BEAV B/E Aerospace, Inc.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

BE Aerospace, Inc.

 

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

BE AEROSPACE, INC.

1400 CORPORATE CENTER WAY

WELLINGTON, FLORIDA 33414

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

 

TO BE HELD JULY 26, 2011

 

Notice is hereby given that the Annual Meeting of Stockholders of BE Aerospace, Inc. will be held at the Boston Harbor Hotel, 70 Rowes Wharf, Boston, Massachusetts at 10:30 a.m. Eastern Time on Tuesday, July 26, 2011 for the following purposes:

 

1.         To elect two Class II Directors;

 

4.         Ratification of appointment of Independent Registered Public Accounting Firm; and

 

5.         To transact any other business that may properly come before the meeting, or any adjournment thereof.

 

Stockholders of record at the close of business on June 3, 2011 are entitled to notice of and to vote at the meeting.

 

Whether or not you plan to attend the meeting in person, please sign and date the enclosed proxy and return it promptly in the enclosed envelope.

 

 

 

Wellington, Florida

June 17, 2011

 

 

 

BE AEROSPACE, INC.

ANNUAL MEETING OF STOCKHOLDERS

July 26, 2011

PROXY STATEMENT

THIS PROXY STATEMENT AND THE ENCLOSED PROXY ARE BEING MAILED TO STOCKHOLDERS ON OR ABOUT JUNE 17, 2011.

 

The enclosed form of proxy is solicited on behalf of BE Aerospace, Inc. (the “Company”) to be voted at the 2011 Annual Meeting of Stockholders to be held at the Boston Harbor Hotel, 70 Rowes Wharf, Boston, Massachusetts at 10:30 a.m. Eastern Time on Tuesday, July 26, 2011, or at any adjournment thereof.

 

If you are a stockholder of record, you may vote in person at the annual meeting, vote by proxy using the enclosed proxy card, vote by proxy over the telephone, or vote by proxy on the internet.  Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted.  You may still attend the meeting and vote in person even if you have already voted by proxy.

A proxy may be revoked by a stockholder at any time before it is voted (i) by returning to the Company another properly signed proxy bearing a later date; (ii) by delivering a written revocation to the Secretary of the Company; or (iii) by attending the meeting and voting the shares represented by the proxy in person.  Shares represented by the enclosed form of proxy properly executed and returned or submitted over the telephone or on the internet, and not revoked, will be voted at the meeting by the persons named as proxies, Thomas P. McCaffrey and Ryan M. Patch.

 

The expense of soliciting proxies will be borne by the Company.  In addition to the solicitation of proxies by mail, the Company may use the services of its officers and other employees to solicit proxies personally, by telephone and telegram from brokerage houses and by other stockholders.  Officers and other employees of the Company will receive no compensation in addition to their regular salaries for soliciting proxies.  The Company has retained Georgeson Shareholder Communications, Inc. to assist in solicitation of proxies for a fee of $7,000 plus expenses.  The Company will reimburse brokers and other persons for their reasonable charges and expenses in forwarding soliciting materials to the beneficial owners of the common stock.

 

In the absence of contrary instructions, the persons named as proxies will vote in accordance with the intentions stated below.  The holders of record of shares of the Company’s common stock, $0.01 par value, at the close of business on June 3, 2011 are entitled to receive notice of and to vote at the meeting.  As of April 26, 2011 the Company had 103,493,059 shares of common stock issued and 103,115,223 shares of common stock outstanding.  Each share of common stock is entitled to one vote on each matter to come before the meeting.

 

Consistent with Delaware state law and the Company’s by-laws, a majority of the votes entitled to be cast present in person or represented by proxy, constitutes a quorum as to such matter.  Votes cast by proxy or in person at the meeting will be counted by the person appointed by the Company to act as inspector of election for the meeting.  The two nominees for election as directors at the meeting who receive the greatest number of votes properly cast for the election of directors, Proposal No. 1, shall be elected directors.  The affirmative vote of a majority of the votes in a ttendance at the meeting (at which a quorum is present), present in person or represented by proxy, that are properly cast, is necessary to approve the actions described in Proposal No. 2. and No. 4.  The option that receives the highest number of votes properly cast for the frequency to hold the say-on-pay vote, as described in Proposal No. 3, will be considered the preferred frequency.

 

The inspector of election will count the total number of votes cast “for” the nominee for election as a director or “for” approval of Proposals No. 2 and No. 4 for purposes of determining whether sufficient affirmative votes have been cast for each such proposal and will count the total number of votes cast for each option for purposes of determining which option has received the highest number of votes for Proposal No. 3.  The inspector of election will count shares (i) represented by proxies that withhold authority to vote either for the nominees for election as a director or for Proposals No. 2, No. 3 and No. 4; or (ii) that reflect abstentions and “broker non-votes” as shares that are present and entitled to vote on the matter for purposes of determining the presence of a quorum, but abstentions and broker non-votes will not have any effect on the outcome of voting on the election of directors or Proposals No. 2, No. 3 and No. 4.  “Broker non-votes” are shares represented at the meeting held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote; and (ii) the broker or nominee does not have the discretionary voting power on a particular matter.

 

The Annual Report to Stockholders for the Company’s fiscal year ended December 31, 2010 accompanies this proxy statement.

 

 

 

 

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Nomination of Directors

 

As provided in its charter, the Nominating and Corporate Governance Committee identifies and recommends to the Board of Directors (the “Board”) nominees for election and re-election to the Board and will consider nominations submitted by stockholders.  The Nominating and Corporate Governance Committee, in consultation with the Chairman of the Board of Directors, evaluates candidates proposed by stockholders using the same criteria as for other candidates.

 

The Chairman of the Board and the Nominating and Corporate Governance Committee seek to create a Board of Directors that is strong in its collective skills and experience with respect to finance, leadership, business operations and industry knowledge.  The Nominating and Corporate Governance Committee reviews with the Chairman and the full Board of Directors, on an annual basis, the current composition of the Board of Directors in light of characteristics of independence, skills, experience, competency and availability of service to the Company of its members and of the Company’s anticipated needs.  All of our independent directors serve on Board Committees further supporting the Board by providing experience to those Committees.  The needs of each Committee are also reviewed when considering nominees to the Board.  In connection with its most recent annual review, the Nominating and Corporate Governance Committee recommended the nomination of Messrs. Robert J. Khoury and Jonathan M. Schofield, two of our directors currently designated as Class II Directors, whose terms expire at the meeting, to serve as Class II Directors for a term of three years, expiring at the 2014 Annual Meeting of Stockholders.  If Messrs. Khoury and Schofield are re-elected, the Nominating and Corporate Governance Committee as well as the Chairman and the full Board believe that the Board of Directors will have an excellent Board composition, of a suitable size, and with the appropriate diversity of skills and experience with respect to finance, leadership, business operations and industry knowledge.  The biographies of Messrs. Khoury and Schofield and our continuing current directors below contain information regarding each nominee’s and continuing current directors’ experience, qualifications and skills.  When the Nominating and Corporate Governance Committee reviews a potential new candidate, it looks specifically at the candidate’s qualifications in light of the size of the Board of Directors and the needs of the Board of Directors at a given point in time.

