Exhibit 10.3
 
BE AEROSPACE, INC.
SENIOR EXECUTIVE MANAGEMENT INCENTIVE PLAN – FY 2011

I.  Purpose

The purpose of this Management Incentive Plan (the “Plan” or “MIP”) is to
encourage and reward  a strong, annual relationship between pay and performance
by providing an appropriate level of reward for results that meet or exceed the
performance targets of BE Aerospace, Inc. (the “Corporation”) and its respective
businesses.

II. Eligibility

Eligibility for participation in this Plan is determined by the following senior
executives:  the Chairman & CEO, the President & COO, the Sr. Vice President &
CFO and the Corporate Vice President of Human Resources.  This Plan primarily
includes the Chairman & CEO, the President & COO and the Sr. Vice President &
CFO.   The Corporate Vice President of Human Resources will ensure consistent
eligibility requirements and administration throughout the Corporation.

III. Plan Approval

The financial objectives and strategic initiatives (both criteria and targets)
will be established for the Corporation and the Segment/Site business units at
the beginning of the fiscal year.  These objectives and initiatives are reviewed
by the Chairman & CEO, the President & COO and the Sr. Vice President & CFO and
approved by the Compensation Committee of the Board of Directors (the
“Committee”).

IV. Aggregate Incentive Pool and Targeted Incentive Compensation

Participants in this plan have a bonus target of 150% of base salary.  The
target amount attained may be increased or decreased based on corporate results
achieved.  The aggregate amount of cash incentives payable to all participants
will be determined by multiplying earnings before income taxes by an agreed-upon
percentage, thereby providing an incentive pool which increases or decreases
with pretax earnings.  There are no minimum or maximum MIP payments.

V.  Plan Participation Level

Of the target award indicated above, 80% of this target will be based on the
achievement of financial objectives, and 20% on the achievement of strategic
initiatives (see section VI below).  Actual individual awards can be increased
or decreased by the Committee in its sole discretion based on an individual’s
performance and his/her contribution related to the corporate business unit to
which the individual was assigned during the performance period.
 
 
 

--------------------------------------------------------------------------------

 
 
VI. Plan Components

The Plan features two components, the Financial Objectives and Strategic
Initiatives, which are collectively used to determine the incentive payout
amount:
 
●
Financial Objectives – 80% of the potential incentive payment amount, is based
on the attainment of specified levels of four financial metrics weighted as set
forth below:

 

   
1.
EBIT (earnings before interest and taxes) – weighted at 30%
   
2.
Operating Margin – weighted at 20%
   
3.
Bookings – weighted at 20%
   
4.
Operating Cash Flow – weighted at 30%

 

   
Each year the Committee determines the financial performance objectives under
the MIP based upon the financial plan for that year.  The minimum threshold for
payment under the MIP with respect to a financial performance objective is
generally 80% of the applicable target.  Incentive payments for performance
between 80% and 90% of a financial performance objective would generally not
exceed 10% of the targeted MIP payment, with the actual amount of the incentive
payment between these percentages determined by linear interpolation.  For
performance between 90% and 100%, the actual amount of the incentive payment is
also determined by linear interpolation.  For performance in excess of 100%, the
actual amount of the incentive payment is directly proportionate to the level of
attainment of the financial performance objectives.

 
●
Strategic Initiatives – 20% of the potential incentive payment is based on
discretionary individual performance assessments.  The Corporation does not
establish predetermined individual performance formulas but rather determines
the strategic initiatives which must be attained based on the individual’s role
within the Corporation.  At the end of each year, the Chairman & CEO evaluates
each executive’s performance and provides recommendations to the Committee as to
the individual performance assessment portion of the MIP payment.  The
individual performance assessment process is a discretionary, holistic,
multi-faceted assessment of the executive’s performance during the
year.  Neither the Chairman & CEO nor the Committee uses a specific formula or
applies specific weight when evaluating performance, but rather rely on their
business judgment.  The Chairman & CEO and the Committee generally take into
account one or more of the following factors in connection with the assessment,
as may be applicable:

