<PAGE>
SCHEDULE 14A
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
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] 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, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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:
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<PAGE>
BE AEROSPACE, INC.
1400 Corporate Center Way
Wellington, Florida 33414
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
August 4, 1999
----------------
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
Wednesday, August 4, 1999 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 by 700,000 shares;
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 7, 1999 are entitled
to notice of and to vote at the meeting.
Whether or not you plan to attend the meeting in person, please sign and
date the enclosed proxy and return it promptly in the enclosed envelope.
By Order of the Board of Directors,
Edmund J. Moriarty
Secretary
June 28, 1999
<PAGE>
FORWARD-LOOKING INFORMATION
This Proxy Statement contains certain forward-looking statements and
information relating to the Company and its operations, governance and
policies and procedures that are based on the beliefs of the Company's
management as well as assumptions made by and information currently
available to the Company's management. When used in this Proxy Statement,
words such as "anticipate", "believe", "conclude", "estimate", "expect",
and similar expressions, as they relate to the Company or the Company's
management, are intended to identify forward-looking statements. Such
statements reflect the current view of the Company with respect to future
events and as a result are subject to certain risks, uncertainties and
assumptions. Should underlying assumptions prove incorrect, actual results
may vary materially from those described herein as anticipated, believed,
concluded, estimated or expected. Further information about these matters
can be found in the Company's other Securities and Exchange Commission
filings. The Company does not intend to update these forward-looking
statements.
<PAGE>
BE AEROSPACE, INC.
----------------
Annual Meeting of Stockholders
August 4, 1999
----------------
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
Wednesday, August 4, 1999 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 $5,000 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 Company's common stock, $0.01 par value (the "Common Stock"), at
the close of business on June 7, 1999 are entitled to receive notice of and to
vote at the Meeting. As of that date, the Company had 24,662,692 shares of
Common Stock issued and outstanding. 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 action 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
only as 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.
1
<PAGE>
The Annual Report to Stockholders for the Company's fiscal year ended
February 27, 1999 accompanies this proxy statement. This proxy statement and
the enclosed proxy are being mailed to stockholders on or about June 28, 1999.
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
any or all of such nominees is withheld by marking the proxy to that effect.
Pursuant to the Company's Restated Certificate of Incorporation, the Board
of Directors is divided into three classes, each as nearly equal in number as
possible, so that each director (in certain circumstances after a transitional
period) will serve for three years, with one class of directors being elected
each year.
The nominees are the two directors currently designated as Class II
Directors, whose terms expire at the 1999 Annual Meeting, and until their
respective successors are elected and shall qualify to serve. The enclosed
proxy cannot be voted for a greater number of persons than two.
If Proposal No. 1 is approved, Messrs. Robert J. Khoury and Hansjorg Wyss
will be elected as Class II Directors for a term of three years, expiring at
the 2002 Annual Meeting, and until their respective successors are elected and
shall qualify to serve.
It is expected that Messrs. Robert Khoury and Hansjorg 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.
Director Nominees
<TABLE>
<CAPTION>
Name, Age (as of June 7, 1999),
Business Experience and Current Director
Directorships Since
------------------------------- --------
<S> <C>
ROBERT J. KHOURY, 57--Mr. Khoury has been a Director of the Company 1987
since July 1987. Mr. Khoury was elected Vice Chairman and Chief
Executive Officer effective April 1, 1996. From July 1987 until
that date, Mr. Khoury served as the Company's President and Chief
Operating Officer. Mr. Khoury is the brother of Amin J. Khoury.
HANSJORG WYSS, 63--Mr. Wyss has been a Director of the Company since 1989
August 1989. Since 1977, Mr. Wyss has served as Director, President
and is currently Chairman and Chief Executive Officer of Synthes
North America and Synthes Canada, Ltd., manufacturers and
distributors of orthopedic implants and instruments and is the
Chairman of Synthes-Stratec, the world's leading orthopedic trauma
company. Mr. Wyss formerly held management positions with Monsanto
Europe in Belgium, Schappe-Burlington and Chrysler International in
Switzerland. Mr. Wyss earned his MBA at Harvard Graduate School of
Business and attained a Master of Science from the Swiss Federal
Institute of Technology in Zurich. Mr. Wyss presently sits on
numerous boards including Harvard Graduate School of Business, The
Wilderness Society, The Grand Canyon Trust and is Chairman of the
Southern Utah Wilderness Alliance.
