Exhibit 10.1
HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
Effective October 1, 2006; Amended as of September 15, 2008
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HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
TABLE OF CONTENTS
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ARTICLE 1
Definitions.....................................................................................................1
ARTICLE 2
Selection, Enrollment,
Eligibility..............................................................................6
2.1
Selection by
Committee.........................................................................................6
2.2
Enrollment and Eligibility Requirements; Commencement of
Participation.........................................6
ARTICLE 3
Deferral Commitments/Company Contribution Amounts/ Company Matching
Amounts/ Vesting/Crediting/Taxes............7
3.1
Minimum
Deferrals..............................................................................................7
3.2
Maximum
Deferral...............................................................................................8
3.3
Election to Defer; Effect of Election
Form.....................................................................8
3.4
Withholding and Crediting of Annual Deferral
Amounts...........................................................9
3.5
Company Contribution
Amount...................................................................................10
3.6
Company Matching
Amount.......................................................................................10
3.7
Crediting of Amounts after Benefit
Distribution...............................................................10
3.8
Vesting.......................................................................................................10
3.9
Crediting/Debiting of Account
Balances........................................................................12
3.10
FICA and
Other
Taxes..........................................................................................14
ARTICLE 4
Scheduled Distribution; Unforeseeable
Emergencies..............................................................15
4.1
Scheduled
Distribution........................................................................................15
4.2
Postponing Scheduled
Distributions............................................................................15
4.3
Other Benefits Take Precedence Over Scheduled
Distributions...................................................15
4.4
Unforeseeable
Emergencies.....................................................................................16
ARTICLE 5 Change
in Control
Benefit......................................................................................16
5.1
Change in Control
Benefit.....................................................................................16
5.2
Payment of Change in Control
Benefit..........................................................................17
ARTICLE 6
Retirement
Benefit.............................................................................................17
6.1
Retirement
Benefit............................................................................................17
6.2
Payment of Retirement
Benefit.................................................................................17
ARTICLE 7
Termination
Benefit............................................................................................18
7.1
Termination
Benefit...........................................................................................18
7.2
Payment of Termination
Benefit................................................................................18
ARTICLE 8
Disability
Benefit.............................................................................................18
8.1
Disability
Benefit............................................................................................18
8.2
Payment of Disability
Benefit.................................................................................18
ARTICLE 9 Death
Benefit..................................................................................................18
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HEICO Corporation
Leadership Compensation Plan
Plan Document
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9.1
Death
Benefit.................................................................................................18
9.2
Payment of Death
Benefit......................................................................................18
ARTICLE 10 Beneficiary
Designation........................................................................................19
10.1
Beneficiary...................................................................................................19
10.2
Beneficiary Designation; Change; Spousal
Consent..............................................................19
10.3
Acknowledgment................................................................................................19
10.4
No
Beneficiary
Designation....................................................................................19
10.5
Doubt as
to
Beneficiary.......................................................................................19
10.6
Discharge
of
Obligations......................................................................................19
ARTICLE 11 Leave of
Absence...............................................................................................20
11.1
Paid Leave
of
Absence.........................................................................................20
11.2
Unpaid
Leave of
Absence.......................................................................................20
11.3
Leaves
Resulting in Separation from
Service...................................................................20
ARTICLE 12 Termination
of Plan, Amendment or
Modification.................................................................20
12.1
Termination of
Plan...........................................................................................20
12.2
Amendment.....................................................................................................21
12.3
Plan
Agreement................................................................................................21
12.4
Effect of
Payment.............................................................................................21
ARTICLE 13
Administration.................................................................................................22
13.1
Committee
Duties..............................................................................................22
13.2
Administration Upon Change In
Control.........................................................................22
13.3
Agents........................................................................................................22
13.4
Binding
Effect of
Decisions...................................................................................22
13.5
Indemnity
of
Committee........................................................................................22
13.6
Employer
Information..........................................................................................22
13.7
Receipts
and
