<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
</TABLE>
Be Incorporated
- --------------------------------------------------------------------------------
(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:
Common Stock
- --------------------------------------------------------------------------------
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.
6. Amount Previously Paid:
- --------------------------------------------------------------------------------
7. Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
8. Filing Party:
- --------------------------------------------------------------------------------
9. Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
BE INCORPORATED
800 El Camino Real
Suite 400
Menlo Park, CA 94025
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 30, 2000
To the Stockholders of Be Incorporated:
Notice Is Hereby Given that the Annual Meeting of Stockholders of Be
Incorporated, a Delaware corporation (the "Company"), will be held on Tuesday,
May 30, 2000 at 11:00 a.m. local time at Holbrook Palmer Park--The Pavilion,
150 Watkins Avenue, Atherton, CA 94027 for the following purposes:
1. To elect two (2) directors to hold office until the 2003 Annual Meeting
of Stockholders.
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors of the Company for its fiscal year ending December 31, 2000.
3. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 14, 2000, as
the record date for the determination of stockholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ Daniel S. Johnston
Daniel S. Johnston
Secretary
Menlo Park, California
April 24, 2000
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO
ENSURE YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS
POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT
PURPOSE. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON
IF YOU ATTEND THE MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE
HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT
THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR
NAME.
<PAGE>
BE INCORPORATED
800 El Camino Real
Suite 400
Menlo Park, CA 94025
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 30, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of Be
Incorporated, a Delaware corporation ("Be" or the "Company"), for use at the
Annual Meeting of Stockholders to be held on May 30, 2000, at 11:00 a.m. local
time (the "Annual Meeting"), or at any adjournment or postponement thereof,
for the purposes set forth herein and in the accompanying Notice of Annual
Meeting. The Annual Meeting will be held at Holbrook Palmer Park--The
Pavilion, 150 Watkins Avenue, Atherton, CA 94027. The Company intends to mail
this proxy statement and accompanying proxy card on or about April 24, 2000,
to all stockholders entitled to vote at the Annual Meeting.
Solicitation
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of common stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of common stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of
the. No additional compensation will be paid to directors, officers or other
regular employees for such services.
Voting Rights and Outstanding Shares
Only holders of record of common stock at the close of business on April 14,
2000 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on April 14, 2000, the Company had outstanding and entitled
to vote 35,822,854 shares of common stock.
Each holder of record of common stock on such date will be entitled to one
vote for each share held on all matters to be voted upon at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter
has been approved.
<PAGE>
Voting Via the Internet or by Telephone
You may vote your shares telephonically by calling toll free 1-800-240-6326,
or via the Internet at the following Web site: http://www.eproxy.com/beos/.
For Shares Registered in the Name of a Broker or Bank
A number of brokers and banks are participating in a program provided
through ADP Investor Communication Services that also offer telephone and
Internet voting options. If your shares are held in an account with a broker
or bank participating in the ADP Investor Communication Services program, you
may vote those shares telephonically by calling the telephone number shown on
the voting form received from your broker or bank, or via the Internet at ADP
Investor Communication Services' voting Web site (www.proxyvote.com).
General Information for All Shares Voted Via the Internet or By Telephone
Votes submitted via the Internet or by telephone must be received by 12:00
p.m., Pacific Daylight Time on May 26, 2000. Submitting your proxy via the
Internet or by telephone will not affect your right to vote in person should
you decide to attend the Annual Meeting.
The telephone and Internet voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to give their voting
instructions and to confirm that stockholders' instructions have been recorded
properly. Stockholders voting via the Internet should understand that there
may be costs associated with electronic access, such as usage charges from
Internet access providers and telephone companies, that must be borne by the
stockholder.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 800 El
Camino Real, Suite 400, Menlo Park, CA 94025, a written notice of revocation
or a duly executed proxy bearing a later date, or it may be revoked by
attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
Stockholder Proposals
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2001 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is December 31, 2000. Stockholders wishing to submit proposals or
director nominations that are not to be included in such proxy statement and
proxy must do so no later than 90 days nor earlier than 120 days prior to the
first anniversary of the preceding year's annual meeting of stockholders.