</TABLE>
2
<PAGE>
Current Directors
<TABLE>
<CAPTION>
Name, Age (as of June 7, 1999),
Business Experience and Current Director Term
Directorships Since Expires
------------------------------- -------- -------
<S> <C> <C>
JIM C. COWART, 47--Mr. Cowart has been a director of the 1989 2001
Company since November 1989. Mr. Cowart is currently
Chairman and CEO of E-Com Architects, Inc., a computer
services and software company. He is also a principal of
Cowart & Co. LLC and EOS Capital, Inc., private capital
firms retained from time to time by the Company for
strategic planning, competitive analysis, financial
relations and other services. From January 1993 to November
1997, Mr. Cowart was the Chairman and CEO of Aurora
Electronics Inc. From 1987 until 1991, Mr. Cowart was a
founding general partner of Capital Resource Partners, a
private investment capital manager. Prior to such time, Mr.
Cowart held various positions in investment banking and
venture capital with Lehman Brothers, Shearson Venture
Capital and Kidder, Peabody & Co.
PAUL E. FULCHINO, 52--Mr. Fulchino was elected a Director and 1996 2001
President and Chief Operating Officer of the Company
effective April 1, 1996. From 1990 to 1996, Mr. Fulchino
served as President and Vice Chairman of Mercer Management
Consulting, Inc., an international general management
consulting firm with over 1,100 employees. In addition to
his management responsibilities as President of Mercer, Mr.
Fulchino also had responsibility for advising clients
throughout the world, particularly with respect to the
transportation industry, including a number of major
airlines.
RICHARD G. HAMERMESH, 51--Dr. Hamermesh has been a Director 1987 2000
of the Company since July 1987. Since August 1987, Dr.
Hamermesh has been the Managing Partner of the Center for
Executive Development, an independent executive education
consulting company, and, from December 1986 to August 1987,
Dr. Hamermesh was an independent consultant. Prior to such
time, Dr. Hamermesh was on the faculty at the Harvard
Business School. Dr. Hamermesh is also a Director of Applied
Extrusion Technologies, Inc., a manufacturer of oriented
polypropylene films used in consumer products labeling and
packaging applications and Vialog Corporation, a provider of
teleconferencing and other group communications services.
AMIN J. KHOURY, 60--Mr. Khoury has been Chairman of the Board 1987 2000
of the Company since July 1987 and was Chief Executive
Officer until April 1, 1996. Since 1986, Mr. Khoury has also
been the Managing Director of The K.A.D. Companies, Inc., an
investment, venture capital and consulting firm. Mr. Khoury
is currently the Chairman of the Board of Directors of
Applied Extrusion Technologies, Inc., a manufacturer of
oriented polypropylene films used in consumer products
labeling and packaging applications, a member of the Board
of Directors of Brooks Automation, Inc., the leading
manufacturer in the U.S. of vacuum central wafer handling
systems for semiconductor manufacturing and a member of the
Board of Directors of Synthes-Stratec, the world's leading
orthopedic trauma company. Mr. Khoury is the brother of
Robert J. Khoury.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Name, Age (as of June 7, 1999),
Business Experience and Current Director Term
Directorships Since Expires
------------------------------- -------- -------
<S> <C> <C>
BRIAN H. ROWE, 68--Mr. Rowe has been a Director of the Company 1995 2001
since July 1995. He is currently Chairman Emeritus of GE
Aircraft Engines, a principal business unit of the General
Electric Company, where he also served as Chairman from
September 1993 through January 1995 and as President from
1979 through 1993. Mr. Rowe is also a Director of the
following companies: January 1980--Fifth Third Bank, an Ohio
banking corporation; December 1994--Stewart & Stevenson
Services, Inc., a custom packager of engine systems; March
1995--Atlas Air, Inc., an air cargo carrier; December 1995--
Textron Inc., a manufacturer of aircraft, automobile
components, an industrial segment, systems and components for
commercial aerospace and defense industries, and financial
services; December 1998--Convergys Corporation, an
outsourcing, integration, billing and customer management
services company; and December 1998--Dynatech Corporation, a
test equipment and communication systems manufacturing
company.
</TABLE>
Board of Directors and Committees
The Board of Directors held seven meetings during the fiscal year ended
February 27, 1999 ("Fiscal 1999") and acted pursuant to unanimous written
consent on two occasions. Each director attended at least 75% of the aggregate
of the total number of Board meetings and meetings of committees of the Board
on which he served during Fiscal 1999. 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. Cowart and Hamermesh, held one
meeting during Fiscal 1999. The Audit Committee recommends to the Board of
Directors the independent auditors to be 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, currently composed of Messrs.
Rowe and Wyss, held two meetings during Fiscal 1999 and acted pursuant to
unanimous written consent on seven occasions. The Committee provides
recommendations to the Board regarding compensation matters and administers
the Company's stock option and compensation plans.