 

In nominating director candidates, the Nominating and Corporate Governance Committee strives to nominate directors that exhibit high standards of ethics, integrity, commitment and accountability.  In addition, all nominations attempt to ensure that the Board of Directors shall encompass a range of talent, skills and expertise and industry experience sufficient to provide sound guidance with respect to our operations and activities.

 

Under our Nominating and Corporate Governance Committee charter, directors must inform the Chairman of the Board and the Chair of the Nominating and Corporate Governance Committee in advance of accepting an invitation to serve on another public company board.  In addition, no director may sit on the Board, or beneficially own more than 1% of the outstanding equity securities, of any of our competitors in our principal lines of business.  We also discourage our directors from serving on the board of directors of more than three public companies.

 

To recommend a nominee, a stockholder shall give notice to our Corporate Secretary at our registered address in Wellington, Florida.  This notice should include the candidate’s brief biographical description, a statement of the qualifications of the candidate, taking into account the qualification requirements set forth above, and the candidate’s signed consent to be named in the proxy statement and to serve as a director if elected.  The notice must be given no later than the earlier of (i) 50 days before the first anniversary of the last Annual Meeting of Stockholders or (ii) if less than 60 days notice of the date of the Annual Meeting of Stockholders at which directors are to be elected is given, ten days after such notice.  Once we receive the recommendation, we will deliver a questionnaire to the candidate that requests additional information about the candidate’s independence, qualifications and other information that would assist the Nominating and Corporate Governance Committee in evaluating the candidate, as well as certain information that must be disclosed about the candidate in our proxy statement, if nominated.  Candidates must complete and return the questionnaire within the time frame provided to be considered for nomination by the Nominating and Corporate Governance Committee.

 

The Nominating and Corporate Governance Committee has not received any nominations for director from stockholders for the 2011 Annual Meeting of Stockholders.

 

The persons named in the enclosed proxy intend to vote each share as to which a proxy has been properly executed and returned or submitted over the telephone or on the internet and not revoked in favor of the election as directors of the two nominees named below, each of whom is now a director of the Company, unless authority to vote for the election of any or all of such nominees is withheld by marking the proxy to that effect.

 

 

Pursuant to the Company’s Restated Certificate of Incorporation, the Board of Directors is divided into three classes, each as nearly equal in number as possible, so that each director (in certain circumstances after a transitional period) will serve for three years, with one class of directors being elected each year.

 

The nominees are Messrs. Robert J. Khoury and Jonathan M. Schofield, two of our directors currently designated as Class II Directors, whose terms expire at the meeting, and until their respective successors are elected and shall qualify to serve.  The enclosed proxy cannot be voted for a greater number of persons than two.

 

If elected, Messrs. Robert J. Khoury and Jonathan M. Schofield will serve as Class II Directors for a term of three years, expiring at the 2014 Annual Meeting of Stockholders, and until their respective successors are elected and shall qualify to serve.

 

The Company expects that Messrs. Robert J. Khoury and Jonathan M. Schofield will be able to serve, but if they are unable to serve, the proxies reserve discretion to vote, or refrain from voting, for a substitute nominee or nominees or to fix the number of directors at a lesser number.

 

Set forth below is the business experience of, and certain other information regarding, the two director nominees and the other current directors of the Company.

  

Director Nominees

 

Name, Age, Business Experience and Current Directorships	Director
	Since
ROBERT J. KHOURY, 69	1987
Robert J. Khoury has been a Director since July 1987, when he co-founded the Company.  On December 31, 2005, Mr. Khoury retired from service as the Company’s President and Chief Executive Officer, a position he held since August 2000.  From April 1996 through August 2000, he served as Vice Chairman of the Company.  Mr. Khoury currently serves on the Board of Governors of the Aerospace Industries Association.  Mr. Khoury currently serves on the Board of Directors of Mar-Test, Inc., a leading provider of low-cycle fatigue testing for the aerospace and medical industries. Mr. Khoury has his Professional Director Certification from the American College of Corporate Directors.  Mr. Khoury is the brother of Amin J. Khoury, our Chairman and Chief Executive Officer.  During Mr. Khoury’s 20-year tenure as COO and/or CEO he oversaw the integration of numerous acquired businesses including the alignment of our business processes and I.T. systems across all functions, implemented lean manufacturing and oversaw the implementation of best practices in human resources.  These experiences, together with his intimate knowledge of our business and industry, uniquely qualify him to serve as a member of our Board of Directors.
JONATHAN M. SCHOFIELD, 70	2001
Jonathan M. Schofield has been a Director since April 2001.  From December 1992 through February 2000, Mr. Schofield served as Chairman and CEO of Airbus North America Holdings, a subsidiary of Airbus Industrie, a manufacturer of large civil aircraft, and served as Chairman from February 2000 until his retirement in March 2001.  Prior to 1989 Mr. Schofield served in various executive positions at Pratt & Whitney, a division of United Technologies Corporation.  From 1989 until he joined Airbus, Mr. Schofield was President of United Technologies International Corporation.  Mr. Schofield is currently a member of the Board of Directors of Aero Sat, Inc., Nordam Group, and TurboCombustor Technology, Inc. and is a trustee of LIFT Trust.  Mr. Schofield’s education, aerospace industry business experience, including his role as Chairman and CEO of Airbus North America, and as President of United Technologies International during which he developed and executed global marketing strategies and interfaced with procurement, finance and human resources, together with his intimate knowledge of our business and industry, uniquely qualifies him to serve as a member of our Board of Directors.