Stockholders are also advised to review the Company's Bylaws, which contain
additional requirements with respect to advance notice of stockholder
proposals and director nominations.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation and Bylaws
provide that the Board of Directors shall be divided into three classes, each
class consisting, as nearly as possible, of one-third of the total number of
directors, with each class having a three-year term. Vacancies on the Board
may be filled only by persons elected by a majority of the remaining
directors. A director elected by the Board to fill a vacancy (including a
vacancy created by an increase in the number of directors) shall serve for the
remainder of the full term of the class of directors in which the vacancy
occurred and until such director's successor is elected and qualified.
The Board of Directors is presently composed of seven members. There are two
directors in the class whose term of office expires in 2000. Each of the
nominees for election to this class are currently directors of the Company who
were previously elected by the Board to fill a vacancy. If elected at the
Annual Meeting, each of the nominees would serve until the 2003 annual meeting
and until his successor is elected and has qualified, or until such director's
earlier death, resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented
by executed proxies will be voted, if authority to do so is not withheld, for
the election of the nominee named below. In the event that the nominee should
be unavailable for election as a result of an unexpected occurrence, such
shares will be voted for the election of such substitute nominee as management
may propose. The person nominated for election has agreed to serve if elected,
and management has no reason to believe that the nominee will be unable to
serve.
Set forth below is biographical information for each person nominated and
each person whose term of office as a director will continue after the Annual
Meeting.
Nominees for Election for a Three-year Term Expiring at the 2003 Annual
Meeting
Christian E. Marchandise
Mr. Marchandise, age 50, has served as a director of the Company since
December 1995. Since 1991, Mr. Marchandise has served as Chief Executive
Officer of e-LaSer. Mr. Marchandise also serves as the Chief Executive Officer
of Smart Valley Investment, LLP. Mr. Marchandise attended the University of
Economics and Law, Paris X--Nanterre.
William F. Zuendt
Mr. Zuendt, age 52, has served as a director of the Company since October
1999, and is a member of the Audit Committee. Mr. Zuendt was associated with
Wells Fargo & Company from 1973, serving in various capacities including
having responsibility for their computer systems and operations and directing
Wells Fargo's retail banking business. Most recently, Mr. Zuendt served as
Wells Fargo's President and Chief Operating Officer, retiring in December
1997. Mr. Zuendt also serves as a director of 3Com Corporation and Advent
Software, Inc. Mr. Zuendt holds a B.S. in Mathematics from Rensselaer
Polytechnic Institute and an M.B.A. degree from Stanford University.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF THE NAMED NOMINEES.
3
<PAGE>
Directors Continuing in Office Until the 2001 Annual Meeting
Barry M. Weinman
Mr. Weinman, age 61, has served as a director of the Company since February
1998. and is a member of the Audit Committee and Compensation Committee. Since
1993, Mr. Weinman has served as a General Partner for Media Technology
Ventures and as Managing Director of Media Technology Equity Partners, the
newly created media fund of AVI Management Partners III. Mr. Weinman also
serves as a director of Women.com, Quokka Sports. Inc., TalkCity, Inc., and
InfoGear Technology Corporation. Mr. Weinman holds a B.S. from the Clarkson
University, and an M.A. from the London School of Economics/University of
Southern California.
Garrett P. Gruener
Mr. Gruener, age 45, has served as a director of the Company since April
1996, and is a member of the Compensation Committee. Since 1996, Mr. Gruener
has served as a General Partner in Alta Partners Venture Capital Company. From
1992 to 1996, Mr. Gruener served as a Vice President of Burr, Egan, Deleage &
Co. Mr. Gruener specializes in information technology. Mr. Gruener also serves
as a director of CyberGold, Inc., ImageX.com, Inc., and Ask Jeeves, Inc. Mr.
Gruener holds a B.S. in Political Science from the University of California,
San Diego and an M.A. from the University of California, Berkeley.
Andrei M. Manoliu
Dr. Manoliu, age 48, has served as a director of the Company since February
2000. Since April 2000, Dr. Manoliu has been an independent business and
financial consultant to emerging growth companies. From 1982 to March 2000,
Dr. Manoliu was associated with Cooley Godward LLP, the Company's outside
legal counsel, most recently as senior partner. Dr. Manoliu studied Physics at
the University of Bucharest, Romania, obtained a Ph.D. in Solid State Physics
from the University of California, Berkeley and a J.D. from Stanford Law
School.
Directors Continuing in Office Until the 2002 Annual Meeting
Jean-Louis F. Gassee
Mr. Gassee, age 55, co-founded Be in 1990 and has served as President, Chief
Executive Officer and Chairman of the Board of the Company since October 1990.