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 amended from time to time
(the "Directors' Plan"). Under the Directors' Plan, each Eligible Director is
awarded options to purchase 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 is awarded options to purchase
35,000 shares of Common Stock as of the date of his or her first election as a
director.
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 with respect to 25% of the shares on each of the first through
fourth anniversaries of the date of grant, subject to certain conditions that
accelerate vesting. On December 15, 1998, each of the following directors was
awarded an option to purchase 5,000 shares of Common Stock at a price of
$23.6875 per share: Jim C. Cowart, Richard G. Hamermesh, Brian H. Rowe and
Hansjorg Wyss.
4
<PAGE>
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 May
17, 1999 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 1999 (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>
T. Rowe Price Associates............................ 2,073,300 8.02%
100 East Pratt Street
Baltimore, MD 21202
Hansjorg Wyss*...................................... 251,109(2) **
Paul E. Fulchino+*.................................. 223,391(3) **
Amin J. Khoury+*.................................... 212,826(4) **
Robert J. Khoury+*.................................. 141,319(5) **
Thomas P. McCaffrey+................................ 132,793(6) **
Jim C. Cowart*...................................... 68,000(7) **
Scott A. Smith+..................................... 56,564(8) **
Brian H. Rowe*...................................... 44,000(9) **
Richard G. Hamermesh*............................... 22,350(10) **
All Directors and Executive Officers as a group (17
Persons)........................................... 1,569,924(11) 6.08%
</TABLE>
- --------
+ Named Executive Officer
* Director of the Company
** Less than 1 percent
(1) The number of shares of Common Stock deemed outstanding includes: (i)
24,626,142 shares of Common Stock outstanding as of May 17, 1999 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 May 17, 1999).
(2) Includes 10,000 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 12,500
shares of Common Stock that are not exercisable in the next sixty days.
(3) Includes 212,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned pursuant to the
Company's 401(k) and Supplemental Executive Retirement Plans (the
"Company Benefit Plans"). Excludes options to purchase 117,500 shares of
Common Stock that are not exercisable in the next sixty days.
(4) Includes 200,000 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned pursuant to the
Company Benefit Plans. Excludes options to purchase 160,000 shares of
Common Stock that are not exercisable in the next sixty days.
(5) Includes 125,000 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned pursuant to the
Company Benefit Plans. Excludes options to purchase 135,000 shares of
Common Stock that are not exercisable in the next sixty days.
5
<PAGE>
(6) Includes 115,000 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned pursuant to the
Company Benefit Plans. Excludes options to purchase 90,000 shares of
Common Stock that 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 50,000
shares of Common Stock that are not exercisable in the next sixty days.
(8) Includes 46,250 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned pursuant to the
Company Benefit Plans. Excludes options to purchase 78,750 shares of
Common Stock that are not exercisable in the next sixty days.
(9) Includes 42,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 12,500
shares of Common Stock that are not exercisable in the next sixty days.
(10) Includes 13,750 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 12,500
shares of Common Stock that are not exercisable in the next sixty days.
(11) Includes 1,212,250 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 884,000
shares of Common Stock that are not exercisable in the next sixty days.
EXECUTIVE COMPENSATION
Report of the Stock Option and Compensation Committee of the Board of
Directors
The Stock Option and 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 1999:
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 four compensation components to retain and motivate
executive performance: annual salary, incentive cash bonuses, retirement
benefits 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 competitive 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,
operating earnings and working capital management for the year, together with
gains in market share for the Company's products. Because the Stock Option and
Compensation Committee believes that short-term fluctuations in stock price do
not necessarily reflect the underlying strength or future prospects of the
Company, the Stock Option and 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. Certain Named Executive Officers also have a
retirement benefit provision in their employment agreement.
While skeptical about the significance of short-term fluctuations in stock
price, the Stock Option and 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
6
<PAGE>
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.
The base salary for Mr. Robert J. Khoury, Vice Chairman of the Board and
Chief Executive Officer of the Company during Fiscal 1999, for Fiscal 1999 was
$600,000, see "Employment Contracts--Robert J. Khoury" below. Mr. Khoury was
granted a bonus of $550,000 in Fiscal 1999 and received options to purchase
70,000 shares of the Company's Common Stock. In arriving at the cash bonus and
option awards for Mr. Khoury, the Committee considered the Company performance
criteria described above, as measured by specific targets and performance
objectives, and concluded that the Company had made substantial progress
during Fiscal 1999 toward achieving such targets and performance objectives.
