FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 1997
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM____TO____
Commission file number: 0-28096
-----------------------------
THE YORK GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0490631
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
9430 OLD KATY ROAD, HOUSTON, TEXAS 77055
(Address of principal executive offices) (Zip Code)
(713) 984-5500
(Registrant's telephone number, including area code)
------------------------------
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [_]
The number of shares outstanding of the registrant's common stock as of August
12, 1997 was 8,892,550.
<PAGE>
THE YORK GROUP, INC.
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1997 (Unaudited) and December 31, 1996 ....... 2
Consolidated Statements of Income (Unaudited) -
Three months ended June 30, 1997 and 1996
Six months ended June 30, 1997 and 1996 ............... 3
Consolidated Statements of Cash Flows (Unaudited) -
Six months ended June 30, 1997 and 1996 ............... 4
Notes to Consolidated Financial Statements (Unaudited) .. 5
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition ................. 7
Part II. Other Information
Item 2. Changes in Securities ................................... 9
Item 4. Submission of matters to a vote of Security Holders ..... 9
Item 6. Exhibits and Reports on Form 8-K ........................ 9
Signature ............................................................... 10
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE YORK GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(Unaudited) (Audited)
June 30, December 31,
1997 1996
---------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ...................... $ 29,395 $ 32,056
Trade accounts and notes receivable, net
of allowance for doubtful accounts and
returns and allowances of $2,808 in 1997
and $1,755 in 1996:
Stockholders and affiliates ................. 4,134 5,377
Other ....................................... 15,260 6,848
Inventories (Note 3) .......................... 30,067 19,101
Prepaid expenses ............................... 2,211 1,555
Deferred tax asset ............................. 3,063 2,258
---------- ----------
Total current assets ....................... 84,130 67,195
---------- ----------
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements .......................... 3,993 2,956
Buildings and improvements ..................... 12,063 10,515
Equipment ...................................... 33,831 31,092
Construction-in-progress ....................... 2,928 1,134
---------- ----------
52,815 45,697
Less: accumulated depreciation ................. (19,338) (16,377)
---------- ----------
Property, plant and equipment, net ........... 33,477 29,320
---------- ----------
NOTES RECEIVABLE:
Related party .................................. 100 175
Other .......................................... 880 171
GOODWILL ......................................... 8,343 2,806
OTHER NONCURRENT ASSETS .......................... 482 268
---------- ----------
TOTAL ASSETS ................................... $ 127,412 $ 99,935
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt .............. $ 91 $ 70
Accounts payable ............................... 4,648 3,699
Accrued expenses ............................... 14,920 9,599
---------- ----------
Total current liabilities .................. 19,659 13,368
---------- ----------
OTHER NONCURRENT LIABILITIES ..................... 1,075 1,275
---------- ----------
DEFERRED TAX LIABILITY ........................... 5,836 4,149
---------- ----------
LONG-TERM DEBT (Note 5) .......................... 29,586 25,097
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000,000
shares authorized and unissued
Common stock, $.01 par value, 25,000,000
shares authorized; 8,494,695 and
7,999,864 shares issued and outstanding ..... 85 80
Additional paid-in capital ..................... 39,957 30,939
Retained earning ............................... 31,214 25,027
---------- ----------
Total stockholders' equity .................. 71,256 56,046
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..... $ 127,412 $ 99,935
========== ==========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
THE YORK GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES (including sales to
stockholders and affiliates
of $14,622 and $19,921 for the
three months ended June 30,
1997 and 1996, respectively,
and $32,678 and $42,653 for the
six months ended June 30, 1997
and 1996, respectively) .............. $ 43,439 $ 35,197 $ 86,446 $ 73,863
COST OF SALES .......................... 33,485 27,498 65,850 57,351
------------ ------------ ------------ ------------
Gross Profit ...................... 9,954 7,699 20,596 16,512
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES ............. 4,932 2,993 9,428 5,805
