EXHIBIT 10.7
 
EXECUTION COPY
 
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This Amended and Restated Agreement (this “Agreement”) dated as of December 31,
2008, is between BE Aerospace, Inc., a Delaware corporation (the “Company”), and
Amin J. Khoury (“Executive”).
 
WHEREAS, Executive and the Company entered into an amended and restated
Employment Agreement dated as of April 27, 2006 (the “Employment Agreement”);
and
 
WHEREAS,  Executive, having provided services to the Company since August 1,
1987, agrees to continue to provide services for an additional period as
provided herein, and the Company wishes to procure such services; and
 
WHEREAS, Executive and the Company wish to further amend and restate the
Employment Agreement in its entirety in the manner set forth herein.
 
NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth,
the parties agree as follows:
 
1.  
REFERENCE TO EMPLOYMENT AGREEMENT.

 
The Employment Agreement is hereby restated, superseded and replaced in its
entirety by this Agreement.
 
2.  
ARRANGEMENT.

 
Executive shall provide to the Company, and the Company shall accept from
Executive, the services set forth in Section 4.2 below, subject to the terms and
conditions set forth in this Agreement.
 
3.  
TERM.

 
Executive shall provide to the Company services hereunder during the term of
this Agreement which, unless otherwise terminated pursuant to the provisions of
Article 7 hereof, shall be the period ending three (3) years from any date as of
which the term is being determined (the “Employment Term”).  The date on which
the Employment Term ends, including any extensions thereof, is sometimes
hereinafter referred to as the “Expiration Date.”  Pursuant to, and in
accordance with, Section 7.7 hereof, the Company is required to engage Executive
to render consulting services to the Company after Executive ceases to be
employed by the Company.
 
4.  
CAPACITY, SERVICES AND PERFORMANCE.

 
4.1  
Capacity.  Executive shall serve the Company as its Chairman of the Board of
Directors of the Company (the “Board”) and Chief Executive Officer, or in such
other Board or executive capacity as the Board may designate from time to time,
but only upon agreement with Executive.

 
 

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4.2  
Services.  In the capacity set forth in Section 4.1 above, Executive shall be
retained by the Company and shall perform such duties and responsibilities on
behalf of the Company as Executive and the Board shall by mutual agreement from
time to time determine.

 
4.3  
Performance.  During the Employment Term,  Executive shall use his business
judgment, skill and knowledge to the advancement of the Company’s interests and
to the discharge of his duties and responsibilities hereunder; provided,
however, that  Executive shall be required only to devote so much time
as  Executive determines is reasonably necessary to discharge his duties as
Chairman of the Board and Chief Executive Officer, and, subject to the
provisions of Section 6 below, Executive may engage in other business activities
during the Employment Term.

 
5.  
COMPENSATION AND BENEFITS.

 
5.1  
Salary.  Effective as of July 1, 2008, and during the Employment Term, Executive
shall receive an annual salary (the “Salary”) of one million and forty-one
thousand dollars ($1,041,000) during each year of the Employment Term.  The
Salary shall be subject to adjustment from time to time by the Compensation
Committee of the Board (the “Compensation Committee”); provided, however, that
at no time shall the Salary be adjusted below the Salary for the preceding
year.  Commencing on July 1, 2009, and on July 1st of each year thereafter
during the Employment Term, the Salary then in effect shall be increased by an
amount not less than the amount determined by applying to the Salary then in
effect to the percentage increase in the U.S. Bureau of Labor Statistics
Consumer Price Index Revised - Urban Wage Earners and Clerical Workers -
National - All Items (1982-84 = 100) (the “Index”) for the consecutive twelve
(12)-month period (July through June) immediately preceding such July 1.  If the
Index is no longer issued, the Compensation Committee and Executive shall agree
upon a substitute index issued by such agency which most reasonably reflects the
criteria utilized in the most recent issue of the Index.  Except as otherwise
provided in this Agreement, the Salary shall be payable biweekly or in
accordance with the Company’s current payroll practices, and shall be pro-rated
for any period of service less than a full year.

 
5.2  
Bonuses.  Executive may receive bonuses from the Company when, as and if
determined from time to time by the Compensation Committee.  Any such bonuses
paid to Executive shall be in addition to the Salary then in effect.  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 respect of which
Executive earned such bonus.

 
5.3  
Benefits.  So long as employed, Executive shall be entitled to participate in
all employee benefit plans, life insurance plans, disability income plans,
incentive compensation plans and other benefit plans, other than retirement
plans, as may be from time to time in effect for executives of the Company
generally.  In addition, Executive and his spouse, for as long as they each may
live, shall be entitled to (i) all medical, dental and health benefits available
from time to time to the Company’s executive officers and their spouses,
respectively (other than medical reimbursement plans) on similar terms and
conditions as active employees (provided that the level of such benefits is not
greater than the benefits available to Executive on December 31, 2004 and which
included 100% reimbursement of all medical and dental benefits incurred by
Executive and his family, the cost of which is fully paid by the Company), and
(ii) the benefits available under the Company’s executive medical reimbursement
plan in effect as of March 1, 2001.