 

 

Current Directors

 

	Director	Term
Name, Age, Business Experience and Current Directorships	Since	Expires
CHARLES L. CHADWELL, 70	2007	2012
Charles L. Chadwell has been a Director since January 2007.  He was the Vice President and General Manager, Commercial Engine Operations for GE Aircraft Engines, from which he retired in 2002.  After joining General Electric in 1965, he held a variety of management positions, including:  Program Manager, CF6-80C program; Plant Manager, GE Aircraft Engines’ Wilmington, North Carolina plant; General Manager, GE Aircraft Engines’ Sourcing Operations; General Manager, Production Operations, GE Aircraft Engines’ Lynn, Massachusetts plant; Vice President, GE Aircraft Engines Human Resources; and Vice President and General Manager, Production and Procurement, GE Aircraft Engines.  Mr. Chadwell currently serves on the Boards of Spirit AeroSystems Holdings Inc., Parkway Products Inc. and is Chairman of the Board of PaR Systems.  Mr. Chadwell’s education and business experience, including his senior management roles with General Electric in human resources, production and procurement, program management, and as a general manager with oversight responsibilities for engineering, supply chain and procurement, production, finance and human resources, as well as his intimate knowledge of our business and industry, qualifies him to serve as a member of our Board of Directors.
RICHARD G. HAMERMESH, 63	1987	2012
Richard G. Hamermesh has been a Director since July 1987.  Dr. Hamermesh has been a Professor of Management Practice at Harvard Business School since July 1, 2002.  From 1987 to 2001, he was a co-founder and a Managing Partner of The Center for Executive Development, an executive education and development consulting firm.  From 1976 to 1987, Dr. Hamermesh was a member of the faculty of Harvard Business School.  He is also an active investor and entrepreneur, having participated as a principal, director and investor in the founding and early stages of more than 15 organizations.  Dr. Hamermesh’s education and business experience as co-founder of a leading executive education and consulting firm, as president, founder, director and co-investor in over 15 early stage businesses, and his 25 years as a Professor of Management Practice at Harvard Business School where he has led MBA candidates through thousands of business case studies, as well as his intimate knowledge of our business and industry (including over 24 years as a member of our Board of Directors), uniquely qualifies him to serve as a member of our Board of Directors.
AMIN J. KHOURY, 72	1987	2012
Amin J. Khoury has been the Chairman of the Board of Directors since July 1987 when he co-founded the Company.  Effective December 31, 2005, Mr. Amin J. Khoury was appointed Chief Executive Officer.  Mr. Amin J. Khoury also served as the Company’s Chief Executive Officer until April 1, 1996.  Since 1986, Mr. Khoury has been a director of Synthes, Inc., the world’s leading manufacturer and marketer of orthopedic trauma implants and a leading global manufacturer and marketer of cranial maxillofacial and spine implants.  Mr. Khoury has a Professional Director Certification, earned through an extended series of director education programs sponsored by the Corporate Directors Group, an accredited organization of RiskMetrics Group.  Mr. Khoury’s education, his business experience, which includes having co-founded our Company, and serving as Chairman and CEO since 1987, during which he was primarily responsible for the development and execution of our business strategies which resulted in the growth in our business from a single product line business with $3.5 million in annual sales, to the leading global manufacturer of commercial aircraft and business jet cabin interior products and the world’s leading distributor of consumable products, with annual revenues in 2010 of nearly $2.0 billion, uniquely qualify him to serve as a member of our Board of Directors.
Mr. Khoury has led both our acquisition strategy and our operational integration and execution strategies.  He is a highly effective leader in organizational design and development matters and has been instrumental in identifying and attracting both the managerial talent and Board members who currently serve the Company.  He has an intimate knowledge of the Company, its industry and its competitors which he has gained over the last 24 years, all of which uniquely qualify him to serve as our Company’s Chairman of the Board of Directors.

 

	Director	Term
	Since	Expires
JIM C. COWART, 59	1989	2013
Jim C. Cowart has been a Director since November 1989.  Since March, 2010, Mr. Cowart has been a director of Beers Enterprises, Incorporated, a privately held, leading provider of broadcast video transport services for domestic and international networks, common carriers, producers or distributors of live broadcast programming. Since July 2009, Mr. Cowart has been Chairman of Central Fiber LLC, a privately held manufacturer of cellulose fiber products.  From September 2005 through December 2010, Mr. Cowart was a Director of EAG Inc., a privately held company, a predecessor of which was a company listed on the London Stock Exchange, which provides microanalytic laboratory services including surface analysis and materials characterization.  Since September 2004, Mr. Cowart has been Chairman and Chief Executive Officer of Auriga Medical Products GmbH, a now dormant distributor of medical devices.  He is a Principal of Cowart & Co. LLC and Auriga Partners, Inc., private capital firms that provide strategic planning, competitive analysis, financial relations and other services.  From August 1999 to May 2001, he was Chairman of QualPro Corporation, an aerospace components manufacturing company.  From January 1993 to November 1997, he was the Chairman and CEO of Aurora Electronics Inc. Previously, Mr. Cowart was a founding general partner of Capital Resource Partners, a private investment capital manager, and held various positions in investment banking and venture capital with Lehman Brothers, Shearson Venture Capital and Kidder, Peabody & Co.  Mr. Cowart has a Professional Director Certification, earned through an extended series of director education programs sponsored by the Corporate Directors Group, an accredited organization of RiskMetrics Group.  Mr. Cowart’s education, including extensive director continuing education, his business experience, including positions as Chairman and CEO of public and private companies in various industries (including aerospace), his experience as a venture capitalist and investment banker, and his intimate knowledge of our business and industry (due to his 22 years as a member of our Board of Directors) uniquely qualifies him to serve as a member of our Board of Directors.
ARTHUR E. WEGNER, 73	2007	2013
Arthur E. Wegner has been a Director since January 2007.  Mr. Wegner retired in 2000 as Executive Vice President of Raytheon Company and Chairman of Raytheon Aircraft.  He joined Raytheon Company in July 1993 as a Senior Vice President and was appointed Chairman and CEO of Raytheon’s Beech Aircraft Corporation.  In September 1994, he was appointed Chairman and CEO of Raytheon Aircraft, which was formed by the merger of Raytheon subsidiaries Beech Aircraft and Raytheon Corporate Jets.  He became Chairman of Raytheon Aircraft in 2000.  He was elected an Executive Vice President of Raytheon Company in March 1995.  Mr. Wegner joined the Raytheon Company after 20 years with United Technologies Corporation (UTC), where he was Executive Vice President and President of UTC’s Aerospace and Defense Sector.  Prior to that he was President of UTC’s Pratt and Whitney Division.  Mr. Wegner is a past Chairman of the Board of Directors of the General Aviation Manufacturers Association and the Aerospace Industries Association.  During the course of Mr. Wegner’s career he oversaw all aspects of the business including engineering, manufacturing, supply chain and procurement, finance and human resources.  These experiences together with Mr. Wegner’s educational background, his vast business experience in the aerospace industry and his intimate knowledge of our business and industry, uniquely qualifies him to serve as a member of our Board of Directors.

CORPORATE GOVERNANCE MATTERS

 

Meetings of the Board of Directors and Committees

 

The Board of Directors held seven meetings during 2010.  All of the current directors attended all of the meetings.  The Board of Directors currently has three standing Committees: the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee.  Each current director attended all of the meetings of the Committees of the Board of Directors on which they served during 2010.  All members of our Board of Directors attended the 2010 Annual Meeting of Stockholders.  The Board of Directors has determined that Messrs. Chadwell, Cowart, Hamermesh, Schofield and Wegner are independent under NASDAQ National Market rules.