------------ ------------ ------------ ------------
Operating income .................. 5,022 4,706 11,168 10,707
INTEREST EXPENSE, NET .................. (91) (62) (213) (752)
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM ............... 4,931 4,644 10,955 9,955
INCOME TAX PROVISION ................... 1,849 1,738 4,108 3,726
------------ ------------ ------------ ------------
INCOME BEFORE EXTRAORDINARY ITEM ....... 3,082 2,906 6,847 6,229
EXTRAORDINARY ITEM,
less applicable tax (Note 5) ...... -- (736) -- (736)
------------ ------------ ------------ ------------
NET INCOME ............................. $ 3,082 $ 2,170 $ 6,847 $ 5,493
============ ============ ============ ============
EARNINGS PER SHARE:
Income before extraordinary item .. $ .37 $ .37 $ .82 $ .91
============ ============ ============ ============
Net income ........................ $ .37 $ .27 $ .82 $ .80
============ ============ ============ ============
AVERAGE SHARES OUTSTANDING ............. 8,437,142 7,926,839 8,321,665 6,842,321
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
THE YORK GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
------------------------
1997 1996
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ....................................... $ 6,847 $ 5,493
Adjustments to reconcile income to net cash
provided by operating activities --
Depreciation and amortization ................. 2,316 1,861
Deferred income tax provision ................. 382 120
Loss on disposition of property, plant
and equipment ................................ 12 16
Provision for doubtful accounts ............... 31 30
Decrease/(increase) in:
Accounts receivable ......................... (10) 39
Inventories ................................. (687) 1,118
Prepaid expenses ............................ (375) (456)
Other noncurrent assets ..................... (208) 1,178
Increase/(Decrease) in:
Accounts payable ............................ (954) (192)
Accrued expenses ............................ 3,626 1,538
Income taxes payable ........................ -- (56)
---------- ----------
Net cash provided by operating activities ... 10,980 10,689
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ............................. (3,427) (1,949)
Collection of notes receivable ................... 168 128
Acquisitions, net of cash acquired of $3,783 ..... (6,882)
---------- ----------
Net cash used in investing activities ....... (10,141) (1,821)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid ................................... (660) (1,004)
Repayment of line of credit ...................... -- (175)
Repayment of long-term debt ...................... (2,860) (11,011)
Proceeds from issuance of common stock,
net of issuance costs .......................... 20 25,773
---------- ----------
Net cash (used in) provided by financing
activities ................................ (3,500) 13,583
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ................................... (2,661) 22,451
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..... 32,056 10,867
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........... $ 29,395 $ 33,318
========== ==========
Supplemental schedule of noncash investing
and financing activities:
Details of acquisitions (Note 2)
Fair value of assets acquired ................. $ 27,881
Debt issued ................................... (4,500)
Liabilities assumed ........................... (7,496)
Common stock issued ........................... (9,003)
----------
Cash paid $ 6,882
==========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
THE YORK GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of The
York Group, Inc. and all wholly-owned subsidiaries (the "Company") and have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. These
consolidated financial statements should be read in conjunction with the
Company's December 31, 1996 audited financial statements and the notes thereto.
In the opinion of the Company, all adjustments and eliminations, consisting only
of normal and recurring adjustments, necessary to present fairly the
consolidated financial position of the Company as of June 30, 1997 and December
31, 1996 and the consolidated results of its operations and cash flows for the
three and six month periods ended June 30, 1997 and 1996 have been included. The
results of operations for such interim periods are not necessarily indicative of
results for the full year.
2. ACQUISITIONS
On January 17, 1997, the Company completed the acquisition of substantially all
the business assets and assumed the associated debts and liabilities of Houston
Casket Company, a casket distributor, for $2.3 million in cash, $2.5 million of
notes and $2.0 million of convertible notes. The acquisition was accounted for
using the purchase method of accounting.
