<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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.
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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.:
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(3) Filing Party:
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(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 8, 2000
----------------
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,
August 8, 2000 for the following purposes:
1. To elect two Class III directors;
2. To consider and act upon a proposal to amend the 1994 Employee Stock
Purchase Plan by increasing the number of shares available for issuance
thereunder by 500,000 shares;
3. To consider and act upon a proposal to adopt the Non-Employee
Directors Stock and Deferred Compensation Plan;
4. To consider and act upon a proposal to adopt the MacBride Principles;
and
5. To transact any other business that may properly come before the
meeting, or any adjournment thereof.
Stockholders of record at the close of business on June 12, 2000 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 16, 2000
<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 8, 2000
----------------
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,
August 8, 2000 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 therefore
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 12, 2000 are entitled to receive notice of and
to vote at the Meeting. As of that date, the Company had 25,150,459 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, 3, and 4 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, 3 and 4 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, 3 and 4 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 26, 2000 accompanies this proxy statement. This proxy statement and
the enclosed proxy are being mailed to stockholders on or about June 16, 2000.
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 III
Directors, whose terms expire at the 2000 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. Richard G. Hamermesh and Amin J.
Khoury will be elected as Class III Directors for a term of three years,
expiring at the 2003 Annual Meeting, and until their respective successors are
elected and shall qualify to serve.
It is expected that Messrs. Richard Hamermesh and Amin Khoury 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, 2000),
Business Experience and Current Director
Directorships Since
------------------------------- --------
<S> <C>
RICHARD G. HAMERMESH, 52--Dr. Hamermesh has been a Director of the 1987
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, 61--Mr. Khoury has been Chairman of the Board of the 1987
Company since July 1987 when he founded the Company and was Chief
Executive Officer until April 1, 1996. 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., a
leader in semiconductor tool and factory automation solutions for
the global semiconductor industry, 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>
2
<PAGE>
Current Directors
<TABLE>
<CAPTION>
Name, Age (as of June 7, 2000),
Business Experience and Current Director Term
Directorships Since Expires
------------------------------- -------- -------
<S> <C> <C>
JIM C. COWART, 48--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 of the Board of Directors
and Chief Executive Officer 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.
ROBERT J. KHOURY, 58--Mr. Khoury has been a Director of the 1987 2002
Company 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.
BRIAN H. ROWE, 69--Mr. Rowe has been a Director of the 1995 2001
Company 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.
HANSJORG WYSS, 64--Mr. Wyss has been a Director of the 1989 2002
Company since 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>
3
<PAGE>
Board of Directors and Committees
The Board of Directors held five meetings during the fiscal year ended
February 26, 2000 ("Fiscal 2000") and acted pursuant to unanimous written
consent on two occasions. Each director attended all of the Board meetings and
meetings of committees of the Board of Directors on which he served during
Fiscal 2000 except for Mr. Wyss who was absent from two Board meetings. The
Board of Directors currently has two standing committees, the Audit Committee
and the Stock Option and Compensation Committee.
The Audit Committee, currently composed of Messrs. Cowart and Hamermesh,
held one meeting during Fiscal 2000. 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 one meeting during Fiscal 2000 and acted pursuant to
unanimous written consent on four occasions. The Committee provides
recommendations to the Board of Directors 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 $12,500 per calendar quarter, half in cash and half in Company
Common Stock. Eligible Directors are also 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, 1999, each of the following directors was
awarded an option to purchase 5,000 shares of Common Stock at a price of $7.00
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
15, 2000 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 seven other most highly paid
executive officers of the Company in Fiscal 2000 (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>
Hansjorg Wyss*...................................... 2,421,109(2) 8.98%
Amin J. Khoury+*.................................... 460,326(3) 1.71%
Robert J. Khoury+*.................................. 316,319(4) 1.17%
Marco Lanza+........................................ 264,680(5) **
Thomas P. McCaffrey+................................ 247,205(6) **
Brian H. Rowe*...................................... 125,000(7) **
Paul E. Fulchino+................................... 109,217(8) **
Scott A. Smith+..................................... 105,314(9) **
E. Ernest Schwartz+................................. 92,500(10) **
Roman G. Ptakowski+................................. 92,342(11) **
Jim C. Cowart*...................................... 85,500(12) **
Richard G. Hamermesh*............................... 37,350(13) **
All Directors and Executive Officers as a group (15
Persons)........................................... 4,573,137(14) 16.96%
</TABLE>
--------
+ Named Executive Officer
* Director of the Company
** Less than 1 percent
(1) The number of shares of Common Stock deemed outstanding includes: (i)
25,115,944 shares of Common Stock outstanding as of May 15, 2000 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 15, 2000).
(2) Includes 15,000 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 385,000 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 215,000 shares of
Common Stock that are not exercisable in the next sixty days.
(4) Includes 285,000 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 215,000 shares of
Common Stock that are not exercisable in the next sixty days.
5
<PAGE>
(5) Includes 242,500 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 82,500 shares of
Common Stock that are not exercisable in the next sixty days.
(6) Includes 210,000 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 115,000 shares of
Common Stock that are not exercisable in the next sixty days.
(7) 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 that are not exercisable in the next sixty days.
(8) Includes 100,000 shares issuable upon the exercise of stock options
exercisable in the next sixty days.
(9) Includes 95,000 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.
