EXHIBIT 10.3
BE AEROSPACE, INC.
FIFTH AMENDMENT TO EMPLOYMENT AGREEMENT
This Fifth Amendment ("Amendment") made and entered into
effective as of the 20th day of October, 2003 is between BE AEROSPACE, INC., a
Delaware corporation (the "Company") and THOMAS P. MCCAFFREY (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company and the Executive entered into that
certain Employment Agreement, dated as of September 14, 2001;
WHEREAS, the Company and the Executive amended that certain
Employment Agreement effective September 14, 2001, May 15, 2002, March 24, 2003
and April 30, 2003 (as amended, the "Agreement");
WHEREAS, the Executive and the Company mutually desire to
amend the Agreement to reduce certain payments made upon a Change of Control of
the Company (as defined in the Agreement);
WHEREAS, the Company's Compensation Committee and the Board of
Directors believe this Amendment is in the best interest of the Company and,
accordingly, the Compensation Committee has approved, and the Board of Directors
has ratified, this Amendment.
NOW, THEREFORE, effective as of the 20th day of October, 2003,
the Agreement shall be amended as follows:
1. Section 5(e) shall be deleted in its entirety and replaced
with the following:
(e) Change of Control.
(i) If a "Change of Control" of the Company occurs, the
Company will be obligated as provided in Section 5 of this Agreement. For
purposes of determining the Company's obligations under this Section 5(e), the
date on which a Change of Control occurs shall be referred to as the "Change of
Control Date." If a "Change of Control" occurs during the Employment Term, the
Company or its successor in interest shall:
(A) if, within three years following the Change of
Control Date, Executive's employment with the Company is
terminated by the Company without Cause or by Executive for
"Good Reason," then within five (5) business days after the
Termination Date, pay to Executive, (or in the event of
Executive's subsequent death, such person as Executive shall
have designated in a notice filed with the Company, or, if no
such person shall have been designated, Executive's estate) a
lump sum payment equal to the sum of: (1) any accrued and
unpaid Salary through the Termination Date, (2) the unpaid
amount of any bonuses declared to be payable to Executive for
any fiscal periods of the Company ending prior to the
Termination Date, and (3) an amount equal to two (2) times the
Salary, at the rate in effect on the Termination Date, that
would have been payable to Executive through the Expiration
Date;
(B) if, within three years following the Change of
Control Date, Executive's employment with the Company is
terminated by the Company without Cause or by Executive for
"Good Reason, during the balance of the Employment Term and
thereafter until the Expiration Date,
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(1) provide Executive with continued life insurance
and disability insurance and medical and dental insurance
coverage in the same amounts and upon the same terms and
conditions as in effect on his Termination Date, or if
greater, as those provided immediately prior to the Change of
Control; and
(2) continue to provide Executive with the automobile
allowance provided pursuant to Section 4(e) hereof as of the
Termination Date, or if greater, as provided immediately prior
to the Change of Control;
(C) provide that any stock options granted to
Executive that would not vest on or prior to the Change of
Control Date shall be exercisable immediately upon the
execution of any agreement that would constitute a Change of
Control (regardless of whether such agreement is consummated),
and such stock options shall continue to be exercisable until
the later of their expiration date or the date on which shares
of the Company are no longer traded as such; and
(D) pay Executive the amount of any Gross-Up Payment
payable by the Company to the Executive under Section 5(h)
hereof.
(ii) For purposes of this provision, a "Change of Control"
means:
(A) the entering into of any agreement relating to a
transaction or series of related transactions involving the
ownership of the Company that requires a shareholder vote for
the consummation of such transaction;
(B) individuals who, as of March 1, 2001 (the
"Effective Date"), constitute the Board of Directors of the
Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of
the Company, provided that any person becoming a director
subsequent to the Effective Date whose election, or nomination
for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of
an individual whose initial assumption of office is in
connection with an actual or threatened election contest
relating to the election of the directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act) shall be, for
purposes of this Agreement, considered as though such person
were a member of the Incumbent Board;
(C) the acquisition (other than from the Company) by
any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act, of 25% or
more of either the then outstanding shares of the Company's
Common Stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote generally
in the election of directors (hereinafter referred to as the
ownership of a "Controlling Interest") excluding, for this
purpose, any acquisitions by (1) the Company or its
subsidiaries, (2) any person, entity or "group" that as of the
Effective Date owns beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Securities Exchange Act)
of a Controlling Interest, or (3) any employee benefit plan of
the Company or its subsidiaries; or
(D) the sale or other disposition by the Company of
25% or more of the value of its assets to any person or entity
that is not controlled by the Company.
(iii) For purposes of this provision, "Good Reason" means:
(A) a decrease in Executive's Salary or a failure by
the Company to pay material compensation due and payable to
Executive in connection with his employment;
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(B) a change in Executive's responsibilities,
positions, duties, status, title or reporting relationships;
(C) Executive ceasing to be the Corporate Senior Vice
President of Administration and Chief Financial Officer (or
such other positions the Executive holds immediately prior to
the Change of Control Date) of a publicly traded company
pursuant to this Agreement; provided, however, that
Executive's status as Corporate Senior Vice President of
Administration and Chief Financial Officer (or such other
positions with the Company Executive holds immediately prior
to the Change of Control Date) of a company other than the
Company or its successor immediately prior to the Change of
Control Date shall not by itself prevent Executive's ability
to resign for Good Reason pursuant to this clause (iii);
(D) the Company's requiring Executive to be based at
any office or location that is anywhere other than Executive's
principal place of employment immediately prior to the Change
of Control Date; or
(E) a material breach by the Company of any term or
provisions of this Agreement.
2. Section 5(f) of the Agreement shall be deleted in its entirety
and replaced with the following:
"(f) Severance Pay. If Executive's employment hereunder is terminated
for any reason, other than Executive's death pursuant to Section 7.2 hereof, or
Executive's incapacity pursuant to Section 5(b) hereof, then within five (5)
days after Executive's Termination Date, the Company shall pay to Executive (or
in the event of Executive's subsequent death, such person as Executive shall
have designated in a notice filed with the Company, or, if no such person shall
have been designated, to Executive's estate), a lump sum amount equal to
Executive's annual Salary in effect as of the Termination Date, which lump sum
shall not be pro-rated. The obligations of the Company pursuant to this Section
7.5 shall survive any termination of this Agreement or Executive's employment as
aforesaid."
3. Section 9 of the Agreement shall be amended by adding a new
paragraph 9(c) as follows:
"(c) Waiver. 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, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 5(e) of this Agreement,
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."
4. The Agreement shall remain unchanged in all other respects.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed effective as of the day and year first above written.
EXECUTIVE BE AEROSPACE, INC.
/s/ Thomas P. McCaffrey By: /s/ Robert J. Khoury
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Thomas P. McCaffrey Name: Robert J. Khoury
Corporate Senior Vice President of Title: President and
Administration and Chief Financial Officer Chief Executive Officer
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