The Committee also considered the Company's progress toward its strategic
objective of becoming the industry leader in manufacturing and servicing
commercial aircraft cabin interior equipment, and Mr. Khoury's leadership role
in achieving such progress.
With respect to the above matters, the Stock Option and Compensation
Committee submits this report.
STOCK OPTION and
COMPENSATION COMMITTEE
Brian H. Rowe
Hansjorg Wyss
7
<PAGE>
Compensation of Executive Officers
The following table sets forth information with respect to the compensation
of the Named Executive Officers in Fiscal 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------- --------------------------
Securities
Name and Principal Underlying All Other
Position Year (1) Salary($) Bonus($) Options(#) Compensation($)
------------------ -------- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Amin J. Khoury......... 1999 $621,540 $550,000 70,000 $ 46,169(2)
Chairman 1998 521,159 550,000 140,000 36,847
1997 445,046 550,000 150,000 6,188
Robert J. Khoury....... 1999 $585,772 $550,000 70,000 $ 45,123(2)
Vice Chairman and 1998 521,159 550,000 140,000 32,866
Chief Executive 1997 434,084 400,000 50,000 15,079
Officer
Paul E. Fulchino....... 1999 $497,157 $150,000 60,000 $ 38,425(2)
President and Chief 1998 478,461 465,000 120,000 375,783(3)
Operating Officer 1997 398,084 350,000 250,000 29,407
Thomas P. McCaffrey.... 1999 $278,867 $220,000 40,000 $ 20,049(2)
Corporate Senior Vice 1998 238,680 230,000 90,000 18,748
President of 1997 229,326 305,000 60,000 23,760
Administration,
Chief Financial
Officer
and Assistant
Secretary
Scott A. Smith (4)..... 1999 $241,156 $390,000 125,000 $5,000(5)
Group Vice President
and General Manager of
B/E Global Services
</TABLE>
- --------
(1) The periods covered by this table are the fiscal years ended in February
1999, 1998, and 1997.
(2) Represents contributions to the Company's 401(k) Plan and Supplemental
Executive Retirement Plan (the "Employee Benefit Plans").
(3) Represents contributions to the Employee Benefit Plans of $33,138 and
relocation expenses of $342,645.
(4) Mr. Smith commenced his employment with the Company as of April 1, 1998.
(5) Represents contributions to the Company's 401(k) Plan.
8
<PAGE>
Stock Options
The following table sets forth information concerning stock options granted
to the Named Executive Officers in Fiscal 1999.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Potential
Realized Value
at Assumed Rates of
% of Total Stock Price
Options Appreciation for
Granted to Option Term (3)
Options Employees in Exercise Expiration ---------------------
Name Granted (1) (#) Fiscal Year (2) Price ($/Sh) Date 5% 10%
---- --------------- -------------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Amin J. Khoury.......... 70,000 4.88 $20.8125 9/1/08 $ 916,374 $2,322,259
Robert J. Khoury........ 70,000 4.88 $20.8125 9/1/08 $ 916,374 $2,322,259
Paul E. Fulchino........ 60,000 4.19 $20.8125 9/1/08 $ 785,464 $1,990,508
Thomas P. McCaffrey..... 40,000 2.79 $20.8125 9/1/08 $ 523,643 $1,327,005
Scott A. Smith.......... 40,000 2.79 $16.4375 1/27/09 $ 413,568 $1,048,055
25,000 1.74 $20.8125 9/1/08 $ 327,277 $ 829,378
60,000 4.19 $28.1250 4/1/08 $1,061,438 $2,689,875
</TABLE>
- --------
(1) All of the above stock option awards vest over a three year period (25% on
the date of grant and 25% on the three succeeding grant annual anniversary
dates). The exercise prices were based on the fair market value (as
determined in accordance with the Company's Amended and Restated 1989
Stock Option Plan) of the shares of Common Stock at the time the options
were granted. The exercise price may be paid in cash or by any other
lawful means authorized by the Board of Directors. Options terminate ten
years after the date of grant or three months following termination of the
optionee's employment, whichever occurs earlier.
(2) During Fiscal 1999, the Company granted options covering 1,433,500 shares
of Common Stock.
(3) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of the stock price of the Company. If the Company's stock price were
in fact to appreciate at the assumed 5% or 10% annual rate for the ten
year term of these options, a $1,000 investment in the Common Stock of the
Company would be worth $1,629 and $2,594 respectively, at the end of the
term.
9
<PAGE>
Option Exercises and Fiscal Year-End Holdings
The following table provides information concerning stock option exercises
in Fiscal 1999 and unexercised stock options held by each Named Executive
Officer as of February 26, 1999.