Release..........................................................................................22
ARTICLE 14 Other
Benefits and
Agreements..................................................................................23
14.1
Coordination with Other
Benefits..............................................................................23
ARTICLE 15 Claims
Procedures..............................................................................................23
15.1
Presentation of
Claim.........................................................................................23
15.2
Notification of
Decision......................................................................................23
15.3
Review of
a Denied
Claim......................................................................................24
15.4
Decision
on
Review............................................................................................24
15.5
Legal
Action..................................................................................................25
ARTICLE 16
Trust..........................................................................................................25
16.1
Establishment of the
Trust....................................................................................25
16.2
Interrelationship of the Plan and the
Trust...................................................................25
16.3
Distributions From the
Trust..................................................................................25
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HEICO Corporation
Leadership Compensation Plan
Plan Document
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ARTICLE 17
Miscellaneous..................................................................................................25
17.1
Status of
Plan................................................................................................25
17.2
Unsecured
General
Creditor....................................................................................25
17.3
Employer's
Liability..........................................................................................25
17.4
Nonassignability..............................................................................................26
17.5
Not a
Contract of
Employment..................................................................................26
17.6
Furnishing
Information........................................................................................26
17.7
Terms.........................................................................................................26
17.8
Captions......................................................................................................26
17.9
Governing
Law.................................................................................................26
17.10
Notice........................................................................................................26
17.11
Successors....................................................................................................27
17.12 Spouse's
Interest.............................................................................................27
17.13
Validity......................................................................................................27
17.14
Incompetent...................................................................................................27
17.15 Court
Order...................................................................................................27
17.16
Distribution in the Event of Income Inclusion Under
409A......................................................28
17.17 Deduction
Limitation on Benefit
Payments......................................................................28
17.18
Insurance.....................................................................................................28
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<PAGE>
HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
Purpose
-------
The purpose of this Plan is to provide specified benefits to
Directors
and a select group of management or highly compensated Employees who contribute
materially to the continued growth, development and future business
success of
HEICO Corporation, a
Florida corporation,
and its subsidiaries,
if any, that
sponsor this Plan. This Plan shall be unfunded for tax purposes and
for purposes
of Title I of ERISA.
This Plan is also
intended to comply with all applicable
law, including Code
Section 409A and related Treasury guidance and Regulations,
and shall be operated and interpreted in accordance with this
intention.
ARTICLE 1
Definitions
-----------
For the purposes of this Plan, unless otherwise clearly apparent
from
the context, the
following phrases or terms shall have the following indicated
meanings:
1.1
"Account Balance" shall mean, with respect to a Participant,
an entry
on the records of the Employer equal to the sum of the
Participant's
Annual Accounts. The
Account Balance shall be a bookkeeping entry only
and shall be utilized
solely as a device for the measurement and
determination of the
amounts to be paid to a Participant, or his or
her designated Beneficiary, pursuant to this Plan.
1.2
"Annual Account" shall
mean, with respect to a Participant, an entry
on the records of the Employer equal to the following amount:
(i) the
sum of the Participant's Annual Deferral Amount, Company Contribution
Amount and Company
Matching Amount for
any one Plan Year,
plus (ii)
amounts credited
or debited to such
amounts pursuant to this Plan,
less (iii) all
distributions made to
the Participant
or his or her
Beneficiary pursuant
to this Plan that
relate to the Annual
Account
for such Plan Year.
The Annual Account
shall be a bookkeeping
entry
only and shall be utilized solely as a device for the
measurement and
determination of the
amounts to be paid to a Participant, or his or
her designated Beneficiary, pursuant to this Plan.
1.3
"Annual Deferral
Amount" shall mean
that portion of a
Participant's
Base Salary, Bonus, Commissions, Director Fees and LTIP Amounts
that a
Participant defers in accordance with Article 3 for any one Plan
Year,
without regard to
whether such
amounts are
withheld and credited
during such Plan Year.
In the event of a
Participant's
Retirement,
Disability, death or
Termination of Employment prior to the end of a
Plan Year, such year's
Annual Deferral Amount shall be the actual
amount withheld prior to such event.
1.4
"Annual Installment Method" shall be an annual
installment
payment
over the number of years selected by the Participant in accordance
with this Plan,
calculated
as follows: (i) for the first annual
installment, the
vested portion of each Annual Account shall be
calculated as of the close of business on or around the
Participant's
Benefit Distribution
Date, as determined by the Committee in its sole
discretion, and (ii)
for remaining annual
installments,
the vested
portion of each applicable Annual Account shall be calculated on
every
anniversary of such
calculation
date, as applicable. Each annual
installment shall be
calculated
by multiplying this balance by a
fraction, the
numerator of which is one and the denominator of which
is the remaining number of
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<PAGE>
HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
annual payments
due to the
Participant.
