Company and such waiver and release becomes effective and
irrevocable in its entirety prior to such date. If the waiver and
release does not become effective and irrevocable on or prior to the payment
date set forth in the preceding sentence, the Company shall have no further
obligations pursuant to this Section 4(c). The Company’s obligation
to pay the Executive his Salary shall terminate if the Executive subsequently
takes other employment to the extent of the Executive’s salary and benefits from
such subsequent employment. Any dispute between the President and
Chief Operating Officer 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 Senior Vice President and the Executive, whose
decision shall be binding on all parties.
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(d) Termination by the Company
for Cause; Resignation by the Executive.
(i) If
the Executive’s employment is terminated by the Company 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 this Agreement, “Cause”
shall mean (i) the Executive’s material failure, refusal or neglect to perform
and discharge his powers, duties and responsibilities hereunder (including
duties prescribed by the President and Chief Operating Officer pursuant to
Section 3), other material breach of the terms hereof, or breach of any
fiduciary duties he may have because of any position he holds with the Company
or any subsidiary or affiliate thereof or (ii) a felony conviction or a
conviction for any crime involving the Executive’s personal dishonesty or moral
turpitude.
(e) Full Term
Payment. If the Executive remains employed through the
Expiration Date, he shall be
entitled to a lump sum cash payment of $415,000 (the “Full Service
Payment”). The Full Service Payment shall be made in a cash
lump sum on the second (2nd)
anniversary of the Expiration Date. Notwithstanding the forgoing, if
the Company terminates the Executive’s employment hereunder without Cause prior
to the Expiration Date the Full Service Payment shall be made within sixty (60)
days following the Termination Date. Payment of the Full Service
Payment is conditioned upon the Executive signing a waiver and release agreement
in the form provided by the Company and such waiver and release agreement
becoming effective and irrevocable in its entirety prior to such
date. If the waiver and release does not become effective and
irrevocable on or prior to the applicable payment date set forth in this Section
4(e), the Company shall have no further obligations pursuant to this
Section 4(e). To the extent the Executive is eligible to receive
a payment pursuant to Section 4(f), he shall not be entitled to a payment
pursuant to this Section 4(e).
(f) Change of
Control.
(i) If a
“Change of Control” occurs during the Employment Period and, in connection with or within
two years following such Change of Control the Executive’s employment is
terminated by the Company without Cause, or the Executive resigns his employment
because the Executive’s title and duties under Section 2 above are materially
reduced without his agreement, or any compensation or benefit payable or
otherwise extended to the Executive hereunder (including without
limitation Salary, incentive bonus and benefits set forth in Section 3 above) is
eliminated or reduced, the Company or its successor in interest
shall: give prompt notice to the Executive of any such termination, elimination
or reduction and pay to the Executive a lump sum payment equal to:
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(x) the
Executive’s Salary (at the rate in effect as of the Termination Date), which
amount shall not be pro-rated and shall be paid in addition to the Salary due
and payable under (y) below;
(y) the
Salary (at the rate in effect as of the date of the Change of Control) payable
during the period from the Termination Date through the Expiration Date;
and
(z) his
target incentive bonus for the year in which the Termination Date
occurs.
The lump
sum payment shall be made within sixty (60) days following the Termination Date;
provided that
prior to the payment date the Executive signs a waiver and release agreement in
the form provided by the Company and such waiver and release becomes effective
and irrevocable in its entirety prior to such date. If the waiver and
release does not become effective and irrevocable on or prior to the payment
date set forth in the preceding sentence, the Company shall have no further
obligations pursuant this Section 4(f).
(ii) For
purposes of this 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).
(g) Benefit
Continuation. If the Executive's employment is terminated
pursuant to Sections 4(c), 4(e) or 4(f), 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 earlier of (i) the second (2nd)
anniversary of the Expiration Date and (ii) the date the Executive becomes
eligible for comparable benefits provided by a third party; 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, 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.
5. Consulting
Arrangement.
(a) Consulting
Services. Upon the Expiration Date, the Company shall engage
the Executive to provide consulting services to the Company for a period of two
(2) Years (the “Consulting
Period”). During the Consulting Period, the Executive shall
provide advice and consultation to the Company and such other services mutually
agreed to by the Executive and the Company (the “Consulting
Services”). At all times the Consulting Services shall be
nonexclusive and the Executive shall only be required to devote so much time as
is reasonably necessary to discharge the Consulting Services. If the Executive incurs
a Separation from Service for any reason prior to the Expiration Date, the
Company shall not be obligated to engage the Executive to provide the Consulting
Services pursuant to this Section 5.