 

The Audit Committee is currently composed of Messrs. Cowart, Hamermesh and Wegner, with Mr. Cowart acting as Chairman.  The Audit Committee held four meetings during 2010.  The Audit Committee is responsible for: (i) the appointment, compensation and oversight of our independent auditors; (ii) overseeing the quality and integrity of our financial statements and related disclosures; (iii) our compliance with legal and regulatory requirements; (iv) assessing our independent auditors’ qualifications, independence and performance; and (v) monitoring the performance of our internal audit and control functions.

 

All members of the Audit Committee are independent under NASDAQ National Market and SEC rules.  The Audit Committee operates under a written charter adopted by and approved by our Board of Directors.

  

The Nominating and Corporate Governance Committee is currently composed of Messrs. Chadwell, Cowart, Hamermesh, Schofield and Wegner with Mr. Schofield acting as Chairman.  The Nominating and Corporate Governance Committee held one meeting during 2010.  The Nominating and Corporate Governance Committee is responsible for, among other things, assisting the Board of Directors by actively identifying individuals qualified to become Board members and recommending to the Board of Directors the director nominees for election at the next Annual Meeting of Stockholders and making recommendations with respect to corporate governance matters.  All of the members of the Nominating and Corporate Governance Committee are independent as defined by current NASDAQ National Market rules.  The Nominating and Corporate Governance Committee operates under a written charter adopted and approved by our Board of Directors.  All of the members of the Nomination and Corporate Governance Committee support the nominations of Messrs. Khoury and Schofield.

 

The Compensation Committee is currently composed of Messrs. Chadwell and Schofield.  The Compensation Committee held four meetings during 2010.  The Compensation Committee provides recommendations to the Board of Directors regarding compensation matters and oversees the Company’s incentive and compensation plans.  All of the members of the Compensation Committee are independent as defined by NASDAQ National Market rules.  The Compensation Committee operates under a written charter adopted and approved by our Board of Directors.

 

The Compensation Committee is not authorized to delegate any of its authority described herein to any other persons (other than a subcommittee).  Our CEO, COO and CFO attended portions of some or all of the Compensation Committee meetings during 2010 at the invitation of the Compensation Committee.  Management input was taken into consideration in assessing the performance and pay levels of our key management employees as well as the establishment of bonus measures and targets.  Our Vice President-Law & General Counsel also attended selected meetings during 2010 to provide the Compensation Committee with information to consider in respect to his area of expertise.  Our Vice President-Law & General Counsel also serves as secretary to the Compensation Committee.  On no occasion were any of our Named Executive Officers involved in any discussion specifically relating to their own compensation, other than our CEO, who discussed both his performance and his compensation directly with our Compensation Committee.

 

Copies of the charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our website, www.beaerospace.com, in the Investor Relations section.  Please note that the information contained in or connected to our website is not intended to be a part of this proxy statement.

 

Board Diversity

 

The Chairman of the Board of Directors together with the Nominating and Corporate Governance Committee, in accordance with the Board’s governance principles, seeks to create a Board of Directors that, as a whole, is strong in its collective knowledge and has a diversity of skills and experience with respect to industry knowledge, vision and strategy, human resource management, general management and leadership, marketing, business operations, business judgment, crisis management, risk assessment, accounting and finance, capital markets, general corporate governance and global markets.

 

In considering candidates for the Board of Directors, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards.  The Nominating and Corporate Governance Committee believes our Board of Directors has achieved its diversity objectives as evidenced by Board members with extensive experience in general management, human resources, manufacturing operations, marketing, engineering, capital markets, developing and executing mergers and acquisition strategies, including successful integration activities related thereto, as founders or co-founders of a multitude of businesses, and the collective experiences developed during their business careers which total over 200 years in the aerospace, defense and related industries.

Risk Oversight

 

Our Board of Directors has an active role in overseeing the risk management of the Company with a focus on the most significant risks facing the Company.  The Board of Directors’ oversight of risk management is designed to support the achievement of the strategic objectives of the Company and increase stockholder value.  A fundamental part of risk management for the Company is not only understanding the risks that are faced by the Company and the steps necessary to manage those risks, but also understanding what level of risk is appropriate for the Company.  The Company's Chief Executive Officer, President, Chief Financial Officer and other members of senior management regularly evaluate and report to the Board of Directors on significant risks facing the Company.  In addition, each Committee of the Board of Directors is also responsible for assessing the risk exposure related to its specific area.  The Committees discuss matters of interest with the Company’s senior management, including matters related to our corporate governance and our code of conduct, and report to the full Board of Directors as appropriate, including when a matter rises to the level of a material or enterprise level risk.

Board Leadership Structure

 

The Board of Directors believes that the Company and its stockholders have been and will continue to be well served by having the Company’s principal founder and Chief Executive Officer serve as Chairman of the Board of Directors.  Mr. Amin J. Khoury has led both our acquisition strategy and our operational integration and execution strategy.  He is a highly effective leader in organizational design and development matters and has been instrumental in identifying and attracting both the managerial talent and Board members who currently serve the Company.  He has an intimate knowledge of the Company, its industry and its competitors which he has gained over the last 24 years, all of which uniquely qualify him to serve as our Company’s Chairman of the Board of Directors.  The Board of Directors believes that the current leadership of the Board, when combined with the other elements of our corporate governance structure, strikes an appropriate balance between strong and consistent leadership and independent oversight of the Company’s business and affairs.

 

The Board of Directors is composed of a majority of independent directors.  The Company’s Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee are each composed solely of independent directors.  The Company’s independent directors bring experience, oversight and expertise from outside the Company, while the Chief Executive Officer brings industry, competitive and company-specific experience and expertise.  The Board of Directors believes the combined role of Chairman and Chief Executive Officer promotes unified leadership and direction for the Company, which allows for a single, clear focus for management to execute the Company’s strategy and business plans.  Notwithstanding the above, the Board of Directors recognizes that, in the future, circumstances may necessitate that the roles of Chairman and Chief Executive Officer be separated and, therefore, the Board of Directors retains the authority to separate the roles if it were to determine that such a division might be appropriate in the future.

 

One of the key responsibilities of the Board of Directors is to assist management in developing strategic direction and then holding management accountable for the execution of strategy once it is developed.  The Board of Directors believes, at this time, the combined role of Chairman and Chief Executive Officer, together with the independent directors, is in the best interest of stockholders because it provides the appropriate balance between strategy development and independent oversight of management.

 

While the Board of Directors has not formally appointed a lead independent director, the Board of Directors believes that the current composition of the Board of Directors and the functioning of the independent directors effectively maintain independent oversight of the Company’s management.  Five out of seven of the Company’s directors are independent and the chair and members of each of the Company’s Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee are independent directors.  As a result, independent directors oversee all significant matters affecting the Company, including the Company’s financial statements, executive compensation matters, the nomination and assessment of directors and the risk management practices.  Independent directors meet in regular executive sessions not attended by the non-independent directors and management in conjunction with each regular Board meeting and as they otherwise deem appropriate.  At each executive session, the respective chair of the Board Committee relating to the specific matter discussed by the independent directors, leads the discussion.  For example, the chair of the Nominating and Corporate Governance Committee leads the discussions with respect to director nominations, the current composition of the Board of Directors and other Board policy matters.