 
 
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5.4  
Business Expenses.  The Company shall pay or reimburse Executive for all
reasonable business expenses incurred or paid by him during the Employment Term
in the performance of his services.

 
5.5  
Automobile.  So long as employed, Executive shall receive either an automobile
owned or leased by the Company or a monthly automobile allowance, as determined
by the Company, which automobile or allowance shall be at least equivalent to
that which the Company was providing to Executive as of April 30, 2006.  The
automobile allowance, if applicable, 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 the automobile allowance was accrued.

 
5.6  
Equity Incentive Compensation.  So long as employed, Executive shall be eligible
to participate in any applicable equity incentive compensation program of the
Company on the terms set forth by the Compensation Committee in its sole
discretion.

 
6.  
PROPRIETARY RIGHTS AND NON-COMPETITION.

 
Executive acknowledges that the Company is engaged in a continuous program of
research, development and production in connection with its business, present
and future, and hereby covenants as follows:
 
6.1  
Confidentiality.   Executive will maintain in confidence and will not disclose
or use, either during or after the Employment Term, any proprietary or
confidential information or know-how belonging to the Company (“Proprietary
Information” hereinafter defined), whether or not in written form, except to the
extent required to perform duties on behalf of the Company.  For purposes of
this Agreement, “Proprietary Information” shall mean any information, not
generally known to the relevant trade or industry, which was obtained from the
Company, or which was learned, discovered, developed, conceived, originated or
prepared by Executive in connection with this Agreement.  Such Proprietary
Information includes, without limitation, software, technical and business
information relating to the Company’s inventions or products, research and
development, production processes, manufacturing and engineering processes,
machines and equipment, finances, customers, marketing and production and future
business plans, information belonging to customers or suppliers of the Company
disclosed incidental to Executive’s performance under this Agreement, and any
other information which is identified as confidential by the Company, but only
so long as the same is not generally known in the relevant trade or industry.

 
 
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6.2  
Inventions.

 
6.2.1    
Definition of Inventions.  For purposes of this Agreement, “Inventions” shall
mean any new or useful art, discovery, contribution, finding or improvement,
whether or not patentable, and all related know-how.  Inventions shall include,
without limitation, all designs, discoveries, formulae, processes, manufacturing
techniques, semiconductor designs, computer software, inventions, improvements
and ideas.

 
6.2.2    
Disclosure and Assignment of Inventions.  Executive will promptly disclose and
describe to the Company all Inventions which he may solely or jointly conceive,
develop, or reduce to practice during the Employment Term or the Consulting
Period (as defined in Section 7.7) (i) which relate at the time of conception,
development, or reduction to practice of the Invention to the Company’s business
or actual or demonstrably anticipated research or development, (ii) which were
developed, in whole or in part, on the Company’s time or with the use of any of
the Company’s equipment, supplies, facilities or trade secret information, or
(iii) which resulted from any work performed by  Executive for the Company (the
“Company’s Inventions”).  Executive hereby assigns to the Company all of his
right, title and interest world-wide in and to the Company’s Inventions and in
all intellectual property rights based upon the Company’s Inventions; provided,
however, that Executive does not assign or agree to assign any Inventions,
whether or not relating in any way to the Company’s business or demonstrably
anticipated research and development, which were made by him prior to the date
of this Agreement, or which were developed by him independently during the
Employment Term and not under the conditions stated in subparagraph (ii) above.

 
6.3  
Documents and Materials.  Upon termination of this Agreement or at any other
time upon the Company’s request, Executive will promptly deliver to the Company,
without retaining any copies, all documents and other materials furnished to him
by the Company (other than personal copies of documents relating to Executive’s
employment terms), prepared by him for the Company or otherwise relating to the
Company’s business, including, without limitation, all written and tangible
material in his possession incorporating any Proprietary Information.

 
6.4  
Competitive Employment.  During the Employment Term, the Consulting Period (as
defined in Section 7.7), if applicable, and for a period of two (2) years
thereafter (collectively, the “Extended Term”), Executive will not engage in any
employment, consulting, or other activity in any business competitive with the
Company without the Company’s written consent, which consent shall not be
unreasonably withheld; provided, however, that nothing in this Section 6.4 shall
preclude Executive from serving as a director of any other corporation, or a
partner or investor in a private equity firm.

 
 
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6.5  
Non-Solicitation.  During the Extended Term, Executive will not solicit or
encourage, or cause others to solicit or encourage, any employees of the Company
to terminate their employment with the Company.

 
6.6  
Acts to Secure Proprietary Rights.

 
6.6.1    
Further Acts.  Executive agrees to perform, during and after the Employment Term
and the Consulting Period, if applicable, all acts deemed necessary or desirable
by the Company to permit and assist it, at its expense, in perfecting and
enforcing the full benefits, enjoyment, rights and title throughout the world in
the Company’s Inventions.  Such acts may include, without limitation, execution
of documents and assistance or cooperation in the registration and enforcement
of applicable patents and copyrights or other legal proceedings.