 

 
o
Implementation and execution of supply chain, lean/continuous improvement
initiatives
 
o
New product development initiatives
 
o
Customer recognition awards such as “Supplier of the Year” and “Customer Support
and Service Champion”
 
o
Process alignment initiatives driven toward simplifying and standardizing key
processes throughout the business
 
o
Asset management
 
o
Domestic and international cost reductions
 
o
Leadership
 
o
Strategic planning
 
o
Financial and operational excellence
 
o
Customer satisfaction
 
o
Staff development, talent management and retention
 
o
Implementation of global human resources strategies
 
o
Implementation of global tax strategies
 
o
Improving operating efficiency
 
o
Implementation of sales strategies
 
o
Client relationship management

 
 
2

--------------------------------------------------------------------------------

 
 
VII.  Administration of the Plan
 
●
Senior Executives assigned to this Plan will receive awards based on corporate
performance.
   
●
The achievement of the financial objectives and strategic initiatives as
previously indicated are the primary factors that determine bonus
eligibility.  In conjunction with this, the actual amount of an individual’s
award is subject to his/her performance and the achievement of business
goals.  Bonus payments are not guaranteed as the Corporation reserves the right
to increase or reduce the amount of the incentive compensation paid under this
Plan at its sole discretion notwithstanding the level of attainment of the
specified objective or individual strategic initiatives.
 
 
●
The Compensation Committee, Chairman & CEO, President & COO, Sr. Vice President
& CFO, and the Corporate Vice President of Human Resources will review
attainment of the business plan goals and objectives at the close of the fiscal
year.  Awards will be paid in cash as soon as practicable after the Corporation
has publicly reported its fiscal year results and in no event later than March
15 following the applicable plan year.
   
●
Exceptions and adjustments to the Plan may be made at the discretion of the
Committee upon the recommendation of the Chairman & CEO, based on input from the
President & COO, Sr. Vice President & CFO, and the Corporate Vice President of
Human Resources.
   
●
Participants in the Plan who enter after the start of the fiscal year may
receive a prorated award.
   
●
Employee Benefits, Taxes and Deductions - Awards paid under this Plan are
subject to applicable taxes, withholding as required by law, 401(k)
contributions and other payroll deductions.
   
●
Transfer or Change of Assignment - A participant transferring into or out of
qualifying positions during the fiscal year may receive a prorated award based
on a share of time spent in the qualifying assignment.
   
●
Termination of Employment - Any participant who resigns or is dismissed from
employment with the Corporation and/or its subsidiaries and affiliates for any
reason or who is not on the active payroll on the date that the award is paid,
will not be eligible for an award. However, a participant who officially retires
from the Corporation after age 60 with ten or more years of service shall be
eligible to receive a prorated award for the period such employee worked as an
eligible participant in the Plan.

 
Nothing in this Plan confers any contractual right, either express or implied,
on any employee to continue in the employment of the Corporation and its
subsidiaries and affiliates, or to continue on any assignment.  Further, nothing
in this Plan will interfere in any way with the at will nature of any
Participant’s employment and the right of the Corporation to terminate the
employment of any employee affected by this Plan at any time and for any reason.

Participation in the Plan is discretionary.  Nothing in this Plan will interfere
in any way with the right of the Corporation to (i) change or modify the terms
and conditions of this Plan, (ii) reassign a participant to a different
incentive plan for future years, or (iii) reassign a participant out of any and
all incentive plans for future years.  In addition, nothing in the Plan confers
on a participant the right or entitlement to receive compensation or bonus in
any specific amount for any future fiscal year.  Moreover, the awards under the
Plan do not constitute wages, or regular, recurrent or contractual compensation
and will have no effect on the determination of employee-related rights or
benefits under law or any plan of the Corporation or its subsidiaries and
affiliates.

The benefits provided pursuant to the awards are in no way secured, guaranteed
or warranted by the Corporation.

 3