Exhibit 10.10
RETIREMENT AGREEMENT
THIS RETIREMENT AGREEMENT, dated as of December 31, 2005 (the
"Agreement"), by and between BE Aerospace, Inc., a Delaware corporation (the
"Company") and Xxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain
Employment Agreement, dated as of August 1, 2005 (the "Employment Agreement");
WHEREAS, the Company and the Executive have agreed to the
Executive's retirement as an employee and an officer of the Company; and
WHEREAS, except as otherwise set forth herein, the parties intend
that this Agreement shall set forth the terms of the Executive's retirement and
that this Agreement shall supersede all prior agreements between the parties
regarding the subject matter contained herein, including the Employment
Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth in this Agreement, the parties hereto hereby agree as
follows:
1. Retirement. (a) Except as set forth in Section 1(b) below, the
Executive hereby retires from his position as President and Chief Executive
Officer of the Company, and from all other positions, offices and directorships
with the Company and any of its subsidiaries (collectively, the "Company
Group"), effective as of December 31, 2005 (the "Effective Date").
(b) Following the Effective Date, the Executive will remain a
member of the Board of Directors of the Company (the "Board") for the remainder
of his current term. The Company shall nominate the Executive as a director for
at least one additional term thereafter. For so long as the Executive continues
to serve on the Board and he is not an employee of the Company, the Executive
shall be entitled to all compensation and benefits afforded to "non-employees
directors."
2. Severance Payments and Benefits. In consideration of the
covenants set forth herein and the waiver and release of claims set forth below,
and provided that the Executive does not revoke this Agreement during the
Revocation Period (as defined in Section 6 below), the Company shall provide the
Executive with the following severance payments and benefits:
(a) Severance Payments. The Company shall pay the Executive a lump
sum cash payment equal to $ 792,500, which shall be payable on the first
business day following the six-month anniversary of the Effective Date, or as
soon as administratively practicable thereafter (the "Payment Date").
(b) Retirement Payments. The Executive acknowledges that the
Company has deposited to the Executive's Retirement Trust a pre-tax lump-sum
amount of $198,124.99 (the "Final Deposit"), which represents his remaining
unfunded Retirement Compensation under Section 7.6 of the Employment Agreement.
Within thirteen (13) business days following the Final Deposit, all funds in the
Executive's Retirement Trust will be transferred to the Executive in a lump sum
amount in accordance with the terms and conditions of the trust agreement.
(c) Treatment of Stock Options. All stock options previously
granted or awarded to the Executive under any stock options plan of the Company,
including, without limitation, the Amended and Restated 1989 Stock Option Plan,
the 1996 Stock Option Plan and the 2001 Stock Option Plan (together with the
individual grant documents, the "Stock Option Plans") shall, to the extent
vested as of the Effective Date, remain exercisable in accordance with, the
terms of the applicable Stock Option Plan, through their stated expiration
dates. Attached hereto as Exhibit A, is a list of the Executive's outstanding
stock options as of the Effective Date and their stated expiration dates.
(d) Continuation of Health Insurance. The Executive and his
spouse, for as long as they each may live, shall be entitled to all medical,
dental and health benefits available from time to time to the Company's
executive officers and their spouses, respectively, and the Executive and his
spouse, for as long as they each may live, shall be entitled to the benefits
available under the Company's executive medical reimbursement plan in effect as
of March 1, 2001.
(e) Accrued Amounts. Within ten (10) business days following the
expiration of the Revocation Period, the Company shall pay the Executive a lump
sum cash payment in an amount equal to (i) all accrued but unpaid compensation
as of the Effective Date and (ii) all accrued and unpaid bonuses the Executive
was awarded as of the Effective Date.
(f) 2005 Bonus. The Executive shall be entitled to a bonus with
respect to calendar year 2005 in an amount determined by the Company in
accordance with policies applicable to executive bonuses generally. Such amount
shall be paid to the Executive on the date bonuses are generally paid to
executives of the Company and in any event not later than March 15, 2006.
(g) Continued Indemnification. The Executive shall continue to be
indemnified to the fullest extent permitted under applicable laws, rules and
regulations and the corporate governance documents of the Company and any other
member of the Company Group in accordance with their terms. The Company agrees
that for purposes of this Section 2(g) it (or any member of the Company Group,
as the case may be) shall interpret and/or apply any provision of applicable law
or any corporate governance document relating to indemnification (including
advancement of expenses) with respect to the Executive in a manner consistent
with how such provisions are interpreted and applied by the Company (or the
relevant member of the Company Group) to then active senior officers of the
Company or of the relevant member of the Company Group. The Executive shall
continue to be covered under the Company's directors' and officers' liability
insurance policies in effect from time to time to the same extent he would have
been covered if he were employed when a claim is made. The Executive agrees to
promptly notify the Company of any claims made against the Executive in his
capacity as a former officer/employee of the Company or any other member of the
Company Group.