On May 13, 1997 the Company acquired all of the outstanding common stock of West
Point Casket Company, Inc. for a combination of 493,331 shares of the Company's
common stock and $7.8 million in cash. West Point Casket Company is an assembler
and distributor of caskets and a manufacturer of metal burial vaults. The
acquisition has been accounted for using the purchase method of accounting.
The following unaudited pro forma information has been prepared assuming that
the acquisitions of Houston Casket Company and West Point Casket Company, Inc.
had occurred at the beginning of the periods presented. Permitted pro forma
adjustments include only the effects of events directly attributable to a
transaction that are factually supportable and expected to have a continuing
impact. Pro forma adjustments reflecting anticipated "efficiencies" in
operations resulting from a transaction are, under most circumstances, not
permitted. As a result of the limitations imposed with regard to the types of
permitted pro forma adjustments, the Company believes that this unaudited pro
forma information is not indicative of future results of operations, nor the
results of historical operations had the acquisitions been consummated as of the
assumed dates.
(Unaudited)
PRO FORMA FINANCIAL
INFORMATION FOR THE
SIX MONTHS ENDED JUNE 30,
---------------------------
1997 1996
---------- ----------
(in thousand, except per share amounts)
Net sales ............................. $ 93,344 $ 85,941
Income before extraordinary item,
less applicable tax ................ $ 6,796 $ 6,292
Net income ............................ $ 6,796 $ 5,556
Earnings per share:
Income before extraordinary item ... $ .78 $ .85
Net income ......................... $ .78 $ .75
5
<PAGE>
3. INVENTORIES
June 30, December 31,
1997 1996
---------- ----------
(in thousands)
Raw materials ........................ $ 8,812 $ 7,414
Work in process ...................... 2,617 2,568
Finished goods ....................... 18,638 9,119
---------- ----------
$ 30,067 $ 19,101
========== ==========
4. CONTINGENCIES
ENVIRONMENTAL MATTERS
In 1991, the Georgia Department of Natural Resources (the GDNR) issued a Notice
of Violation - Consent Order alleging that the Company's Lawrenceville, Georgia
facility was storing and treating hazardous wastes without a permit and was
otherwise in violation of certain hazardous waste regulations in the operation
of its electroplating line and associated waste water treatment system. The GDNR
approved a closure-plan and post-closure plan for the facility in August 1994,
and issued a Hazardous Waste Facility Permit effective September 27, 1995 to
document the post-closure care requirements. The Company has provided financial
assurance in the form of a letter of credit in the amount of approximately
$1,100,000 to secure its post-closure care obligations.
At June 30, 1997 and December 31, 1996, the Company had reserves of
approximately $1,200,000 and $1,500,000, respectively, for estimated costs to
complete the implementation of the post-closure plan. Actual remediation costs
may differ from estimates due to unforeseen factors which may arise as the
closure occurs. Accordingly, these reserves may be adjusted as additional
information becomes available.
5. CAPITALIZATION EVENT
In April 1996, the Company completed an initial public offering (the "Offering")
of 2,145,000 shares of its common stock. Proceeds to the Company from the
Offering, after deduction of associated expenses, were approximately
$25,300,000. The Company utilized a portion of the proceeds of the Offering to
repay its $11,000,000 Subordinated Series A Note, which was originally issued at
a discount. The early extinguishment of this debt resulted in an extraordinary
charge of $736,000, net of tax, during the three month period ended June 30,
1996, related to the write-off of the unamortized discount.
6. SUBSEQUENT EVENT
On July 31, 1997 the Company acquired all of the outstanding common stock of
Elder Davis, Inc., a manufacturer of cloth covered caskets and cremation
containers, for 387,255 shares of the Company's common stock, for a total
consideration of approximately $7.6 million. This transaction will be accounted
for as a pooling of interests.