Prior to forming Be, Mr. Gassee was associated with Apple Computer, Inc. for
ten years serving in numerous capacities including President of Apple
Products, the R&D and Manufacturing division of Apple. Prior to joining Apple
Computer, Inc., Mr. Gassee was President and General Manager of the French
subsidiary of Exxon Chemical Company. He also held several management
positions with Data General Corporation, including Chief Executive Officer of
Data General for France and Director of Product Marketing for Europe. Mr.
Gassee serves as a director of several private and publicly traded companies.
Mr. Gassee serves as a director of 3Com Corporation, Electronics for Imaging,
Inc., Logitech International S.A., and VirtualFund.com, Inc. Mr. Gassee holds
an M.A. of Science from the Faculty of Sciences (France).
Stewart Alsop
Mr. Alsop, age 48, has served as a director of the Company since March 1999,
and is a member of the Compensation Committee. Since 1998, Mr. Alsop has
served as a General Partner at New Enterprise Associates, a venture capital
investment firm. Mr. Alsop was a Venture Partner at New Enterprise Associates
from 1996 to 1998. From June 1991 to 1996, Mr. Alsop served as Senior Vice
President and Editor-in-Chief of InfoWorld Media Group, Inc., which publishes
InfoWorld, a weekly newspaper for information-technology professionals. Mr.
Alsop also serves as a director of Tivo, Inc., Egreetings Network, Inc. and
Netcentives, Inc. Mr. Alsop holds a B.A. in English from Occidental College.
4
<PAGE>
Board Committees and Meetings
During the fiscal year ended December 31, 1999 the Board of Directors held
eight meetings and acted by unanimous written consent twice. The Board has an
Audit Committee and a Compensation Committee.
The Audit Committee meets with the Company's independent auditors at least
annually to review the results of the annual audit and discuss the financial
statements; recommends to the Board the independent auditors to be retained;
and receives and considers the accountants' comments as to controls, adequacy
of staff and management performance and procedures in connection with audit
and financial controls. The Audit Committee was formed by the Board in May
1999 and held one meeting during the fiscal year ended December 31, 1999.
During the first five months, the Audit Committee was composed of two non-
employee directors: Messrs. Alsop and Weinman. In October 1999, Mr. Alsop was
replaced by Mr. Zuendt.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation, awards stock options to employees and consultants
under the Company's stock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board
may delegate. The Compensation Committee was formed by the Board in May 1999
and it did not meet or act by unanimous written consent during the fiscal year
ended December 31, 1999. During the first five months, the Compensation
Committee was composed of two non-employee directors: Messrs. Gruener and
Weinman. In October 1999, Mr. Alsop joined the Compensation Committee.
During the fiscal year ended December 31, 1999, each of the Company's
directors, except Christian Marchandise, attended at least 75% of the
aggregate of the meetings of the Board and of the committees on which they
served, held during the period for which they were a director or committee
member, respectively.
5
<PAGE>
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000
and has further directed that management submit the selection of independent
auditors for ratification by the stockholders at the Annual Meeting.
PricewaterhouseCoopers LLP has audited the Company's financial statements
since its inception in 1991. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting, will have an opportunity to make
a statement if they so desire and will be available to respond to appropriate
questions.
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
the Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers LLP to the stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the selection, the
Audit Committee and the Board will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee and the Board in
their discretion may direct the appointment of different independent auditors
at any time during the year if they determine that such a change would be in
the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of PricewaterhouseCoopers LLP. Abstentions
will be counted toward the tabulation of votes cast on proposals presented to
the stockholders and will have the same effect as negative votes. Broker non-
votes are counted towards a quorum, but are not counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the common stock of the Company as of April 14, 2000:
. each stockholder who is known by us to own beneficially more than 5% of
Company's common stock;
. each of our named executive officers;
. each of our directors; and
. all of our directors and executive officers as a group.
Unless otherwise indicated, to our knowledge, all persons listed below have
sole voting and investment power with respect to their shares of Company's
common stock, except to the extent authority is shared by spouses under
applicable law. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission. Applicable percentage
ownership is based on 35,822,854 shares of common stock outstanding as of
April 14, 2000, together with options and/or warrants for that stockholder
that are currently exercisable or exercisable within 60 days of April 14,
2000. In computing the number and percentage of shares beneficially owned by a
person, shares of common stock subject to options currently exercisable, or
exercisable within 60 days of April 14, 2000 are counted as outstanding, while
these shares are not counted as outstanding for computing the percentage
ownership of any other person.