(10) Includes 92,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 52,500
shares of Common Stock that are not exercisable in the next sixty days.
(11) Includes 87,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days and shares owned pursuant to the
Company's Benefit Plans. Excludes options to purchase 87,500 shares of
Common Stock that are not exercisable in the next sixty days.
(12) Includes 82,500 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase 37,500
shares of Common Stock that are not exercisable in the next sixty days.
(13) Includes 18,750 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.
(14) Includes 1,846,750 shares issuable upon the exercise of stock options
exercisable in the next sixty days. Excludes options to purchase
1,080,000 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 2000:
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
6
<PAGE>
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 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 2000, for Fiscal 2000 was
$625,000. See "Employment Contracts--Robert J. Khoury" below. Mr. Khoury was
not granted a bonus in Fiscal 2000 but instead he received options to purchase
240,000 shares of the Company's Common Stock. In determining the incentive
compensation awards for Mr. Khoury, the Committee considered the Company
performance criteria described above, as measured by specific targets and
performance objectives, and concluded that the Company had made progress
during Fiscal 2000 toward achieving such targets and performance objectives.
The Committee also considered the Company's progress toward its strategic
objective of becoming the industry leader in manufacturing and servicing
commercial and executive aircraft cabin interior equipment, and Mr. Khoury's
leadership role in achieving such progress.
With respect to the above matters, the Stock Option and Compensation
Committee submits this report.
STOCK OPTION and
COMPENSATION COMMITTEE
Brian H. Rowe
Hansjorg Wyss
7
<PAGE>
Compensation of Executive Officers
The following table sets forth information with respect to the compensation
of the Named Executive Officers in Fiscal 2000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Securities
Name and Principal -------------------------- Underlying All Other
Position Year(1) Salary($) Bonus($) Options(#) Compensation($)
------------------ ------- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Amin J. Khoury......... 2000 $667,316 $ 0 240,000 $48,539(2)
Chairman 1999 621,540 550,000 70,000 46,169
1998 521,159 550,000 140,000 36,847
Robert J. Khoury....... 2000 $617,318 $ 0 240,000 $46,539(2)
Vice Chairman and 1999 585,772 550,000 70,000 45,123
Chief Executive 1998 521,159 550,000 140,000 32,866
Officer
Paul E. Fulchino(3).... 2000 $510,392 $ 0 70,000 $26,323(2)
President and Chief 1999 497,157 150,000 60,000 38,425
Operating Officer 1998 478,461 465,000 120,000 375,783(4)
Thomas P. McCaffrey.... 2000 $299,924 $ 0 120,000 $20,735(2)
Corporate Senior Vice 1999 278,867 220,000 40,000 20,049
President of 1998 238,680 230,000 90,000 18,748
Administration, Chief
Financial Officer
and Assistant
Secretary
Marco Lanza............ 2000 $279,622 $ 0 80,000 $16,354(2)
Group Vice President 1999 266,924 125,000 30,000 5,846
and General Manager 1998 254,608 125,000 60,000 4,719
General Aviation and
Flight Structures and
Engineering Services
Scott A. Smith (5)..... 2000 $288,273 $ 87,000 60,000 $ 5,000(2)
Group Vice President 1999 241,156 390,000 125,000 5,000
and
General Manager
Global Customer
Service and Support
Roman G. Ptakowski..... 2000 $192,435 $136,000 105,000 $14,217(2)
Group Vice President 1999 178,846 145,000 15,000 11,625
and General Manager 1998 129,138 90,000 35,000 7,112
Interior Systems
E. Ernest Schwartz..... 2000 $233,012 $116,000 55,000 $13,919(2)
Corporate Senior Vice 1999 233,012 90,000 5,000 5,000
President 1998 224,934 90,000 40,000 4,750
Development and
Planning
</TABLE>
--------
(1) The periods covered by this table are the fiscal years ended in February
2000, 1999, and 1998.
(2) Represents contributions to the Company's 401(k) Plan and Supplemental
Executive Retirement Plan (the "Employee Benefit Plans").
(3) Mr. Fulchino's employment with the Company terminated on November 17,
1999.
(4) Represents contributions to the Employee Benefit Plans of $33,138 and
relocation expenses of $342,645.
(5) Mr. Smith commenced his employment with the Company as of April 1, 1998.
8
<PAGE>
Stock Options
The following table sets forth information concerning stock options granted
to the Named Executive Officers in Fiscal 2000
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Potential
Realized Value
at Assumed Rates of
% of Total Stock Price
Options Appreciation for
Granted to Option Term(3)
Options Employees in Exercise Expiration ---------------------
Name Granted(1) (#) Fiscal Year(2) Price ($/Sh) Date 5% 10%
---- -------------- -------------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Amin J. Khoury.......... 140,000 6.11 $17.7500 5/27/09 $1,563,065 $3,961,090
100,000 4.37 8.4375 1/19/10 530,719 1,344,938
Robert J. Khoury........ 140,000 6.11 17.7500 5/27/09 1,563,065 3,961,090
100,000 4.37 8.4375 1/19/10 530,719 1,344,938
Paul E. Fulchino(4)..... 70,000 3.06 17.7500 5/27/09 781,533 1,980,545
Thomas P. McCaffrey..... 70,000 3.06 17.7500 5/27/09 781,533 1,980,545
50,000 2.18 8.4375 1/19/10 265,359 672,469
Marco Lanza............. 30,000 1.31 17.7500 5/27/09 334,943 848,805
50,000 2.18 8.4375 1/19/10 265,359 672,469
Scott A. Smith.......... 10,000 0.44 17.7500 5/27/09 111,648 282,935
50,000 2.18 8.4375 1/19/10 265,359 672,469
Roman G. Ptakowski...... 30,000 1.31 17.7500 5/27/09 334,943 848,805
75,000 3.27 8.4375 1/19/10 398,039 1,008,703
E. Ernest Schwartz...... 5,000 0.22 17.7500 5/27/09 55,824 141,468
50,000 2.18 8.4375 1/19/10 265,359 672,469
</TABLE>
(1) All of the above stock option awards are vested 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 2000, the Company granted to its employees options covering
2,290,200 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.
