EXHIBIT 10.12
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”) is made as of this 1st day of
January, 2009, by and between BE Aerospace, Inc., a Delaware corporation (the
“Company”) and Robert A. Marchetti (the “Executive”).
 
RECITALS
 
WHEREAS, the Company wishes to employ the Executive and the Executive wishes to
accept such employment on the terms and conditions hereafter set forth; and
 
WHEREAS, the Company wishes to make secure for itself the experience, abilities
and services of the Executive and to prevent the loss of such experience,
services and abilities; and
 
WHEREAS, the Executive has successfully completed drug/substance abuse testing,
and the Company has received the results of such testing;
 
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto, each intending to be legally
bound, do hereby agree as follows:
 
1. Employment.  The Company shall employ the Executive, and the Executive shall
perform services for and continue in the employment of the Company, for a period
of two (2) years (the “Employment Period”) commencing on January 1, 2009, and
ending on December 31, 2010 (the “Expiration Date”).
 
2. Position and Duties.  The Executive shall serve the Company in the capacity
of Vice President and General Manager, Distribution Segment, and shall be
accountable to, and shall have such other powers, duties and responsibilities,
consistent with this capacity, as may from time to time be prescribed by the
President and Chief Operating Officer of the Company, or his designee.  The
Executive shall perform and discharge, faithfully, diligently and to the best of
his ability, such powers, duties and responsibilities.  The Executive shall
devote all of his working time and efforts to the business and affairs of the
Company.
 
3. Compensation.
 
(a) Salary.  During the Employment Period, the Executive shall receive a salary
(the “Salary”) payable at the rate of $415,000 per annum.  Such rate may be
adjusted from time to time by the Compensation Committee of the Board of
Directors (the “Compensation Committee”); provided, however, that it shall at no
time be adjusted below $415,000.  The Salary shall be payable biweekly or in
accordance with the Company’s current payroll practices, less all required
deductions.  The Salary shall be pro-rated for any period of service less than a
full year.
 
(b) Incentive Bonus.  During the Employment Period, the Executive may receive an
incentive performance bonus in accordance with the Company’s executive bonus
plan then in effect from time to time, as determined by the Compensation
Committee in its sole discretion.  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 which it shall accrue.
 

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(c) Expenses.  During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable business expenses incurred by
him on behalf of the Company in accordance with the Company’s policies in effect
from time to time.
 
(d) Benefits.  During the Employment Period, the Executive shall be entitled to
participate in or receive benefits under any life or disability insurance,
health, pension, retirement, accident and other employee benefit plans, programs
and arrangements made generally available by the Company to its employees,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements as in effect from time to
time.  In accordance with the Company’s policies as in effect from time to time,
the Executive shall also be entitled to paid vacation in any fiscal year during
the Employment Period as well as all paid holidays given by the Company to its
employees.
 
(e) Automobile.  During the Employment Period, the Executive shall be furnished
with an automobile allowance of $1,100 per month less applicable taxes, payable
in accordance with Company policy, but in no event later than March 15th of the
year following the year in which the Automobile Allowance will accrue.
 
4. Termination and Compensation Thereon.
 
(a) Termination.  Subject to the terms and conditions of this Agreement, the
Executive’s employment pursuant to this Agreement may be terminated either by
the Executive or the Company at any time and for any reason with or without
Cause.  The term “Termination Date” shall mean the earlier of (i) the Expiration
Date; or (ii) if the Executive’s employment is terminated (x) by his death, the
date of his death, or (y) for any other reason, the date on which the Executive
incurs a Separation from Service (as defined below).
 
(b) Death.  The Executive’s employment hereunder shall terminate upon his
death.  In such event, the Company shall within thirty (30) days following his
date of death pay to such person as the 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 the Salary (at the rate in effect as
of the Termination Date) that would have been due to the Executive had this
Agreement been in effect and he remained employed from the date of his death
until the Expiration Date.
 