<TABLE>
<CAPTION>
Shares Issuable
pursuant to Shares Beneficially Owned
Options (Including the Number of
Exercisable Shares Shown in
within 60 days the First Column)
of April 14, ----------------------------
Name of Beneficial Owner 2000 Number Percent
- ------------------------ --------------- -------------- -------------
<S> <C> <C> <C>
New Enterprise Associates VI,
L.P.............................. -- 2,288,462 6.39%
c/o New Enterprise Associates
2490 Sand Hill Road
Menlo Park, CA 94025
Intel Corporation(1).............. -- 3,076,924 8.24
2200 Mission Boulevard
Santa Clara, CA 95052
Jean-Louis F. Gassee.............. 145,833 4,127,594 11.48
Stewart Alsop..................... 43,750 43,750 *
Garrett P. Gruener................ 43,750 108,937 *
Barry M. Weinman(2)............... 43,750 1,457,443 4.06
Steve M. Sakoman.................. 429,582 589,693 1.63
Christian E. Marchandise(3)....... 43,750 46,049 *
William F. Zuendt................. -- -- *
Andrei M. Manoliu(4).............. -- 6,365 *
Albert A. Lombardo(5)............. 54,581 104,119 *
All officers and directors as a
group (9 persons)(6)............. 6,483,950 17.70%
</TABLE>
- --------
* Represents beneficial ownership of less than one percent of the common
stock.
(1) Includes 1,538,462 shares issuable pursuant to a warrant.
(2) Includes 1,207,777 shares held by AVI Capital, L.P., 187,031 shares held
by Associated Venture Investors III, 12,885 shares held by AVI Silicon
Valley Partners L.P. and 1,000 shares held by the Weinman Family Trust,
dated September 25, 1998. AVI Capital Management, L.P. is the general
partner of AVI Capital. AVI Management Partners III, L.P. is the general
partner of Associated Venture Investors III and AVI Silicon Valley
Partners. Mr. Weinman is a general partner of AVI Capital Management and
AVI Management Partners III. Mr. Weinman disclaims beneficial ownership
of these shares except to the extent of his pecuniary interest therein.
7
<PAGE>
(3) Includes 747 shares and 452 shares issuable upon exercise of warrants held
by Charlotte Marchandise and 1,000 shares held by Smart Valley Investment
LLC. Mr. Marchandise claims voting power over the shares and warrant held
by Charlotte Marchandise, his daughter. Mr. Marchandise is the Chief
Executive Officer of Smart Valley Investment, and disclaims beneficial
ownership of these shares except to the extent of his pecuniary interest
therein.
(4) Shares are held by the Manoliu-Neimat Living Trust, of which Mr. Manoliu
is a trustee.
(5) Includes 38,288 shares held by the Albert A. Lombardo 1994 Trust, dated
8/11/94, of which Mr. Lombardo is a trustee.
(6) Also includes 1,000 shares held by Smart Valley Investment LLC, 747 shares
and 452 shares upon the exercise of warrants held by Charlotte
Marchandise, 1,407,693 shares held by the AVI entities and 1,000 shares
held by the Weinman Family Trust.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
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 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 stockholders are
required by SEC regulation 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 written representations that no other
reports were required, during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
8
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Directors
Directors who are also executive officers of the Company do not receive any
additional compensation for serving as members of the Board of Directors or
any committee of the Board of Directors. Only those directors who are not also
employees of the Company or an affiliate (as defined in the Code), are
eligible to receive options under the 1999 Non-Employee Directors' Stock
Option Plan (the "Directors' Plan"). Stock options granted under the
Directors' Plan cannot qualify as incentive stock options under the Code.
Option grants under the Directors' Plan are automatic. On the date of
approval of the Directors' Plan by the Board, each non-employee director was
automatically granted a stock option to purchase 150,000 shares of common
stock. On the date on which a person is first elected or appointed a non-
employee director, that person will automatically be granted a stock option to
purchase 100,000 shares of common stock under the Directors' Plan. On the date
that a stock option granted under the Directors' Plan becomes fully vested,
the optionholder, if still a non-employee director, will automatically be
granted a stock option to purchase 100,000 shares of common stock. The
exercise price of a stock option granted under the Directors' Plan is 100% of
the fair market value of a share of the common stock subject to the stock
option on the date of grant. Stock options granted under the Directors' Plan
have a term of ten years and vest over a four year period with 25% of the
shares vesting at the end of the first year of service and thereafter at a
rate of 1/48th of the shares monthly in accordance with their terms. In the
event the Company merges with or into another corporation, all outstanding
options may either be assumed or an equivalent option may be substituted by
the surviving entity or, if such options are not assumed or substituted, such
options shall become exercisable as to all of the shares subject to the
options, including shares which would not otherwise be exercisable.
