UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 12, 2006
SBE, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-8419 94-1517641
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4000 Executive Parkway, Suite 200
San Ramon, CA 94583
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (925) 355-2000
Not Applicable
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01. Other Events.
On January 12, 2006, the Board of Directors (the "Board") of SBE, Inc.
("SBE") approved a company-wide reduction in employee base salaries, effective
January 16, 2006. In order to continue to motivate and retain SBE's 40 employees
despite such salary reductions, the Board also approved restricted stock grants
to all employees of the Company pursuant to the Company's 1996 Stock Option
Plan. A total of 233,381 shares of the Company's Common Stock will be issued
pursuant to such restricted stock grants. Such stock grants will vest in five
ratable semi-monthly installments, for so long as the employees continue to act
as employees (or directors or consultants) of the Company, with the first
installment vesting on January 31, 2006. The salary reductions will remain in
effect until such time as the Board determines to increase them.
The employee salary and director fee reduction was adopted in order to
reduce the Company's cash operating expenses in the short-term while continuing
to develop the Company's next-generation Voice over IP and IP based storage
software products. The Company expects to have cash savings of approximately
$550,000 per quarter as a result of such salary and director fee reductions and
other cost savings measures. With these cash savings, the Company expects to
have sufficient cash resources to execute its business plan of developing and
selling the next generation of IP based voice and storage products. The Company
expects that employees of the Company will sell shares granted pursuant to such
stock grants as they vest in order to cover their personal expenses, and that
such selling may have a depressive effect on the Company's stock price in the
short term.
All officers of the Company were included in this salary reduction and
stock bonus program. The current and new base salaries of, and stock grants made
to, the executive officers of the Company is as follows:
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Total number of shares
Base salary before Base salary after subject to restricted
Name and Title reduction reduction stock grant
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Daniel Grey, Chief Executive Officer $200,000 $140,000 11,364
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David Brunton, Chief Financial Officer $170,000 $119,000 9,659
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Andre Hedrick, Chief Technical Officer $175,000 $122,500 9,943
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Greg Yamamoto, Vice President and $175,000 $122,500 9,943
General Manager, Storage
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In addition, the Board also approved the suspension of all cash Board
and Board committee fees, indefinitely. In place of such cash payments, the
Board made a restricted stock grant of 10,227 shares to Ronald Ritchie, SBE's
Chairman of the Board, and restricted stock grants of 6,818 shares to each of
the three other non-employee members of the Board, Mel Stuckey, John Reardon and
William B. Heye, Jr. Such stock grants will vest in three equal monthly
installments, for so long as the directors continue to act as directors (or
employees or consultants) of the Company, with the first installment vesting on
January 31, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: January 13, 2006
SBE, INC.
By: /S/ DAVID BRUNTON
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David Brunton
Chief Financial Officer