 

Following each executive session, the independent directors report the results of the discussions to the full Board of Directors as appropriate.  These discussions are led by the appropriate Committee chair.  Additional executive sessions may be convened at any time at the request of an independent director, and, in such event, the independent director chairperson of the most closely associated Committee to the discussed topic leads the discussion and the report to the full Board of Directors.  During executive sessions directors also discuss and propose matters to be included in the agenda for future Board of Directors meetings.

 

To gain a perspective on external pay levels, emerging practices and regulatory changes, our Compensation Committee engages an outside executive compensation consultant to provide benchmark and survey information and advise the Compensation Committee as it conducts its review of our compensation process.  The Compensation Committee selected Mercer Human Resource Consulting (“Mercer”) as its consultant for 2010 and tasked them with gathering market competitive data, reviewing compensation plan design alternatives and instructing the Compensation Committee on compensation trends and best practices.  As a result, Mercer periodically participated in Compensation Committee meetings, and also provided the Compensation Committee with specialized advice to consider in establishing and evaluating our compensation practices.  No member of management has engaged Mercer to advise them on executive compensation matters.  Further, Mercer has not been engaged to advise the Company or its management on any other matters.  Mercer reports directly to the Compensation Committee.  The activities of the Compensation Committee related to Mercer were led by the chair of the Compensation Committee.  An affiliate of Mercer, Marsh Inc. provides risk management and insurance brokerage services to the Company that are unrelated to executive and director compensation, for which it was paid approximately $91,700 in 2010.  The Compensation Committee has reviewed the risk management and brokerage services provided by Marsh Inc. and has determined that these services do not constitute a conflict of interest or prevent Mercer from being objective in its work for the Compensation Committee.  Greater detail regarding our compensation process is set forth below in our Compensation Discussion and Analysis.

Stockholder Communications with Our Board of Directors

 

To facilitate the ability of stockholders to communicate with our Board of Directors, we have established an electronic mailing address and a physical mailing address to which communications may be sent:  BE_Directors@beaerospace.com, or The Board of Directors, c/o The Corporate Secretary, BE Aerospace, Inc., 1400 Corporate Center Way, Wellington, Florida 33414.

 

Our Corporate Secretary reviews all correspondence addressed to the Board of Directors and regularly presents to the Board a summary of all such correspondence and forwards to the Board of Directors or individual directors, as the case may be, copies of all correspondence that, in the opinion of the Corporate Secretary, deals with the functions of the Board of Directors or Committees thereof or that he otherwise determines requires their attention.  Examples of communications that would be logged, but not automatically forwarded, include solicitations for products and services or items of a personal nature not relevant to us or our stockholders.  Directors may at any time review the log of all correspondence received by our Company that is addressed to members of the Board of Directors and request copies of any such correspondence.  Concerns relating to accounting, internal controls or auditing matters are brought to the attention of the Audit Committee, other than potential ethical or conflict of interest situations, which are directed to the Nominating and Corporate Governance Committee.

 

Compensation Committee Interlocks and Insider Participation

 

No person who is or has been an officer or other employee of the Company served as a member of the Company’s Compensation Committee.  No executive officer of the Company served as a member of the Compensation Committee on the board (or as a director) of any company where an executive officer of such company is a member of the Compensation Committee or a director of the Company.  No member of the Compensation Committee was a party to any transaction required to be disclosed as a related person transaction.

 

Compensation of Directors

 

Directors who are employees of the Company receive no additional compensation for serving on the Board of Directors.  In 2010, non-employee directors received an annual cash retainer of $85,000.  In addition, the chairs of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee also received additional annual cash retainers of $10,000, $10,000 and $5,000, respectively.  All cash payments are made quarterly in arrears.  We do not pay any additional fees for attendance at Board of Director or Committee meetings.

 

Non-employee directors also received an annual grant of restricted stock with a fair market value of $45,000 (determined as of the date of grant) during 2010 pursuant to our 2005 Long-Term Incentive Plan.  The awards vest on each of the first, second, third and fourth anniversaries of the date of grant, provided the director remains in continuous service through the applicable vesting period.

 

In 2010 we contributed $30,000 of stock on behalf of each non-employee director to our Non-Employee Director Deferred Stock Plan.  This amount is included as deferred share units under the plan.  Directors may also elect to defer up to 100% of their cash and stock retainers under the plan.  The deferred compensation is held in a share unit account under the plan until the termination of the director’s service and is distributed in a lump sum or in up to five annual installments, as elected by the director.  The directors are fully vested in the deferred shares at all times but have no rights as stockholders until distribution.  In the event of a change of control (as defined in the plan), the share accounts under the plan will immediately be distributed to the directors.

 

We reimburse our non-employee directors for reasonable business and travel expenses incurred in connection with their service on the Board of Directors.  In addition, non-employee directors are eligible to participate in our health and business travel accident insurance program on the same terms and conditions as employees generally.  We do not provide our directors with any other perquisites or special benefits for their service on our Board of Directors.

 

Director compensation is recommended by the Compensation Committee and approved by the entire Board of Directors.

 

Consulting Arrangement with Robert J. Khoury.   Effective January 1, 2006, upon his retirement as our President and Chief Executive Officer, Mr. Khoury entered into a consulting agreement with us pursuant to which he agreed to provide certain specified services to us through December 31, 2011, including sales and marketing services, assistance in developing and implementing key customer strategies, advice and consultation regarding operational matters of the Company and maintenance of key customer relationships through periodic customer visits.  In consideration for the consulting services, Mr. Khoury receives a consulting fee of $263,300 per calendar year.  He is also entitled to an office, secretarial support and air travel in accordance with past practices under our travel policy.  The consulting agreement may not be amended, modified or terminated without the prior written consent of both parties.  If Mr. Khoury ceases to provide the consulting services as a result of his death or disability, he or his estate will be entitled to a lump sum payment equal to the consulting fees payable through the remainder of the consulting period.  As a member of the Board of Directors, Mr. Khoury is also entitled to receive all compensation paid to our non-employee directors.  During 2010, the independent members of the Board of Directors awarded Mr. Khoury a $25,000 cash bonus for his efforts in connection with the acquisition of TSI Group, Inc.

