<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
BE AEROSPACE, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
BE AEROSPACE, INC.
1400 CORPORATE CENTER WAY
WELLINGTON, FLORIDA 33414
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 23, 1996
----------------
Notice is hereby given that the Annual Meeting of Stockholders of BE
Aerospace, Inc. will be held in the Conference Center, 36th Floor, Ropes &
Gray, One International Place, Boston, Massachusetts at 10:30 A.M. on Tuesday,
July 23, 1996 for the following purposes:
1. To elect two Class II directors;
2. To consider and act upon a proposal to amend the Amended and Restated
1989 Stock Option Plan by increasing the aggregate number of shares
available for grant thereunder;
3. To consider and act upon a proposal to adopt the MacBride Principles;
and
4. 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, 1996 are entitled
to notice of and to vote at the meeting.
If you are unable to attend the meeting in person, please sign and date the
enclosed proxy and return it promptly in the enclosed envelope.
By Order of the Board of Directors,
Edmund J. Moriarty
Secretary
June 24, 1996
<PAGE>
BE AEROSPACE, INC.
----------------
ANNUAL MEETING OF STOCKHOLDERS
JULY 23, 1996
----------------
PROXY STATEMENT
----------------
The enclosed form of proxy is solicited on behalf of the Board of Directors
of BE Aerospace, Inc. (the "Company") to be voted at the Annual Meeting of
Stockholders to be held in the Conference Center, 36th Floor, Ropes & Gray,
One International Place, Boston, Massachusetts 02110 at 10:30 A.M. on Tuesday,
July 23, 1996 or at any adjournment thereof (the "Meeting"). 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
otherwise 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, and not revoked, will be voted at the Meeting.
The expense of soliciting proxies will be borne by the Company. Officers and
regular employees of the Company (who will receive no compensation therefor in
addition to their regular salaries) may solicit proxies. In addition to the
solicitation of proxies by use of the mails, the Company may use the services
of its officers and regular employees to solicit proxies personally and by
mail, telephone and telegram from brokerage houses and other shareholders. The
Company also has retained Corporate Investor Communications, Inc. to assist in
such solicitation for a fee of $4,000 plus expenses. The Company also will
reimburse brokers and other persons for their reasonable charges and expenses
in forwarding soliciting materials to their principals.
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 common stock, $0.01 par value, of the Company (the "Common
Stock") at the close of business on June 3, 1996 are entitled to receive
notice of and to vote at the Meeting. As of that date, the Company had issued
and outstanding 16,583,214 shares of Common Stock. Each such 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 shares entitled to be cast on a particular matter, 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 shall be elected directors.
A majority of the shares in attendance at the Meeting, present in person or
represented by proxy, is necessary to approve the actions described in
Proposal Nos. 2 and 3 of the accompanying Notice of Annual Meeting. The
inspector of election will count the total number of votes cast "for" approval
of Proposal Nos. 2 and 3 for purposes of determining whether sufficient
affirmative votes have been cast. The inspector of election will count shares
represented by proxies that withhold authority to vote either for the nominees
for election as a director or for Proposal Nos. 2 and 3 or that reflect
abstentions and "broker non-votes" (i.e., 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) only as
<PAGE>
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum, but neither abstentions nor broker non-
votes will have any effect on the outcome of voting on any matter.
The Annual Report to Stockholders for the Company's fiscal year ended
February 24, 1996 accompanies this proxy statement. This proxy statement and
the enclosed proxy are being mailed to stockholders on the same date as the
date of the Notice of Annual Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The persons named in the enclosed proxy intend to vote each share as to
which a proxy has been properly executed and returned 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
either or both 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, 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 the two directors currently designated as Class II
Directors, whose terms expire at the 1996 Annual Meeting. The enclosed proxy
cannot be voted for a greater number of persons than two.
If Proposal No. 1 is approved, Messrs. R. Khoury and Wyss will be elected as
Class II Directors for a term of three years, expiring at the 1999 Annual
Meeting, and until their respective successors are elected and shall qualify
to serve.
It is expected that Messrs. Khoury and Wyss will be able to serve, but if
either is 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.
NOMINEES
<TABLE>
<CAPTION>
NAME, AGE (AS OF JUNE 14, 1996), DIRECTOR
BUSINESS EXPERIENCE AND CURRENT DIRECTORSHIPS SINCE
--------------------------------------------- --------
<S> <C>
ROBERT J. KHOURY, 54--Since April 1996, Vice Chairman of the Board of 1987
Directors and Chief Executive Officer of the Company; from 1987 to
April 1996, President and Chief Operating Officer of the Company. Mr.
Khoury is the brother of Amin J. Khoury
HANSJORG WYSS, 60--Since 1977, Director, President and Chief Executive 1989
Officer of Synthes (U.S.A.), Ltd. and Synthes (Canada), Ltd.,
manufacturers and distributors of orthopedic implants and
instruments; currently a director of Applied Extrusion Technologies,
Inc., a manufacturer of oriented polypropylene films for labeling and
packaging applications for the food, beverage, confectionary and
other consumer products industries.
</TABLE>
2
<PAGE>
CURRENT DIRECTORS
<TABLE>
<CAPTION>
NAME, AGE (AS OF JUNE 14, 1996), DIRECTOR TERM
BUSINESS EXPERIENCE AND CURRENT DIRECTORSHIPS SINCE EXPIRES
--------------------------------------------- -------- -------
<S> <C> <C>
JIM C. COWART, 44--Since January 1993, Chairman of the Board 1989 1998
of Directors and Chief Executive Officer of Aurora
Electronics, Inc., a supplier of environmental recycling and
recovery services to the electronics industry; since January
1992, Director of Aurora Management, Inc., a private capital
firm from time to time retained by the Company for consulting
services; from 1987 until 1991, General Partner of Capital
Resource Partners, a private capital investment manager.
PAUL E. FULCHINO, 49--Since April 1996, President and Chief 1996 1998
Operating Officer of the Company; from 1990 to 1996,
President and Vice Chairman of Mercer Management Consulting,
Inc., a general management consulting firm with over 1,100
employees.
RICHARD G. HAMERMESH, 48--Since 1987, Managing Partner, Center 1987 1997
for Executive Development, an independent executive education
and training firm; currently a director of Applied Extrusion
Technologies, Inc.