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 FY- Options at FY-
End End
--------------- ----------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized Unexercisable Unexercisable(1)
- ---- --------------- -------- --------------- ----------------
<S> <C> <C> <C> <C>
Amin J. Khoury....... 0 $ 0 200,000/160,000 $ 0/0
Robert J. Khoury..... 0 0 125,000/135,000 0/0
Paul E. Fulchino..... 0 0 162,500/167,500 225,000/225,000
Thomas P. McCaffrey.. 0 0 115,000/90,000 150,000/0
Scott A. Smith....... 0 0 31,250/93,750 0/0
</TABLE>
- --------
(1) The closing price for the Company's Common Stock on the Nasdaq National
Market on February 26, 1999, the last trading day of the fiscal year, was
$14.75 per share.
Defined Benefit Arrangements
Pursuant to the employment agreements between the Company and each of Mr.
Amin J. Khoury and Mr. Robert J. Khoury (each an "Executive"), upon the
earlier of May 28, 2003 or the Executive's termination of his employment as a
result of death, incapacity or a change of control (as defined), the
Executive, or his designee, as the case may be, shall be entitled to receive
annual retirement compensation payments (the "Retirement Compensation") equal
to the Executive's highest annual salary paid to him during his employment by
the Company for a number of years equal to the number of years of service
provided by him to the Company.
Pursuant to the employment agreements between the Company and each of Mr.
Fulchino and Mr. McCaffrey (each an "Officer"), if the Officer's employment is
terminated for any reason other than for cause (as defined) after March 31,
2006, in the case of Mr. Fulchino or after April 30, 2003, in the case of Mr.
McCaffrey, then the Company shall provide a retirement benefit to such
Officer, or his designee, for 10 years after such termination in an annual sum
equal to one-half his average annual salary for the three completed fiscal
years immediately preceding such termination.
Employment Contracts
Amin J. Khoury. Mr. Khoury and the Company entered into an employment
agreement on May 29, 1998, which was amended on November 12, 1998, and which
extends through May 28, 2003 (the "Expiration Date") unless earlier
terminated. Under the employment agreement, Mr. Khoury receives a base salary
of $650,000 per year, subject to increases as determined from time to time by
the Board of Directors and subject to cost of living increases. Mr. Khoury is
also entitled to receive incentive bonuses from the Company at the discretion
of the Board of Directors. In the event of Mr. Khoury's death, his designee
will receive (i) an amount equal to the salary that would have been due to Mr.
Khoury from the date of his death until the Expiration Date, plus (ii) the
Retirement Compensation; provided, however, that in no event will the
aggregate amount payable upon
10
<PAGE>
Mr. Khoury's death be less than twenty times the maximum annual salary paid to
Mr. Khoury during his employment by the Company. The Company has purchased a
life insurance policy that would fully pay the death benefit due upon Mr.
Khoury's death. In the event of Mr. Khoury's incapacity, Mr. Khoury will
receive (i) his then current salary and benefits until the Expiration Date,
and (ii) the Retirement Compensation. In the event there is a change of
control (as defined) prior to the Expiration Date as a result of which Mr.
Khoury's employment is terminated or he resigns, Mr. Khoury will receive a
lump sum payment equal to the sum of (i) the balance of compensation which
would otherwise have been due pursuant to his employment agreement through the
Expiration Date, (ii) a lump sum amount equal to two years' base salary, and
(iii) the Retirement Compensation. Mr. Khoury is also entitled to a lump sum
amount equal to his annual salary in the event his employment is not extended
past the Expiration Date or Mr. Khoury voluntarily resigns. Mr. Khoury is
prohibited for a period of two years following the termination of his
employment with the Company from engaging in any employment, consulting or
other activity in any business competitive with the Company without the
Company's written consent. The agreement also prohibits Mr. Khoury from
soliciting or causing others to solicit any employees of the Company to
terminate their employment with the Company.
Robert J. Khoury. Mr. Khoury and the Company entered into an employment
agreement on May 29, 1998, which was amended on November 12, 1998, and which
extends through the Expiration Date, unless otherwise terminated. Under the
employment agreement, Mr. Khoury receives a base salary of $600,000 per year,
subject to increases as determined from time to time by the Board of Directors
and subject to cost of living increases. Mr. Khoury is also entitled to
receive an annual incentive bonus at the discretion of the Board of Directors.
In all other respects, Mr. Khoury's employment agreement contains
substantially similar provisions to those in Mr. Amin J. Khoury's employment
agreement as described above.