By way of example,
if the
Participant elects a
ten (10) year Annual
Installment Method as
the
form of Retirement
Benefit for an Annual
Account, the first
payment
shall be 1/10 of the vested balance of such Annual Account,
calculated
as described in this definition. The following year, the payment
shall
be 1/9 of the vested
balance of such Annual
Account, calculated
as
described in this definition.
1.5
"Base Salary"
shall mean the annual
cash compensation relating to
services performed during any calendar year, excluding distributions
from nonqualified deferred compensation plans, bonuses,
commissions,
overtime, fringe
benefits, stock options, relocation expenses,
incentive payments, non-monetary awards, director fees and other
fees,
and automobile
and other allowances paid to a Participant for
employment services
rendered (whether or not such allowances are
included in the
Employee's
gross income). Base Salary shall be
calculated before reduction for compensation voluntarily deferred or
contributed by
the Participant pursuant to all qualified or
nonqualified plans of
any Employer and shall be calculated to include
amounts not otherwise included in the Participant's gross income
under
Code Sections 125,
402(e)(3),
402(h), or 403(b) pursuant to plans
established by any Employer; provided, however, that all such
amounts
will be included
in compensation only to the extent that had
there
been no such plan, the
amount would have been
payable in cash to the
Employee.
1.6
"Beneficiary" shall mean one or more persons, trusts, estates or
other
entities, designated
in accordance with Article 10, that are entitled
to receive benefits under this Plan upon the death of a
Participant.
1.7
"Beneficiary
Designation Form"
shall mean the form
established from
time to time by the Committee that a Participant completes,
signs and
returns to the Committee to designate one or more
Beneficiaries.
1.8
"Benefit
Distribution
Date" shall
mean a date that triggers
distribution of
a Participant's vested benefits. A Benefit
Distribution Date
for a Participant shall be determined upon the
occurrence of any one of the following:
(a) If the Participant
Retires, the Benefit Distribution Date for his
or her vested
Account Balance shall be the last day of the
six-month period
immediately
following the date on which the
Participant Retires;
provided,
however,
in the event the
Participant changes
the Retirement Benefit
election for one
or
more Annual Accounts
in accordance
with Section 6.2(b), the
Benefit Distribution
Date for such Annual
Account(s)
shall be
postponed in accordance with such section 6.2(b); or
(b) If the Participant
experiences a
Termination of Employment, the
Benefit Distribution
Date for his or her
vested Account Balance
shall be the last day of the six-month period immediately
following the
date on which the Participant experiences a
Termination of Employment; or
(c) If the Participant
dies prior to the complete distribution of his
or her vested Account Balance, the Participant's Benefit
Distribution Date shall be the date on which the
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HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
Committee is
provided with proof that is satisfactory to the
Committee of the Participant's death; or
(d) If the Participant
becomes Disabled,
the Participant's
Benefit
Distribution Date
shall be the date on
which the Participant
becomes Disabled; or
(e) If (i) a Change
in Control occurs prior to the Participant's
Termination of Employment, Retirement, death or Disability, and
(ii) the Participant
has elected to receive
a Change in Control
Benefit, as set forth
in Section 5.1 below,
the Participant's
Benefit Distribution
Date shall be the date on which the Company
experiences a Change
in Control, as
determined by the Committee
in its sole discretion.
1.9
"Board" shall mean the board of directors of the Company.
1.10 "Bonus"
shall mean any
compensation,
in addition to Base Salary,
Commissions and LTIP
Amounts, earned by a
Participant
for services
rendered during a Plan
Year, under any
Employer's
annual bonus and
cash incentive plans.
1.11 "Change
in Control" shall mean any "change in control event" as
defined in accordance
with Code Section 409A and related Treasury
guidance and Regulations.
1.12 "Change
in Control Benefit" shall have the meaning set forth in
Article 5.
1.13 "Claimant"
shall have the meaning set forth in Section 15.1.
1.14
"Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.15
"Commissions" shall
mean the cash commissions earned by a Participant
from any Employer for services rendered during a Plan Year,
excluding
Bonus, LTIP Amounts or other additional incentives or awards earned
by
the Participant.
1.16
"Committee" shall mean the committee described in Article 13.