The following table summarizes the compensation paid to our non-employee directors in 2010:

 

 

 

 

Audit Committee

 

The Audit Committee is responsible for the appointment, compensation and oversight of our independent auditors, overseeing the quality and integrity of our financial statements and related disclosures, our compliance with legal and regulatory requirements, assessing our independent auditors’ qualifications, independence and performance, and monitoring the performance of our internal audit and control functions.  The Audit Committee is currently composed of three directors: Messrs. Cowart, Hamermesh and Wegner, and operates under a written charter adopted and approved by the Board of Directors, which is available on our website at www.beaerospace.com in the Investor Relations section.  Mr. Cowart currently chairs the Audit Committee.

 

Our Audit Committee is a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  All three current directors serving on the Audit Committee are independent Committee members as defined by NASDAQ National Market and SEC rules.  Our Board of Directors has determined that Mr. Cowart is an “audit committee financial expert” in accordance with SEC rules.

 

Report of the Audit Committee of the Board of Directors

 

Management is responsible for the financial reporting process, including the system of internal controls and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.  The Company’s independent auditors are responsible for auditing those financial statements.  The Audit Committee’s responsibility is to monitor and review these processes.  We rely, without independent verification, on the information provided to us and on the representations made by management and the independent auditors.

 

We have reviewed and discussed the audited consolidated financial statements for 2010 with management and Deloitte & Touche LLP, the Company’s independent registered public accounting firm.

 

The Audit Committee discussed and reviewed with Deloitte & Touche LLP all communications required by generally accepted auditing standards, including, among other things, the matters required to be discussed by the Public Company Accounting Oversight Board (“PCAOB”) Standard AU 380, “Communication with Audit Committees,” and Statement on Auditing Standards No. 114, “The Auditor’s Communication with Those Charged with Governance,” and discussed and reviewed the results of Deloitte & Touche LLP’s audit of the Company’s consolidated financial statements.  The Audit Committee also discussed the results of internal audit examinations.

 

The Company’s independent auditors also provided to us the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and we discussed with the independent auditors their independence from the Company.  When considering Deloitte & Touche LLP’s independence, we considered whether their provision of services to the Company, beyond those rendered in connection with their audit and review of the Company’s consolidated financial statements, was consistent with maintaining their independence.  We also reviewed, among other things, the amount of fees paid to Deloitte & Touche LLP for audit and non-audit services.

 

Based on our review and these meetings, discussions and reports, and subject to the limitations on our role and responsibilities referred to above and in the Audit Committee Charter, we have recommended to the Board of Directors that the Company’s audited consolidated financial statements for 2010 be included in the Company’s Annual Report on Form 10-K.

 

 

PROPOSAL NO. 2

We believe our performance in 2010 was well aligned with pay and reflects our record performance in 2010 in which we:

We believe the above achievements were the key short-term drivers of intrinsic value creation during 2010.  During the one and two year periods ended December 31, 2010 our share price increased by approximately 58% and 382%, respectively.  We believe our stock was one of the best performing aerospace stocks for the one and two year periods ended December 31, 2010.

 

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our executives and the objectives, policies and practices described in this proxy statement.

 

The say-on-pay vote is advisory only and is not binding on BE Aerospace, Inc. However, the Compensation Committee and our Board of Directors will consider the results of the stockholders’ vote and evaluate whether any actions should be taken in light of those results.

 

PROPOSAL NO. 3

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO HOLD THE SAY-ON-PAY VOTE EVERY 3 YEARS.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table and notes thereto set forth certain information with respect to the beneficial ownership of the Company’s common stock as of April 26, 2011, except as otherwise noted, by (i) each person who is known to us to beneficially own more than 5% of the outstanding shares of common stock of the Company; (ii) each of the Company’s Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and the three other most highly paid executive officers in 2010, currently employed; (iii) each of the Company’s directors; and (iv) all of the Company’s Named Executive Officers and directors as a group.  Except as otherwise indicated, each of the stockholders named below has sole voting and investment power with respect to the shares of common stock beneficially owned:

 

---

+  Named executive officer

 

*  Director of the Company

 

** Less than 1 percent

(2)

Based on information in the Schedule 13G, as of December 31, 2010, filed on February 14, 2011, FMR LLC reported sole voting power over 2,899,640 shares and sole dispositive power over 6,878,480 shares.  The Company has not attempted to independently verify any of the foregoing information, which is based solely upon the information contained in the Schedule 13G. The percent of outstanding shares set forth above is based on the number of our shares outstanding as of that date.

 

 

 

 

 

 

 

 

COMPENSATION DISCUSSION & ANALYSIS

 

The Objectives of Our Named Executive Officer Compensation Program

 

The following Compensation Discussion and Analysis addresses the objectives and elements of our executive compensation program, how our Compensation Committee uses external information to assist their oversight of our executive compensation and how we measure individual and Company performance.

 

The objectives of our 2010 executive compensation program were as follows:

Our Named Executive Officers

 

Our Named Executive Officers include our seven most highly compensated executives during 2010, consisting of:

 

 

 

Company Performance .   Through the provision of short-term and long-term incentives, our 2010 executive compensation program was designed to reward: (i) the achievement of short-term financial goals measuring operating earnings, cash flows, operating expense management and operating margins, and (ii) the execution of our long-term strategic goals and objectives.

During 2010, we:

 

Our business strategy includes maintenance of a global market leadership position and to best serve our customers by:

Our Compensation Committee performs annual reviews of our performance and the contributions of our Named Executive Officers to ensure that our executive compensation program rewards the achievement of our financial objectives and the execution of our business strategy.  We believe our executive compensation program is reasonable and provides appropriate incentives to our executives to achieve our corporate objectives without encouraging them to take excessive risks for short-term gains in their business decisions.

 

Individual Performance.   In addition to overall Company performance, our compensation program rewards individual performance toward the attainment of our goals and objectives.  In setting the targeted pay levels of the Named Executive Officers, a variety of factors are considered, including: competencies, skills, prior experience, scope of responsibility and accountability within the organization.

 

On an annual basis, each Named Executive Officer’s attainment of goals and demonstration of defined leadership competencies is assessed by our Chairman and Chief Executive Officer through our leadership performance and development assessment process.  Each year, our CEO recommends to the Compensation Committee (i) proposed base salary increases; (ii) proposed cash incentive awards for each of our Named Executive Officers for the preceding year; and (iii) proposed long-term equity incentives for each of our Named Executive Officers.  The Compensation Committee performs a similar assessment of our CEO and approves his compensation program.

The Elements of our Compensation Program

 

At the beginning of each year the Compensation Committee determines the targeted range of compensation levels which may be earned by each Named Executive Officer.  In February 2010, the Compensation Committee approved 2010 compensation for our Named Executive Officers (depending on their title and position) in the following forms and percentages:

 

The aggregate total targeted maximum long term incentive compensation expressed as a percentage of annual base salary, for each Named Executive Officer (depending on title and position) was 120% - 310%.