AMIN J. KHOURY, 57--Since 1987, Chairman of the Board of 1987 1997
Directors; from 1987 to April 1996, Chief Executive Officer
of the Company; since 1986, Managing Director of The K.A.D.
Companies, Inc., an investment, venture capital and
consulting firm; currently Chairman of the Board of Directors
of Applied Extrusion Technologies, Inc.; and a director of
Aurora Electronics, Inc. and Brooks Automation, Inc., a
manufacturer of vacuum central wafer handling systems for the
semiconductor process industry. Mr. Khoury is the brother of
Robert J. Khoury.
BRIAN H. ROWE, 65--Since February, 1995, Chairman Emeritus of 1995 1998
GE Aircraft Engines ("GEAE"), a principal business unit of
the General Electric Company ("GE"); Chairman of GEAE from
1993 to 1995 and President from 1990 to 1993; held various
senior management positions with GEAE from 1979 to 1990;
joined GE in 1957; currently a director of Atlas Air, Inc.,
an air cargo carrier; the Fifth Third Bank, an Ohio banking
corporation; Stewart & Stevenson Services, Inc., a custom
packager of engine systems for the generation of electrical
and mechanical power; Textron, a multi-industry manufacturer
of commercial and military aircraft, automotive components,
industrial fastening systems and other products; and Canadian
Marconi Company, a provider of aerospace products, electronic
components, communications products and surface
transportation electronics.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held four meetings during the fiscal year ended
February 24, 1996 ("Fiscal 1996"). All directors attended at least 75% of
Board meetings during Fiscal 1996. The Board of Directors currently has two
standing committees, the Audit Committee and the Stock Option and Compensation
Committee.
The Audit Committee, composed of Messrs. Richard G. Hamermesh and Hansjorg
Wyss, held one meeting during Fiscal 1996. The Audit Committee recommends to
the Board of Directors the independent auditors to be
3
<PAGE>
engaged by the Company, reviews with management and with the independent
auditors the Company's internal accounting procedures and controls and reviews
with the independent auditors the scope and results of their audit.
The Stock Option and Compensation Committee, composed of Messrs. Cowart and
Hamermesh, held one meeting during Fiscal 1996 and acted pursuant to unanimous
written consent on two occasions. The Committee provides recommendations to
the Board regarding compensation matters and administers the Company's stock
option and compensation plans.
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 June
14, 1996 by (i) each person who is known to the Company to beneficially own
more than 5% of the outstanding shares of Common Stock of the Company; (ii)
each of the chief executive officer and the four other most highly paid
executive officers of the Company in Fiscal 1996 (collectively, the "Named
Executive Officers") and each director of the Company; and (iii) all executive
officers and directors of the Company 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:
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
-------------------------------------
PERCENT OF
NUMBER OUTSTANDING
OF SHARES SHARES(1)
------------------- ----------------
<S> <C> <C>
Wellington Management Company............ 2,273,300 13.7
75 State Street
Boston, MA 02109
State of Wisconsin Investment Board...... 1,585,000 9.5
P.O. Box 7842
Madison, WI 53707
Sanford C. Bernstein & Co................ 1,131,439 6.8
1 State Street Plaza
New York, NY 10004
Frank Russell Co. Inc.................... 998,200 6.0
909 A Street
Tacoma, WA 98401
Dimensional Fund Advisors................ 916,700 5.5
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Amin J. Khoury+*......................... 707,800(2) 4.1
Marco C. Lanza+.......................... 220,148(3) 1.3
Hansjorg Wyss*........................... 188,609(4) 1.1
Robert J. Khoury+*....................... 173,717(5) 1.0
Jim C. Cowart*........................... 168,000(6) 1.0
Thomas P. McCaffrey+..................... 70,596(7) **
Richard G. Hamermesh*.................... 63,802(8) **
Paul E. Fulchino*........................ 50,000(9) **
E. Ernest Schwartz+...................... 29,750(10) **
Brian H. Rowe*........................... 8,750(11) **
All Directors and Executive Officers as a
group (14 persons)...................... 1,798,290(12) 9.8
</TABLE>
4
<PAGE>
- --------
+ Named Executive Officer
* Director of the Company
** Less than 1 percent
(1) The number of shares of Common Stock deemed outstanding includes: (i)
16,623,214 shares of Common Stock outstanding as of June 14, 1996 and
(ii) shares of Common Stock subject to outstanding stock options which
are exercisable by the named individual or group in the next sixty days
(commencing June 14, 1996).
(2) Includes shares issuable upon the exercise of stock options exercisable
in the next sixty days.
(3) Includes 175,000 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned through the Company
401(k) plan. Excludes options to purchase 25,000 shares of Common Stock
which are not exercisable in the next sixty days.
(4) Includes 47,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 12,500
shares of Common stock which are not exercisable in the next sixty days.
(5) Includes 172,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned through the Company
401(k) plan. Excludes options to purchase 27,500 shares of Common Stock
which are not exercisable in the next sixty days.
(6) Includes 20,000 shares acquired by a profit sharing plan in which Mr.
Cowart has a fifty percent interest and 145,000 shares issuable upon the
exercise of stock options exercisable in the next sixty days. Excludes
options to purchase 20,000 shares of Common Stock which are not
exercisable in the next sixty days.
(7) Includes 65,000 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 5,000
shares of Common Stock which are not exercisable in the next sixty days.
(8) Includes 2,000 shares held in trusts for the benefit of Mr. Hamermesh's
two children, of which trust Mr. Hamermesh and his wife are trustees and
in which shares Mr. Hamermesh disclaims all beneficial interest. Also
includes 37,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 12,500
shares of Common Stock which are not exercisable in the next sixty days.
(9) Excludes options to purchase 150,000 shares of Common Stock which are not
exercisable in the next sixty days.
(10) Includes 28,750 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 6,250
shares of Common Stock which are not exercisable in the next sixty days.
(11) Includes 8,750 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 26,250
shares of Common Stock which are not exercisable in the next sixty days.
(12) Includes 1,544,050 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 343,750
shares of Common Stock which are not exercisable in the next sixty days.