Paul E. Fulchino. Mr. Fulchino and the Company entered into an employment
agreement dated as of May 29, 1998, which was amended on November 12, 1998,
and which extends through May 28, 2003. Thereafter, the agreement extends
automatically for consecutive one year periods until either Mr. Fulchino or
the Company gives the other 90 days' written notice prior to May 28, 2003 or
the end of each subsequent twelve month period (the "Fulchino Expiration Date"
being the date as of which Mr. Fulchino's employment is so terminated). Under
the employment agreement, Mr. Fulchino receives a base salary of $500,000 per
year, subject to increases as determined by the Board of Directors and subject
to cost of living increases. Mr. Fulchino is also 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, his designee will receive an amount equal to the salary that would have
been due to Mr. Fulchino from the date of his death until the Fulchino
Expiration Date. In the event of Mr. Fulchino's termination due to incapacity,
Mr. Fulchino will continue to receive his then current salary and benefits
until the Fulchino Expiration Date. If Mr. Fulchino is terminated for cause
(as defined) he will receive from the Company only unpaid salary and benefits
accrued through the termination date (as defined). If there is a change of
control (as defined) prior to the Fulchino Expiration Date as a result of
which Mr. Fulchino's employment is terminated or he resigns because of a
change in his position, powers, duties, salary or benefits, Mr. Fulchino will
(i) receive a lump sum amount equal to two times his then current salary (ii)
will continue to receive his salary, and benefits through the Fulchino
Expiration Date, and (iii) will receive, for a period equal to the number of
years of employment with the Company (not to exceed ten years), an amount
equal to one-half of his then existing base-salary. Mr. Fulchino is also
entitled to a lump sum amount equal to his annual salary in the event his
employment is not extended past the Fulchino Expiration Date. Mr. Fulchino is
also entitled to retirement compensation in the event his employment is
terminated other than for cause (as defined) on or after March 31, 2006. See
"Defined Benefit Arrangement" above. Mr. Fulchino does not have a
noncompetition provision in his employment agreement.
11
<PAGE>
Thomas P. McCaffrey. Mr. McCaffrey and the Company entered into an
employment agreement on May 29, 1998, which was amended November 12, 1998, and
which extends through May 28, 2003, unless sooner terminated. Thereafter, the
agreement extends automatically for consecutive one-year periods until either
Mr. McCaffrey or the Company gives the other party at least 90 days' written
notice prior to May 28, 2003 or the end of each subsequent twelve-month period
(the "McCaffrey Expiration Date" being the date as of which Mr. McCaffrey's
employment is so terminated). Under the employment agreement, Mr. McCaffrey
receives a base salary of $293,000 per year subject to increases as determined
from time to time by the Board of Directors and subject to cost of living
increases. Mr. McCaffrey is also entitled to receive an annual incentive bonus
at the discretion of the Board of Directors which shall not exceed 100% of his
then current salary. In all other material respects, Mr. McCaffrey's
employment agreement is substantially similar to Mr. Fulchino's employment
agreement described above.
Scott A. Smith. Mr. Smith and the Company entered into an employment
agreement on March 6, 1998. The initial term of Mr. Smith's employment
agreement expired on March 25, 1999; however, the agreement extends
automatically for consecutive one-year periods until either Mr. Smith or the
Company gives the other party at least 30 days' written notice prior to the
end of the next calendar year (the "Smith Expiration Date" being the date as
of which Mr. Smith's employment is so terminated). Under the employment
agreement, Mr. Smith receives a base salary of $275,000 per year, subject to
adjustment from time to time by the Board of Directors. Mr. Smith is also
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. Smith's death, his designee will receive an amount
equal to the salary that would have been due to Mr. Smith from the date of his
death until the Smith Expiration Date. In the event of Mr. Smith's incapacity,
Mr. Smith will continue to receive his then current salary as well as benefits
until the Smith Expiration Date, however, the Company's obligation to Mr.
Smith shall terminate to the extent that Mr. Smith receives compensation from
other employment. In the event there is a change in control (as defined) prior
to the Smith Expiration Date as a result of which Mr. Smith's employment is
terminated or he resigns because of a change in his position, powers, duties,
salary or benefits, Mr. Smith will receive (i) a lump sum amount equal to his
then current salary and (ii) salary and benefits through the Smith Expiration
Date. Mr. Smith's employment agreement does not contain a noncompetition
provision and does not provide for retirement benefits.
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.
During Fiscal 1999, Jim Cowart, a director of the Company, was actively
involved in the Company's 1999 acquisition program and performed consulting
services for the Company in connection with its various acquisitions
throughout the year. As compensation for these services, Mr. Cowart received
cash compensation of $350,000 and was granted 25,000 options to purchase
shares of Common Stock at an exercise price equal to the fair market value of
the Common Stock on the date of the grant.
