UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2005
BE AEROSPACE, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-18348 06-1209796
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
1400 Corporate Center Way, Wellington, Florida 33414
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 791-5000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
EXPLANATORY NOTE
BE Aerospace, Inc. is filing this amendment to its Current Report on
Form 8-K filed on November 14, 2005, which announced the retirement of Robert J.
Khoury as the company's Chief Executive Officer and President and the
appointments of Amin J. Khoury as Chief Executive Officer and Michael B. Baughan
as President and Chief Operating Officer, to provide additional information that
was not determined at the time the Current Report on Form 8-K was filed relating
to the terms of the agreements entered into between BE Aerospace, Inc. and
Robert J. Khoury and between BE Aerospace, Inc. and Michael B. Baughan. These
agreements were entered into after the Current Report on Form 8-K announcing
Robert J. Khoury's retirement and Michael B. Baughan's appointment was filed.
Item 1.01 Entry into Material Definitive Agreement;
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Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
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(b) On November 8, 2005, BE Aerospace, Inc. (the "Company") announced
that Robert J. Khoury would, effective December 31, 2005, retire from his
position as President and Chief Executive Officer of the Company and, upon his
retirement, Mr. Khoury would remain on the Company's Board of Directors and
become a part time consultant to the Company.
On December 31, 2005, Mr. Khoury's retirement became effective and the
Company entered into both a retirement agreement (the "Retirement Agreement")
and a consulting agreement (the "Consulting Agreement") with Mr. Khoury.
Retirement Agreement
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The Retirement Agreement clarifies and sets forth the payments that are
due to Mr. Khoury pursuant to his existing employment agreement, amended as of
August 1, 2005 (the "RK Employment Agreement") and provides for mutual releases
of employment-related claims by the Company and Mr. Khoury. Mr. Khoury will
receive (i) a cash severance payment of $792,500 on or about July 3, 2006 and
(ii) an annual bonus with respect to fiscal 2005 in an amount to be determined
in accordance with the Company's incentive plan and paid on or before March 15,
2006. Mr. Khoury is also entitled to all other benefits (including retirement
benefits) under the plans, programs and arrangements in which he participated in
as of December 31, 2005.
In accordance with the RK Employment Agreement, the Company will
continue to provide (i) Mr. Khoury and his spouse with health insurance coverage
for the remainder of their lives and (ii) Mr. Khoury with a gross-up for any tax
payments pursuant to Sections 409A and 280G of the U.S. Internal Revenue Code
(the "Code").
Following his retirement, Mr. Khoury will remain a member of the Board
of Directors of the Company (the "Board"). As a member of the Board, Mr. Khoury
will be entitled to receive all compensation paid to non-employee directors of
the Company.
Consulting Agreement
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Pursuant to the Consulting Agreement, Mr. Khoury will provide certain
specified services to the Company during a six-year consulting period (the
"Consulting Period") including sales and marketing services, assistance in
developing and implementing key customer strategies, advice and consultation
regarding Company operational matters and maintenance of key customer
relationships through periodic customer visits (the "Consulting Services").
In consideration for the Consulting Services, Mr. Khoury will receive a
consulting fee of $263,300 per calendar year (the "Fee"). During the Consulting
Period, Mr. Khoury will also be
entitled to an office, secretarial support and air travel in accordance with
past practices under the Company's travel policy.
The Consulting Agreement may not be amended, modified or terminated
without the prior written consent of both the Company and Mr. Khoury. If Mr.
Khoury ceases providing the Consulting Services as a result of his death or
disability, he will be entitled to a lump-sum payment equal to the Fees payable
through the remainder of the Consulting Period.
During the Consulting Period and for a period of two years thereafter,
Mr. Khoury may not (i) engage in any employment, consulting or other activity in
any business that competes with the Company or (ii) solicit employees of the
Company. The Consulting Agreement also prohibits Mr. Khoury from disclosing the
Company's confidential and proprietary information for an indefinite period.
(c) On November 8, 2005, the Company also announced that, effective
December 31, 2005, Amin J. Khoury, Chairman of the Company's Board of Directors,
would be appointed as Chief Executive Officer of the Company and Michael B.
