a5903959_ex108.htm


    EXHIBIT 10.8

     

    EXECUTION
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    AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

     

    This
Amended and Restated Employment Agreement (this "Agreement")
is made as of this 31st day of December, 2008, by and between BE Aerospace,
Inc., a Delaware corporation (the "Company")
and Michael B. Baughan ("Executive").

     

    RECITALS

     

    WHEREAS,
Executive and the Company are parties to an amended and restated employment
agreement, dated as of April 27, 2007 (the "Employment
Agreement"), pursuant to which Executive serves as the Company's
President and Chief Operating Officer;

     

    WHEREAS,
Executive, having provided services to the Company since May 28, 1999,
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 amend and restate the Employment Agreement in
its entirety.

     

    NOW,
THEREFORE, in consideration of the mutual promises hereinafter set forth, the
parties agree as follows:

     

    1. Reference to Prior
Employment Agreement.  The Employment Agreement is hereby
restated, superseded and replaced in its entirety by this
Agreement.

     

    2. Employment.  Unless
otherwise terminated pursuant to the provisions of Section 5 hereof,
Executive shall provide to the Company services hereunder during the term of his
employment under this Agreement, which 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."

     

    3. Position and
Duties.  Executive shall serve the Company in the capacity of
President and Chief Operating Officer, or in such other positions as the Chief
Executive Officer of the Company, his designee or the Board of Directors of the
Company (the "Board")
may designate from time to time, and shall be accountable to, and shall have
such other powers, duties and responsibilities, consistent with this capacity,
as the Chief Executive Officer of the Company, his designee or the Board shall
determine in its sole discretion.  Executive shall report directly to
the Chief Executive Officer of the Company.  Executive shall perform
and discharge, faithfully, diligently and to the best of his ability, such
duties and responsibilities.  Executive shall devote substantially all
of his working time and efforts to the business and affairs of the
Company.  Consistent with the Company's practices, Executive's
performance will be reviewed by the Chief Executive Officer on at least an
annual basis.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
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    4. Compensation.

     

    (a) Salary.  During
the Employment Term, Executive shall receive a salary (the "Salary")
payable at the rate of five hundred thirty four thousand five hundred and eight
dollars ($534,508) per annum.  Such rate shall be subject to
adjustment from time to time by the Compensation Committee of the Board (the
"Compensation
Committee"); provided, however, that it
shall at no time be adjusted below the Salary for the preceding
year.  On July 1st of each
year during the Employment Term, the Salary shall be increased by an amount not
less than the amount determined by applying to the Salary then in effect 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 twelve (12) month period (July through June) immediately preceding
such July 1st.  If the Index is no longer issued, the
Compensation Committee and Executive shall agree upon a substitute adjustment
index issued by such agency that 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, less all required
deductions.

     

    (b) Incentive
Bonus.  During the Employment Term, Executive will be eligible
to receive an incentive bonus (the "Bonus") of
up to 120% of the Salary for each fiscal year or portion thereof during which
Executive has been employed hereunder as determined by the Compensation
Committee at the end of the applicable fiscal year in its sole
discretion.  The 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 the
Bonus.

     

    (c) Expenses.  Executive
shall be entitled to receive prompt reimbursement for all reasonable business
expenses incurred by him during the Employment Term on behalf of the Company in
accordance with the Company's policies in effect from time to time.

     

    (d) Benefits.  During
the Employment Term, 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 executives, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements.  In accordance with the Company policies as in
effect from time to time, Executive shall also be entitled to paid vacation in
any fiscal year during the Employment Term as well as all paid holidays given by
the Company to its employees.  In addition, upon Executive's
Separation from Service (as defined in Section 15(c)) due to his death,
Incapacity (as defined in Section 5(c)) or contemporaneously with a Change
of Control (as defined in Section 5(f)), Executive and his spouse and
eligible dependents shall be entitled, on similar terms and conditions as active
executives, from the Termination Date until the second (2nd)
anniversary of the Termination Date to participate in all medical, dental and
health benefit plans available to the Company's executive officers from time to
time.    To the extent that reimbursable medical and dental
care expenses constitute deferred compensation for purposes of Section 409A
("Section 409A")
of the Internal Revenue Code of 1986, as amended and the rules, regulations and
guidance promulgated thereunder (the "Code"),
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.

     

    
      
        
        

      

      
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    (e) Automobile.  During
the Employment Term, Executive shall be furnished with an automobile allowance
(an "Automobile
Allowance") of one thousand one hundred dollars ($1,100) per month,
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.