 
6.6.2    
Appointment of Attorney-In-Fact.  In the event that the Company is unable, for
any reason whatsoever, to secure Executive’s signature to any lawful and
necessary document required to apply for or execute any patent, copyright or
other applications with respect to any of the Company’s Inventions (including
improvements, renewals, extensions, continuations, divisions or continuations in
part thereof), Executive hereby irrevocably appoints the Company and its duly
authorized officers and agents as his agents and attorneys-in-fact to execute
and file any such application and to do all other lawfully permitted acts to
further the prosecution and issuance of patents, copyrights or other rights
thereon with the same legal force and effect as if executed by him, intending
hereby to create a so-called “durable power” which will survive any subsequent
disability.

 
6.7  
No Conflicting Obligations.  Executive’s performance of this Agreement does not
breach and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him.

 
6.8  
Corporate Opportunities.  Executive agrees that during the Employment Term and
the Consulting Period, if applicable, he will first present to the Board, for
its acceptance or rejection on behalf of the Company, any opportunity to create
or invest in any company which is or will be involved in equipping or furnishing
airplane cabin interiors, which comes to his attention and in which he, or any
of his affiliates, might desire to participate.  If the Board rejects the same
or fails to act thereon in a reasonable time, Executive shall be free to invest
in, participate or present such opportunity to any other natural person,
corporation, limited liability company, limited or general partnership, or any
other entity (each, a “Person”).

 
 
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6.9  
Specific Performance.  Executive acknowledges that a breach of any of the
promises or agreements contained herein could result in irreparable and
continuing damage to the Company for which there may be no adequate remedy at
law, and the Company shall be entitled to seek injunctive relief and/or a decree
for specific performance.

 
7.  
TERMINATION AND CHANGE OF CONTROL.

 
7.1  
Termination Date; Termination or Resignation other than Contemporaneously with a
Change of Control.

 
7.1.1    
Termination Date.  The term “Termination Date” shall mean the date on which
Executive incurs a Separation from Service (as defined below) with the Company
and its subsidiaries and affiliates for any reason.

 
7.1.2    
Termination by Executive.  If Executive resigns his employment for any reason
other than (i) death pursuant to Section 7.2, (ii) Incapacity pursuant to
Section 7.3,  (iii) Good Reason following a Change of Control pursuant to
Section 7.4.3 or (iv) contemporaneously with a Change of Control pursuant to
Section 7.4.2, then on the Termination Date, Executive shall receive payment of
(A) any accrued and unpaid Salary and benefits through the Termination Date, (B)
the entire remaining unpaid balance of the Retirement Compensation pursuant to
Section 7.6 hereof, determined as of the Termination Date, and (C) the Severance
Payment pursuant to Section 7.5 hereof.  In addition, Executive and his spouse
shall continue to be entitled to medical, dental and health benefits pursuant to
Section 5.3 hereof and the Company shall engage Executive to render consulting
services to the Company in accordance with Section 7.7 hereof.

 
7.1.3    
Termination by the Company.  If the Company terminates Executive’s employment
hereunder for any reason other than (i) death pursuant to Section 7.2, (ii)
Incapacity pursuant to Section 7.3 or (iii) contemporaneously with a Change of
Control pursuant to Section 7.4.2, then on the Termination Date, Executive shall
receive payment of (A) any accrued and unpaid Salary and benefits through the
Termination Date, (B) any bonuses payable to Executive for any fiscal periods of
the Company ending prior to the Termination Date, (C) a lump-sum amount equal to
his Salary that he would have received had he remained employed from the
Termination Date through the Expiration Date, (D) the entire remaining unpaid
balance of the Retirement Compensation pursuant to Section 7.6 hereof,
determined as of the Expiration Date, and (E) the Severance Payment pursuant to
Section 7.5 hereof.  In addition, (x) Executive and his spouse shall continue to
be entitled to medical, dental and health benefits pursuant to Section 5.3
hereof, (y) any stock options or restricted stock awards (“Equity Awards”)
granted to Executive that would not vest on or prior to the Termination Date
shall vest and be exercisable immediately, and, notwithstanding any termination
of employment provisions set forth in the applicable agreement or related plan,
all Equity Awards shall continue to be exercisable until their original stated
expiration date and (z) the Company shall engage Executive to render consulting
services to the Company in accordance with Section 7.7 hereof.

 
 
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7.2  
Death.

 
7.2.1    
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 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 payment equal to (i) the Salary that would have been due to Executive
had this Agreement been in effect from the date of his death until the
Expiration Date and (ii) the entire remaining unpaid balance of the Retirement
Compensation as provided in Section 7.6 below, determined as of the Termination
Date.

 
7.2.2    
Upon Executive’s death at any time during or after the Employment Term, the
Company shall, within thirty (30) days following the date of death, also pay to
such Person as 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 death benefit in the amount of three (3) million dollars in accordance
with the Death Benefit Agreement attached as Exhibit A hereto.

 
7.2.3    
The Company shall, within thirty (30) days following Executive’s date of death,
also pay to such Person as 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 and
benefits through his date of death, and (ii) any bonuses payable to Executive
for any fiscal periods of the Company ending prior to the date of
death.  Executive’s spouse shall continue to be entitled to medical, dental and
health benefits pursuant to Section 5.3 hereof.