(4) Mr. Fulchino's employment with the Company terminated on November 17,
1999.
9
<PAGE>
Option Exercises and Fiscal Year-End Holdings
The following table provides information concerning stock option exercises
in Fiscal 2000 and unexercised stock options held by each Named Executive
Officer as of February 26, 2000.
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-End Options at FY-End
----------------- -----------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized Unexercisable Unexercisable(1)
---- --------------- -------- ----------------- -----------------
<S> <C> <C> <C> <C>
Amin J. Khoury.......... 0 $ 0 350,000/250,000 $14,063/42,188
Robert J. Khoury........ 0 0 250,000/250,000 14,063/42,188
Paul E. Fulchino........ 0 0 100,000/0 0/0
Thomas P. McCaffrey..... 0 0 192,500/132,500 13,281/21,094
Marco Lanza............. 0 0 235,000/90,000 143,281/21,094
Scott A. Smith.......... 0 0 77,500/107,500 7,031/21,094
Roman G. Ptakowski...... 0 0 80,000/95,000 10,547/31,641
E. Ernest Schwartz...... 0 0 91,250/53,750 18,906/21,094
</TABLE>
--------
(1) The closing price for the Company's Common Stock on the Nasdaq National
Market on February 25, 2000, the last trading day of the fiscal year, was
$9.00 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, upon the earlier of the Expiration
Date (as defined) or the executive's termination of his employment, 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
with the Company for a number of years equal to the number of years of service
provided by the executive to the Company. The Retirement Compensation will
become due as a result of the executive's resignation, prior to a change of
control, or as a result of any other termination of the executive's Employment
Agreement. See discussion below for Retirement Compensation payable in lieu of
the foregoing upon termination of employment after a Change in Control.
Pursuant to the employment agreement between the Company and Mr. McCaffrey,
if Mr. McCaffrey's employment is terminated for any reason other than for
cause (as defined) after April 30, 2003, then the Company shall provide a
retirement benefit to Mr. McCaffrey, 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
September 30, 1999, and which extends through the later of May 28, 2003 or
three years from any date as of which the term is being determined (the
"Expiration Date")
10
<PAGE>
unless earlier terminated. Under the employment agreement, Mr. Khoury receives
a base salary of $695,250 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. The agreement also
provides that Mr. Khoury and his spouse are also entitled to receive medical,
dental, health and executive medical reimbursement benefits under the
Company's plans for the remainder of their lives.
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
(described above); provided, however, that in no event will the aggregate
amount payable upon 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 life insurance policies 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, through the Expiration Date, (i) two times his
highest annual salary, (ii) the Retirement Compensation, and (iii) continued
health and welfare benefits.
Upon a termination resulting from a change of control (as defined), Mr.
Khoury will receive a lump sum payment equal to the sum of (a) one and one-
half times the base salary and bonus (calculated at 100% of his base salary)
(the "Salary") that he would have received during the then-remaining term of
his agreement and (b) two times his base salary. Through the Expiration Date,
Mr. Khoury would also continue to receive the Salary and continued health,
welfare and perquisite benefits. Mr. Khoury would also be entitled to receive
a lump sum payment of the Retirement Compensation he would have been entitled
to receive if he had continued his employment until May 28, 2003. Upon the
execution of an agreement that would, if consummated, constitute a change in
control all stock options held by Mr. Khoury will immediately vest and become
exercisable. In the event that any payments made to Mr. Khoury that are
contingent upon a change in control are subject to excise tax as an "excess
parachute payment" under the Internal Revenue Code, Mr. Khoury would also be
receive an excise tax "gross-up" payment.
Mr. Khoury is also entitled to a lump sum severance amount equal to his
annual salary in the event his employment is terminated for any reason other
than his death or incapacity.
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
September 30, 1999, and which extends through the Expiration Date, unless
otherwise terminated. Under the employment agreement, Mr. Khoury receives a
base salary of $643,750 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.
Thomas P. McCaffrey. Mr. McCaffrey and the Company entered into an
employment agreement on May 29, 1998, which was amended November 12, 1998 and
September 30, 1999, and which extends through the later of May 28, 2003, or
three years from any date as of which the term is being determined unless
sooner terminated (the "Expiration Date"). Under the employment agreement, Mr.
McCaffrey receives a base salary of $312,100 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 that shall not
exceed 100% of this then current salary. In the event of Mr. McCaffrey's
death, his designee will receive an amount equal to the salary that would have
been due to Mr. McCaffrey through the Expiration Date. In the event of Mr.