7. PENDING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement No 128, "Earnings per Share" (SFAS No. 128). SFAS No. 128 is effective
for financial statements issued for periods ending after December 15, 1997 and
early adoption is prohibited. The Company will adopt SFAS No. 128 in the year
ending December 31, 1997, upon adoption, SFAS No. 128 will require restatement
of prior years' Earnings per Share. Management anticipates the impact of
adoption to be immaterial.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The Company is the second largest casket manufacturer in the United
States and produces a wide variety of metal and wood caskets, as well as casket
components. The Company's finished caskets are primarily marketed through a
network of Company and privately owned distributors, which serve an estimated
15,000 domestic funeral homes, as well as certain foreign markets. Casket
components are sold to other casket manufacturers and assemblers.
In April 1996, the Company completed an initial public offering of
2,145,000 shares of its common stock. A portion of the net proceeds of
approximately $25.3 million was used to repay the Company's subordinated debt,
with the remainder designated for general corporate purposes, including
potential acquisitions.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Net sales increased $8.2 million, or 23.4%. This reflects an increase in
finished casket volume from operations owned in both periods, net price
increases, and additional net sales from operations acquired during the fourth
quarter of 1996 and the first six months of 1997. The increase was partially
offset by a decline in sales of casket components.
Gross profit increased $2.3 million, or 29.3%. Gross margin increased
from 21.9% to 22.9%. The gross margin was affected by net price and volume
increases and the incremental margin from acquired distribution operations.
Selling, general and administrative expenses increased $1.9 million, or
64.8%, and as a percentage of net sales increased from 8.5% to 11.4%. The
increase in selling, general and administrative expenses as a percentage of net
sales primarily reflects such expenses for distribution companies acquired in
late 1996 and in 1997, as well as expenses associated with the development of
the Company's merchandising services business in 1997.
Net interest expense increased $29,000, or 46.8%. The increase reflects
the use of cash and issuance of debt for acquisitions, partially offset by
higher earnings rates on invested cash balances.
The Company's effective tax rate was 37.5% in both periods.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
Many of the factors that affected second quarter results also had an
impact on year to date results. Refer to the second quarter comparison for
additional discussion.
Net sales increased $12.6 million, or 17.0%. The increase reflects an
increase in finished casket volume from operations owned in both periods, net
price increases, and net sales of operations acquired in late 1996 and the first
six months of 1997, with sales of casket components approximating 1996 levels.
7
<PAGE>
Gross profit increased $4.1 million, or 24.7%. Gross margin increased
from 22.4% to 23.8%.
Selling, general and administrative expenses increased $3.6 million, or
62.4%, and as a percentage of net sales, increased from 7.9% to 10.9%.
Net interest expense decreased $539,000, or 71.7%. The decrease reflects
the early extinguishment of the Company's $11 million Subordinated Series A Note
in April 1996, and higher interest income due to higher invested cash balances
and slightly higher investment interest rates.
The Company's effective tax rate was 37.5% in both periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically relied on cash flows from operations as
well as borrowings from banks and other lenders to fund its operations.
Cash and cash equivalents were $29.4 million at June 30, 1997, a
decrease of $2.7 million from December 31, 1996. For the six months ended June
30, 1997, cash provided by operations totaled $11.0 million, cash used in
investing activities totaled $10.1 million and cash used in financing activities
totaled $3.5 million.
The Company utilized approximately $6.9 million of cash for acquisitions
during the first six months of 1997, net of cash acquired.
Long-term debt at June 30, 1997 totaled $29.6 million compared to $25.1
million at December 31, 1996, with the increase attributable to the issuance of
debt related to the Houston Casket acquisition. Long-term debt at June 30, 1997
consisted primarily of $25.0 million of Senior Notes, $2.5 million in promissory
notes and $2.0 million in convertible notes.
The Company maintains a $6.0 million unsecured revolving credit facility
with a major bank which expires January 31, 1998. The revolving credit facility
provides for borrowings and the issuance of letters of credit up to the lesser
of $6.0 million or a borrowing base, consisting of accounts receivable and
inventory. At June 30, 1997, no borrowings were outstanding, $2.3 million of
letters of credit were outstanding and $3.7 million was available under the
revolving credit facility.