5
<PAGE>
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee, which is responsible for making recommendations
to the Board of Directors on compensation relating to officers of the Company
and administering the Company's stock option plans, makes the following report
on executive compensation for Fiscal 1996:
The Company's executive compensation program is designed to reward and
retain executives who are capable of leading the Company in achieving its
strategic and financial objectives in the competitive and rapidly changing
commercial aircraft cabin interior products industry.
The Company relies on three compensation components to motivate executive
performance: annual salary, incentive cash bonuses and stock-based incentive
compensation. Each of the Named Executive Officers has an employment agreement
that establishes an annual base salary at a level the Company believes is very
modest for companies in the aerospace and airline industries and in the mid-
range for growth companies traded on the Nasdaq National Market. In addition
to base salary, each Named Executive Officer may receive an incentive cash
bonus at the end of each fiscal year based upon corporate performance and that
officer's individual performance. Corporate performance is measured by the
Company's strategic and financial performance in that fiscal year, with
particular reference to net revenues and operating earnings for the year,
together with gains in market share for the Company's products. Because the
Compensation Committee believes that short-term fluctuations in stock price do
not necessarily reflect the underlying strength or future prospects of the
Company, the Compensation Committee does not emphasize year-to-year changes in
stock price in its evaluation of corporate performance. Individual performance
is measured by the strategic and financial performance of the particular
officer's operational responsibility in comparison to targeted performance
criteria.
While skeptical about the significance of short-term fluctuations in stock
price, the Compensation Committee believes that long-term stock price
appreciation will reflect the Company's achievement of its strategic goals and
objectives. Accordingly, the Company seeks to create long-term performance
incentives for its key employees through the Company's stock-based incentive
compensation program. Stock options are granted to key employees at a price
equal to the fair market value on the date of grant, and awards are based on
the performance of such employees and anticipated contributions by such
employees in helping the Company achieve its strategic goals and objectives.
Stock option grants are also made by reference to the number of stock options
an employee already holds.
For the last two fiscal years, despite the achievement of essentially all of
the strategic objectives associated with the creation of long-term shareholder
value, including gains in market share for all of the Company's products,
revenues and operating earnings did not meet the Company's projections due to
the continued recession in the airline industry and, therefore, the Company
did not pay any cash bonuses to any of its Named Executive Officers. The
Company did grant stock options to key employees, other than the Named
Executive Officers, upon recommendation of management and approval of the
Compensation Committee.
The base salary for Mr. Amin J. Khoury, Chairman of the Board and Chief
Executive Officer of the Company during Fiscal 1996, for Fiscal 1996 was
$403,211, which included a cost-of-living increase calculated by reference to
the Consumer Price Index as provided in his employment agreement with the
Company. See
6
<PAGE>
"Employment Contracts--Amin J. Khoury" below. Mr. Khoury was not granted any
bonus or stock options for Fiscal 1996.
With respect to the above matters, the Compensation Committee submits this
report.
COMPENSATION COMMITTEE
Jim C. Cowart
Richard G. Hamermesh
The following tables set forth information with respect to the compensation
of the Named Executive Officers in Fiscal 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------- --------------------------
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR(1) SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
- --------------------------- ------- ---------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Amin J. Khoury.......... 1996 $ 403,211 $ 0 $ 0 $3,990(2)
Chairman and Chief 1995 382,653 0 0 3,764(2)
Executive Officer 1994 370,440 0 0 5,514(2)
Robert J. Khoury........ 1996 256,000 0 0 5,137(2)
President and Chief 1995 200,000 0 60,000 4,551(2)
Operating Officer 1994 200,000 0 50,000 4,497(2)
Marco C. Lanza..........
Executive Vice 1996 202,500 0 0 4,666(2)
President, Marketing 1995 150,010 0 90,000 4,432(2)
and Product Development 1994 150,000 0 10,000 4,497(2)
Thomas P. McCaffrey.....
Vice President, Chief 1996 195,000 0 0 5,515(2)
Financial Officer and 1995 155,192 0 20,000 4,201(2)
Secretary 1994 123,384 0 50,000 0
E. Ernest Schwartz...... 1996 174,282 0 0 4,936(2)
President, Galley 1995 137,500 0 5,000 18,859(2)
Products Group 1994 135,000 20,000 20,000 4,497(2)
</TABLE>
- --------
(1) The periods covered by this table are the fiscal years ended in February
1996, 1995 and 1994.
(2) Defined contribution plan contribution paid by the Company.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END(#) FY-END($)
-------------- ---------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
---- --------------- ----------- -------------- ---------------------
<S> <C> <C> <C> <C>
Amin J. Khoury.......... 0 N.A. 782,800/0 4,096,050/N.A.
Robert J. Khoury........ 0 N.A. 172,500/27,500 924,062.50/138,437.50
Marco C. Lanza.......... 0 N.A. 175,000/25,000 935,937.50/120,312.50
Thomas P. McCaffrey..... 0 N.A. 47,500/22,500 206,875/100,625
E. Ernest Schwartz...... 15,000 78,750 27,500/7,500 118,125/38,750
</TABLE>
- --------
(1) The closing price for the Company's Common Stock on the Nasdaq National
Market on February 23, 1996, the last trading day of the fiscal year, was
$13.00 per share.
DEFINED BENEFIT ARRANGEMENT
Pursuant to the employment agreement between the Company and Mr. Amin J.
Khoury, upon the occurrence of the earlier of December 31, 2001 (the
employment agreement's termination date) or the termination of the employment
agreement by reason of Mr. Khoury's death or incapacity, Mr. Khoury or his
estate, as the case may be, shall be entitled to receive a retirement
compensation payment (the "Retirement Compensation") equal to Mr. Khoury's
base salary, as adjusted for inflation, in effect immediately prior to the
termination of his employment, which amount is payable for each successive
year following termination for the number of years Mr. Khoury has served the
Company. Mr. Khoury's base salary is currently $450,000, and his service to
the Company began on August 1, 1987, the date he became Chairman and Chief
Executive Officer of the Company. The Retirement Compensation may be paid in
monthly installments, or Mr. Khoury or his personal representative, as the
case may be, may elect to receive the present value of the aggregate
Retirement Compensation in a lump sum.
Pursuant to the amended employment agreement between the Company and Mr.