1.17 "Company"
shall mean HEICO Corporation, a Florida corporation, and any
successor to all or
substantially
all of the
Company's assets or
business.
1.18 "Company
Contribution
Amount" shall mean,
for any one Plan Year, the
amount determined in accordance with Section 3.5.
1.19 "Company
Matching Amount" shall mean, for any one Plan Year,
the
amount determined in accordance with Section 3.6.
1.20 "Death
Benefit" shall mean the benefit set forth in Article 9.
1.21 "Director"
shall mean any member of the board of
directors of any
Employer.
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HEICO Corporation
Leadership Compensation Plan
Plan Document
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1.22 "Director
Fees" shall mean the
annual fees earned by a Director from
any Employer,
including
retainer
fees and meetings fees, as
compensation for serving on the board of directors.
1.23
"Disability" or "Disabled" shall mean that a Participant is (i)
unable
to engage in any substantial gainful activity by reason of any
medically determinable
physical or mental impairment which can be
expected to
result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) by reason of
any
medically determinable
physical or mental impairment which can be
expected to
result in death or can be expected to last for a
continuous period
of not less than 12 months, receiving income
replacement benefits
for a period of not
less than 3 months under an
accident or
health plan covering employees of the Participant's
Employer. For
purposes of this Plan,
a Participant
shall be deemed
Disabled if determined to be totally disabled by the Social
Security
Administration, or if determined to be disabled in accordance with
the
applicable
disability
insurance program
of such Participant's
Employer, provided
that the definition of "disability" applied under
such
disability insurance
program complies with the requirements
in
the preceding sentence.
1.24
"Disability Benefit" shall mean the benefit set forth in Article
8.
1.25 "Election
Form" shall mean the form, which may be in electronic
format, established
from time to time by the Committee that a
Participant completes,
signs and returns to
the Committee to make an
election under the Plan.
1.26 "Employee"
shall mean a person who is an employee of any Employer.
1.27
"Employer(s)" shall
mean the Company
and/or any of its
subsidiaries
(now in existence or
hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have
adopted the
Plan as a sponsor.
1.28 "ERISA"
shall mean the
Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.29 "First
Plan Year" shall mean the period beginning October 1, 2006 and
ending October 31, 2006.
1.30 "401(k)
Plan" shall mean, with respect to an Employer, a plan
qualified under Code
Section 401(a) that
contains a cash or deferral
arrangement described in Code Section 401(k), adopted by the
Employer,
as it may be amended from time to time, or any successor
thereto.
1.31 "LTIP
Amounts" shall mean any portion of the compensation
attributable
to a Plan Year that is earned by a Participant as an Employee under
any Employer's
long-term incentive plan or any other long-term
incentive arrangement designated by the Committee.
1.32
"Participant" shall
mean any Employee or Director (i) who is selected
to participate
in the Plan, (ii) who submits an executed Plan
Agreement, Election
Form and Beneficiary
Designation Form, which are
accepted by the
Committee,
and (iii) whose Plan
Agreement has not
terminated.
1.33 "Plan"
shall mean the HEICO
Corporation
Executive Retention Plan,
which shall
be evidenced by this instrument and by each Plan
Agreement, as they may be amended from time to time.
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HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
1.34 "Plan
Agreement"
shall mean a written
agreement,
as may be amended
from time to time,
which is entered into
by and between an
Employer
and a Participant.
Each Plan Agreement
executed by a Participant and
the Participant's
Employer shall provide for the entire
benefit to
which such Participant
is entitled
under the Plan;
should there be
more than one Plan
Agreement, the Plan
Agreement bearing the
latest
date of acceptance by the Employer shall supersede all previous Plan
Agreements in their
entirety and shall govern such entitlement. The
terms of any Plan Agreement may be different for any Participant,
and
any Plan Agreement may
provide additional
benefits not set forth
in
the Plan or limit the
benefits otherwise provided under the Plan;
provided, however,
that any such additional benefits or benefit
limitations must
be agreed to by both the Employer and the
Participant.
1.35 "Plan
Year" shall, except for the First Plan Year, mean a period
beginning on November 1 of each year and continuing through October
31
of the following year.