During the last fiscal year, the Company granted options covering 700,000
shares to five non-employee directors of the Company, at a weighted average
exercise price per share of $5.11, the fair market value of such common stock
on the date of grant. For options granted prior to the Company's initial
public offering, the fair market value of the common stock was determined by
the Board of Directors at the time of grant, and for options granted after the
Company's initial public offering, the fair market value of the common stock
is based on the closing sales price of the Company's common stock reported on
the Nasdaq National Market on the date of grant. As of April 14, 2000, no
options had been exercised under the Directors' Plan.
9
<PAGE>
Compensation of Executive Officers
Summary of Compensation
The following table shows for the fiscal years ended December 31, 1998 and
1999, compensation awarded or paid to, or earned by: (i) the Company's Chief
Executive Officer; (ii) its other highest compensated executive officers whose
annual salary and bonus were in excess of $100,000 at December 31, 1999; and
(iii) one former executive officer who departed from the Company during the
fiscal year 1999 (the "Named Executive Officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Long-term
Compensation
Annual Compensation Awards
--------------------- ------------
Securities
Other Annual Underlying
Name and Principal Position Year(1) Salary Compensation Options
- --------------------------- ------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Jean Louis F. Gassee............... 1999 $275,000 -- 500,000
Chief Executive Officer and
Director 1998 187,500 -- 500,000
Steve M. Sakoman................... 1999 213,333 -- 250,000
Chief Operating Officer 1998 175,000 -- 340,000
Wesley S. Saia..................... 1999 212,500 -- 250,000
Vice President and Chief Financial
Officer 1998 162,500 -- 250,000
Roy Graham(3)...................... 1999 178,198 $135,000(2) 660,000
Executive Vice President, Sales
and Marketing 1998 -- -- --
</TABLE>
- --------
(1) The Company's Registration Statement on Form S-1 for its initial public
offering was declared effective by the Securities and Exchange Commission
in July 1999, and therefore, as permitted by the rules promulgated by the
Securities and Exchange Commission, no amounts are shown for the fiscal
year ending December 31, 1997.
(2) Consists of severance payments made to Mr. Graham.
(3) Mr. Graham terminated his employment with the Company in November 1999.
10
<PAGE>
Stock Option Grants and Exercises
The Company grants options to its Named Executive Officers under its 1999
Equity Incentive Plan (the "Incentive Plan"). As of April 14, 2000, options to
purchase a total of 5,310,989 shares were outstanding under the Incentive Plan
and options to purchase 2,160,574 shares remained available for grant
thereunder. See "Employment, Severance and Change of Control Agreements" for
details regarding the vesting schedule for certain optionholders upon a
change-in-control of the Company.
The following tables show for the fiscal year ended December 31, 1999,
certain information regarding options granted to, exercised by, and held at
year end by, the Named Executive Officers:
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term(2)
------------------------------------------ -----------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Expiration
Granted in 1999(1) Per Share Date 5% 10%
---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jean Louis F. Gassee.... 500,000 11.55% $5.00 3/29/09 $2,386,684 $5,281,227
Steve M. Sakoman........ 250,000 5.78 5.00 3/29/09 1,193,342 2,640,614
Wesley S. Saia.......... 250,000 5.78 5.00 3/29/09 1,193,342 2,640,614
Roy Graham.............. 660,000 15.25 5.00 3/29/09 3,150,423 6,971,220
</TABLE>
- --------
(1) The total number of options granted to the Company's employees in fiscal
year 1999 was 4,328,000.