Robert J. Khoury, in the event that Mr. Khoury terminates his employment, then
Mr. Khoury or his estate, as the case may be, shall be entitled to receive in
each of the ten years following termination a retirement compensation payment
equal to Mr. Khoury's base salary in effect as of the date of termination,
plus incentive bonus and other benefits contained in his contract. Mr.
Khoury's base salary is currently $450,000, and his service to the Company
began on August 1, 1987, the date he became President and Chief Operating
Officer of the Company.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no additional
compensation for serving on the Company's Board of Directors. Directors who
are not employees of the Company (the "Eligible Directors") receive
compensation of $2,500 per calendar quarter and are entitled to participate in
the Company's 1991 Directors' Stock Option Plan, as from time to time in
effect (the "Directors' Plan"). Under the Directors' Plan, each Eligible
Director is awarded an option for 5,000 shares of Common Stock on December 15
of each year the plan is in effect, provided he or she is an Eligible Director
on that date. In addition, each Eligible Director, excluding those individuals
who are currently directors of the Company, is awarded an initial grant of
35,000 shares of Common Stock as of the date of his or her first election as a
director.
8
<PAGE>
The exercise price of all options granted under the Directors' Plan may not
be less than 100% of the fair market value of the Common Stock on the date of
the grant. Options expire 10 years after the date of grant and become
exercisable, subject to certain conditions which accelerate vesting, as
follows: 25% on the first anniversary of the date of grant and an additional
25% each calendar year thereafter. On December 15, 1995, each of the following
directors was awarded an option to purchase 5,000 shares of Common Stock at a
price of $10.375 per share: Jim C. Cowart, Richard G. Hamermesh and Hansjorg
Wyss.
EMPLOYMENT CONTRACTS
Amin J. Khoury. Mr. Khoury and the Company have entered into an employment
agreement dated as of January 1, 1992, amended as of August 1, 1992 and April
1, 1996, which extends through December 31, 2001. Under the employment
agreement, Mr. Khoury receives an initial base salary of $450,000 per year,
subject to increases as determined from time to time by the Board of Directors
and subject to cost of living increases calculated by reference to the
Consumer Price Index. Mr. Khoury's base salary for Fiscal 1996 was $403,211.
Mr. Khoury is also entitled to receive bonuses from the Company when, as and
if determined from time to time by the Board of Directors. In the event of Mr.
Khoury's death or incapacity, Mr. Khoury (or in the event of his death, his
designee) will continue to receive his then current salary and, to the extent
legally practicable, benefits until the end of the term of the contract or the
current one-year extension period. If a change of control of the Company
results in the termination of his employment or reduction in salary or
benefits or if Mr. Khoury resigns following such a change of control because
of a change in his position or responsibilities, Mr. Khoury will receive a
lump sum payment equal to two times his then current salary and will then
continue to receive his salary and benefits under the agreement until the end
of the term of the agreement or the next calendar year end, whichever is
later. Mr. Khoury is also entitled to retirement compensation upon the
expiration of his employment term. See "Defined Benefit Arrangement" above.
Robert J. Khoury. Mr. Khoury and the Company have entered into an employment
agreement dated as of March 1, 1992, amended as of August 1, 1992 and April 1,
1996, which extends through February 28, 2001, unless otherwise terminated.
Thereafter, the agreement extends automatically for consecutive one-year
periods until either Mr. Khoury or the Company gives the other at least 90
days' written notice prior to the end of the next calendar year end. Under the
employment agreement, Mr. Khoury receives a base salary of $450,000, subject
to increases from time to time as determined by the Board of Directors and
subject to cost of living increases calculated by reference to the Consumer
Price Index. Mr. Khoury is entitled to receive an annual incentive bonus when,
as and if determined by the Board of Directors, which shall not exceed 100% of
his then current salary. In the event of Mr. Khoury's death or incapacity, Mr.
Khoury (or in the event of his death, his designee) will continue to receive
his then current salary and, to the extent legally practicable, benefits until
the end of the term of the contract or the current one-year extension period.
If a change of control of the Company results in the termination of his
employment or reduction in salary or benefits or if Mr. Khoury resigns
following such a change of control because of a change in his position or
responsibilities, Mr. Khoury will receive a lump sum payment equal to two
times his then current salary and will then continue to receive his salary and
benefits under the agreement until the end of the term of the agreement or the
next calendar year end, whichever is later. If the Company terminates his
employment agreement for cause, the Company has no further obligations to him,
except for unpaid salary and benefits accrued through the date of termination.
Mr. Khoury is also entitled to retirement compensation upon the expiration of
his employment term. See "Defined Benefit Arrangement" above.
Paul E. Fulchino. The Company has entered into a three-year employment
agreement dated as of April 1, 1996 with Mr. Fulchino under which Mr. Fulchino
receives a base salary of $450,000, subject to increases as determined from
time to time by the Board of Directors and subject to cost of living increases
calculated by
9
<PAGE>
reference to the Consumer Price Index. Mr. Fulchino also is entitled to
receive an annual incentive bonus as determined by the Board of Directors,
which shall not exceed 100% of his then current salary. In the event of Mr.
Fulchino's death or incapacity, Mr. Fulchino (or, in the event of his death,
his designee) will continue to receive his then current salary (and in the
case of disability, benefits) for the balance of the term of the contract. If
a change of control of the Company results in the termination of his
employment or if Mr. Fulchino resigns following such a change of control
because of a change in his position or responsibilities, or his compensation
or benefits are terminated or reduced, Mr. Fulchino will receive a lump sum
payment equal to two times his then current salary. If the Company terminates
his employment agreement for cause, the Company will have no further
obligations to him, except for unpaid salary and benefits accrued through the
date of termination.
Marco C. Lanza. Mr. Lanza and the Company have entered into an employment
agreement dated as of March 1, 1992, amended as of January 1, 1996, which
extends through December 31, 1999, unless sooner terminated. Thereafter, the
agreement extends automatically for consecutive one-year periods until either
Mr. Lanza or the Company gives the other at least 90 days' written notice
prior to the end of the next calendar year. Under the employment agreement,
Mr. Lanza receives a base salary of $240,000 and is entitled to receive an
annual incentive bonus when, as and if determined by the Board of Directors.