(c) Incapacity.  If, in the reasonable judgment of the President and Chief
Operating Officer, as a result of the Executive’s incapacity due to physical or
mental illness, the Executive shall have been absent from his full-time duties
as described hereunder for the entire period of six (6) consecutive months
(“Incapacity”), the Executive’s employment shall terminate at the end of the six
(6)-month period.  In such event, upon the Termination Date, the Company shall
pay to the Executive a lump sum payment equal to the Salary (at the rate in
effect as of the Termination Date) payable during the period from the
Termination Date through the Expiration Date.  The lump sum payment shall be
made within sixty (60) days following the Termination Date provided that prior
to the payment date the Executive signs a waiver and release agreement in the
form provided by the Company and such waiver and release becomes effective and
irrevocable in its entirety prior to such date.  If the waiver and release does
not become effective and irrevocable on or prior to the payment date set forth
in the preceding sentence, the Company shall have no further obligations
pursuant to this Section 4(c).  The Company’s obligation to pay the Executive
his Salary shall terminate if the Executive subsequently takes other employment
to the extent of the Executive’s salary and benefits from such subsequent
employment.  Any dispute between the President and Chief Operating Officer and
the Executive with respect to the Executive’s Incapacity shall be settled by
reference to a competent medical authority mutually agreed to by the Senior Vice
President and the Executive, whose decision shall be binding on all parties.
 
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(d) Termination by the Company for Cause; Resignation by the Executive.
 
(i)  If the Executive’s employment is terminated by the Company for Cause or the
Executive resigns his employment for any reason (other than pursuant to Section
4(f) , the Company shall have no further obligations to the Executive hereunder
after the Termination Date, except for unpaid Salary and benefits accrued
through the Termination Date.
 
(ii) For purposes of this Agreement, “Cause” shall mean (i) the Executive’s
material failure, refusal or neglect to perform and discharge his powers, duties
and responsibilities hereunder (including duties prescribed by the President and
Chief Operating Officer pursuant to Section 3), other material breach of the
terms hereof, or breach of any fiduciary duties he may have because of any
position he holds with the Company or any subsidiary or affiliate thereof or
(ii) a felony conviction or a conviction for any crime involving the Executive’s
personal dishonesty or moral turpitude.
 
(e) Full Term Payment.  If the Executive remains employed through the Expiration
Date, he shall be entitled to a lump sum cash payment of $415,000 (the “Full
Service Payment”).  The Full Service Payment shall be made in a cash lump sum on
the second (2nd) anniversary of the Expiration Date.  Notwithstanding the
forgoing, if the Company terminates the Executive’s employment hereunder without
Cause prior to the Expiration Date the Full Service Payment shall be made within
sixty (60) days following the Termination Date.  Payment of the Full Service
Payment is conditioned upon the Executive signing a waiver and release agreement
in the form provided by the Company and such waiver and release agreement
becoming effective and irrevocable in its entirety prior to such date.  If the
waiver and release does not become effective and irrevocable on or prior to the
applicable payment date set forth in this Section 4(e), the Company shall have
no further obligations pursuant to this Section 4(e).  To the extent the
Executive is eligible to receive a payment pursuant to Section 4(f), he shall
not be entitled to a payment pursuant to this Section 4(e).
 
(f) Change of Control.
 
(i) If a “Change of Control” occurs during the Employment Period and, in
connection with or within two years following such Change of Control the
Executive’s employment is terminated by the Company without Cause, or the
Executive resigns his employment because the Executive’s title and duties under
Section 2 above are materially reduced without his agreement, or any
compensation or benefit payable or otherwise extended  to the Executive
hereunder (including without limitation Salary, incentive bonus and benefits set
forth in Section 3 above) is eliminated or reduced, the Company or its
successor  in interest shall: give prompt notice to the Executive of any such
termination, elimination or reduction and pay to the Executive a lump sum
payment equal to:
 
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(x)           the Executive’s Salary (at the rate in effect as of the
Termination Date), which amount shall not be pro-rated and shall be paid in
addition to the Salary due and payable under (y) below;
 
(y)           the Salary (at the rate in effect as of the date of the Change of
Control) payable during the period from the Termination Date through the
Expiration Date; and
 
(z)           his target incentive bonus for the year in which the Termination
Date occurs.
 
The lump sum payment shall be made within sixty (60) days following the
Termination Date; provided that prior to the payment date the Executive signs a
waiver and release agreement in the form provided by the Company and such waiver
and release becomes effective and irrevocable in its entirety prior to such
date.  If the waiver and release does not become effective and irrevocable on or
prior to the payment date set forth in the preceding sentence, the Company shall
have no further obligations pursuant this Section 4(f).
 