(2) In order to comply with the rules of the Securities and Exchange
Commission, the gains or "option spreads" that would exist for the
respective options the Company has granted to the named executive officers
are included. The Company calculates these gains based upon the initial
public offering price of $6.00 per share appreciating at 5% and 10%
compounded annually from the date of the option grant until the
termination date of the option. These gains do not represent the Company's
estimate or projection of the future common stock price.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at December 31, 1999 December 31, 1999(1)
Acquired Value ---------------------------- -------------------------
Name on Exercise Realized Exercisable(2) Unexercisable Exercisable Unexercisable
---- ----------- --------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jean Louis F. Gassee.... -- -- 93,750 406,250 $1,669,969 $7,236,531
Steve M. Sakoman........ -- -- 386,875 203,125 8,472,404 3,618,266
Wesley S. Saia.......... 57,288 $1,286,86 223,947 203,125 4,812,553 3,618,266
Roy Graham.............. -- -- 285,000 -- 5,076,705 --
</TABLE>
- --------
(1) The amount set forth represents the difference between the fair market
value of the underlying common stock as of December 31, 1999 ($22.813) and
the exercise price of the option, multiplied by the number of shares
underlying the option.
(2) The shares listed for Messrs. Sakoman and Saia include an unvested portion
of options which may be exercised prior to vesting under the Company's
1992 Stock Option Plan and will be subject to the Company's right of
repurchase.
11
<PAGE>
Employment, Severance and Change of Control Agreements
Wesley S. Saia, the Company's former Vice President and Chief Financial
Officer, entered into an at-will employment agreement with us on June 22,
1998. The agreement provided that Mr. Saia is entitled to a severance package
consisting of six months salary in the event that his employment is terminated
without cause or resulting from our change in control. This employment
agreement also entitles him to all company benefits for a period of six months
from the date of written notice of termination. Mr. Saia resigned as Vice
President and Chief Financial Officer on February 29, 2000.
Roy Graham, the Company's former Executive Vice President, Sales and
Marketing, entered into a separation agreement with us on November 2, 1999.
This agreement which we entered into in connection with Mr. Graham leaving the
Company provides for, among other things, a severance payment of $135,000 and
the immediate vesting of 125,000 shares of common stock subject to unvested
stock options held by Mr. Graham. The agreement also provides for a release by
Mr. Graham of any claims against us including any arising under Mr. Graham's
employment with the Company or the termination of that employment.
We have entered into a Change of Control Agreement with all of our officers
and certain other employees. These agreements, provide that, among other
things, if employee's employment is terminated without cause or if at any time
during the period starting six months prior to the date of a change of control
of Be and ending eighteen months following the change of control, employee
resigns for good reason which includes any material reduction in the package
of benefits and incentives provided to the employee or elimination of
employee's duties or responsibilities, then the employee shall be entitled to
a severance payment equal to twelve months of employee's base salary
immediately prior to the termination and all of the unvested options issued to
employee shall be accelerated in full and immediately exercisable. The
agreement also provides for a release by employee of any claim against us
including any arising under the employee's employment or termination of
employment with us.
12
<PAGE>
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION/1/
The Compensation Committee of the Board of Directors (the "Committee") is
composed of three non-employee directors. The Committee is responsible for
determining salaries, incentive compensation, and awarding stock options for
our employees and officers and established policies governing our stock
programs. The Committee was formed in May 1999 and it did not meet during the
fiscal year ended December 31, 1999. The determination of executive
compensation, stock options grants and compensation policies for the year
ended 1999 was made by the Company's Board of Directors
Compensation Policy
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract,
retain and award the highest quality executive officers and key employees. The
key elements of this policy are:
. The Company pays competitively with leading software and other
technology companies with which the Company competes for talent.
. The Company provides significant equity-based incentives for executives
and employees to ensure that they are motivated over the long-term to
respond to the Company's business challenges and opportunities as owners
and not just as employees.
. The Company rewards executives and key employees who contribute to the
Company's progress and long-term success.
Base Salary and Long-Term Incentives for Executives
The executive officers' salary in 1999 was established by the Board based on
determination of several factors, including, individual and corporate
performance, levels of responsibility, prior experience, breadth of knowledge
and competitive pay practices. In general, the salaries and stock options
awarded to executive officers are not determined by the Company's achievement
of specific corporate performance criteria but rather a subjective evaluation
of the officer's performance and contribution to the Company's long-term
success. The Board increased executive officers' base salaries in 1999, in the
average of approximately 30%, to bring the salaries with what it believed to
be in line with those for executives of public software and other technology
companies and to reflect each of the officers' contributions to the Company's
progress. There were no bonuses awarded to executives in 1999.