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(b) Service
Standards. The Executive shall perform the Consulting Services
in a commercially reasonable manner. In no event shall the Executive
have any liability to the Company arising out of or related to the Executive’s
performance of the Consulting Services except to the extent it arises directly
by reason of the Executive’s gross negligence or willful misconduct in
performing such Consulting Services.
(c) Consulting
Fees. During the Consulting Period, the executive shall
receive a monthly consulting fee $21,067 payable
in monthly installments in arrears on the last day of the month (pro-rated for
partial months).
(d) Expenses. During
the Consulting Period the Company shall pay or reimburse the Executive for
reasonable out-of-pocket expenses incurred in connection with the Executive’s
performance of the Consulting Services in accordance with past
practices.
(e) Independent
Contractor. The Executive acknowledges that the Consulting
Services shall be performed in the capacity of an “independent contractor,” that
the Executive is solely responsible for the Executive’s actions or inactions,
and that nothing in this Agreement shall be construed to create an employment
relationship between the parties during the Consulting Period. The
Executive agrees that, with respect to the Consulting Services provided
hereunder, the Executive is not an employee of the Company for any purpose,
including, without limitation: (i) for federal, state or local tax, employment,
withholding or reporting purposes; or (ii) for eligibility or entitlement to any
benefit under any of the Company’s employee benefit plans (including, without
limitation, those plans that are subject to the Employee Retirement Income
Security Act of 1974, as amended), incentive compensation or other employee
programs or policies.
(f) Code of
Conduct. During the Consulting Period, the Executive shall
comply with the Company’s Code of Conduct and its Delegations of Authority, each
as in effect from time to time (as if he was a non-management employee with
respect to the Delegation of Authority Policy).
(g) Indemnification. To
the fullest extent permitted under applicable laws, rules and regulations and
the Company’s applicable corporate governance documents, the Company agrees to
indemnify and hold the Executive harmless from any loss or liability, cost and
expense (including, but not limited to, reasonable attorney’s fees) incurred by
the Executive as a result of his being made a party to any action or proceedings
by reason of his provision of the Consulting Services.
(h) Payment of
Taxes. The Executive shall be responsible for and shall
maintain adequate records of expenses that he incurs in the course of performing
the Consulting Services hereunder and shall be solely responsible for and shall
file, on a timely basis, tax returns and payments required to be filed with or
made to any federal, state or local tax authority with respect to his
performance of the Consulting Services. Neither federal, state nor
local income tax of any kind shall be withheld or paid by the Company with
respect to any amount paid to the Executive pursuant to this Consulting
Agreement. The Executive agrees that he is responsible for
withholding and paying all employment taxes and income withholding taxes as
required.
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(i) Proprietary Rights
Agreement. The Proprietary Rights Agreement dated as of
[-----] between the Executive and the Company attached as Exhibit
A shall remain in full force and effect during the Consulting
Period.
6. 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.
7. 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 Xxxx
Xxxxxxx-Xxxxx,
XX 00000
Attention: President and Chief
Operating 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:
0000 Xxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
8. Entire
Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and supersedes
all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties; provided, however, that this
Agreement shall not supersede the Proprietary Rights Agreement between the
Executive and the Company attached as Exhibit A which is
incorporated herein by reference.
9. 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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10. Counterparts. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument.
11. 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.
12. 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.
13. Section
409A.
(a) If any
amounts that become due under Section 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 (1st)
business day following the date that is six (6) 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 13(b)
shall only apply if required to comply with Section 409A.
(c) For
purposes of this Agreement, “Separation from
Service” shall have the meaning set forth in
Section 409A(a)(2)(A)(i) 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), as determined in accordance with the uniform
methodology and procedures adopted by the Company and then in
effect.
(d) It is
intended that the terms and conditions of this Agreement comply with Section
409A. If any provision of this Agreement contravenes any regulations
or Treasury guidance promulgated under Section 409A, or could cause any
amounts or benefits hereunder to be subject to taxes, interest and penalties
under Section 409A, 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, (ii) avoid the imposition of
taxes, interest and penalties under Section 409A, and/or
(iii) maintain, to the maximum extent practicable, the original intent of
the applicable provision without contravening the provisions of
Section 409A. This Section 13(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.
(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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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.
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
Section 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.
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IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| EXECUTIVE | ||
| /s/ Xxxxxx X. Xxxxxxxxx | ||
|
|
Xxxxxx X. Xxxxxxxxx | |
| BE AEROSPACE, INC. | ||
| /s/ Xxxxxx X. XxXxxxxxx | ||
| Xxxxxx X. XxXxxxxxx | ||
| Senior Vice President and Chief Financial Officer | ||
Exhibit
A
Proprietary
Rights Agreement