12
<PAGE>
Performance Graphs
The following graphs compare 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 April 24, 1990, the date of
the Company's initial public offering and from February 25, 1994 through
February 26, 1999, the last trading day of Fiscal 1999, based upon an assumed
$100 investment in the Company's Common Stock and in the stocks comprising
each such index as of each respective starting date.
[GRAPH SHOWING COMPARISON OF 91 MONTH CUMULATIVE TOTAL RETURN APPEARS HERE]
<TABLE>
<CAPTION>
Dow Jones Nasdaq
Dow Jones Aerospace & National
BE Aerospace, Inc. Airlines Index Defense Index Market - U.S.
------------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
4/90 100 100 100 100
- --------------------------------------------------------------------------------
7/91 200 94 114 122
- --------------------------------------------------------------------------------
2/92 200 106 121 158
- --------------------------------------------------------------------------------
2/93 143 94 127 169
- --------------------------------------------------------------------------------
2/94 164 109 178 197
- --------------------------------------------------------------------------------
2/95 79 92 200 202
- --------------------------------------------------------------------------------
2/96 186 146 352 287
- --------------------------------------------------------------------------------
2/97 371 142 440 343
- --------------------------------------------------------------------------------
2/98 421 233 520 460
- --------------------------------------------------------------------------------
2/99 211 214 385 598
- --------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
[GRAPH SHOWING COMPARISON OF 60 MONTH CUMULATIVE TOTAL RETURN APPEARS HERE]
<TABLE>
<CAPTION>
Dow Jones Nasdaq
Dow Jones Aerospace & National
BE Aerospace, Inc. Airlines Index Defense Index Market - U.S.
------------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
2/94 100 100 100 100
- --------------------------------------------------------------------------------
2/95 48 85 112 101
- --------------------------------------------------------------------------------
2/96 113 133 192 141
- --------------------------------------------------------------------------------
2/97 226 128 238 169
- --------------------------------------------------------------------------------
2/98 256 216 292 230
- --------------------------------------------------------------------------------
2/99 128 198 216 300
- --------------------------------------------------------------------------------
</TABLE>
- --------
(1) The stock prices on the Performance Graphs are not necessarily indicative
of future stock price performance.
Neither the Report of the Compensation Committee of the Board of Directors
nor the Performance Graphs shall be deemed incorporated by reference by any
general statement incorporating this proxy statement into 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.
14
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
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 1999, all Section 16(a) filing requirements applicable to its officers,
directors and greater-than-ten-percent beneficial owners were complied with
except for Mr. Cowart who failed to report a grant of options on a Form 4 on a
timely basis, which transaction was later reported on a Form 5.
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.
15
<PAGE>
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 from 3,700,000 to
4,400,000, an increase of 700,000 shares.
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 Meeting 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,
July 26, 1995, July 23, 1996, August 6, 1997 and August 5, 1998 (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 and Compensation
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 1989 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) or three months following an optionee's
termination of employment, whichever occurs earlier. Options generally become
exercisable as follows: 25% upon grant and an additional 25% each calendar
year thereafter. Effective August 15, 1996, options granted under the 1989
Plan may not be repriced.
Currently, a total of 3,700,000 shares of Common Stock has been reserved
under the 1989 Plan. As of May 17, 1999, 268,687 options were available for
grant under the 1989 Plan. During the fiscal year ended February 27, 1999 the
Company granted options under the 1989 Plan to purchase an aggregate of
410,000 shares of Common Stock at a weighted average exercise price of $20.39
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 certain federal income
tax consequences, based on the law as currently in effect, does not purport to
cover federal employment tax or other federal 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
16
<PAGE>
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, equal in general
to the difference between the option price and the value of the shares on the
date of exercise. In addition, a participant may have additional gain on a
disqualifying disposition that is a sale if shares are sold for more than the
value of the shares on the date of exercise. Moreover, in certain cases, a
participant may be treated as making a disqualified disposition of shares
acquired pursuant to the exercise of an incentive stock option even though the
participant has not sold the shares (for example, if the participant makes a
gift of the shares other than to a spouse). 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 in 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. The rules described above for incentive stock options assume that a
participant exercises the option while an employee of the Company or within
three months following termination of employment (one year, if the termination
occurred by reason of total and permanent disability).
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. The tax is due regardless of whether or not the optionee sells the
stock acquired upon exercise of the option. Any subsequent sale of stock
purchased under a non-statutory stock option generally will result in capital
gain or loss, provided the shares are held as a capital asset by the
participant.
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.