Baughan, Senior Vice President and General Manager, Commercial Aircraft Segment,
will be appointed as the President and Chief Operating Officer of the Company.
These appointments became effective on December 31, 2005.
Amin J. Khoury, 66, has been the Company's Chairman of the Board since
July 1987 when he founded the Company and acted as Chief Executive Officer of
the Company until April 1, 1996. Since 1986, Mr. Amin Khoury has been a director
of Synthes, Inc., a manufacturer and marketer of orthopedic trauma implants and
cranial-maxillofacial and spine implants. Since July 1994, Mr. Amin Khoury has
been a member of the board of directors of Brooks Automation, Inc., a supplier
of integrated automation solutions for the global semiconductor, data storage
and flat panel display manufacturing industries. Mr. Amin Khoury is the brother
of Robert J. Khoury.
Michael B. Baughan, 45, has been the Company's Senior Vice President
and General Manager, Commercial Aircraft Segment, since July 2002. From May 1999
to July 2002, Mr. Baughan was Group Vice President and General Manager of
Seating Products. From September 1994 to May 1999, Mr. Baughan was Vice
President, Sales and Marketing for Seating Products.
The material terms of Mr. Amin Khoury's employment agreement with the
Company have been previously disclosed in the Company's annual proxy statement,
filed with the Securities and Exchange Commission on April 29, 2005, and in the
Company's Quarterly Report on Form 10-Q for the period ended June 30, 2005, to
which a copy of Mr. Amin Khoury's employment agreement is attached as Exhibit
10.2. The terms of Mr. Amin Khoury's employment agreement have not been modified
in connection with his appointment.
On January 4, 2006, the Company entered into an amended and restated
employment agreement with Mr. Baughan (the "MB Employment Agreement"). The MB
Employment Agreement will have an initial term of two years that will
automatically be renewed for additional one-year terms unless either Mr. Baughan
or the Company gives the other party at least ninety days' written notice prior
to the then-applicable expiration date.
Under the terms of the MB Employment Agreement, Mr. Baughan will
receive an annual salary of $440,000 per year subject to adjustment from time to
time by the Board and an annual incentive bonus at the discretion of the Board,
which may not exceed 120% of his then current salary. Mr. Baughan is also
entitled to (i) an automobile allowance and (ii) participation in all benefit
plans, programs and arrangements generally made available to the Company's
executives. In connection with his appointment as President, on December 27,
2005, Mr. Baughan received an option to purchase 75,000 shares of the Company's
common stock at an exercise price of $22.18 pursuant to the Company's 2005
Long-Term Incentive Plan.
In the event of Mr. Baughan's death, his designee will receive an
amount equal to the salary that would have been due through the expiration of
the then-applicable term of the agreement. In the event of Mr. Baughan's
incapacity, he will continue to receive his then current salary and benefits
through the expiration date of the then-applicable term of the agreement or
until he obtains alternate employment. If the Company fails to extend the term
of Mr. Baughan's employment for at least one year beyond an applicable
expiration date at his then-current salary and otherwise at the same terms and
conditions, the Company must continue to pay Mr. Baughan his salary and medical
benefits until the first anniversary of the then-applicable expiration date.
Upon a termination of Mr. Baughan's employment by the Company for Cause or Mr.
Baughan's resignation for any reason, he will not be entitled to any further
compensation or benefits.
If there is a change in control of the Company (as defined under
Section 409A of the Code) as a result of which Mr. Baughan's employment is
terminated by the Company without Cause (as defined), Mr. Baughan will receive
(i) a lump sum amount equal to three times his salary and (ii) continuation of
his benefits for one year. The MB Employment Agreement provides Mr. Baughan with
a gross-up for any tax payments pursuant to Sections 409A and 280G of the Code.
Mr. Baughan is also party to the Company's standard proprietary
information and confidentiality agreement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amended report to be signed on its behalf by
the undersigned hereunto duly authorized.
BE AEROSPACE, INC.
(Registrant)
By: /s/ Thomas P. McCaffrey
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Name: Thomas P. McCaffrey
Title: Senior Vice President of
Administration and Chief
Financial Officer
Date: January 6, 2006