McCaffrey's incapacity, he will be entitled to receive his salary,
11
<PAGE>
welfare benefits through the Expiration Date. If Mr. McCaffrey is terminated
for cause (as defined) he will only be entitled to receive his unpaid salary
and benefits accrued through the date of termination.
Upon a termination resulting from a change in control (as defined), Mr.
McCaffrey will receive (i) a lump sum amount equal to (a) two times his then-
current salary and (b) two times the base salary that he would have received
through the Expiration Date, (ii) continued welfare benefits through the
Expiration Date and (iii) an amount equal to one-half of his highest base-
salary multiplied by his years of employment after May 1, 1993. In addition,
upon the execution of an agreement that would constitute a change in control
(regardless of whether such agreement is consummated) all stock options held
by Mr. McCaffrey will immediately vest and become exercisable. In the event
that any payments made to Mr. McCaffrey that are contingent upon a change in
control constitute an "excess parachute payment" under the Internal Revenue
Code, Mr. McCaffrey will be entitled to receive an excise tax "gross-up"
payment from the Company.
Mr. McCaffrey is also entitled to a lump sum severance amount equal to his
annual salary in the event his employment is terminated for any reason other
than his death or incapacity.
Marco Lanza. Mr. Lanza and the Company entered into an employment agreement
on March 1, 1992, which was most recently amended on September 30, 1999 The
agreement has a current three-year term commencing on January 1, 2000 and is
automatically extended for additional one-year periods unless either Mr. Lanza
or the Company gives the other party at least 90 days written notice prior to
the then-applicable expiration date. Under the terms of his employment
agreement, Mr. Lanza receives a base salary of $285,000 per year subject to
increases as determined from time to time by the Board of Directors. Mr. Lanza
is also entitled to receive an annual incentive bonus at the discretion of the
Board of Directors that shall not exceed 100% of his then current salary.
Upon Mr. Lanza's death, his designee will receive an amount equal to the
salary that would have been due to him through the then-applicable expiration
date. In the event of Mr. Lanza's termination due to incapacity, he will
receive his salary and benefit continuation through the then-applicable
expiration date. Upon a termination resulting from a change of control (as
defined), Mr. Lanza is entitled to (i) a lump-sum payment equal to the sum of
(a) the base salary that he would have received through the appliable
expiration date and (b) two times his annual salary and (ii) continued welfare
and automobile benefits. In the event that any payments made to Mr. Lanza that
are contingent upon a change of control constitute an "excess parachute
payment" under the Internal Revenue Code, Mr. Lanza will be entitled to
receive an excise tax "gross up" payment from the Company.
Mr. Lanza is also entitled to a lump-sum severance amount equal to his
annual salary in effect as of the termination date in the event his employment
is not extended and the agreement is terminated.
Scott A. Smith. Mr. Smith and the Company entered into an employment
agreement on March 6, 1998 that is automatically renewed 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.
Under the employment agreement, Mr. Smith receives a base salary of $290,000
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 at the
discretion of 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 through the expiration
of the then-applicable term. In the event of Mr. Smith's incapacity, Mr. Smith
will continue to receive his then current salary and benefits through the
expiration or until Mr. Smith obtains alternate employment. In the event there
is a change in control (as defined) prior to the expiration date as a result
of which Mr. Smith's employment is
12
<PAGE>
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 benefit continuation through the
expiration date.
Roman Ptakowski. Mr. Ptakowski and the Company entered into an employment
agreement on December 8, 1997. The agreement had an initial one-year term that
ended on December 7, 1998 and is automatically extended for additional one-
year terms unless either Mr. Ptakowski or the Company gives the other party at
least 30 days written notice prior to the then-applicable expiration date.
Under the terms of his employment agreement, Mr. Ptakowski receives an annual
salary of $230,000 per year subject to adjustment from time to time by the
Board of Directors. In all other respects, Mr. Ptakowski's agreement is
substantially similar to Mr. Smith's employment agreement.
E. Ernest Schwartz. Mr. Schwartz and the Company entered into an employment
agreement on March 1, 1992, which was amended January 1, 1996. The agreement
is automatically renewed for one-year terms unless either Mr. Schwartz or the
Company gives the other party at least 90 days written notice prior to the
then applicable expiration date. Under the terms of his employment agreement,
Mr. Schwartz receives a base salary of $233,000 per year subject to increases
as determined from time to time by the Board of Directors and subject to cost
of living increases. Mr. Schwartz is also entitled to receive an annual
incentive bonus at the discretion of the Board of Directors that shall not
exceed 100% of this then current salary.
In the event of Mr. Schwartz's death, his designee will receive an amount
equal to the salary that would have been due to him through the applicable
expiration date. In the event of Mr. Schwartz's termination due to incapacity,
he will continue to receive his then current salary and benefits until the
applicable expiration date. If Mr. Schwartz's employment term is not extended
and the agreement terminates, or his employment is terminated as a result of a
change in control (as defined), Mr. Schwartz is entitled to a lump-sum payment
in an amount equal to his annual salary on the date of termination. In
addition, upon a change of control (as defined) prior to the expiration date
as a result of which Mr. Schwartz's employment is terminated for any reason or
he resigns his employment because of a change in his position, powers, duties,
salary or benefits, Mr. Schwartz will receive salary and benefit continuation
through the expiration date.