     

    (f) Equity
Awards.  During the employment term, Executive shall be
eligible to participate in the Company's equity award program with the timing
and amount of equity awards determined by the Compensation Committee in its sole
discretion.  Notwithstanding any provision in the applicable award
documents, Executive's equity awards will immediately become fully vested and
unrestricted and settle within thirty (30) days following (i) the
Termination Date (as defined in Section 5(a)) in the event of Executive's
Separation from Service by the Company without Cause or due to Executive's death
or Incapacity or (ii) a Change of Control (as defined in
Section 5(f)).

     

    5. Termination and Compensation
Thereon.

     

    (a) Termination.  Subject
to the terms and conditions of this Agreement, Executive's employment pursuant
to this Agreement may be terminated either by Executive or the Company at any
time and for any reason.  The term "Termination
Date" shall
mean if Executive's employment is terminated (i) by his death, the date of
his death or (ii) for any other reason, the date on which Executive incurs
a Separation from Service (as defined in Section 15(c) below).

     

    (b) Death.

     

    (i) Executive's
employment hereunder shall terminate upon his death.  In such event,
the Company shall, within thirty (30) days following the Termination Date,
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 (A) the Salary (at the rate in effect as of the
Termination Date) that would have been due to Executive had this Agreement been
in effect and he remained employed from the Termination Date until the
Expiration Date, (B) any accrued and unpaid Salary and benefits through the
Termination Date, and (C) any bonuses declared to be payable to Executive
for any fiscal periods of the Company ending prior to his date of
death;

     

    (ii) 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 $1.5 million in accordance with the
Death Benefit Agreement attached as Exhibit A
hereto;

     

    
      
        
        

      

      
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    (iii) Following
Executive's death, his spouse and eligible dependents shall be entitled to
continuation of medical, dental and health benefits for two (2) years
pursuant to Section 4(d) hereof;

     

    (iv) Upon
Executive's death, the Retirement Compensation shall vest in full and the
Company shall, within thirty (30) days following the Termination Date, 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 the entire remaining unpaid balance of the Retirement
Compensation accrued through Termination Date; and

     

    (v) Upon
Executive's death, 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, 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.

     

    (c) Incapacity.  If,
in the reasonable judgment of the Compensation Committee, as a result of
Executive's incapacity due to physical or mental illness, Executive shall have
been absent from his full-time duties as described hereunder for the entire
period of twenty-nine (29) consecutive months ("Incapacity"),
Executive's employment shall terminate at the end of the
twenty-nine (29)-month period.  Any dispute between the Board and
Executive with respect to Executive's Incapacity shall be settled by reference
to a competent medical authority mutually agreed to by the Board and Executive,
whose decision shall be binding on all parties.  In addition, in the
event of a termination for Incapacity:

     

    (i) the
Company shall pay to Executive within thirty (30) days following 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
declared to be payable to Executive for any fiscal periods ending prior to the
Termination Date;

     

    (ii) the
Company shall pay to Executive within thirty (30) days following the
Termination Date a lump-sum amount equal to the Salary and Automobile Allowance
(at the rates in effect as of the Termination Date) that he would have received
had he remained employed during the period from the Termination Date through the
Expiration Date;

     

    (iii) the
Retirement Compensation shall vest in full and the Company shall pay to
Executive a lump-sum amount equal to the entire remaining unpaid balance of the
Retirement Compensation accrued through such Termination Date;

     

    
      
        
        

      

      
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    (iv) the
Company shall provide Executive and his spouse and eligible dependents with
continuation of medical, dental and health benefits for two (2) years
pursuant to Section 4(d)hereof; and

     

    (v) upon a
termination due to Incapacity, 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.

     

    (d) Termination by the Company
for Cause; Resignation by Executive.  If Executive's employment
is terminated by the Company for Cause or Executive resigns his employment for
any reason, the Company shall have no further obligations to Executive hereunder
after the Termination Date, except for payment of any accrued and unpaid Salary
and benefits accrued through the Termination Date.  If Executive's
employment is (i) terminated for Cause at any time or (ii) Executive
resigns his employment for any reason prior to the Vesting Date (as defined in
Section 5(h)(ii)), Executive shall immediately forfeit all rights to the
Retirement Compensation provide for in Section 5(h).  For
purposes of this Agreement, "Cause"
shall mean (i) Executive's material failure, refusal or neglect to perform and
discharge his duties and responsibilities hereunder (including duties prescribed
by the Board 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 Executive's personal
dishonesty or moral turpitude.