1.36
"Retirement",
"Retire(s)" or "Retired" shall mean, with respect to an
Employee, separation
from service with all
Employers for any
reason
other than death or Disability, as determined in accordance with
Code
Section 409A and
related Treasury
guidance and
Regulations,
on or
after the earlier of the attainment of (a) age sixty-five
(65) or (b)
age fifty-five
(55) with ten (10)
Years of Service;
and shall mean
with respect to a
Director who is not an
Employee, separation
from
service as a Director with all Employers. Except as otherwise
required
to comply with Code Section 409A, if a Participant is both an
Employee
and a Director,
Retirement
shall occur when he or
she Retires as an
Employee (whether or not the Participant also terminates
service as a
Director).
1.37
"Retirement Benefit" shall mean the benefit set forth in Article
6.
1.38 "Scheduled
Distribution"
shall mean the distribution set forth in
Section 4.1.
1.39 "Stock"
shall mean HEICO Corporation common stock, $.01 par value,
or
any other equity securities designated by the Committee.
1.40 "Terminate
the Plan", "Termination of the Plan" shall mean a
determination by an
Employer's board of directors that (i) all of its
Participants shall no
longer be eligible to
participate in the Plan,
(ii) no new deferral elections for such Participants shall be
permitted, and (iii)
such Participants shall no longer be eligible to
receive company contributions under this Plan.
1.41
"Termination Benefit" shall mean the benefit set forth in Article 7.
1.42
"Termination of
Employment" shall mean
the separation
from service
with all Employers, voluntarily or involuntarily, for any reason
other
than Retirement, Disability or death, as determined in accordance
with
Code Section
409A and related
Treasury guidance and Regulations.
Except as otherwise
required to comply with Code Section 409A, if a
Participant is both an
Employee and a
Director, a Termination of
Employment shall occur
upon the termination of service as an Employee
(whether or
not the Participant also terminates service as a
Director).
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HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
1.43
"Trust" shall mean one
or more trusts
established
by the Company in
accordance with Article 16.
1.44
"Unforeseeable Emergency" shall mean a severe financial hardship of
the
Participant or his or her Beneficiary resulting from (i) an illness
or
accident of the
Participant
or Beneficiary, the Participant's or
Beneficiary's spouse,
or the Participant's or Beneficiary's dependent
(as defined in Code Section 152(a)), (ii) a loss of the Participant's
or Beneficiary's
property due to casualty, or (iii) such other similar
extraordinary and
unforeseeable
circumstances arising
as a result of
events beyond the
control of the Participant or the Participant's
Beneficiary, all as determined in the sole discretion of the
Committee.
1.45
"Years of Service" shall mean the total number of full years in
which a
Participant has been employed by one or more Employers. For
purposes of
this definition, a year of employment shall be a 365 day period (or
366
day period in the case
of a leap year)
that, for the first year of
employment, commences
on the Employee's
date of hiring and
that, for
any subsequent year,
commences on an
anniversary of that hiring date.
The Committee shall make a determination as to whether any partial
year
of employment shall be counted as a Year of Service.
ARTICLE 2
Selection, Enrollment, Eligibility
----------------------------------
2.1 Selection
by Committee.
Participation in the
Plan shall be limited to
Directors and, as determined by the Committee in its sole
discretion, a
select group of management or highly compensated Employees. From that
group, the
Committee shall select, in its sole discretion, those
individuals who may actually participate in this Plan.
2.2 Enrollment
and Eligibility Requirements; Commencement of Participation.
----------------------------------------------------------------------
(a) As a
condition to participation, each Director or selected
Employee who is eligible to participate in the Plan effective
as
of the first day of a
Plan Year shall complete, execute and
return to the Committee a Plan Agreement, an Election Form and a
Beneficiary Designation Form, prior to the first day of such
Plan
Year, or such other earlier deadline as may be established by
the
Committee in its sole
discretion.
In addition,
the Committee
shall establish
from time to time such other enrollment
requirements as it
determines,
in its sole discretion, are
necessary. With
respect to the First Plan Year, each Director or
selected Employee must complete these requirements within thirty
(30) days of the date on which such Director or Employee
becomes
eligible to
participate
in the Plan. Except as provided in
Section 2.2(b)
below, with respect to any Plan Year after
the
First Plan Year, each Director or selected Employee must
complete
these requirements
prior to the first day
of such Plan Year, or
such other
earlier deadline as may be established by the
Committee in its sole discretion.