(ii) For purposes of this Agreement, a “Change of Control” shall mean a “change
in control event” within the meaning of the default rules under Section 409A of
the U.S. Internal Revenue Code of 1986, as amended, and the regulations and
guidance promulgated thereunder (the “Code”).  The obligations of the Company
pursuant to this Section 4(f) shall survive any termination of this Agreement or
the Executive’s employment or any resignation of such employment by the
Executive pursuant to this Section 4(f).
 
(g) Benefit Continuation.  If the Executive's employment is terminated pursuant
to Sections 4(c), 4(e) or 4(f), the Company shall provide the Executive and his
eligible dependents with continued participation in medical, dental and health
benefit plans available to the Company’s executive officers on similar terms and
conditions as active executives, from the Termination Date until the earlier of
(i) the second (2nd) anniversary of the Expiration Date and (ii) the date the
Executive becomes eligible for comparable benefits provided by a third party;
provided, however, that the continuation of such benefits shall be subject to
the respective terms of the applicable plan, as in effect from time to time, and
the timely payment by the Executive of his applicable share of the applicable
premiums in effect from time to time.  To the extent that reimbursable medical
and dental care expenses constitute deferred compensation for purposes of
Section 409A, the Company shall reimburse the medical and dental care expenses
as soon as practicable consistent with the Company’s practice, but in no event
later than the last day of the calendar year next following the calendar year in
which such expenses are incurred.
 
5. Consulting Arrangement.
 
(a) Consulting Services.  Upon the Expiration Date, the Company shall engage the
Executive to provide consulting services to the Company for a period of two (2)
Years (the “Consulting Period”).  During the Consulting Period, the Executive
shall provide advice and consultation to the Company and such other services
mutually agreed to by the Executive and the Company (the “Consulting
Services”).  At all times the Consulting Services shall be nonexclusive and the
Executive shall only be required to devote so much time as is reasonably
necessary to discharge the Consulting Services. If the Executive incurs a
Separation from Service for any reason prior to the Expiration Date, the Company
shall not be obligated to engage the Executive to provide the Consulting
Services pursuant to this Section 5.
 
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(b) Service Standards.  The Executive shall perform the Consulting Services in a
commercially reasonable manner.  In no event shall the Executive have any
liability to the Company arising out of or related to the Executive’s
performance of the Consulting Services except to the extent it arises directly
by reason of the Executive’s gross negligence or willful misconduct in
performing such Consulting Services.
 
(c) Consulting Fees.  During the Consulting Period, the executive shall receive
a monthly consulting fee $21,067 payable in monthly installments in arrears on
the last day of the month (pro-rated for partial months).   
 
(d) Expenses.  During the Consulting Period the Company shall pay or reimburse
the Executive for reasonable out-of-pocket expenses incurred in connection with
the Executive’s performance of the Consulting Services in accordance with past
practices.
 
(e) Independent Contractor.  The Executive acknowledges that the Consulting
Services shall be performed in the capacity of an “independent contractor,” that
the Executive is solely responsible for the Executive’s actions or inactions,
and that nothing in this Agreement shall be construed to create an employment
relationship between the parties during the Consulting Period.  The Executive
agrees that, with respect to the Consulting Services provided hereunder, the
Executive is not an employee of the Company for any purpose, including, without
limitation: (i) for federal, state or local tax, employment, withholding or
reporting purposes; or (ii) for eligibility or entitlement to any benefit under
any of the Company’s employee benefit plans (including, without limitation,
those plans that are subject to the Employee Retirement Income Security Act of
1974, as amended), incentive compensation or other employee programs or
policies.
 
(f) Code of Conduct.  During the Consulting Period, the Executive shall comply
with the Company’s Code of Conduct and its Delegations of Authority, each as in
effect from time to time (as if he was a non-management employee with respect to
the Delegation of Authority Policy).
 
(g) Indemnification.  To the fullest extent permitted under applicable laws,
rules and regulations and the Company’s applicable corporate governance
documents, the Company agrees to indemnify and hold the Executive harmless from
any loss or liability, cost and expense (including, but not limited to,
reasonable attorney’s fees) incurred by the Executive as a result of his being
made a party to any action or proceedings by reason of his provision of the
Consulting Services.
 