     

    (e) Termination Without
Cause.  The Company may terminate Executive's employment
hereunder at any time without Cause.  In such event:

     

    (i) the
Company shall pay to Executive, a lump-sum amount equal (A) to any accrued
and unpaid Salary and benefits through the Termination Date and (B) any
bonuses declared to be payable to Executive for any fiscal periods ending prior
to the Termination Date within thirty (30) days following the Termination
Date;

     

    (ii) the
Company shall pay to Executive a lump-sum amount equal to the  Salary
(at the rate in effect as of the Termination Date) that he would have received
had he remained employed during the period from the Termination Date through the
Expiration Date;

     

    
      
        
        

      

      
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    (iii) the
Retirement Compensation shall vest in full and the Company shall pay to
Executive a lump-sum amount equal to the entire remaining unpaid balance of the
Retirement Compensation accrued through such Termination Date;

     

    (iv) the
Company shall provide Executive and his spouse and eligible dependents with
continuation of medical, dental and health benefits for two (2) years
pursuant to Section 4(d) hereof; and

     

    (v) Equity
Awards granted to Executive that would not vest on or prior to the Termination
Date shall vest, settle 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.

     

    (f) Change of
Control.

     

    (i) Upon a
"Change of Control", the Retirement Compensation shall vest in
full.  In addition, if contemporaneously with a Change of Control,
Executive's employment is terminated without Cause, within thirty (30) days
after the Termination Date, the Company or its successor in interest shall
(A) pay to Executive, a lump-sum amount equal to (x) any accrued and
unpaid Salary and benefits through the Termination Date and (y) any bonuses
declared to be payable to Executive for any fiscal periods ending prior to the
Termination Date;  (B) pay to Executive a lump-sum amount equal
to three (3) times the  Salary (at the rate in effect as of the
Termination Date) which lump-sum amount shall not be pro-rated; (C) provide
Executive and his spouse and eligible dependents with continuation of medical,
dental and health benefits for two (2) years pursuant to Section 4(d)
hereof; (D) pay to Executive a lump-sum amount equal to the entire
remaining unpaid balance of the Retirement Compensation accrued through such
Termination Date; and (E) 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 (x) the
Change of Control Date and (y) 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.

     

    (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.   For purposes of this Agreement, a
termination will be deemed to be made "contemporaneously" with a Change of
Control if (A) it is made pursuant to at least one hundred and twenty
(120) days prior written notice from the Company to Executive, and
(B) it is effective as of the Change of Control Date.

     

    
      
        
        

      

      
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    (iii) The
obligations of the Company pursuant to this Section 5(f) shall survive any
termination of this Agreement or Executive's employment or any resignation of
such employment by Executive pursuant to this Section 5(f).

     

    (iv) If, at any
time during the Employment Term the Board determines that a Change of Control is
likely to occur, the Company hereby agrees to establish a grantor 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.  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.  Notwithstanding the establishment of a
trust, the Company's obligation upon a Change of Control may be paid from the
general assets of the Company or from assets of the 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.

     

    (g) Certain Additional Payments
by the Company.

     

    (i) Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, distribution or other 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) including,
without limitation any additional payments required under this Section 5(g)
(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 rate of 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 rates 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 taxes.  The Gross-Up Payment
shall be paid to Executive no later than the end of the taxable year next
following the taxable year in which Executive remits the taxes related to the
Gross-Up Payment.

     

    
      
        
        

      

      
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    (ii) Subject to
the provisions of paragraph (iii) of this Section 5(g) all
determinations required to be made under this Section 5(g), 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) 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 5(g), 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 5(g)
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 Executive remits the taxes.  The
previous sentence shall apply mutatis mutandis to any
overpayment of the Gross-Up Payment.

     

    (iii) 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) 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 Executive 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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    (A) give the
Company any information reasonably requested by the Company relating to such
claim;

     

    (B) 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;

     

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

     

    (D) 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 5(g)(iii), 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 provided further 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.

     

    (iv) If, after
the receipt by Executive of an amount advanced by the Company pursuant to
Section 5(g)(iii), 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 5(g)(iii)) 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 5(g)(iii), 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.

     

    
      
        
        

      

      
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    (h) Retirement
Compensation

     

    (i) Subject to
vesting pursuant to Section 5(h)(ii), if Executive's employment is
terminated for any reason other than Cause, the Company shall pay to Executive a
lump-sum amount equal to the amount by which (A) the product of
(x) one-half (1/2) multiplied by Executive's average annual salary for the
three (3)-year period preceding the Termination Date times (y) the
number of years (including any partial year) since April 27, 2007 (the
"Retirement
Compensation") exceeds (B) the sum of any amounts previously
distributed to Executive pursuant to Sections 5(h)(iii) and
(iv).  The lump-sum amount to be paid shall not be present-valued or
otherwise reduced by use of any other discount or discounting
method.

     

    (ii) The
Retirement Compensation will vest in full on April 26, 2012 (the "Vesting
Date") provided that Executive remains continuously employed through the
Vesting Date.  In addition the Retirement Compensation will vest in
full upon (i) Executive's termination of employment due to (A) death,
(B) Incapacity or (C) by the Company without Cause and (ii) a
Change of Control.  Except as otherwise provided herein, prior to
vesting pursuant to this Section 5(h)(ii), Executive's rights to the
Retirement Compensation shall be the mere contractual right of an unsecured
creditor.  Prior to the Vesting Date the Company may elect to
establish a grantor 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.  Any trust so established and any
assets held therein will be subject to the claims of the Company's
creditors.