The Company's capital resources consist of its cash balances at June 30,
1997, future cash flows from operations and the borrowing capacity under the
revolving credit facility. The Company believes that these resources will be
sufficient to fund capital expenditures and meet other operating requirements
for the foreseeable future. Future acquisitions will be funded by available
cash, additional debt and future offerings of shares.
Historically, the Company's operations have experienced certain seasonal
patterns. Generally, the Company's net sales are highest in the first quarter
and lowest in the third quarter of each year. These fluctuations are due in part
to the seasonal variances in the death rate, with a greater number of deaths
generally occurring in cold weather months, and the timing of the Company's
annual manufacturing facilities vacation shutdowns, which occur primarily in the
third quarter. In addition, operating results can vary between quarters of the
same or different years due to, among other things, fluctuations in the number
of deaths, changes in product mix, limitations on the timing of price increases,
and variance in the cost of raw materials. As a result, the Company experiences
variability in its operating results on a quarterly basis, which may make
quarterly year-to-year comparisons less meaningful.
INFLATION
Historically, inflation has not had a material impact on the results of
operations of the Company nor is it anticipated to have a material impact for
the foreseeable future.
8
<PAGE>
PART II. OTHER INFORMATION
Item 2. Changes in Securities
Effective May 13, 1997, the Company issued 493,331 shares of its
common stock pursuant to Section 4(2) of the Securities Act of
1933, to acquire the outstanding common stock of West Point
Casket Company, Inc.
Item 4. Submission of Matters to a Vote of Security Holders
On April 29, 1997 the Company held its annual meeting of
stockholders to elect directors. The following table sets forth
the name of each director, and the number of votes cast for each
director or withheld.
NAME FOR WITHHELD AUTHORITY
---- --- ------------------
Bruce E. Elder .......... 7,057,656 32,238
Eldon P. Nuss ........... 7,086,731 3,163
Kirk P. Pendleton ....... 7,086,631 3,263
Robert T. Rakich ........ 7,085,231 4,663
Bill W. Wilcock ........ 7,072,131 17,763
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 - The York Group, Inc. Non-Employee Director Cash
and Equity Compensation Plan
27 - Financial data schedule
(b) Reports on Form 8-K
Form 8-K filed on May 23, 1997, as amended by Form 8-K/A
filed on July 25, 1997
9
<PAGE>
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.
August 14, 1997 THE YORK GROUP, INC.
By: /S/ DAVID F. BECK
David F. Beck
Vice President and Chief Financial Officer
(Principal Financial Officer and Duly
Authorized Officer)
10
EXHIBIT 10.1
THE YORK GROUP, INC.
NON-EMPLOYEE DIRECTORS CASH AND EQUITY COMPENSATION PLAN
ELECTION FORM
FOR THE PLAN YEAR ENDING DECEMBER 31, 19__
DIRECTOR INFORMATION
Name: ______________________________________________________
Social Security Number: ______________________________________________________
Address: ______________________________________________________
______________________________________________________
______________________________________________________
Telephone: ______________________________________________________
Instructions: If this is the first Election Form executed by you under The York
Group, Inc. Non-Employee Directors Cash And Equity Compensation Plan ("Plan"),
complete the form in full. If this is not the first Election Form executed by
you under the Plan, complete only the Section(s) you want changed from prior
elections that are currently effective. In general, this election shall be
effective as of the first day of the Plan Year that follows the date of this
election. However, if you first become eligible to participate in the Plan
during the Plan Year, the effective date of your election will be provided to
you upon receiving this Election Form.