Severance Agreement
Paul E. Fulchino. Pursuant to an agreement dated December 3, 1999, Mr.
Fulchino's employment with the Company terminated effective as of November 17,
1999. The agreement provides that Mr. Fulchino is entitled to continuation of
(i) his base salary, (ii) welfare benefits and (iii) car allowance for the
period ending on May 16, 2001. All options held by Mr. Fulchino, other than
the options granted on April 1, 1996, were revoked as of November 17, 1999. In
consideration of the benefits provided to Mr. Fulchino pursuant to his
agreement, Mr. Fulchino and the Company executed a mutual release of all
claims.
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 2000, Jim Cowart, a director of the Company, 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 grant. He received
this award for his involvement in the Company's acquisition program and for
various consulting services he performed for the Company.
13
<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 24, 1995 through
February 25, 2000, the last trading day of Fiscal 2000 , 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 APPEARS HERE]
COMPARISON OF 118 MONTH CUMULATIVE TOTAL RETURN*
AMONG BE AEROSPACE, INC., THE NASDAQ STOCK MARKET-US INDEX,
THE DOW JONES AIRLINES INDEX and
THE DOW JONES AEROSPACE & DEFENSE INDEX
<TABLE>
<CAPTION>
4/90 7/91 2/92 2/93 2/94 2/95 2/96 2/97 2/98 2/99 2/00
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BE Aerospace, Inc. 100 200 200 143 164 79 186 371 421 211 129
DJ Airlines Index 100 94 106 94 109 92 146 142 233 214 173
DJ Aerospace & Defense Index 100 114 121 127 178 200 352 440 520 385 293
Nasdaq National Market - US 100 124 158 168 199 202 281 335 458 596 1212
</TABLE>
*$100 INVESTED ON 2/24/90 IN STOCK OR IN INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS.
14
<PAGE>
[GRAPH APPEARS HERE]
COMPARISON OF 60 MONTH CUMULATIVE TOTAL RETURN*
AMONG BE AEROSPACE, INC., THE NASDAQ STOCK MARKET - US INDEX,
THE DOW JONES AIRLINES INDEX AND
THE DOW JONES AEROSPACE & DEFENSE INDEX
2/95 2/96 2/97 2/98 2/99 2/00
BE Aerospace, Inc. 100 236 473 535 268 164
DJ Airlines Index 100 159 154 253 232 188
DJ Aerospace & Defense Index 100 176 220 260 192 147
Nasdaq National Market -- US 100 139 166 227 296 601
*$100 INVESTED ON [2/24/95] IN STOCK OR IN INDEX -- INCLUDING
REINVESTMENT OF DIVIDENDS
FOR FISCAL YEAR ENDING FEBRUARY 26, 2000.
--------
(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 Graph 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.
15
<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 "SEC") 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 SEC 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 2000, 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 SEC.
16
<PAGE>
Proposal No. 2
APPROVAL OF AMENDMENT TO
THE 1994 EMPLOYEE STOCK PURCHASE PLAN
On January 19, 2000, the Board of Directors unanimously approved, subject to
stockholder approval, an increase in the number of shares available for
purchase under the 1994 Employee Stock Purchase Plan (the "Purchase Plan")
from 500,000 to 1,000,000, an increase of 500,000 shares. This amendment is
being submitted for approval by the affirmative vote of a majority of the
shares present, in person or by proxy, and entitled to vote at the Meeting.
The following is a general description of the material features of the
Purchase Plan. A copy of the plan may be obtained upon written request to
Attention: Human Resources at BE Aerospace, Inc., 1400 Corporate Center Way,
Wellington, Florida 33414.
History. The Purchase Plan was initially adopted by the Company's Board of
Directors on February 1, 1994 and approved by the stockholders on August 11,
1994 reserving 500,000 shares for issuance.
Purpose. The purpose of the Purchase Plan is to provide eligible employees
of the Company and its subsidiaries with an opportunity to purchase shares of
the Company's Common Stock through voluntary payroll deductions. The Board of
Directors believes that the equity incentive opportunity represented by the
Purchase Plan is an important factor in attracting, retaining and motivating
the best available talent. The Purchase Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code.
Administration. The Purchase Plan, and the rights of the participants to
make purchases thereunder, are intended to qualify under the provisions of
Sections 421 and 423 of the Internal Revenue Code. The Purchase Plan is
administered by the Compensation Committee of our Board of Directors which has
the right to determine any questions which may arise regarding the
interpretation and application of the provisions of the Purchase Plan and to
make, administer, and interpret such rules and regulations as it deems
necessary.
Eligibility. Any individual who has been employed by the Company (or any of
its majority-owned subsidiaries) for at least 90 days and is customarily
employed by the Company (or any of its majority-owned subsidiaries) for at
least 20 hours per week is eligible to participate in the Purchase Plan,
provided that the individual is employed on the first day of an option period
and subject to certain limitations imposed by Section 423(b) of the Internal
Revenue Code.
Option Periods. The Purchase Plan is implemented by consecutive 6-month
option periods, beginning on September 1 and March 1 of each year and ending
on the last day in February and August, respectively. Shares are issued on the
last day of each 6-month option period. Eligible employees may commence their
participation in the Purchase Plan only at the beginning of any option period.