In the event of Mr. Lanza's death or incapacity, Mr. Lanza (or in the event of
his death, his designee) will continue to receive his then current salary and,
to the extent legally practicable, benefits until the end of the term of the
contract or the current one-year extension period. If a change of control of
the Company results in the termination of his employment or reduction in
salary or benefits or if Mr. Lanza resigns following such a change of control
because of a change in his position or responsibilities, Mr. Lanza will
receive a lump sum payment equal to his then current salary and will then
continue to receive his salary and benefits under the agreement until the end
of the term of the agreement or the next calendar year end, whichever is
later. Mr. Lanza does not have provision in his employment agreement for a
retirement benefit. In all other respects, Mr. Lanza's employment agreement is
the same as Mr. Robert Khoury's employment agreement described above.
Thomas P. McCaffrey. Mr. McCaffrey and the Company have entered into an
employment agreement dated as of May 1, 1993, amended as of January 1, 1996,
which extends through December 31, 1999, unless sooner terminated. Thereafter,
the agreement extends automatically for one-year periods until either Mr.
McCaffrey or the Company gives the other at least 90 days' written notice
prior to the end of the next calendar year. Under the employment agreement,
Mr. McCaffrey receives a base salary of $225,000 and is entitled to receive an
annual incentive bonus when, as and if determined by the Board of Directors
but not to exceed 100% of salary. In all other respects, Mr. McCaffrey's
employment agreement is the same as Mr. Lanza's employment agreement described
above.
E. Ernest Schwartz. Mr. Schwartz and the Company have entered into an
employment agreement dated as of March 1, 1992, amended as of January 1, 1996,
which extends through January 1, 1997, unless sooner terminated. Thereafter,
the agreement extends automatically for one-year periods until either Mr.
Schwartz or the Company gives the other at least 90 days' written notice prior
to the end of the next calendar year. Mr. Schwartz receives a base salary of
$200,000 under the agreement and is entitled to receive an annual incentive
bonus when, as and if determined by the Board of Directors. Mr. Schwartz does
not have provision in his employment agreement for a retirement benefit. Mr.
Schwartz's employment agreement contains provisions with respect to change in
control identical to those in Mr. Lanza's employment agreement described
above.
REPORT OF REPRICING OF OPTIONS
The Compensation Committee makes the following report on the repricing of
options in Fiscal 1996:
On August 23, 1995, the Compensation Committee repriced certain outstanding
options of the Company with exercise prices ranging from $9.25 to $11.75 per
share so that such repriced options now have an exercise
10
<PAGE>
price of $7.625, the closing price of the Company's Common Stock on August 22,
1995. The Compensation Committee took this action on the recommendation of the
Chairman, who specifically requested that no options held by him be repriced.
The Committee believes that, particularly in view of the fact that no bonuses
were paid to the Company's Named Executive Officers with respect to the last
two fiscal years, executives and other employees of the Company to whom stock
options have been granted have a greater incentive to perform to their maximum
potential and to continue their service with the Company when they perceive
their options as having, or being close to having, an immediate and realizable
value.
With respect to the above matter, the Compensation Committee submits this
report.
COMPENSATION COMMITTEE
Jim C. Cowart
Richard G. Hamermesh
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET PRICE EXERCISE ORIGINAL
SECURITIES OF STOCK AT PRICE AT OPTION TERM
UNDERLYING TIME OF TIME OF REMAINING AT
OPTIONS REPRICING OR REPRICING OR NEW DATE OF
REPRICED OR AMENDMENT AMENDMENT EXERCISE REPRICING OR
NAME DATE AMENDED (#) ($) ($) PRICE ($) AMENDMENT
---- ------- ----------- ------------ ------------ --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Amin J. Khoury......... 4/21/93 775,000 8.75 12.25 8.75 8 yrs., 11 mos.
Chairman and Chief
Executive Officer
Robert J. Khoury....... 8/23/95 50,000 7.625 9.50 7.625 5 yrs., 3 mos.
President and Chief 8/23/95 50,000 7.625 11.75 7.625 8 yrs., 2 mos.
Operating Officer
Marco C. Lanza......... 8/23/95 40,000 7.625 9.50 7.625 5 yrs., 3 mos.
Executive Vice 8/23/95 10,000 7.625 11.7 7.625 8 yrs., 2 mos.
President, Marketing
and Product
Development
G. Bernard Jewell...... 8/23/95 10,000 7.625 11.75 7.625 5 yrs., 3 mos.
President, Seating
Products Division
E. Ernest Schwartz..... 8/23/95 20,000 7.625 11.75 7.625 8 yrs., 2 mos.
President, Galley
Products Division
Jeffrey P. Holtzman,... 8/23/95 10,000 7.625 9.25 7.625 8 yrs., 2 mos.
Treasurer 8/23/95 10,000 7.625 11.75 7.625 8 yrs., 4 mos.
</TABLE>
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1990, the Company adopted a formal policy whereby all transactions
between the Company and its officers, directors, principal stockholders or
other affiliates must be on terms no less favorable to the Company than could
be obtained from unaffiliated third parties on an arm's-length basis, and such
transactions will be approved by a majority of the Company's independent and
disinterested directors.
Under a Supply Agreement dated April 17, 1990 with Applied Extrusion
Technologies, Inc., a Delaware corporation ("AET"), the Company purchases from
AET its requirements of injection-molded plastic parts for use in the
manufacture of passenger control units and other products for installation in
commercial aircraft for the period ending March 31, 1998. Under that
agreement, AET has agreed to use its best efforts at all times to maintain
available and in good working order a sufficient number and variety of
injection molding machines to satisfy the Company's orders as received and to
use its best efforts to initiate production within three days of receipt of an
order or, in emergency situations, on the day on which the order is received.
The price to be paid by the Company to AET for products purchased under the
Supply Agreement is an amount which results in a 33 1/3% gross margin to AET,
after including in AET's standard cost for such products, all direct and
indirect costs of labor, materials, equipment and overhead. Purchases by the
Company under this agreement for Fiscal 1996 were approximately $1,300,000.
Mr. Amin J. Khoury is a director and significant stockholder of AET and serves
as Chairman of its Board of Directors. Messrs. Hamermesh and Wyss, directors
of the Company, also are directors of AET.