(h) Certain Additional Payments by the Company. Section 7.8 of the
Employment Agreement is hereby incorporated into this Retirement Agreement by
reference as if its provisions were set forth herein in full.
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(i) Vested Benefits. The Executive shall be entitled to any vested
benefits under all employee benefit, pension, profit sharing, insurance and
other plans and otherwise payable in accordance with the terms and conditions of
such plans.
3. Proprietary Rights and Cooperation.
(a) Proprietary Rights. Sections 6.1, 6.2, 6.3 and 6.6 of the
Employment Agreement are hereby incorporated into this Retirement Agreement by
reference as if their provisions were set forth herein in full.
(b) Cooperation. From and after the Effective Date, the Executive
shall cooperate in all reasonable respects with the Company Group and their
respective directors, officers, attorneys and experts in connection with the
conduct of any action, proceeding, investigation or litigation involving the
Company Group, including any such action, proceeding, investigation or
litigation in which the Executive is called to testify.
4. Releases.
(a) General Release by Executive. In consideration of the payments
and benefits provided to the Executive under this Agreement and after
consultation with counsel, the Executive, and each of the Executive's respective
heirs, executors, administrators, representatives, agents, successors and
assigns (collectively, the "Releasors") hereby irrevocably and unconditionally
release and forever discharge the Company Group and each of their respective
officers, employees, directors, shareholders and agents from any and all claims,
actions, causes of action, rights, judgments, obligations, damages, demands,
accountings or liabilities of whatever kind or character (collectively,
"Claims"), including, without limitation, any Claims under any federal, state,
local or foreign law, that the Releasors may have, or in the future may possess,
arising out of (i) the Executive's employment relationship with and service as
an employee or officer of the Company Group, and the termination of such
relationship or service, or (ii) the Employment Agreement; provided, however,
that the release set forth in this Section 4(a) shall not apply to (i) the
obligations of the Company under this Agreement and (ii) any indemnification
rights the Executive may have in accordance with the governance instruments of
any member of the Company Group or under any director and officer liability
insurance maintained by any member of the Company Group with respect to
liabilities arising as a result of the Executive's service as an officer,
director or employee of any member of the Company Group. The Releasors further
agree that the payments and benefits described in this Agreement shall be in
full satisfaction of any and all claims for payments or benefits, whether
express or implied, that the Releasors may have against the Company Group
arising out of the Executive's employment relationship or the Executive's
service as an employee and officer of the Company Group and the termination
thereof.
(b) Specific Release of ADEA Claims by Executive. In further
consideration of the payments and benefits provided to the Executive under this
Agreement, the Releasors hereby unconditionally release and forever discharge
the Company Group, and each of their respective officers, employees, directors,
shareholders and agents from any and all Claims that the Releasors may have as
of the date the Executive signs this Agreement, arising under the Federal Age
Discrimination in Employment Act of 1967, as amended, and the applicable rules
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and regulations promulgated thereunder ("ADEA"). By signing this Agreement, the
Executive hereby acknowledges and confirms the following: (i) the Executive was
advised by the Company in connection with his retirement to consult with an
attorney of his choice prior to signing this Agreement and to have such attorney
explain to the Executive the terms of this Agreement, including, without
limitation, the terms relating to the Executive release of claims arising under
ADEA and, the Executive has in fact consulted with an attorney; (ii) the
Executive was given a period of not fewer than 21 days to consider the terms of
this Agreement and to consult with an attorney of his choosing with respect
thereto; (iii) the Executive is providing the release and discharge set forth in
this Section 4(b) only in exchange for consideration in addition to anything of
value to which the Executive is already entitled; and (iv) that the Executive
knowingly and voluntarily accepts the terms of this Agreement.
(c) Release by the Company. The Company, on behalf of itself and
the Company Group, in exchange for the consideration embodied in this Agreement,
hereby unconditionally and irrevocably waives, releases, and forever discharges
the Executive from all Claims which the Company Group may have or in the future
may possess against the Executive arising out of the Executive's employment
relationship with and service as an employee, officer or director of the Company
and its subsidiaries and affiliates, and the termination of such relationship or
service; provided, however, that the Company Group does not waive any rights
under this Agreement.
(d) No Assignment. The Executive and the Company each represent
and warrant that they have not assigned any of the Claims being released under
this Section 4.
(e) Claims. The Executive and the Company each agree that they
have not instituted, assisted or otherwise participated in connection with, any
action, complaint, claim, charge, grievance, arbitration, lawsuit, or
administrative agency proceeding, or action at law or otherwise against any
member of the Company Group or any of their respective officers, employees,
directors, shareholders or agents, with respect to the matters being released.