(h) Payment of Taxes.  The Executive shall be responsible for and shall maintain
adequate records of expenses that he incurs in the course of performing the
Consulting Services hereunder and shall be solely responsible for and shall
file, on a timely basis, tax returns and payments required to be filed with or
made to any federal, state or local tax authority with respect to his
performance of the Consulting Services.  Neither federal, state nor local income
tax of any kind shall be withheld or paid by the Company with respect to any
amount paid to the Executive pursuant to this Consulting Agreement.  The
Executive agrees that he is responsible for withholding and paying all
employment taxes and income withholding taxes as required.
 
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(i) Proprietary Rights Agreement.  The Proprietary Rights Agreement dated as of
[-----] between the Executive and the Company attached as Exhibit A  shall
remain in full force and effect during the Consulting Period.
 
6. Amendments.  No amendment to this Agreement or any schedule hereto shall be
effective unless it shall be in writing and signed by each party hereto.
 
7. Notices.  All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or sent by telecopy or three
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
 
If to the Company, to it at

BE Aerospace, Inc.
1455 Fairchild Road
Winston-Salem, NC  27105
Attention: President and Chief Operating Officer

With a copy to:

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

If to the Executive, to him at:

2499 Eagle Watch Lane
Weston, FL 33327

8. Entire Agreement.  This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties; provided, however, that this Agreement
shall not supersede the Proprietary Rights Agreement between the Executive and
the Company attached as Exhibit A which is incorporated herein by reference.
 
9. Headings.  The headings in this Agreement are for convenience of reference
only and shall not alter or otherwise affect the meaning hereof.
 
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10. Counterparts.  This Agreement may be executed in any number of counterparts
which together shall constitute one instrument.
 
11. Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of the State of
Florida.
 
12. Withholding.  All payments made by the Company under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under
applicable law.
 
13. Section 409A.
 
(a) If any amounts that become due under Section 4 of this Agreement constitute
“nonqualified deferred compensation” within the meaning of Section 409A of the
Code and the regulations promulgated thereunder (“Section 409A”), 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.
 
(b) 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) the Executive’s date of death.  The provisions of this Section 13(b) shall
only apply if required to comply with Section 409A.
 
(c) For purposes of this Agreement, “Separation from Service” shall have the
meaning set forth in Section 409A(a)(2)(A)(i) and determined in accordance with
the default rules under Section 409A.  “Specified Employee” shall have the
meaning set forth in Section 409A(a)(2)(B)(i), as determined in accordance with
the uniform methodology and procedures adopted by the Company and then in
effect.
 
(d) It is intended that the terms and conditions of this Agreement comply with
Section 409A.  If any provision of this Agreement contravenes any regulations or
Treasury guidance promulgated under Section 409A, or could cause any amounts or
benefits hereunder to be subject to taxes, interest and penalties under
Section 409A, the Company may, in its sole discretion and without the
Executive’s consent, modify the Agreement to:  (i) comply with, or avoid being
subject to, Section 409A, (ii) avoid the imposition of taxes, interest and
penalties under Section 409A, and/or (iii) maintain, to the maximum extent
practicable, the original intent of the applicable provision without
contravening the provisions of Section 409A. This Section 13(d) does not create
an obligation on the part of the Company to modify this Agreement and does not
guarantee that the amounts or benefits owed under this Agreement will not be
subject to interest and penalties under Section 409A.
 
(e) Anything in this Agreement to the contrary notwithstanding, no reimbursement
payable to the Executive pursuant to any provisions of this Agreement or
pursuant to any plan or arrangement of the Company Group 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.  No amount reimbursed during
any calendar year shall affect the amounts eligible for reimbursement in any
other calendar year.
 
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14. Enforceability; Waiver.  The invalidity and unenforceability of any term or
provision hereof shall not affect the validity or enforceability of any other
term or provision hereof.  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, 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.
 
15. Assignment.  This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, successors and permitted
assigns.  This Agreement may be assigned by the Company.  The Executive may not
assign or delegate his duties under this Agreement without the Company’s prior
written approval.
 
16. Survival.  The entitlement of the Executive and the obligations of the
Company pursuant to Section 4 hereof shall each survive any termination or
expiration of this Agreement, or any termination or resignation of the
Executive’s employment, as the case may be.
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
 
 

  EXECUTIVE           /s/ Robert A. Marchetti  
 
Robert A. Marchetti                 BE AEROSPACE, INC.         /s/ Thomas P.
McCaffrey     Thomas P. McCaffrey   Senior Vice President and Chief Financial
Officer

 

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Exhibit A
 
Proprietary Rights Agreement