Tax Consequences to the Company. The employer will generally be entitled to
claim a deduction equal to the amount of ordinary income, if any, recognized
by a participant in connection with the exercise of a non-statutory option or
the disqualifying disposition of shares acquired pursuant to an incentive
stock option. No deduction is allowed to the employer in connection with an
incentive stock option, except in the case of a disqualifying disposition of
shares acquired under an incentive stock option. The Internal Revenue Code
generally requires that the amounts be included in the participant's gross
income in order to claim the deduction.
17
<PAGE>
The employer's ability to claim a deduction with respect to awards may also
be limited in certain cases, including special rules applicable to
compensation payable in connection with a change in control and compensation
to key officers in excess of $1 million.
The affirmative vote of a majority of the shares present, in person or by
proxy, and entitled to vote at the Meeting is required to approve the
amendment of the 1989 Plan.
The Board of Directors unanimously recommends that stockholders vote FOR
this Proposal.
18
<PAGE>
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 in a letter dated
February 1, 1999, that they own an aggregate of 130,600 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, employment discrimination in Northern Ireland has been cited by the
International Commission of Jurists as one of the major causes of conflict in
that country;
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.
19
<PAGE>
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 the 1995
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 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 to the
Company and its stockholders of the threatened litigation, the Company
determined that the potential cost of defending any such 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 the 1995 annual meeting. Nonetheless, he resubmitted it for
inclusion in the 1996 and 1998 proxy materials, at which meetings the proposal
received the support of 6.5% and 8.5% of our stockholders, respectively. Once
again, the Comptroller has requested his proposal to be included in the proxy
material for this year's annual meeting. Based upon our prior experiences 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 the stockholders vote
AGAINST this proposal.
20
<PAGE>
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.
In May, 1986, a United States District Court ruled on the legality of the
MacBride Principles under the Fair Employment (Northern Ireland) Act of 1976,
and granted a preliminary injunction requiring that American Brands include a
MacBride Principles shareholder proposal in its proxy materials, stating that
"all nine of the MacBride Principles could be legally implemented by
management in its Northern Ireland facility." NYCERS v. American Brands, 634F.
Supp. 1382 (S.D.N.Y., May 12, 1986). The Employment (Northern Ireland) Act was
amended in 1989.
An endorsement of the MacBride Principles by BE Aerospace, Inc. will
demonstrate the company's concern for human rights and equality of opportunity
in its international operations.
Please vote your proxy FOR these concerns.
21
<PAGE>
AUDIT MATTERS
Deloitte & Touche has been selected to audit the financial statements of the
Company for the fiscal year ending February 26, 2000 and to report the results
of their examination.
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 intended to be presented at the annual meeting of
stockholders to be held in 2000 pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended, must be received by the Secretary of the
Company at its executive offices no later than February 16, 2000 to be
considered for inclusion in the Company's proxy materials for that meeting.
OTHER MATTERS
The Board of Directors is not aware of any matters that will be brought
before the Meeting other than as described in this Proxy Statement. However,
if any matters properly come before the Meeting that are not specifically set
forth on the proxy card and in this Proxy Statement, the persons designated as
proxies will have authority to vote thereon in accordance with 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., Attention: Investor Relations, 1400 Corporate Center Way,
Wellington, Florida 33414.
22
<PAGE>
- --------------------------------------------------------------------------------
PROXY ANNUAL MEETING OF PROXY
BE AEROSPACE, INC.
August 4, 1999
The undersigned hereby constitutes and appoints Messrs. Thomas P. McCaffrey
and Edmund J. Moriarty, 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 August 4, 1999 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,
this Proxy will be voted FOR both nominees for Director, a vote FOR proposal 2
and a vote AGAINST proposal 3, and in the discretion of the named proxies as to
any other matter that may properly come before the Meeting.
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(Continued and to be signed on reverse side) SEE REVERSE
SIDE
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<PAGE>
Please Detach and Mail in the Envelope Provided
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[X] Please mark your
votes as in this
example.
The Board unanimously recommends a vote
FOR Proposals 1 and 2.
FOR WITHHELD
ALL FROM ALL
1. Election of NOMINEES NOMINEES
two Class II [ ] [ ] Nominees: Robert J. Koury
Directors
Hansjorg Wyss
[ ]
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To withhold authority to vote for any nominee(s)
print that nominee's name in the space provided
above.
FOR AGAINST ABSTAIN
2. Amend the 1989 Stock Option Plan. [ ] [ ] [ ]
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The Board unanimously recommends a
vote AGAINST Proposal 3.
FOR AGAINST ABSTAIN
3. Proposal to adopt the MacBride [ ] [ ] [ ]
Principles.
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Signature: Date:
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Signature: Date:
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NOTE: 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.
