The no-beep option causes the mysql command line client not to beep when errors occur.
If that's an option you want, it should be in the [mysql] section of your my.cnf. This error suggests that it's in the [client] section of your my.cnf, which causes mysql_upgrade to throw the error since the option isn't recognized.
Check your my.cnf and either remove the line or place it in the [mysql] section instead of [client] and you should be good.
The [client] option group is read by all client programs (but not by
mysqld). This enables you to specify options that apply to all
clients. For example, [client] is the perfect group to use to specify
the password that you use to connect to the server. (But make sure
that the option file is readable and writable only by yourself, so
that other people cannot find out your password.) Be sure not to put
an option in the [client] group unless it is recognized by all client
programs that you use. Programs that do not understand the option quit
after displaying an error message if you try to run them.
-- http://dev.mysql.com/doc/refman/5.5/en/option-files.html