Base Salary.  We provide each of our Named Executive Officers with a competitive fixed annual base salary.  The base salaries for our Named Executive Officers are reviewed annually by the Compensation Committee by taking into account the results achieved by the executive, the executive’s future potential, scope of responsibilities and experience, and competitive salary practices.  Employment agreements entered into with each of our Named Executive Officers provide for an annual cost of living increase or as otherwise determined by our Compensation Committee.  Adjustments to base salaries for all of our employees are generally made as of July 1st of each year.

 

We believe that it is important to pay a base salary that is consistent with similarly sized industry peers with similar continuous performance characteristics.  In 2010, base salary increases for our Named Executive Officers, exclusive of increases associated with promotions and changes in responsibilities were approximately 4% of their 2009 base salaries.  As more fully described under the heading “External Benchmarking” below, these increases generally positioned our Named Executive Officers’ base salary levels at approximately the 75 th percentile of the base salaries of executives in comparable positions in the peer group.

  

Annual Cash Incentives.

 

 

●	Implementation and execution of supply chain, lean/continuous improvement initiatives

 

 

Severance and Change of Control Benefits.   We have entered into employment agreements with each of our Named Executive Officers, which are described below in detail under the heading “Employment, Severance and Change of Control Agreements” which provide for severance and change in control benefits.  Our severance and change of control benefits were determined on the basis of market practices in order to provide a competitive overall compensation package to our Named Executive Officers .

 

Pursuant to the employment agreements, we provide each of our Named Executive Officers with severance benefits if their employment is terminated for any reason other than cause or, in some instances, due to their resignation for good reason (as each term is defined in the applicable agreements).  In such cases, the employment agreements require that we pay the executive his salary for the then-existing term of the applicable employment agreement and/or provide a severance payment ranging from one to three times the executive’s base salary.  For executives who are entitled to retirement benefits, we also provide a lump sum payment equal to the amounts the executive would have received for the remainder of the then-existing term of their agreement.  In addition, for some Named Executive Officers all outstanding equity awards will vest pursuant to their employment agreements.

 

In the event that the executive is terminated by us in connection with a change of control of our Company, the executive is entitled to a severance payment ranging from one to three times his base salary.  In addition, all outstanding equity will vest upon a change in control.  If the executive remains employed following a change in control he will continue to be eligible to receive severance benefits upon a subsequent involuntary termination.  In certain instances, the severance benefits are enhanced if the executive resigns for good reason.  For Messrs. Khoury and McCaffrey, in the event that payments or benefits paid to the executive are subject to excise taxes as an “excess parachute payment” under the Internal Revenue Code, the executive will receive an excise tax gross up from the Company.  We provide a similar gross-up payment with respect to excise taxes, interest and penalties payable pursuant to Section 409A of the code for Messrs. Khoury, McCaffrey and Patch.

   

Mr. Michael B. Baughan, our former President and Chief Operating Officer resigned from the Company effective as of December 13, 2010.  In connection with his resignation, we entered into a separation agreement that provided for a one-time cash payment aggregating approximately $2,336,000 and accelerated vesting of 98,634 shares of restricted stock.  The separation agreement also provides that Mr. Baughan will not compete with the Company for a period of 42 months following his termination.

 

Retirement Benefits.   Our Named Executive Officers participate in our 401(k) plan under the same terms as all other employees and as set forth below.  In addition, we provide Messrs. Khoury, Lieberherr and McCaffrey with the following retirement benefits:

 

 

To the extent applicable, these amounts are included in the Summary Compensation Table as part of the “All Other Compensation” column.

External Benchmarking

 

Benchmarking Objectives.   We believe our executives should possess above-average competencies, skills and prior experience and display above-average leadership skills as they discharge their responsibilities.  We benchmark targeted pay levels for essentially every position throughout our organization.  Our objective is to establish total targeted compensation (defined as base salary, targeted annual cash incentive, long-term incentives, and, where applicable, payments in lieu of retirement benefits) for our Named Executive Officers near the 75 th percentile of our peer group.  We believe the weighting of each component of our compensation program (as described above under the heading “The Elements of our Compensation Program”) is appropriate given the historically cyclical nature of our industry, which has resulted and may result in several-year periods during which substantially lower cash incentives are awarded.

 

Benchmarking Process .  In 2010 the Compensation Committee retained Mercer Human Resources Consulting, an independent compensation consultant, to assist in the design and implementation of our executive compensation program including the review of market surveys and peer group comparisons.  Compensation and other financial data for our peer group are compiled from publicly available information as well as from Mercer’s proprietary database for similar sized industrial companies.  Because the information is based on publicly available data, the comparisons are always against the data for the immediately preceding year (i.e., the 2010 study was based on data included in the 2009 annual reports and 2009 proxy statements of our peer group).

 

We believe market data provides a reference and framework for decisions about the base salary, targeted annual cash incentives and the appropriate level of long-term incentives to be provided to each Named Executive Officer.  However, due to variability and the inexact science of matching and pricing executive jobs, we believe that market data should be interpreted within the context of other important factors and should not solely be used to dictate a specific pay level for an executive.  As a result, in setting the target pay level of our Named Executive Officers, market data is reviewed along with a variety of other factors, including individual performance, competencies, skills, future potential, prior experience, scope of responsibility and accountability within the organization.

 

In 2010, Mercer reviewed both the individual components and aggregate composition of our compensation packages for our Named Executive Officers focusing on several components of pay including:

 

Based on this review, Mercer advised the Compensation Committee that, for each of our Named Executive Officers:

●	Goodrich Corporation

Stock Ownership

 

Our Board of Directors established stock ownership guidelines for our executive officers and non-employee directors.  Under these guidelines, our Named Executive Officers and members of the Board of Directors are required to own shares of the Corporation’s common stock with a market value of at least a specified multiple of their base salary or annual cash retainer, as applicable, within a reasonable period of time from their election to the Board of Directors or appointment as an executive officer, as determined by our Board of Directors. The guidelines are five times base salary for the CEO, three and one-half times base salary for all other executive officers and three times the annual cash retainers for members of our Board of Directors.  Progress toward meeting the guidelines is reviewed by the Compensation Committee annually.  At December 31, 2010 all members of our Board of Directors and all Named Executive Officers were in compliance with our guidelines.

 

The Compensation Committee considers all shares held by a director or executive officer toward meeting the ownership requirements including: shares owned outright (including in family trusts and those held by a spouse), time vested restricted shares, shares or share equivalents held in our 401(k) plan or Non-Employee Directors Deferred Stock Plan and shares in our employee stock purchase plan.  Unexercised stock options and unearned performance shares are not included toward meeting the guidelines.  We do not have any policies requiring our executives to hold shares of common stock received upon vesting or exercise of equity awards.