(b) A Director
or selected Employee
who first becomes eligible to
participate in this
Plan after the first day of a Plan Year must
complete, execute and
return to the Committee a Plan Agreement,
an Election
Form, and a Beneficiary Designation Form within
thirty (30)
days after he or she first becomes eligible to
participate in the Plan, or within such other earlier deadline
as
may be established by the Committee, in its sole discretion, in
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HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
order to participate
for that Plan Year.
In such event, such
person's participation
in this Plan shall not
commence earlier
than the date
determined by the
Committee pursuant to Section
2.2(c) and such person shall not be permitted to defer under
this
Plan any portion of his or her Base Salary, Bonus, LTIP Amounts,
Commissions and/or
Director Fees that are paid with respect
to
services performed prior to his or her participation
commencement
date, except to the
extent permissible
under Code Section
409A
and related Treasury guidance or Regulations.
(c) Each Director or
selected Employee who is eligible to participate
in the Plan shall commence participation in the Plan on the
date
that the Committee determines, in its sole discretion,
that the
Director or Employee
has met all
enrollment
requirements
set
forth in this
Plan and required by the Committee, including
returning all
required documents to the Committee within the
specified time
period. Notwithstanding the foregoing, the
Committee shall process such Participant's deferral election as
soon as administratively practicable after such deferral
election
is submitted to and accepted by the Committee.
(d) If a Director or an Employee fails to meet all requirements
contained in this
Section 2.2 within the period required, that
Director or Employee
shall not be eligible to participate in the
Plan during such Plan Year.
ARTICLE 3
Deferral Commitments/Company Contribution Amounts/
--------------------------------------------------
Company Matching Amounts/ Vesting/Crediting/Taxes
-------------------------------------------------
3.1
Minimum Deferrals.
-----------------
(a) Annual
Deferral Amount. For each Plan Year, a Participant
may
elect to defer, as his or her Annual Deferral Amount, Base
Salary, Bonus, Commissions, LTIP Amounts and/or Director Fees
in
the following minimum amounts for each deferral elected:
------------------------------------------------------
Deferral
Minimum Amount
------------------------ ----------------------------
Base Salary, Bonus,
Commissions and/or LTIP
$5,000 aggregate
Amounts
------------------------ ----------------------------
Director Fees
$0
------------------------ ----------------------------
If the Committee
determines, in its sole discretion, prior to the
beginning of a Plan Year that a Participant has made an election
for less than the stated minimum amounts, or if no election is
made, the amount deferred shall be zero. If the Committee
determines, in its
sole discretion, at any time after the
beginning of a Plan Year that a Participant has deferred less
than the stated
minimum amounts for
that Plan Year, any
amount
credited to the
Participant's
applicable Annual
Account as the
Annual Deferral Amount for that Plan Year shall be distributed
to
the Participant within
sixty (60) days after the last day of the
Plan Year in which the Committee determination was made.
(b) Short Plan Year.
Notwithstanding the
foregoing, if a Participant
first becomes a
Participant after the
first day of a Plan Year,
or in the case of the First Plan Year of the
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<PAGE>
HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
Plan itself,
the minimum
Annual Deferral Amount shall be an
amount equal to the
minimum set forth
above, multiplied by a
fraction, the numerator of which is the number of complete
months
remaining in the Plan Year and the denominator of which is 12.
3.2
Maximum Deferral.
----------------
(a) Annual
Deferral Amount. For each Plan Year, a Participant
may
elect to defer, as his or her Annual Deferral Amount, Base
Salary, Bonus, Commissions, LTIP Amounts and/or Director Fees
up
to the following maximum percentages for each deferral elected:
------------------------------------------------------
Deferral
Maximum Percentage
------------------------ ----------------------------
Base Salary
100%
------------------------ ----------------------------
Bonus
100%
------------------------ ----------------------------
Commissions
100%
------------------------ ----------------------------
LTIP Amounts
100%
------------------------ ----------------------------
Director Fees
100%
------------------------ ----------------------------
(b) Short Plan Year.
Notwithstanding the
foregoing, if a Participant
first becomes a
Participant after the
first day of a Plan Year,
or in the case of the
First Plan Year of the
Plan itself,
the
maximum Annual
Deferral Amount shall be limited to the amount of
compensation not yet earned by the Participant as of the date
the
Participant submits a
Plan Agreement
and Election
Form to the
Committee for acceptance, except to the extent permissible
under
Code Section 409A and related Treasury guidance or Regulations.