For fiscal year 1996, Boston Film Company, Inc., a multimedia film and video
production house ("BFC"), was paid an aggregate of $134,000 in fees and
expenses for extensive support services performed for a number of the
Company's Divisions, including the production of CD ROM and other marketing
and training materials, preparation of corporate video and slide
presentations, and providing technical support for the management information
systems group. Amin C. Khoury, President of BFC, is the son of Amin J. Khoury,
Chairman of the Company and a minority stockholder of BFC.
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return on its Common Stock with the cumulative
total return on the Nasdaq National Market Index, the Dow Jones Airlines Index
and the Dow Jones Aerospace and Defense Index from July 29, 1990 through
February 23, 1996, the last trading day of Fiscal 1996, based upon an assumed
$100 investment in the Company's Common Stock and in the stocks comprising
each such index as of July 1990:
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
S&P DJ
Measurement period BE AEROSPACE SMALLCAP DJ AEROSPACE
(Fiscal Year Covered) INC NASDAQ 600 AIRLINES & DEFENSE
- --------------------- ------------ ------ -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Measurement PT -
7/29/90 $100 $100 $100 $100 $100
FYE 7/91 $140 $112 $102 $ 96 $103
FYE 2/92 $140 $143 $127 $106 $105
FYE 2/93 $100 $153 $139 $ 94 $110
FYE 2/94 $115 $181 $169 $108 $155
FYE 2/95 $ 55 $183 $162 $ 92 $174
FYE 2/96 $130 $255 $212 $144 $296
</TABLE>
- --------
(1) The stock prices on the Performance Graph are not necessarily indicative
of future stock price performance.
Each of the Report of the Compensation Committee of the Board of Directors
and the Performance Graph shall not be deemed incorporated by reference by any
general statement incorporating this proxy statement into
13
<PAGE>
any filing under the Securities Act of 1933, as from time to time in effect,
or under the Securities Exchange Act of 1934, as from time to time in effect,
except to the extent that the Company specifically incorporates this
information by reference and shall not otherwise be deemed filed under such
acts.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission (the"Commission") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater-than-ten-
percent shareholders are required by Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and, with respect to its officers and
directors, written representations that no other reports were required, during
Fiscal 1996, all Section 16(a) filing requirements applicable to its officers,
directors and greater-than-ten-percent beneficial owners were complied with,
except that (i) each of Messrs. R. Khoury, Lanza, McCaffrey and Schwartz
reported on their Form 5 for Fiscal 1996 their May 1994 option grants; and
(ii) in filing Forms 5 for each of Messrs. Holtzman, Jewell, R. Khoury and
Lanza, the Company's outside counsel inadvertently failed to report an option
repricing that occurred in August 1995. The latter transactions were reported
on amendments to each person's Form 5 within three weeks following the due
date of such Forms.
In making the above statements, the Company has relied on the written
representations of its directors and officers and copies of the reports that
have been filed with the Commission.
PROPOSAL NO. 2
APPROVAL OF AMENDMENT OF AMENDED AND RESTATED
1989 STOCK OPTION PLAN
The Board of Directors has unanimously approved, subject to stockholder
approval, an increase in the number of shares available for grants of options
under the Amended and Restated 1989 Stock Option Plan (the "1989 Plan") from
1,800,000 to 2,550,000.
In July 1989, the Company's Board of Directors and stockholders approved the
1989 Stock Option Plan. An amendment and restatement of the 1989 Stock Option
Plan was approved by the stockholders of the Company at the Annual Meetings of
Stockholders held on December 5, 1991 and it was further amended by action of
the stockholders at the Annual Meetings of Stockholders held on July 15, 1992
and July 26, 1995 (the 1989 Stock Option Plan as amended and restated is
referred to herein as the "1989 Plan"). The 1989 Plan is administered by the
Stock Option Committee and provides for the grant of incentive stock options
and non-statutory stock options to employees, consultants or advisers of the
Company. Directors who are also employees, consultants or advisers are also
eligible to participate in the 1989 Plan.
The exercise price of all options granted under the Employee Option Plan may
not be less than 100% (110% for owners of more than 10% of the Common Stock in
the case of incentive stock options) of the fair market value of the Common
Stock on the date of grant. Options expire 10 years after the date of grant (5
years after the date of grant for owners of more than 10% of the Common Stock
in the case of incentive stock options).
14
<PAGE>
Options generally become exercisable as follows: 25% upon grant and an
additional 25% each calendar year thereafter.
A total of 1,800,000 shares of Common Stock has been reserved under the 1989
Plan. As of June 14, 1996, no options were available for grant under the 1989
Plan. During the fiscal year ended February 24, 1995, the Company granted
options under the 1989 Plan to purchase an aggregate of 222,500 shares of
Common Stock at a weighted average exercise price of $8.47 per share. All of
such options were granted at an exercise price equal to the fair market value
of the Common Stock on the date of grant.
Federal Tax Effects. The following general summary of federal income tax
consequences, based on the law as currently in effect, does not purport to be
a complete description of federal or other tax aspects of the 1989 Plan.
Moreover, the following summary does not discuss possible foreign, state,
estate or other tax consequences.
Incentive Stock Options. Neither the grant nor, in general, the exercise of
an incentive stock option produces taxable ordinary income to the employee or
a deduction to the Company. However, upon exercise of an incentive stock
option the participant's "alternative minimum taxable income" will be
increased, generally by the excess of the fair market value of the shares at
time of exercise over the option price, and the employee may be required to
pay the alternative minimum tax ("AMT"). Any AMT attributable to the exercise
of an incentive stock option may be applied as a credit against the
participant's regular tax liability in subsequent years, subject to certain
limitations.
If the participant does not dispose of stock received upon the exercise of
an incentive stock option within two years from the date the option was
granted nor within one year after the date of exercise, any later sale of the
shares will result in a long-term capital gain or loss. However, if shares
received upon exercise of an incentive stock option are disposed of before
these holding-period requirements have been satisfied (a "disqualifying
disposition"), the participant will realize ordinary income, and the Company
will be entitled to a deduction, equal in general to the difference between
the option price and the value of the shares on the date of exercise. In the
case of a disqualifying disposition that is a sale with respect to which loss
(if sustained) would be recognized, the amount of ordinary income will not
exceed the excess of the amount realized on such sale over the adjusted basis
for the stock. A disqualifying disposition of shares acquired upon exercise of
an incentive stock option that occurs in the same taxable year of the
participant as the date his or her AMT income was increased by reason of such
exercise will eliminate the AMT effect, if any, of such exercise.