 
7.2.4    
Upon Executive’s death, any Equity Awards granted to Executive that would not
vest on or prior to the Termination Date shall vest and, if applicable, be
exercisable immediately and, notwithstanding any termination of employment
provisions set forth in the applicable agreement or related plan, all Equity
Awards shall continue to be exercisable until their original stated expiration
date.

 
7.3  
Incapacity.  If, in the reasonable judgment of the Compensation Committee, as a
result of the Executive’s incapacity due to a medically determinable physical or
mental illness, the Executive shall have been absent from his full-time duties
as described hereunder for the entire period of twenty-nine (29) consecutive
months (“Incapacity”), the Executive’s employment shall terminate at the end of
the twenty-nine (29)-month period as provided in this Section 7.3.  In such
event:

 
 
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(i)      
the Company shall give prompt notice to Executive of any such termination;

 
(ii)      
the Company shall pay to the Executive within sixty (60) days following the
Termination Date, a lump-sum amount equal to two (2) times the Salary (at the
rate in effect on the Termination Date) that would have been payable from the
Termination Date through the Expiration Date;

 
(iii)      
the Company shall pay to Executive the entire remaining unpaid balance of the
Retirement Compensation as provided in Section 7.6 and below, determined as of
the Termination Date;

 
(iv)      
the Company shall pay to Executive within ten (10) business days after the
Termination Date a lump-sum amount equal to (A) any accrued and unpaid Salary
and benefits through the Termination Date and (B) any bonuses payable to
Executive for any fiscal periods of the Company ending prior to the Termination
Date;

 
(v)      
the Company shall continue to provide medical, dental and health benefits as
provided in Section 5.3 hereof; and

 
(vi)      
any Equity Awards granted to Executive that would not vest on or prior to the
Termination Date shall vest and, if applicable, be exercisable immediately and,
notwithstanding any termination of employment provisions set forth in the
applicable agreement or related plan, such Equity Awards shall continue to be
exercisable until their original stated expiration date.

 
Any dispute between the Compensation Committee and Executive with respect to
Executive’s Incapacity shall be settled by reference to a competent medical
authority mutually agreed to by the Compensation Committee and Executive or his
personal representative, whose decision shall be binding on all parties.
 
7.4  
Change of Control; Definitions.

 
7.4.1    
Change of Control.  If a “Change of Control” of the Company occurs, the Company
will be obligated as provided in this Section 7.4.1.  For purposes of
determining the Company’s obligations under this Section 7.4.1, 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:

 
 
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(i)      
pay to Executive the amount of any Gross-Up Payment payable by the Company to
Executive under Section 7.8 hereof in accordance with the payment terms therein;

 
(ii)      
continue to provide to Executive and his spouse, for their respective lifetimes,
medical, dental and health benefits as provided in Section 5.3 hereof; provided,
however, that the terms and level of such benefits shall be substantially
similar as Executive and his spouse were receiving as of the Change of Control
Date, or if greater, as they were receiving on December 31, 2004; and

 
(iii)      
provide that any Equity Awards granted to Executive that would not vest on or
prior to the Change of Control Date shall vest, settle and, if applicable, be
exercisable upon the earlier of (i) the Change of Control Date and (ii) the
execution of an agreement, if any, that would constitute a Change of Control
(regardless of whether such agreement is consummated), and, notwithstanding any
termination of employment provisions set forth in the applicable agreement or
related plan, such Equity Awards shall continue to be exercisable until their
original stated expiration date.

 
7.4.2    
Termination or Resignation Contemporaneous with a Change of Control.  If,
contemporaneously with a Change of Control, Executive’s employment is terminated
by the Company for any reason or Executive resigns his employment for any reason
other than for Good Reason pursuant to Section 7.4.3, the Company shall:

 
    (i)      
pay to Executive on the Termination Date a lump-sum amount equal to (A) any
accrued and unpaid Salary and benefits through the Termination Date and (B) any
bonuses payable to Executive for any fiscal periods of the Company ending prior
to the Termination Date;

 
(ii)      
pay to Executive the entire remaining unpaid balance of the Retirement
Compensation, as provided in Section 7.6 and below, determined as of the
Termination Date;

 
(iii)      
continue to provide medical, dental and health benefits as provided in
Section 5.3 hereof;

 
(iv)      
engage Executive to render consulting services to the Company in accordance with
Section 7.7 hereof; and

 
(v)      
pay to Executive the Severance Payment pursuant to Section 7.5 hereof.

 
 
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For purposes of this Agreement, a termination by the Company will be deemed to
be made “contemporaneously” with a Change of Control if (A) it is made pursuant
to at least 120 days’ prior written notice from the Company to Executive and
(B) it is effective as of the Change of Control Date.
 