     

    (iii) Within
ninety (90) business days following the Vesting Date, the Company shall
establish a trust (the "Retirement
Trust") for the remaining duration of the Employment Term, and,
commencing on the Vesting Date and on a quarterly basis, thereafter (each a
"Contribution
Date") the Company shall contribute to the Retirement Trust for the
benefit of Executive an amount equal to (A) the Retirement Compensation
that would be payable to Executive under Section 5(h)(i) 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 5(h)(iii), 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 5(h)(iii),
shall be payable to Executive, and that prior to payment of such retirement
compensation, the assets of the Retirement Trust shall be exempt from the claims
of the Company's creditors.

     

    
      
        
        

      

      
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      EXECUTION COPY

       

    

    (iv) 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 5(h)(iii).  As of the last day of each calendar quarter
ending on or after the Vesting Date, during the Employment Term, the trustee of
the Retirement Trust shall be required to distribute to Executive 25% of the
amount of the Assumed Taxes that the Company reasonably estimates will be
payable by Executive for the calendar year for which the distribution is being
made and as a result of his beneficial interest in the Retirement
Trust.  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 tax rates.

     

    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.

    1400 Corporate Center Way

    Wellington,
FL  33414

    Attention: Chief Executive
Officer

    


    with a copy to:

    


    BE Aerospace, Inc.

    1400 Corporate Center Way

    Wellington,
FL  33414

    Attention:  General
Counsel

    


    
      
        
        

      

      
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        EXECUTION
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    If to Executive, to him at

    


    Michael B. Baughan

    343 Fairfax Drive

    Winston-Salem,
NC  27104

    


    8. Unfunded
Status.  This Agreement is intended to constitute an unfunded
plan for incentive compensation.  Except with respect to the
Retirement Compensation following the Vesting Date, 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 of the Board may authorize the creation of trusts,
acquisition of life insurance policies or other arrangements to meet the
obligations created under this Agreement.

     

    9. Entire
Agreement.  This Agreement (including the Exhibits attached
hereto) 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 Executive
and the Company attached as Exhibit B which is
incorporated herein by reference

     

    10. Headings.  The
headings in this Agreement are for convenience of reference only and shall not
alter or otherwise affect the meaning hereof.

     

    11. Counterparts.  This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument.

     

    12. Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.

     

    13. Withholding.  Without
limiting the effect of Sections 5(g) and 15 hereof, all payment 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.

     

    14. 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.

     

    15.  Section 409A.

     

    (a) If any
amounts that become due under Section 5 (other than Section 5(g)) of
this Agreement constitute "nonqualified deferred compensation" within the
meaning of Section 409A, payment of such amounts shall not commence until
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.

     

    
      
        
        

      

      
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      EXECUTION
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    (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 Executive's
Separation from Service for any reason other than death or (ii) Executive's
date of death.  The provisions of this Section 15(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 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 15(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
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.

     

    (f) The
provisions of Section 5(g) of this Agreement, mutatis mutandis, shall apply
to any imposition of taxes on Executive under Section 409A so that
Executive shall be fully grossed up for the amount of, and shall not be
adversely affected by, such taxes.

     

    16. 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.  Executive's or the Company's failure to
insist upon strict compliance with any provision hereof 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.

     

    
      
        
        

      

      
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      EXECUTION
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    17. Assignment.  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.  This Agreement may be assigned by the
Company.  Executive may not assign or delegate his duties under this
Agreement without the Company's prior written approval.

     

    18. Survival.  The
entitlement of Executive and the obligations of the Company pursuant to
Sections 5 and 15 hereof and the provisions of Sections 6 through 13
and 15 through 18 hereof shall each survive any termination or expiration of
this Agreement, or any termination or resignation of Executive's employment, as
the case may be.

     

    [Signature
Page Follows]

     

    
      
        
        

      

      
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        EXECUTION
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    IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	 
      	EXECUTIVE	 
	 
      	 	 	 
	 	/s/
      Michael B. Baughan	 
	
                                                                       

                                                                    	Michael B. Baughan	 
	 
      	 	 	 
	 
      	 	 	 
	 
      	BE AEROSPACE, INC.
	 
      	 	 	 
	 
      	By:	/s/
      Thomas P. McCaffrey
	 	Name:	Thomas
      P. McCaffrey
	 	Title:	Senior
      Vice President and Chief Financial
Officer


                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
 

    
      
        
        

      

      
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    Exhibit A

     

    Death
Benefit Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit B

     

    Proprietary
Rights Agreement