Participation in the Plan. Eligible employees become participants in the
Purchase Plan by executing and delivering to the Company an enrollment form at
least 15 days prior to the beginning of an option period. The enrollment form
specifies the employee's contribution percentage and authorizes the Company to
make payroll deductions for the purchase of shares under the Purchase Plan. A
person who becomes employed after the commencement of an option period may not
participant in the Purchase Plan until the commencement of the next option
period. Once an employee becomes a participant, he or she will automatically
be enrolled in subsequent periods unless he or she withdraws from the plan or
becomes ineligible to participate. Unless the participant's participation is
discontinued, the purchase of shares occurs automatically at the end of the
option period.
17
<PAGE>
Purchase Price. The purchase price per share at which shares are sold under
the Purchase Plan is 85% of the fair market value of the Common Stock on (a)
the date of commencement of the option period or (b) the last day of the
option period, whichever is lower. The fair market value of the Common Stock
on a given date is the closing sales price on the NASDAQ National Market as of
such date.
Payment of Purchase Price; Payroll Deductions. The purchase price of the
shares is accumulated by payroll deductions during the option period. The
deductions may not be less than 2% or more than 15% a participant's eligible
compensation corresponding to the paydays on which the deductions were made.
"Eligible compensation" includes base pay, plus all other amounts attributable
to income (as defined in the Internal Revenue Code) including overtime, shift
premiums, incentive compensation, regular bonuses and commissions, exclusive
of "spot bonuses" and any other such similar items. A participant may
discontinue his or her participation in the Purchase Plan or may increase or
decrease the rate of payroll deductions (but not below 2% of compensation) at
any time during the option period by delivering written notice to the Company.
Payroll deductions generally commence on the first payday following the
commencement of the option period, and continue at the same rate until the end
of the option period unless sooner terminated as provided in the Purchase
Plan. All payroll deductions are credited to the participant's account under
the Purchase Plan and are deposited with the general funds of the Company. All
payroll deductions received or held by the Company may be used by the Company
for any corporate purpose. Participants do not earn interest on any amounts
credited to their accounts under the Purchase Plan.
The maximum number of shares that a participant may purchase during any
option period is the number of shares that when multiplied by the fair market
value of the Company's Common Stock at the beginning of such option period
equals $12,500 or less. In addition, the maximum number of shares that a
participant may purchase under the Purchase Plan in a calendar year may not
exceed the number of shares purchasable without allowing a participant to
accrue the right to purchase shares under the Purchase Plan at a rate
exceeding $25,000 of fair market value of such shares (determined at the first
day of the option period) for each calendar year in which the option is
outstanding at any time.
Notwithstanding the foregoing, no participant will be permitted to subscribe
for shares under the Purchase Plan if, immediately after the grant of the
option, the participant would own 5% or more of the combined voting power or
value of all classes of stock of the Company or of any of our subsidiaries
(including stock that may be purchased under the Purchase Plan or pursuant to
any other options).
Cancellation and Withdrawal. A participant may cancel his or her option in
whole, but not in part, at any time during an option period by written notice
delivered to the Company. Upon such cancellation, all payroll deductions for
the option period will be returned to the participant in cash, without
interest. Any cancellation by the participant of accumulated payroll
deductions for a given option period automatically terminates the
participant's participation in that option period. The participant may not
reelect to participate in the Purchase Plan during the option period but may
make a new election to participate in any future option period.
Termination of Employment; Death. Upon the termination of a participant's
employment with the Company and its subsidiaries, the participant's
participation in the Purchase Plan will immediately cease and the participant
will receive any amounts being held in his or her account. In the event of a
participant's death during an option period, the participant's designated
beneficiary will be entitled to receive the amount credited to the
participant's account or to have the account applied to the purchase of Common
Stock at the end of the option period.
18
<PAGE>
Adjustment or Changes in Capitalization. In the event any change in the
outstanding stock of the Company by reason of a stock split, stock dividend,
recapitalization, merger, consolidation, reorganization or other capital
change, the aggregate number of shares available under the Purchase Plan, the
number of shares underlying options under the Purchase Plan and the purchase
price of such options will be appropriately adjusted.
Non-assignability. No rights or accumulated payroll deductions of a
participant under the Purchase Plan may be pledged, assigned or transferred
for any reason during the lifetime of a participant. If a participant attempts
to make such a transfer, any option held by the participant may be terminated
by the Company.
Amendment and Termination of the Plan. The Purchase Plan may be amended by
the Board of Directors for any reason. However, if the Board of Directors
elect to amend the Plan to increase the number of outstanding shares of Common
Stock available for issuance, the amendment must be approved by the Company's
stockholders within twelve months. The Purchase Plan will remain in effect
until February 29, 2004, unless terminated earlier by the Board of Directors.
Certain Federal Income Tax Considerations. The following is only a summary
of the effects of federal income taxation upon the participants and the
Company with respect to the shares purchased under the Purchase Plan.
Reference should be made to the applicable provisions of the Internal Revenue
Code. In addition, the summary does not discuss the tax consequences of a
participant's death or the income tax laws of any state or foreign country in
which the participant may reside.