In awarding stock options prior to the formation of the Committee, the Board
of Directors considered individual performance, overall contribution to the
Company, officer retention, the number of unvested stock options and the total
number of stock options to be awarded. The stock options awarded in 1999 to
each of the existing executive officers was equal to or less than those
awarded to the officer in the prior year and reflect the Company's
compensation policy to retain and reward executives and employees contributing
to the Company's accomplishments in 1999 and overall long-term success. In the
year ending December 31, 1999, the Company's key accomplishments includes:
. Completion of the initial public offering;
. Further development and progress of the Company's software platform
intended for the Internet appliance market;
- --------
/1/The material in this report is not "soliciting material," is not deemed
"filed" with the SEC and is not to be incorporated by reference in any filing
of the Company under the Securities Act of 1933, as amended, or the Exchange
Act of 1934, as amended, whether made before or after the date of this Proxy
Statement and irrespective of any general incorporation language contained in
such filing.
13
<PAGE>
. Established relationships with key technology partners such as Sun
Microsystems, Intel Corporation, RealNetworks and Opera Software;
. Released version 4.5 of BeOS; and
. Established relationships with key device manufacturers and OEMs in the
Internet appliance market such National Semiconductor and Compaq
Computer Corporation.
Chief Executive Officer Compensation.
The Committee uses the same procedures described above in setting the annual
salary and stock option awards for Jean-Louis Gassee, the Company's Chief
Executive Officer. Mr. Gassee's base annual salary for 1999 was increased from
$200,000 to $300,000. In setting this amount, the Board took into account (i)
Mr. Gassee's significant and broad-based experience in the software and
computer industry and general acknowledgment as a leading executive in the
software industry; (ii) the scope of Mr. Gassee's increased responsibilities,
especially as the Company progressed towards becoming a public company, and
(iii) the Board's confidence in Mr. Gassee to lead the Company's overall
management, development and marketing efforts, especially as a public Company.
In awarding stock options, the Committee considers the CEO's performance,
overall contribution to the Company, retention, the number of unvested options
and the total number of options to be granted. The number of options granted
to Mr. Gassee in 1999 was same as those in 1998.
Section 162(m) of the Internal Revenue Code (the "Code") limits the Company
to a deduction for federal income tax purposes of no more than $1 million of
compensation paid to certain named executive officers in a taxable year.
Compensation above $1 million may be deducted if it is "performance-based
compensation" within the meaning of the Code. The Compensation Committee has
not yet established a policy for determining which forms of incentive
compensation awarded to its named executive officers shall be designed to
qualify as "performance-based compensation."
The Board of Directors
Jean-Louis F. Gassee
Stewart Alsop
Garrett P. Gruener
Andrei M. Manoliu
Christian E. Marchandise
Barry M. Weinman
William F. Zuendt
14
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Company's Compensation Committee of the Board of
Directors is currently or has been, at any time since our formation, an officer
or employee of the Company. The Company's full Board of Directors set the
Company's compensation policies and determined the compensation of executive
officers with respect to 1999 compensation.
PERFORMANCE MEASUREMENT COMPARISON/1/
The following graph shows the total stockholder return of an investment of
$100 in cash on July 20, 1999 for (i) the Company's common stock, (ii) the
Nasdaq Stock Market Index and (iii) the S&P Computers (Software & Services)
Index. All values assume reinvestment of the full amount of all dividends and
are calculated as of December 31 of each year:
COMPARISON OF 5 MONTH CUMULATIVE TOTAL RETURN
AMONG BE INCORPORATED, THE NASDAQ STOCK MARKET (U.S) INDEX
AND THE S & P COMPUTERS (SOFTWARE & SERVICES) INDEX
<TABLE>
<CAPTION>
NASDAQ S&P
Measurement Period BE STOCK MARKET COMPUTERS
(Fiscal Year Covered) INCORPORATED INDEX INDEX
- --------------------- --------------- ------------ ----------
<S> <C> <C> <C>
Measurement Pt-07/20/1999 $100.00 $100.00 $100.00
FYE 07/1999 $113.54 $ 98.23 $ 93.82
FYE 08/1999 $104.17 $102.34 $ 98.70
FYE 09/1999 $117.71 $102.42 $101.90
FYE 10/1999 $ 95.83 $110.42 $106.56
FYE 11/1999 $239.58 $123.32 $113.62
FYE 12/1999 $380.22 $150.90 $143.93
</TABLE>
- --------
/1/This Section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the Company
under the 1933 Act or the 1934 Act whether made before or after the date hereof
and irrespective of any general incorporation language in any such filing.