I. ELECTION TO RECEIVE 100% OF THE ANNUAL RETAINER AND MEETING FEES IN THE FORM
OF CASH OR COMPANY SHARES
I hereby acknowledge having received a copy of the Plan document setting forth
the terms of the Plan. I understand that 50% of the annual retainer and meeting
fees will be paid to me in the form of cash and 50% in the form of Company
Shares unless I elect as follows:
I hereby elect to receive 100% of the annual retainer and meeting fees
_____ paid to me in the form of cash.
I hereby elect to receive 100% of the annual retainer and meeting fees
_____ paid to me in the form of Company Shares.
<PAGE>
II. DEFERRAL OF FEES ELECTION
I hereby elect to defer the portion of the annual retainer and meeting
_____ fees which were to be paid to me in the form of cash.
I hereby elect to defer the portion of the annual retainer and meeting
_____ fees which were to be paid to me in the form of Company Shares.
I hereby acknowledge having received a copy of the Plan document setting forth
the terms of the Plan. I hereby elect to defer my annual retainer and meeting
fees as indicated above. I hereby revoke any prior elections made by me under
the Plan. This election relates only to services performed and amounts earned by
me after the date hereof. I understand that a contribution credit equal to my
election will be made under the Plan for my benefit and that this election is
subject to all of the applicable terms of the Plan.
III. DESIGNATION OF DEATH BENEFIT BENEFICIARY/IES
I hereby revoke any prior designations of death benefit beneficiary/ies under
the Plan, and I hereby designate the following beneficiary/ies to receive any
benefit payable on account of my death under the Plan, subject to my right to
change this designation and subject to the terms of the Plan. I acknowledge that
the beneficiary election made herein will continue indefinitely until
subsequently changed by me on another Election Form.
A. Primary Beneficiary/ies
Name, Address, Phone _________________________________
Relationship to Participant _________________________________
% of Plan Account _________________________________
Date of Birth (if applicable) _________________________________
Social Security or Tax Identification Number _________________________________
B. Contingent Beneficiary/ies (will receive indicated portions of Plan benefit
if no Primary Beneficiary/ies survive the Non-Employee Director)
Name, Address, Phone _________________________________
Relationship to Participant _________________________________
% of Plan Account _________________________________
Date of Birth (if applicable) _________________________________
Social Security or Tax Identification Number _________________________________
_________________________________ _________________________________
Signature Date
<PAGE>
EXHIBIT 10.1
THE YORK GROUP, INC.
NON-EMPLOYEE DIRECTOR
CASH AND EQUITY COMPENSATION PLAN
<PAGE>
THE YORK GROUP, INC.
NON-EMPLOYEE DIRECTOR
CASH AND EQUITY COMPENSATION PLAN
1. PURPOSE.
The primary purpose of the Non-Employee Director Cash and Equity
Compensation Plan is to advance the interests of The York Group, Inc. and
its shareholders by providing for the payment of up to 100 percent of the
compensation of Non-Employee Directors in the form of equity or equity
equivalents by the grant to such Non-Employee Directors of Stock and
Deferred Stock Units under the terms set forth herein. By thus
compensating Non-Employee Directors and increasing their equity or equity
equivalent position in the Company, the Company seeks to attract, retain,
compensate and motivate those highly competent individuals upon whose
judgment, initiative, leadership, and continued efforts the success of the
Company in large measure depends.
2. DEFINITIONS.
As used herein, the following terms shall have the meanings hereinafter
set forth:
(a) "Annual Fee" shall mean a Non-Employee Director's annual retainer
fee, as set from time to time by the Board.
(b) "Annual Meeting" means the Annual Meeting of the shareholders of the
Company.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change-in-Control" means a change in the ownership of the Company,
a change in the effective control of the Company, or a change in the
ownership of a substantial portion of the assets of the Company.
Such determination shall be made by the Board.
(e) "Company" shall mean The York Group, Inc., a Delaware corporation,
and its successors.
(f) "Deferred Stock Units" means the equivalent of one Share, as
established pursuant to the Plan.
(g) "Dividend Date" means each regular quarterly cash dividend payment
date on Stock.
(h) "Effective Date" means the date at which the Plan is adopted by the
Board.