For compensation
that
is earned based upon a specified
performance period,
the Participant's deferral election will
apply to the portion
of such compensation
that is equal to
(i)
the total amount of
compensation
for the performance period,
multiplied by (ii) a
fraction, the numerator of which is the
number of days remaining in the service period after the
Participant's deferral
election is made, and
the denominator of
which is the total number of days in the performance period.
3.3
Election to Defer; Effect of Election Form.
------------------------------------------
(a) First Plan Year.
In connection with a Participant's commencement
of participation
in the Plan,
the Participant shall make an
irrevocable deferral
election for the Plan Year in which the
Participant commences
participation in the Plan, along with such
other elections as the
Committee deems necessary or desirable
under the Plan. For
these elections
to be valid,
the Election
Form must be completed
and signed by the Participant, timely
delivered to the Committee (in accordance with Section 2.2
above)
and accepted by the Committee.
(b) Subsequent
Plan
Years. For each succeeding Plan Year, a
Participant may elect to defer Base Salary, Bonus, Commissions,
Director Fees and LTIP Amounts, and make such other elections
as
the Committee
deems necessary or desirable under the Plan by
timely delivering
a new Election Form to the Committee, in
accordance with its
rules and procedures,
before the
December
31st preceding
the Plan Year in which such compensation is
earned, or
before such other deadline established by the
Committee in
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<PAGE>
HEICO Corporation
Leadership Compensation Plan
Plan Document
================================================================================
accordance with the requirements of Code Section 409A and
related
Treasury guidance
or Regulations. For compensation which is
earned over one or more consecutive fiscal years of an Employer
that is not payable during the service period, the Committee may
determine that a
Participant
may defer such compensation by
making an election before the last day of the fiscal year
preceding the
first fiscal year in which the services are
performed.
Any deferral
election(s) made in
accordance
with this Section
3.3(b) shall
be irrevocable; provided, however, that if the
Committee requires
Participants to make a
deferral election for
"performance-based
compensation" by the
deadline(s)
described
above, it may, in its
sole discretion,
and in accordance
with
Code Section 409A and related Treasury guidance or Regulations,
permit a Participant to subsequently change his or her deferral
election for such
compensation by submitting an Election Form to
the Committee
no later than the deadline established by the
Committee pursuant to Section 3.3(c) below.
(c) Performance-Based
Compensation.
Notwithstanding
the foregoing,
the Committee
may, in its sole
discretion,
determine that an
irrevocable deferral
election pertaining to
"performance-based
compensation" based on
services performed over a period of at
least twelve (12)
months, may be made by
timely delivering
an
Election Form to the Committee, in accordance with its rules
and
procedures, no later
than six (6) months
before the end of
the
performance service
period. "Performance-based
compensation"
shall be compensation, the payment or amount of which is
contingent on
pre-established
organizational
or individual
performance criteria,
which satisfies the
requirements of
Code
Section 409A and related Treasury guidance or Regulations. In
order to be eligible to make a deferral election for
performance-based compensation, a Participant must perform
services continuously
from a date no later
than the date
upon
which the performance criteria for such compensation are
established through
the date upon which the Participant makes a
deferral election
for such compensation. In no event shall an
election to defer
performance-based
compensation be
permitted
after such compensation has become both substantially certain to
be paid and readily ascertainable.
(d) Compensation
Subject to Risk of Forfeiture. With respect to
compensation (i) to
which a Participant
has a legally
binding
right to payment in a subsequent year, and (ii) that is subject
to a forfeiture
condition requiring the Participant's continued
services for a period
of at least twelve
(12) months from the
date the Participant
obtains the
legally binding right, the
Committee may,
in its sole discretion, determine that an
irrevocable deferral
election for such
compensation may be made
by timely delivering an Election Form to the Committee in
accordance with its rules and procedures, no later than the 30th
day after the
Participant obtains
the legally binding
right to
the
compensation,
provided that the election is made at least
twelve (12) months in advance of the earliest date at which the
forfeiture condition could lapse.
3.4
Withholding and
Crediting of Annual Deferral Amounts. For each Plan
Year, the Base Salary portion of the Annual Deferral Amount shall be
withheld from each
regularly scheduled
Base Salary payroll in
equal
amounts, as adjusted
from t