In the event a participant pays the option price of an incentive stock
option by surrendering shares of previously owned stock, the surrender will
not, in general, result in the recognition of gain. However, the exercise of
an incentive stock option by the surrender of shares which were themselves
acquired by the participant upon exercise of an incentive stock option will be
a disqualifying disposition of the surrendered shares if it takes place within
two years after the grant or one year after the exercise of the incentive
stock option pursuant to which the surrendered shares were acquired.
Incentive stock options granted pursuant to the 1989 Plan are treated for
tax purposes as nonstatutory options (see below) to the extent that the
aggregate fair market value of Common Stock with respect to which such options
are exercisable for the first time by an individual during any calendar year
exceeds $100,000. For purposes of the preceding sentence, incentive stock
options under all option plans of the Company and its subsidiaries are
aggregated, and fair market value is determined as of the time of grant of the
option.
15
<PAGE>
Non-Statutory Stock Options. The grant of a non-statutory stock option does
not produce taxable income to the employee or a deduction to the Company. When
a participant exercises a non-statutory stock option, he or she realizes, for
federal income tax purposes, ordinary income, subject to withholding, in the
amount of the difference between the option price and the then-market value of
the shares, and the Company is entitled to a corresponding deduction (subject
to satisfying its obligation to withhold with respect to such income). The tax
is due regardless of whether or not the optionee sells the stock acquired upon
exercise of the option.
If a participant exercises a non-statutory stock option in whole or in part
by surrendering previously acquired stock (whether acquired upon exercise of
an incentive or non-statutory stock option or otherwise), no gain or loss is
recognized on the exchange of the previously acquired shares for an equivalent
number of new shares.
Special Rules Applicable to Executive Officers and Directors. The tax rules
described above are subject to modification in the case of optionees subject
to the so-called "short-swing profit" rules of Section 16(b) of the Securities
Exchange Act of 1934, as amended ("Restricted Parties"). In the case of an
option exercised by a Restricted Party within six months of the date of grant
of the option, the ordinary income (or increase in AMT income, in the case of
an incentive stock option) associated with exercise will in general be
recognized six months following the date of grant and will be measured by the
excess (if any) of the fair market value of the shares over the option price
at that time, rather than being recognized and measured at time of exercise.
Any deduction available to the Company in connection with the exercise will be
similarly deferred. However, a Restricted Party exercising an option within
six months of the date of the option grant may elect under Section 83(b) of
the Code to have the income associated with exercise measured and taken into
account at that time. An election under Section 83(b) of the Code must be made
not later than 30 days after exercise and must satisfy certain other
requirements.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THIS PROPOSAL.
PROPOSAL NO. 3
CONSIDERATION OF THE MACBRIDE PRINCIPLES
The following resolution is submitted by New York City Comptroller Alan G.
Hevesi, Municipal Building, 1 Centre Street, New York New York 10007, on
behalf of the New York City Employees' Retirement System, the New York City
Teachers' Retirement System, the New York City Fire Department Pension Fund
and the New York City Police Pension Fund which state that they own an
aggregate of 105,000 shares of the Common Stock of the Company and have
requested that the Company offer the resolution set forth below for
stockholders to consider at the Meeting.
WHEREAS, BE Aerospace, Inc. operates a wholly-owned subsidiary in Northern
Ireland, Aircraft Furnishing Limited;
WHEREAS, the on-going peace process in Northern Ireland encourages us to
search for non-violent means for establishing justice and equality;
WHEREAS, the Fair Employment Agency for Northern Ireland has found that BE
Aerospace has not provided equality of opportunity to Ulster's Catholic
population;
16
<PAGE>
WHEREAS, Dr. Sean MacBride, founder of Amnesty International and Nobel Peace
laureate, has proposed several equal opportunity employment principles to
serve as guidelines for corporations in Northern Ireland. These include:
1. Increasing the representation of individuals from under represented
religious groups in the workforce including managerial, supervisory,
administrative, clerical and technical jobs.
2. Adequate security for the protection of minority employees both at the
workplace and while traveling to and from work.
3. The banning of provocative religious or political emblems from the
workplace.
4. All job openings should be publicly advertised and special recruitment
efforts should be made to attract applicants from under represented
religious groups.
5. Layoff, recall, and termination procedures should not in practice,
favor particular religious groupings.
6. The abolition of job reservations, apprenticeship restrictions and
differential employment criteria, which discriminate on the basis of
religion or ethnic origin.
7. The development of training programs that will prepare substantial
numbers of current minority employees for skilled jobs, including the
expansion of existing programs and the creation of new programs to train,
upgrade, and improve the skills of minority employees.
8. The establishment of procedures to assess, identify and actively
recruit minority employees with potential for further advancement.
9. The appointment of a senior management staff member to oversee the
company's affirmative action efforts and the setting up of timetables to
carry out affirmative action principles.
RESOLVED, Shareholders request the Board of Directors to:
1. Make all possible lawful efforts to implement and/or increase activity
on each of the nine MacBride Principles.
BOARD OF DIRECTORS RECOMMENDATION
Your Board of Directors believes that adoption of this proposal is not in
the best interests of stockholders and unanimously recommends that
stockholders vote against it. The Company already has taken the steps
necessary to provide equal employment opportunity in Northern Ireland,
regardless of religious affiliation. The Company adheres to both the letter
and the spirit of the "Fair Employment (Northern Ireland) Act of 1989" as well
as the "Code of Practice" promulgated by the Act. The Company is also
registered with the Fair Employment Commission.
When the Comptroller's proposal was submitted in connection with last year's
annual meeting, the Company initially decided to exclude it from the proxy
statement in reliance on Rule 14a-8(c)(7) and other provisions of the proxy
rules of the Securities and Exchange Commission (the "SEC"). That Rule permits
exclusion of proposals that relate to an issuer's ordinary business
operations, since such matters are properly within the domain of the board of
directors and not the stockholders. The Company followed the proxy rules by
notifying the Comptroller and the SEC of its intention to omit the proposal.