7.4.3    
Resignation for Good Reason following a Change of Control.  If, following a
Change of Control, Executive resigns his employment for Good Reason, then on the
Termination Date, Executive shall receive,  payment of (A) any accrued and
unpaid Salary and benefits through the Termination Date, (B) any bonuses payable
to Executive for any fiscal periods of the Company ending prior to the
Termination Date, (C) a lump-sum amount equal to his Salary from the Termination
Date through the Expiration Date, (D) the entire remaining unpaid balance of the
Retirement Compensation pursuant to Section 7.6 hereof, determined as of the
Expiration Date, and (E) the Severance Payment pursuant to Section 7.5
hereof.  In addition, (x) Executive and his spouse shall continue to be entitled
to medical, dental and health benefits pursuant to Section 5.3 hereof, (y) any
Equity Awards granted to Executive that would not vest on or prior to the
Termination Date shall vest, settle and be exercisable immediately, and,
notwithstanding any termination of employment provisions set forth in the
applicable agreement or related plan, all Equity Awards shall continue to be
exercisable until their original stated expiration date and (z) the Company
shall engage Executive to render consulting services to the Company in
accordance with Section 7.7 hereof.

 
7.4.4    
Grantor Trust.  If, at any time during the Employment Term it appears that a
Change of Control is likely to occur, the Company hereby agrees to establish a
trust pursuant to Rev. Proc. 92-64, promulgated under Subpart E, part I,
subchapter J, chapter I, subtitle A of the Code, as modified by Notice
2000-56.  The grantor trust shall serve as a vehicle for accumulating assets to
secure its potential obligations to Executive in the event of a Change of
Control.  Such obligation may be paid from the general assets of the Company or
from the assets of any such rabbi trust.  Any trust so established and any
assets held therein will be subject to the claims of the Company’s creditors in
the event of insolvency or bankruptcy.

 
7.4.5    
Definitions.

 
(i)      
For purposes of this Agreement, a “Change of Control” means:

 
(A)      
Individuals who, as of January 1, 2005 (the “Effective Date”) constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board, 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;

 
 
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(B)      
a transaction or other event occurs such that any Person or Persons acting as a
group acquires ownership of stock of the Company that, together with stock held
by such Person or group, constitutes more than 50% of the total fair market
value or total voting power of the stock of the Company;

 
(C)      
a transaction or other event occurs such that any one Person or group acquires
(or has acquired during the twelve (12)-month period ending on the date of the
most recent acquisition by such Person or group) ownership of stock of the
Company possessing 35% or more of the total voting power of the stock of the
Company; or

 
(D)      
a transaction or other event occurs such that any one Person or group acquires
(or has acquired during the twelve (12)-month period ending on the date of the
most recent acquisition by such Person or group) ownership of assets of the
Company that have a total gross fair market value equal to or more than 40% of
the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions; provided, however, that
no acquisition of ownership of the assets of the Company shall be deemed a
Change of Control if the acquiring Person or group is:

 
(1)      
A shareholder of the Company in exchange for or with respect to its stock;

 
(2)      
Any Majority Owned Entity, as defined below, of the Company;

 
(3)      
A Person or group of which the Company is a Majority Owned Entity; or

 
 
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(4)      
A Majority Owned Entity of any Person or group described by (3), above.

 
(ii)      
For the purposes of this Section 7.4.5, Persons will not be considered to be
acting as a group solely because they purchase or own stock of the same
corporation at the same time, or as the result of the same public
offering.  However, Persons will be considered to be acting as a group if they
are owners of a Person that enters into a merger, consolidation, purchase or
acquisition of stock or assets or similar business transaction with the Company.

 
(iii)      
For the purposes of this Section 7.4.5, a “Majority Owned Entity” of any Person
is any entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by such Person.

 
(iv)      
A Change of Control shall occur on the effective date of any event specified in
Section 7.4.5(i) above.  In connection with any determination of ownership for
purposes of Section 7.4.5(i) above, the attribution rules of Section 318(a) of
the Internal Revenue Code of 1986, as amended (the “Code”), shall apply.

 
(v)      
For purposes of this Agreement, “Good Reason” means:

 
(A)      
Any decrease in Executive’s Salary or a failure by the Company to pay any
material compensation due and payable to Executive in connection with his
employment;

 
(B)      
Any change in Executive’s responsibilities, positions, duties, status, title or
reporting relationships;

 
(C)      
Executive ceasing to be the Chief Executive Officer of a publicly traded company
pursuant to this Agreement;

 
(D)      
Following a Change of Control, the Company (or its successor) requiring
Executive to be based at any office or location other than Executive’s principal
place of employment immediately prior to the effective date of the Change of
Control, if applicable; or

 
(E)      
A material breach by the Company of any term of this Agreement;

 
 
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provided that Executive has given notice thereof to the Company and the Company
has not cured the Good Reason within thirty (30) days after receiving such
notice.
 
7.5  
Severance Payment.

 
If Executive’s employment with the Company is terminated for any reason, other
than due to (i) Executive’s death pursuant to Section 7.2 hereof, or (ii)
Executive’s Incapacity pursuant to Section 7.3 hereof, then on the Termination
Date, the Company shall pay to Executive a lump-sum amount equal to the Salary
in effect on the Termination Date, which lump-sum shall not be pro-rated (the
“Severance Payment”).  The obligations of the Company pursuant to this
Section 7.5 are in addition to any other obligations under Section 7 hereof.
 