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Section 421 and 423
of the Internal Revenue Code. Under these provisions, no income will be
taxable to a participant at the time of purchase of shares. Upon disposition
of the shares, the participant will be subject to tax and the amount of the
tax will depend on the period of time that a participant holds the shares. If
the shares are disposed of by the participant at least two years after the
beginning of the option period and at least one year from the date the shares
are purchased, the lesser of (a) the excess of the fair market value of the
shares at the time of such disposition over the purchase price, or (b) 15% of
the fair market value of the shares on the first day of the option period will
be treated as ordinary income and any further gain will be taxed at long-term
capital gain rates. If the shares are sold after such time and the sale price
is less than the purchase price, the participant recognizes no ordinary income
but instead a capital loss for the difference between the sale price and the
purchase price.
If the shares are sold or otherwise disposed of before the expiration of
such two-year and one-year periods, the excess of the fair market value of the
shares on the exercise date over the purchase price will be treated as
ordinary income. Any additional gain or loss on such sale or disposition will
be long-term or short-term capital gain or loss, depending on the holding
period. The Company is not entitled to a deduction for amounts taxed as
ordinary income or capital gain to a participant except to the extent of
ordinary income recognized by participants upon disposition of shares within
two years from the date of grant or within one year of the date of purchase.
New Plan Benefits. It is not presently possible to determine the benefits or
amounts that will be received by any particular employees or groups in the
future.
The Board of Directors has unanimously approved the amendment to the
Purchase Plan described above and recommends that you vote FOR approval of the
Purchase Plan, as amended.
The affirmative vote of a majority of the shares represented, in person or
by proxy, and voting at the Annual Meeting (at which a quorum is present) is
required to approve the proposed amendment.
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Proposal No. 3
APPROVAL OF THE NON-EMPLOYEE DIRECTORS
STOCK AND DEFERRED COMPENSATION PLAN
On April 18, 2000, the Board of Directors unanimously approved the adoption
of the BE Aerospace, Inc. Non-Employee Directors Stock And Deferred
Compensation Plan (the "Directors Plan"). The Directors Plan is being
submitted for approval by the affirmative vote of a majority of the shares
present, in person or by proxy, and entitled to vote at the Meeting. The
following is a general description of the material features of the Directors
Plan. A copy of the Directors Plan may be obtained upon written request to BE
Aerospace, Inc., Attention: Human Resources, 1400 Corporate Center Way,
Wellington, Florida 33414.
Purpose. The purposes of the Directors Plan are (i) to attract, motivate and
retain eligible directors of the Company who elect to participate in the plan
by offering them an opportunity to defer compensation and (ii) to encourage
directors to increase their stock ownership in the Company. The Board of
Directors believes that the ability to defer retainer and meeting fees and to
invest in shares of Company Common Stock is an important factor in attracting,
retaining and motivating the best available talent.
Eligibility. All directors of the Company who are not also officers or
employees of the Company or its subsidiaries and who are compensated as
directors are eligible to participate in the Directors Plan.
Administration. The Directors Plan is administered by the Board of Directors
or a Committee appointed by the Board of Directors which has the right to
determine any questions which may arise regarding the interpretation and
application of the provisions of the plan and to make, administer, and
interpret such rules and regulations as it deems necessary.
Term. The Directors Plan will become effective on September 1, 2000;
provided, however, that if the Directors Plan is not approved by the Company's
shareholders it will have no force and effect and any prior elections will be
void. The Directors Plan will remain in effect until terminated by the Board
of Directors. No benefits shall accrue with respect to fees earned after the
termination of the Directors Plan.
Share Elections. On or before September 1, 2000 for the calendar year ending
December 31, 2000 and the December 31st immediately preceding each succeeding
calendar year, each eligible director may make an irrevocable election to
receive up to 100% of his or her retainer and meeting fees for the subsequent
year (in 25% increments) in shares of the Company's Common Stock. If a
participant makes such an election, an amount equal to the applicable
percentage of any retainer and meeting fees will be held in an account by the
Company and paid out to the director within 30 business days following the
earlier of (i) the end of the year for which the election was made and (ii)
the date that the participant ceases to be a director of the Company. The
amount deferred will accrue interest from the date of such compensation would
otherwise be payable until the date of distribution.
The number of shares deliverable upon distribution shall be determined by
dividing (a) the value of the share account (including any allocable earnings)
by (b) the "average annual fair market value" of the Company's Common Stock
during the applicable year (or applicable service period) and rounded down to
the nearest whole number of shares. The "average fair market value" means the
sum of the fair market value of the Company's Common Stock on the last day of
each calendar quarter during the applicable year (or applicable service
period) divided by the number of measurement dates during such service period.
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Cash and Stock Unit Deferrals. On or before September 1, 2000 for the year
ending December 31, 2000 and the December 31st immediately preceding each
succeeding calendar year, each eligible director may also make an irrevocable
election to defer up to 100% of his or her retainer and meeting fees for the
subsequent year (in 25% increments) in cash or in stock units. Cash deferrals
will be credited to the participant's account under the plan and will accrue
interest on a quarterly basis. Stock units are non-voting units of measurement
which represent one share of the Company's Common Stock and are used solely as
a device to determine the number of shares of Common Stock that will
eventually be distributed to the participant. Participants are not entitled to
any voting or other stockholder rights with respect to stock units credited to
their accounts under the Directors Plan. The number of stock units credited to
a participant's account is determined by dividing (i) the amount of
compensation that the participant elected to defer in stock units (including
any allocable earnings) by (ii) the "average fair market value" of the
Company's Common Stock during the applicable year (or applicable service
period).