Compensation Risks

 

In 2010, management and the Compensation Committee assessed the Company’s compensation policies and practices and determined that such policies and practices do not create risks that are reasonably likely to have a material adverse affect on the Company.  In reaching this conclusion we primarily considered the following factors:

 

Tax and Accounting Considerations

 

To the extent that it is practicable and consistent with our executive compensation philosophy, we intend to comply with Section 162(m) of the Internal Revenue Code, which limits the deductibility of certain compensation payments to our executive officers in excess of $1 million.  If compliance with Section 162(m) conflicts with the compensation philosophy or is determined not to be in the best interest of stockholders, the Compensation Committee will abide by its compensation philosophy.

 

To the extent that any compensation paid to our Named Executive Officers constitutes a deferral of compensation within the meaning of Section 409A of the Internal Revenue Code, the Compensation Committee intends to cause the award to comply with the requirements of Section 409A and to avoid the imposition of penalty taxes and interest upon the participant receiving the award.

 

The Compensation Committee also takes accounting considerations, including the impact of FASB ASC 718, Compensation – Stock Compensation into account in structuring compensation programs and determining the form and amount of compensation awarded.

 

Report of the Compensation Committee on Executive Compensation

 

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis for the year ended December 31, 2010 with management.  Based on the review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

 

 

 

 

 

Summary Compensation Table

 

The following table sets forth information concerning the total compensation paid to each of our Named Executive Officers in 2010, 2009 and 2008:

 

							Non-Equity
							Incentive
					Stock		Plan
					Awards		Compensation		All Other
Name and Principal Position	Year		Salary		($)(2)		($)(1)(3)		Compensation ($)		Total ($)
(a)	(b)		(c)		(e)		(g)		(i)		(j)
Amin J. Khoury	2010		$1,092,070		$3,456,928		$1,227,000		$3,554,067	(4)	$9,330,065
Chairman and Chief Executive	2009		1,055,428		2,908,022		525,000		3,073,036	(4)	7,561,486
Officer	2008		1,019,580		2,915,007		1,050,000		3,134,125	(4)	8,118,712
Werner Lieberherr	2010		440,788		805,017		508,000		32,607	(5)	1,786,412
President and Chief Operating	2009		419,840		554,111		167,500		26,890	(5)	1,168,341
Officer(6) (Former Vice President	2008		407,390		520,008		335,000		27,122	(5)	1,289,520
and General Manager - Commercial
Aircraft Segment)
Thomas P. McCaffrey	2010		509,577		993,816		572,000		460,650	(7)	2,536,043
Senior Vice President and Chief	2009		495,018		953,790		245,250		443,217	(7)	2,137,275
Financial Officer	2008		480,270		907,008		490,500		460,761	(7)	2,338,539
Wayne Exton	2010		348,029		472,657		281,500		26,437	(8)	1,128,623
Vice President and General	2009		338,103		450,012		135,000		38,448	(8)	961,563
Manager—Business Jet Segment	2008		298,928		420,008		270,000		25,889	(8)	1,014,825
Richard Sharpe	2010		373,077		532,010		288,000		19,446	(9)	1,212,533
Vice President and General	2009		178,846		1,205,511		25,000		48,859	(9)	1,458,216
Manager—Consumables	2008		-		-		-		-	(9)	-
Management Segment
Ryan Patch	2010		412,477		505,028		335,000		47,707	(10)	1,300,212
Vice President Law, General	2009		368,369		450,012		186,000		411,050	(10)	1,415,431
Counsel and Secretary	2008		-		-		-		-	(10)	-
Michael B. Baughan	2010		555,307		-		-		6,238,154	(11)	6,793,461
Former President and Chief Operating	2009		539,442		1,041,777		267,500		310,240	(11)	2,158,959
Officer	2008		523,462		990,003		535,000		278,532	(11)	2,326,997

(6)

Mr. Lieberherr served as Vice President and General Manager for the Commercial Aircraft Segment during 2010 and was promoted to President and Chief Operating Officer after December 31, 2010.

(10)

With respect to Mr. Patch, the amount reported for 2010 and 2009 as “All Other Compensation” includes $0 and $364,715 for reimbursement for relocation expenses; $9,800 and $9,800 for contributions to the Company’s 401(k) plan; $24,707 and $23,335 representing payments under our executive medical plan and COBRA benefits owed to his prior employer; and an additional amount relating to an automobile allowance.  Mr. Patch commenced employment on December 22, 2008.

(11)

With respect to Mr. Baughan, the amount reported for 2010, 2009 and 2008 as “All Other Compensation” includes $221,929, $286,539 and $249,075, respectively, for payments made in lieu of retirement benefits; $9,800, $9,800 and $9,200, respectively, for contributions to the Company’s 401(k) plan; $4,733, $701 and $3,626, respectively, representing payments under our executive medical plan; and an additional amount relating to an automobile allowance and estate planning.   Mr. Baughan resigned from the Company effective as of December 13, 2010.  In connection with his resignation, we entered into a separation agreement that provided for us to make one-time cash payment aggregating approximately $2,336,000 and for the accelerated vesting of 98,634 shares of unvested restricted stock.  The separation agreement also provides that Mr. Baughan will not compete with the Company for a period of 42 months following his termination.

	Estimated Future Payouts Under Non-Equity								All Other Stock		Grant Date Fair
	Incentive Plan Awards (1)								Awards: Number of		Value of Stock
	Grant		Threshold						Shares of Stock or		and Options
Name	Date		($)(2)		Target ($)		Maximum ($)		Units (#)(3)(5)		Awards ($)(4)
(a)	(b)		(c)		(d)		(e)		(i)		(l)
Amin J. Khoury	1/1/2010		$—		$1,005,000		—		$—		$—
	12/15/2010		—		—		—		94,297		3,456,928
Werner Lieberherr	1/1/2010		—		414,000		—		—		—
	12/15/2010		—		—		—		21,959		805,017
Thomas P. McCaffrey	1/1/2010		—		468,000		—		—		—
	12/15/2010		—		—		—		27,109		993,816
Wayne Exton	1/1/2010		—		255,000		—		—		—
	12/15/2010		—		—		—		12,893		472,657
Richard M. Sharpe	1/1/2010		—		288,000		—		—		—
	12/15/2010		—		—		—		14,512		532,010
Ryan M. Patch	1/1/2010		—		303,000		—		—		—
	12/15/2010		—		—		—		13,776		505,028
Michael B. Baughan	1/1/2010		—		—		—		—		—
	12/15/2010		—		—		—		—		—

 

The following table provides information concerning outstanding equity awards held by each Named Executive Officer as of December 31, 2010, which includes unvested shares of restricted stock.

 

(3)

The market value of unvested shares is based on the closing share price of $37.03, which was the closing price of our common stock as quoted on the NASDAQ National Market on December 31, 2010.

Option Exercises and Stock Vested Table   During 20 10

 

The following table provides information concerning vesting of common stock awards held by each Named Executive Officer during 2010.  No options were outstanding in 2010.