7.6  
Retirement Compensation.

 
7.6.1    
Amount of Retirement Compensation. In recognition that Executive founded the
Company and will not be eligible for any retirement plan to be offered by the
Company to its executives (as provided in Section 5.3 above), Executive shall be
entitled to an annual retirement compensation contribution ("Retirement
Compensation") equal to the product of 1.5 times the annual Salary then in
effect (the "Specified Annual Salary"), with a ratable adjustment should
Executive's final period of service be less than a full year.  In addition, the
Executive shall be entitled to supplemental contributions equal to the
difference between all prior Retirement Compensation payments and the amounts
that would have been paid had such payments been made based on the most recent
Specified Annual Salary.  The Retirement Compensation as so determined shall be
paid to Executive (or in the event of Executive's subsequent death, to such
Person as Executive shall have designated in a notice filed with the Company or,
if no such Person shall have been designated, to his estate) at the times
specified in Section 7.6.2 below, or contributed to the Retirement Trust
described in Section 7.6.3 below in accordance with that Section.  The amount of
the Retirement Compensation so due and payable shall not be present-valued or
otherwise reduced by use of any other discount or discounting method.

 
7.6.2    
Payment of Retirement Compensation.

 
(i)      
Within five business days after the date on which the BE Aerospace, Inc.
Executive Compensation Trust II dated April 21, 1999, as amended, is terminated
(the “Distribution Date”), the Company will distribute the amount of Retirement
Compensation that would have been payable to Executive under Section 7.6.1 as of
the Distribution Date, based on his years of service through the Distribution
Date and his then Specified Annual Salary.

 
(ii)      
Within five (5) business days after Executive’s actual Termination Date, the
Company shall pay to Executive an amount equal to (x) the Retirement
Compensation payable to Executive as determined in Section 7.6.1 hereof less (y)
the sum of (1) the amount of Retirement Compensation previously distributed to
Executive pursuant to Section 7.6.2(i) hereof, and (2) the amounts previously
distributed pursuant to Section 7.6.3(i) or 7.6.3(ii).

 
 
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7.6.3    
Retirement Trust.

 
(i)      
Within ninety (90) days after the Distribution Date, the Company shall establish
a trust for the duration of the Employment Term, and, commencing on such date
and on a quarterly basis thereafter, each a “Contribution Date” the Company
shall contribute to the trust (the “Retirement Trust”) for the benefit of
Executive an amount equal to (a) the Retirement Compensation that would be
payable to Executive under Section 7.6.2(ii) if the Contribution Date was his
Termination Date minus (b) the total of all contributions made to the Retirement
Trust by the Company as of such Contribution Date.  The Retirement Trust to
which the Company shall make these contributions shall be irrevocable.  The
Retirement Trust shall provide that Executive may withdraw from the Retirement
Trust, within the thirty (30)-day period beginning on the date on which he
receives notice from the Company that the Company has made a contribution
pursuant to this Section 7.6.3(i), an amount up to but not to exceed the amount
of that contribution.  If and to the extent that Executive fails to exercise
this withdrawal right within the thirty (30)-day period, such withdrawal right
shall lapse.  The Retirement Trust also shall contain such other provisions as
the Company and Executive reasonably agree are necessary in order for the
Retirement Trust to qualify as a grantor trust under Section 671 of the Code
with Executive as the grantor.  The trust agreement for the Retirement Trust
shall provide that any assets remaining in the Retirement Trust, after payment
of all the Retirement Compensation payable pursuant to this Section 7.6, shall
be paid to Executive, and that the Retirement Trust shall be exempt from the
claims of the Company’s creditors.

 
(ii)      
The Executive shall be responsible for all applicable Federal, State and local
income and employment taxes due with respect to each contribution made by the
Company under Section 7.6.3(i).  As of the last day of each calendar quarter
ending on or after the Distribution Date, during the Employment Term, the
trustee of the Retirement Trust shall be required to distribute to Executive 25%
of the amount by which (x) the Assumed Taxes that the Company reasonably
estimates will be assessed upon Executive for the calendar year for which the
distribution is being made as a result of his beneficial interest in the
Retirement Trust, exceeds (y) the amount withdrawn by Executive in such calendar
year pursuant to Section 7.6.3(i).  For this purpose, the term “Assumed Taxes”
shall mean the Federal, State and local income and employment taxes that would
be payable by Executive for the year in question, assuming that the amount
taxable would be subject to the highest Federal and applicable State and local
income and employment taxes.

 
 
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7.7  
Consulting Arrangement.  In the event that Executive’s employment terminates for
any reason (including, without limitation, Executive’s voluntary resignation)
other than death pursuant to Section 7.2 or Incapacity pursuant to Section 7.3,
then the Company shall retain Executive to perform consulting services for a
period of five (5) years following the Termination Date (the “Consulting
Period”).  The terms of Executive’s consulting arrangement are set forth on
Exhibit B attached hereto.