Following a series of letters to the SEC, including correspondence from the
Comptroller in which it expressed its own views, the SEC staff issued
17
<PAGE>
to the Company a "no-action" letter stating that the SEC staff agreed with the
Company that the proposal could properly be omitted from the proxy statement
pursuant to Rule 14a-8(c)(7).
Two weeks before mailing of the proxy materials, however, the Comptroller's
office informed the Company that, if the Company did not agree within 24 hours
to include the proposal in its proxy materials, the Comptroller's office would
bring litigation, including a demand for an injunction, against the Company.
The Company had complied fully with the proxy rules in determining to omit the
proposal and was confident it would have prevailed in any litigation with the
Comptroller's office. Nevertheless, after due consideration of the cost
involved in litigating what it believed to be a settled matter, management
determined that the potential cost to the Company and its stockholders of the
threatened litigation outweighed the cost of submitting the proposal to our
stockholders for their vote.
The Comptroller's proposal received the support of well less than 5% of our
stockholders at last year's annual meeting. Nonetheless, he has seen fit to
resubmit it for inclusion in this year's proxy materials. Based upon our prior
experience with the Comptroller, and to avoid further waste of corporate
assets, management is submitting his proposal to the stockholders once again,
despite its continuing belief that this is not legally required and that the
issue which he purports to raise is irrelevant in the case of the Company.
The Company's policy and practice worldwide is to provide equal opportunity
employment in all locations without regard to race, color, religious belief,
gender, age, national origin, citizenship status, marital status, sexual
orientation or disability. Northern Ireland is no exception. Through its
established equal employment opportunity program, the Northern Ireland
operation essentially complies with the practices outlined in the MacBride
Principles. The Company is an equal opportunity employer in all job
advertisements, and hiring procedures are based on the experience and
qualifications needed to satisfy individual job requirements. Equal
opportunity is observed for all employees in training, advancement, layoff and
recall procedures. The display of potentially offensive or intimidating
religious emblems at the Company's facilities is not permitted. The Company
provides security for all employees at work.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST
THIS PROPOSAL.
NEW YORK CITY COMPTROLLER'S SUPPORTING STATEMENT
- -- Continued discrimination and worsening employment opportunities have been
cited as contributing to support for a violent solution to Northern
Ireland's problems.
- -- We believe that our company benefits by hiring from the widest available
talent pool. An employee's ability to do the job should be the primary
consideration in hiring and promotion decisions.
- -- Implementation of the MacBride Principles by BE Aerospace will demonstrate
its concern for human rights and equality of opportunity in its
international operations.
Please vote your proxy FOR these concerns.
AUDIT MATTERS
Deloitte & Touche has been selected to audit the financial statements of the
Company for the fiscal year ending February 22, 1997, and to report the
results of their examination.
18
<PAGE>
A representative of Deloitte & Touche is expected to be present at the
Meeting and will be afforded the opportunity to make a statement if he or she
desires to do so and to respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
Proposals of stockholders submitted for consideration at the Annual Meeting
of Stockholders to be held in 1997 must be received by the Company no later
than February 24, 1997.
OTHER BUSINESS
The Board of Directors knows of no business that will come before the
meeting for action other than as described in the accompanying Notice of
Meeting. However, as to any such business, the persons designated as proxies
will have discretionary authority to act in their best judgment.
FORM 10-K
A copy of the Company's annual report on Form 10-K filed with the Securities
and Exchange Commission is available without charge by writing to: BE
Aerospace, Inc., ATTN: Treasurer, 1400 Corporate Center Way, Wellington,
Florida 33414.
19
<PAGE>
[X] Please mark
votes as in
this example.
PLEASE DO NOT FOLD THIS PROXY.
1. Election of Directors.
Nominees: Robert J. Khoury and
Hansjorg Wyss
FOR WITHHELD FROM
BOTH [_] [_] BOTH
NOMINEES NOMINEES
- ----------------------------------
To withhold authority to vote for
either nominee, print ONLY that
nominee's name in the space
provided above.
+
+++
2. Amendment of 1989 Stock Option Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. MacBride Principles.
FOR AGAINST ABSTAIN
[_] [_] [_]
- ---------------------------------------------------
The Board unanimously recommends a vote AGAINST
Proposal 3.
- ---------------------------------------------------
MARK HERE
FOR ADDRESS [_]
CHANGE AND
NOTE AT LEFT
Please sign exactly as name(s) appear hereon. When signing as attorney,
executor, administrator, trustee, or guardian, please give your full title as
such. Each joint owner should sign.
Signature:_____________________________________ Date__________________________
Signature:_____________________________________ Date__________________________
ANNUAL MEETING OF BE AEROSPACE, INC.
JULY 23, 1996
The undersigned hereby constitutes and appoints Messrs. Robert J. Khoury
and Thomas P. McCaffrey, or either of them, with full power of substitution to
each, proxies to vote and act at the Annual Meeting of Stockholders of BE
Aerospace, Inc. (the "Company") to be held on July 23, 1996 in the Conference
Center, 36th Floor, Ropes & Gray, One International Place, Boston, Massachusetts
at 10:30 a.m., and at any adjournments thereof (the "Meeting"), upon and with
respect to the number of shares of Common Stock, par value $0.01 per share, that
the undersigned would be entitled to vote if personally present. The undersigned
hereby instructs such proxies, or their substitutes, to vote on those matters
appearing on the reverse side hereof as specified by the undersigned and in such
manner as they may determine on any other matters which may come before the
Meeting, all as indicated in the accompanying Notice of Meeting and Proxy
Statement, receipt of which is hereby acknowledged. All proxies heretofore given
by the undersigned in respect of the Meeting are hereby revoked.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Unless otherwise specified in the boxes provided on the reverse side hereof, the
Proxy will be voted FOR both nominees for Director, FOR approval of the proposed
amendment of the Amended and Restated 1989 Stock Option Plan, AGAINST adoption
of the MacBride Principles, and in the discretion of the named proxies as to any
other matter that may properly come before the Meeting.
---------------
SEE REVERSE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE) SIDE
---------------