5. Miscellaneous.
(a) Entire Agreement. This Agreement, including the provisions
incorporated herein, sets forth the entire agreement and understanding of the
parties hereto with respect to the matters covered hereby and supersedes and
replaces any express or implied, written or oral, prior agreement, plan or
arrangement with respect to the terms of the Executive's employment and the
termination thereof which the Executive may have had with the Company Group
(including, without limitation, the Employment Agreement), but excluding the
Stock Option Plans and any of the plans referenced in Sections 2(d) or 2(i) of
this Agreement. Except as set forth in Section 5(b), this Agreement may only be
amended only by a written document signed by the parties hereto.
(b) Section 409A.
(i) Notwithstanding any provision of this Agreement or any plan,
program, agreement or arrangement to the contrary, payment of any
compensation to the Executive under any plan, program, agreement or
arrangement shall not be made until the
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Payment Date. The provisions of this Section 5(b)(i) shall only apply
if required to comply with Section 409A of the Code.
(ii) If any provision of this Agreement contravenes any
regulations or Treasury guidance promulgated under Section 409A of the
Code, or if any tax is imposed under such Section 409A on any payment
to be received by the Executive hereunder, this Agreement or any
provision hereof may be reformed by the Executive, subject to the
consent of the Company which consent shall not be unreasonably
withheld, to maintain, to the maximum extent practicable, the original
intent of the applicable provision without violating the provisions of
Section 409A of the Code. The Executive agrees in good faith to
consider any such reformation proposed by the Company.
(iii) The provisions of Section 2(h) of this Agreement, mutatis
mutandis, shall apply to any imposition of taxes on Executive under
Section 409A of the Code so that Executive shall be fully grossed up
for the amount of, and shall not be adversely affected by, such taxes.
(c) Withholding Taxes. Any payments made or benefits provided to
the Executive under this Agreement shall be reduced by any applicable
withholding taxes.
(d) Legal Fees. In the event of a dispute between the parties with
respect to any payments due hereunder in connection with a Change of Control,
the Company will pay the costs of any legal fees and related expenses incurred
in connection with such dispute. Such costs and expenses shall be advanced to
Executive currently as reasonably required to continue such action or
proceeding.
(e) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida, without giving
effect to the conflicts of laws principles thereof.
(f) Waiver. The failure of any party to this Agreement to enforce
any of its terms, provisions or covenants shall not be construed as a waiver of
the same or of the right of such party to enforce the same. Waiver by any party
hereto of any breach or default by another party of any term or provision of
this Agreement shall not operate as a waiver of any other breach or default.
(g) Severability. In the event that any one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remainder of the
Agreement shall not in any way be affected or impaired thereby. Moreover, if any
one or more of the provisions contained in this Agreement shall be held to be
excessively broad as to duration, activity or subject, such provisions shall be
construed by limiting and reducing them so as to be enforceable to the maximum
extent allowed by applicable law.
(h) Notices. Any notices required or made pursuant to this
Agreement shall be in writing and shall be deemed to have been given when
delivered or mailed by United States certified mail, return receipt requested,
postage prepaid, as follows:
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if to Executive, to him at:
Xxxxxx X. Xxxxxx
000 Xxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
if to the Company, to it at:
BE Aerospace, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
With a copy to Shearman & Sterling, LLP at:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx III, Esq.
or to such other address as either party may furnish to the other in writing in
accordance with this Section 5(h). Notices of change of address shall be
effective only upon receipt.
(i) Descriptive Headings. The paragraph headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, which, together, shall constitute one and the same agreement.
(k) Successors and Assigns. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be enforceable by the Executive
and the Company and their respective successors and assigns.
6. Revocation. This Agreement may be revoked by the Executive
within the seven (7)-day period commencing on the date the Executive signs this
Agreement (the "Revocation Period"). In the event of any such revocation by the
Executive, all obligations of the parties under this Agreement shall terminate
and be of no further force and effect as of the date of such revocation. No such
revocation by the Executive shall be effective unless it is in writing, signed
by the Executive and received by the Company prior to the expiration of the
Revocation Period.
7. Effective Date of Agreement. This Agreement shall not become
effective until the day following the last day of the Revocation Period.
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IN WITNESS WHEREOF, the Company has executed this Agreement as of
the date first set forth above and the Executive has executed this Agreement as
of the date set forth below (or, if the Executive does not include a date under
the Executive's signature line, the date set forth shall be the date this
Agreement, signed by the Executive, is received by the Company).
BE AEROSPACE, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Chief Financial Officer
THE EXECUTIVE HEREBY ACKNOWLEDGES THAT THE EXECUTIVE HAS READ THIS AGREEMENT,
THAT THE EXECUTIVE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND
THAT THE EXECUTIVE HEREBY ENTERS INTO THIS AGREEMENT VOLUNTARILY AND OF HIS OWN
FREE WILL.
ACCEPTED AND AGREED:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Date: December 31, 2005
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Exhibit A
Executive's Outstanding Stock Options
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Number of Stock Options Exercise Price Expiration Date
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90,000 $4.433 09/25/2012
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155,000 $6.590 01/26/2014
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75,000 $5.590 02/02/2014
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65,000 $10.420 11/24/2014
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