 
7.8  
Certain Additional Payments by the Company.

 
7.8.1    
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment, distribution, benefit, equity-based or
other compensation or other transfer or action by the Company to or for the
benefit of Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise  and including without
limitation any additional payments required under this Section 7.8) (a
“Payment”) would be subject to an excise tax imposed by Section 4999 of the
Code, or any interest or penalties are incurred by Executive with respect to any
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), the Company shall
make a payment to Executive (a “Gross-Up Payment”) in an amount such that after
payment by Executive of all taxes (including any Excise Tax) imposed upon the
Gross-Up Payment, Executive retains (or has had paid to the Internal Revenue
Service on his behalf) an amount of the Gross-Up Payment equal to the sum of (x)
the Excise Tax imposed upon the Payments and (y) the product of any deductions
disallowed because of the inclusion of the Gross-Up Payment in Executive’s
adjusted gross income and the highest applicable marginal rate of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made.  For
purposes of determining the amount of the Gross-Up Payment, Executive shall be
deemed to (i) pay federal income taxes at the highest marginal rates of federal
income taxation for the calendar year in which the Gross-Up Payment is to be
made, and (ii) pay applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the Gross-Up Payment is
to be made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local income and employment
taxes.  The Gross-Up Payment shall be paid to the Executive no later than the
end of the taxable year next following the taxable year in which the Executive
remits the taxes related to the Gross-Up Payment.

 
 
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7.8.2    
Subject to the provisions of Section 7.8.3, all determinations required to be
made under this Section 7.8, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Deloitte & Touche
LLP (the “Accounting Firm”) which shall provide detailed supporting calculations
both to the Company and Executive within fifteen (15) business days of the
receipt of notice from Executive that there has been a Payment, or such earlier
time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.  Any
Gross-Up Payment, as determined pursuant to this Section 7.8, shall be paid by
the Company to Executive promptly following the receipt of the Accounting Firm’s
determination but in no event later than the end of the taxable year next
following the taxable year in which the Accounting Firm’s determination is
received.  If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion that failure to
report the Excise Tax on Executive’s applicable federal income tax return would
not result in the imposition of a negligence or similar penalty.  Any
determination by the Accounting Firm shall be binding upon the Company and
Executive.  As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder.  In the event that the Company
exhausts its remedies pursuant to Section 7.8 and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive but in no event later than the end of the taxable year next following
the taxable year in which the Executive remits the taxes.  The previous sentence
shall apply mutatis mutandis to any overpayment of the Gross-Up Payment.

 
7.8.3    
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment.  Such notification shall be given as soon as practicable
but no later than ten (10) business days after Executive is informed in writing
of such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid.  Executive shall not pay such
claim prior to the expiration of the thirty (30)-day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due).  If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:

 
 
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(i)      
give the Company any information reasonably requested by the Company relating to
such claim,

 
(ii)      
take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,

 
(iii)      
cooperate with the Company in good faith in order effectively to contest such
claim, and

 
(iv)      
permit the Company to participate in any proceedings relating to such claim;

 
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without limitation on the foregoing provisions
of this Section 7.8.3, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay such
claim and sue for a refund, to the extent permitted by law, the Company shall
advance the amount of such payment to Executive, on an interest-free basis and
shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount.  Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
 
 
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7.8.4    
If, after the receipt by Executive of an amount advanced by the Company pursuant
to Section 7.8.3, Executive becomes entitled to receive any refund with respect
to such claim, Executive shall (subject to the Company’s complying with the
requirements of Section 7.8.3 promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after the receipt by Executive of an amount advanced
by the Company pursuant to Section 7.8.3, a determination is made that Executive
shall not be entitled to any refund with respect to such claim and the Company
does not notify Executive in writing of its intent to contest such denial of
refund prior to the expiration of thirty (30) days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.

 
 
7.9  
Restricted Stock Award.  On July 31, 2006, the Company granted to Executive,
without payment by Executive, 387,878 shares of restricted common stock of the
Company (the “Restricted Stock”).  The Restricted Stock was granted pursuant to
and on the terms provided in the Company’s 2005 Long-Term Incentive Plan, as
amended (the “Plan”), and, to the extent not inconsistent with the terms hereof,
the applicable Restricted Stock Award Document (as defined in the Plan).  The
Restricted Stock granted to Executive pursuant to this Section 7.9 will vest and
become unrestricted ratably over a four (4)-year period commencing on July 31,
2007, the first (1st) anniversary of the grant date and or each anniversary
thereafter, provided that Executive is employed by the Company or is rendering
consulting services pursuant to Section 7.7 hereof on each vesting date.  In
addition, the Restricted Stock will immediately become fully vested and
unrestricted, (i) immediately prior to a Change of Control, (ii) upon
Executive’s death or termination due to Incapacity, or (iii) upon termination of
Executive’s employment by the Company for any reason.  For the avoidance of
doubt, all vesting of the Restricted Stock pursuant to this Section 7.9 shall be
subject to the provisions of Sections 7.8 and 12 of this Agreement.