15
<PAGE>
CERTAIN TRANSACTIONS
On July 20, 1999, some of our existing stockholders purchased shares offered
in connection with our initial public offering at the offering price of $6.00
per share, with the exception of 1,000 shares purchased by an entity
affiliated with Mr. Weinman, one of our directors, at a price of $8.40 per
share. The purchasers of our common stock in our initial public offering
included, among others, the following directors, entities associated with
directors, and holders of 5% or more of our common stock:
<TABLE>
<CAPTION>
Common
Investor Stock
-------- -------
<S> <C>
Alta California Partners, L.P. .................................... 100,000
Barry M. Weinman................................................... 103,000
Jean Louis F. Gassee............................................... 50,000
New Enterprise Associates, VI L.P. ................................ 200,000
</TABLE>
For purposes of the above table, shares held by all affiliated persons and
entities have been aggregated.
We have entered into indemnification agreements with our directors and
certain of our other officers for the indemnification of and advancement of
expenses to these persons to the full extent permitted under Delaware law and
the Company's Bylaws. We also intend to execute these agreements with our
future directors and certain other officers.
We believe that each of the foregoing transactions were in our best
interest. As a matter of policy the transactions were, and all future
transactions between ourselves and any of our officers, directors or principal
stockholders will be, approved by a majority of the independent and
disinterested members of the board of directors. Furthermore, the transactions
will be on terms no less favorable to us than could be obtained from
unaffiliated third parties and will be in connection with bona fide business
purposes.
16
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Daniel S. Johnston
Daniel S. Johnston
Secretary
April 24, 2000
17
<PAGE>
[LOGO OF BE]
ANNUAL MEETING OF STOCKHOLDERS
Tuesday, May 30, 2000
11:00 a.m.
Holbrook Palmer Park - The Pavilion
150 Watkins Avenue
Atherton, CA 94027
800 El Camino Real
Menlo Park, CA 94025 PROXY
- --------------------------------------------------------------------------------
This proxy is solicited by the Board of Directors for use at the Annual Meeting
on May 30, 2000.
The shares of stock you hold in your account will be voted as you specify on
the reverse side.
If no choice is specified, the proxy will be voted "FOR" items 1 and 2.
By signing the proxy, you revoke all prior proxies and appoint Jean-Louis F.
Gassee and Daniel S. Johnston, and each of them, with full power of
substitution, to vote your shares on the matters shown on the reverse side and
any other matters which may come before the Annual Meeting and all
adjournments.
See reverse for voting instructions.
<PAGE>
--------------------
COMPANY #
CONTROL #
--------------------
There are three ways to vote your Proxy
Your telephone or internet vote authorizes the Named Proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy
card.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326
. Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. on May 26, 2000.
. You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
. Follow the simple instructions the Voice provides you.
VOTE BY INTERNET -- HTTP://WWW.EPROXY.COM/BEOS/
. Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. on May 26, 2000.
. You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Be Incorporated, c/o Shareowner Services-, P.O.
Box 64873, St. Paul, MN 55164-0873.
If you vote by Phone or Internet, please do not mail your Proxy Card
Please detach here
The Board of Directors Recommends a Vote FOR Items 1 and 2.
<TABLE>
<S> <C> <C> <C>
1. To elect two (2) directors to hold office until 01 Christian E. Marchandise [ ] Vote FOR [ ] Vote WITHHELD
the 2003 Annual Meeting of Stockholders 02 William F. Zuendt all nominees from all nominees
(except as marked)
(Instructions: To withhold authority to vote for any indicated nominee, -----------------------------------------------
write the number(s) of the nominee(s) in the box provided to the right.)
-----------------------------------------------
2. To ratify selection of PricewaterhouseCoopers LLP as independent auditors of
the Company for its fiscal year ending December 31, 2000 [ ]For [ ] Against [ ] Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
---
Address Change? Mark Box [ ]
Indicate changes below:
Date__________________________
-----------------------------------------------
-----------------------------------------------
Signature(s) in Box
Please sign exactly as your name(s) appear on
Proxy. If held in joint tenancy, all persons
must sign. Trustees, administrators, etc.,
should include title and authority. Corporations
should provide full name of corporation and
title of authorized officer signing the proxy.
</TABLE>