Distributions of cash and stock unit deferrals will be made at the earlier
of (a) the date specified in the participant's election form and (b) first day
of the month immediately preceding the date that the participant ceases to be
a director of the Company. Participant's may elect to receive their
distributions in either a lump sum or up to ten annual installments; provided,
however, that if there is less than $10,000 or 1,000 stock units remaining in
a participant's cash or stock unit account upon a termination of service, then
all remaining balances will be distributed in a lump sum. Participant's may
change the manner and time of distribution with respect to amounts credited to
their cash accounts or stock accounts; provided, however, that no changes will
be effective (i) until twelve months after the election was initially made and
(ii) after distribution of amounts held in the account have commenced.
Distributions of stock unit accounts will be made in shares of the Company's
Common Stock and distributions of cash accounts will be made in cash.
Nonexclusive Elections. A participant may elect to utilize the share
election, cash deferrals and stock unit deferrals during any calendar year as
long as elections are made in 25% increments.
Dividend Equivalents. At the end of each quarter, each participant's stock
unit account will be credited with additional stock units in an amount equal
to the dividend equivalents representing dividends paid on a number of shares
of Common Stock equal to the number of stock units held in the participant's
stock unit account.
Acceleration of Distributions. The Board of Directors may accelerate any
payment date in extraordinary circumstances where it determines that such
action is necessary or advisable to prevent a forfeiture or permit the
realization of intended benefits and is otherwise fair to the participant.
Vesting. Participants are always fully vested in their contributions to the
Directors Plan.
Investments. All retainer and meeting fee deferrals are credited to the
participant's account under the Directors Plan and will be deemed invested in
shares of the Company's Common Stock or other investments reasonable
determined by the Committee. The Company will establish a rabbi trust in order
to fund the deferrals made under Directors Plan.
Shares Available under the Directors Plan. An aggregate of 200,000 shares of
Common Stock are available for issuance under the Directors Plan.
Adjustment or Changes in Capitalization. In the event any change in the
outstanding shares of the Company's Common Stock by reason of a stock split,
stock dividend, recapitalization, merger, consolidation,
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reorganization or other capital change, the aggregate number of shares
available under the Directors Plan shall be adjusted as the Committee
determines to be necessary or appropriate.
Non-assignability. Benefits provided under the Directors Plan are not
assignable or transferable (except by law or pursuant to the rules of descent
and distribution) and any purported assignment or transfer of any payments or
benefits under the Directors Plan will not be recognized.
Amendment of the Directors Plan. The Directors Plan may be amended by the
Board of Directors for any reason as long as such amendment or termination
does not adversely affect the rights of a participant. If the Board of
Directors elect to amend the Directors Plan to increase the number of
outstanding shares of Common Stock available for issuance, the amendment must
be approved by the Company's stockholders.
Certain Federal Income Tax Considerations. The following is only a summary
of the effect of federal income taxation upon the participant and the Company
with respect to the Directors Plan. Reference should be made to the applicable
provisions of the Internal Revenue Code. In addition, the summary does not
discuss the tax consequences of a participant's death or the income tax laws
of any state or foreign country in which the participant may reside.
Participants will not be taxed on the retainers or meeting fees they elect
to defer until the date of distribution. In addition, the Company is not
entitled to a deduction for amounts deferred until the date that the deferred
amounts are distributed to participants. For purposes of taxation, the shares
of Company Common Stock delivered upon distribution will be valued at closing
sales price on the NASDAQ National Market on the date that distributions are
made.
New Plan Benefits. It is not presently possible to determine the benefits or
amounts that will be received by any particular employees or groups in the
future.
The Board of Directors has unanimously approved the adoption of the
Directors Plan described above and recommends that you vote FOR approval of
the Directors Plan.
The affirmative vote of a majority of the shares represented, in person or
by proxy, and voting at the Annual Meeting (at which a quorum is present) is
required to approve the adoption of the Directors Plan.
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Proposal No. 4
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
Art. 1B and the New York City Police Pension Fund Art. 2 which state in a
letter dated October 14, 1999, that they own an aggregate of 199,500 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,
Whereas, the on-going peace process in Northern Ireland encourages us to
search for 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 sectarian
strife 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.
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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 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, 1998 and 1999 proxy materials, at which meetings the
proposal received the support of 6.5%, 8.5% and 9.0% 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.
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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.
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AUDIT MATTERS
Deloitte & Touche has been selected to audit the financial statements of the
Company for the fiscal year ending February 24, 2001 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 2001 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, 2001 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.
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Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stock Stockholders
BE AEROSPACE, INC.
August 8, 2000
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example.
The Board unanimously recommends a vote
FOR Proposals 1, 2 and 3.
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
1. Election of [ ] [ ]
two Class III
Directors
Nominees:
Richard G. Hamermesh
Amin J. Khoury
[ ] _________________
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 1994 Employee [ ] [ ] [ ]
Stock Purchase Plan.
3. Proposal to adopt the Non-Employee [ ] [ ] [ ]
Directors Stock and Deferred
Compensation Plan.
-------------------------------------------------------------------------------
The Board unanimously recommends a FOR AGAINST ABSTAIN
vote AGAINST Proposal 4.
4. Proposal to adopt the MacBride [ ] [ ] [ ]
Principles.
--------------------------------------------------------------------------------
Signature________________________________________ Date_________________
Signature________________________________________ Date_________________
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.