 
8.  
WITHHOLDING.

 
Without limiting the effect of Sections 7.8 and 12, all payments made by the
Company under this Agreement shall be reduced by any amounts in respect of
income, social security, FICA and other similar taxes at the then-prevailing
rates required to be withheld by the Company under applicable law.
 
9.  
INDEMNIFICATION.

 
To the maximum extent permitted under Florida law as from time to time in
effect, and subject to any mandatory exclusion of indemnification under Delaware
law applicable to the indemnification of Executive under this Section 9, the
Company hereby agrees to indemnify Executive and hold him harmless from, against
and in respect of any and all damages, deficiencies, actions, suits,
proceedings, demands, assessments, judgments, claims, losses, costs, expenses,
obligations and liabilities arising from or related to the performance of the
services under this Agreement by  Executive.
 
 
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10.  
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
for a period of up to twenty (20) years.  Such costs and expenses shall be
advanced to Executive currently as reasonably required to continue such action
or proceeding.
 
11.  
UNFUNDED STATUS.

 
This Agreement is intended to constitute an unfunded plan for incentive
compensation.  Except with respect to the Retirement Compensation, nothing
contained herein shall give Executive any rights that are greater than those of
a general unsecured creditor of the Company.  In its sole discretion, the
Compensation Committee may authorize the creation of trusts, acquisition of life
insurance policies or other arrangements to meet the obligations created under
this Agreement.
 
12.  
SECTION 409A.

 
12.1  
If any amounts that become due under Section 7 (other than Section 7.8) of this
Agreement constitute “nonqualified deferred compensation” within the meaning of
Section 409A of the Code, 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.  For the avoidance of doubt, the parties agree and acknowledge that the
Retirement Compensation is not “nonqualified deferred compensation” within the
meaning of Section 409A.

 
12.2  
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)
Executive’s date of death.  The Company shall establish a trust pursuant to Rev.
Proc. 92-64, promulgated under subpart E, part I, subchapter J, chapter 1,
subtitle A of the Code, as modified by Notice 2000-56, and fund any such
payments that are deferred pursuant to this Section 12.2 that otherwise would be
immediately payable to  Executive.  The provisions of this Section 12.2 shall
only apply if required to comply with Section 409A of the Code.

 
12.3  
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 of the Code.  “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.

 
 
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12.4  
It is intended that the terms and conditions of this Agreement comply with
Section 409A of the Code.  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, 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:  (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 violating the provisions of Section 409A of the
Code.

 
12.5  
Anything in this Agreement to the contrary notwithstanding, no reimbursement
payable to Executive pursuant to any provisions of this Agreement or pursuant to
any plan or arrangement of the Company or its subsidiary or affiliate 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 of the Code.  No amount
reimbursed during any calendar year shall affect the amounts eligible for
reimbursement in any other calendar year.

 
12.6  
The provisions of Section 7.8 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.

 
13.  
WAIVER.

 
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  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.
 
14.  
SEVERABILITY.

 
If any part of this Agreement is found to be invalid or unenforceable, that part
will be deemed amended to achieve as nearly as possible the same economic effect
as the original provision, and the remainder of this Agreement will remain in
full force and effect.
 
15.  
NOTICES.

 
Any notice or other communication in connection with this Agreement shall be
deemed to be delivered if in writing, addressed as provided below (or to such
other Person or address as to which either party may notify the other in
accordance with this Section 15) and actually delivered at said address:
 
 
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If to Executive, to him at:

Amin J. Khoury
149 South Beach Road
Hobe Sound, FL  33455

If to the Company, to it at:

BE Aerospace, Inc.
1400 Corporate Center Drive
Wellington, FL  33414
Attention:  General Counsel

16.  
SURVIVAL.

 
The provisions of Sections 5.3 and 6 through 17 inclusive hereof shall each
survive any termination or expiration of this Agreement.
 
17.  
MISCELLANEOUS.

 
This Agreement, including the attached exhibits, constitutes the entire
understanding of the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous understandings and agreements, whether
oral or written, regarding such subject matter.  This Agreement may be amended
or modified only by a written instrument signed by Executive and by a duly
authorized representative of the Company.  This Agreement may be executed in any
number of counterparts, which together shall constitute one and the same
instrument.  Except as otherwise provided in this Agreement, this Agreement
shall be governed by and construed in accordance with the laws (other than the
conflicts of law rules) of the State of Florida.  The headings in this Agreement
are for convenience of reference only and shall not alter or otherwise affect
the meaning hereof.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and permitted assigns.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of the
date first above written.
 
EXECUTIVE
 
BE AEROSPACE, INC.
                      /s/ Amin J. Khoury  
By:
/s/ Thomas P. McCaffrey  
Amin J. Khoury
 
Name:
Thomas P. McCaffrey      
Title:
Senior Vice President and Chief Financial Officer                
By:
/s/ Michael B. Baughan      
Name:
Michael B. Baughan      
Title:
President and Chief Operating Officer  

 
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Exhibit A
 
Death Benefit Agreement
 
 
A-1

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Exhibit B
 
Consulting Terms
 
 
 
 
B-1