2
<PAGE>
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value Per Share" as of any date means the average of
the closing bid and asked prices for the shares in the NASDAQ market
on such date.
(k) "Meeting Fees" shall mean the fees paid each Non-Employee Director
for attending a Board or Board committee meeting, as set from time
to time by the Board.
(l) "Non-Employee Director" means any person who is a member of the
Board and who is not, as of the date of an award under the Plan, an
employee of the Company or any of its subsidiaries.
(m) "Payment Date" means the date or day during the Plan Year, as
designated by the Company, in which payment of an amount in Shares
and/or cash, equal to the Annual Fee, as well as any accrued Meeting
Fees, will be paid to Non-Employee Directors.
(n) "Plan" means The York Group, Inc. Non-Employee Director Cash and
Equity Compensation Plan.
(o) "Plan Year" means the calendar year.
(p) "Share" or "Stock" means a share of the Company's Common Stock,
$0.01 par value.
3. ELIGIBILITY.
Each Non-Employee Director shall participate in the Plan.
4. SHARES OF COMMON STOCK AVAILABLE.
The number of Shares that may be issued under the Plan, pursuant to
paragraph 5 hereof shall not exceed 10,000, subject to proportionate
adjustment in the event of any stock split, reverse stock split,
reorganization or recapitalization.
5. PAYMENT.
In general, the Company shall pay Non-Employee Directors one-half of
Annual and Meeting Fees in cash and one-half of such fees in Shares. At
the election of the Non-Employee Director, however, the Company shall
either pay all such fees in the form of cash or in Shares. The amount of
cash and/or Shares representing the Annual Fee and any accrued Meeting
Fees shall be paid to the Non-
3
<PAGE>
Employee Director on the Payment Date, unless such Non-Employee Director
elects to defer the receipt of cash and/or Shares in accordance with
paragraphs 6 or 7 of this Agreement. The number of Shares paid to a
Non-Employee director shall be determined by dividing the amount referred
to above by the Fair Market Value Per Share on the Payment Date.
6. DEFERRED CASH ACCOUNT.
(a) The Company shall establish a deferred cash account ("Cash Account")
for each Non-Employee Director who elects prior to the beginning of
the Plan Year to defer the portion of his or her Annual and Meeting
Fees to be paid in cash. For the initial Plan Year or the Plan Year
in which a Non-Employee Director first becomes eligible, the
election to defer must be made within thirty (30) days after the
Plan is effective or the Non-Employee Director becomes eligible. On
the Payment Date, the Company shall credit the Cash Account with the
Annual and Meeting Fees which would have been paid to the
Non-Employee Director in the form of cash, absent the deferral.
(b) Earnings shall generally be credited to the Cash Account
periodically at the discretion of the Board, but no later than
annually. For those Non-Employee Directors receiving a distribution
during the Plan Year pursuant to paragraph 8 of this Agreement,
earnings shall be credited to the Cash Account through the date of
distribution. The method of computing earnings shall be determined
by the Board.
7. DEFERRED STOCK ACCOUNT.
(a) The Company shall establish a deferred stock account ( "Stock
Account") for each Non-Employee Director who elects prior to the
beginning of the Plan Year to defer the portion of his or her Annual
and Meeting Fees to be paid in the form of Shares. For the initial
Plan Year or the Plan Year in which a Non-Employee Director first
becomes eligible, the election to defer must be made within thirty
(30) days after the Plan is effective or the Non-Employee Director
becomes eligible. On the Payment Date, the Company shall credit the
Stock Account with the number of Deferred Stock Units equal to the
number of Shares that would have been paid in the form of Shares to
the Non-Employee Director, absent the deferral. The value of the
Deferred Stock Units is dependent upon the Fair Market Value Per
Share on the date of distribution to the Non-Employee Director, and
is therefore subject to market fluctuations in value until such
distribution.
(b) At any time a balance is maintained in a Non-Employee Director's
Stock Account, there shall be credited to the Stock Account of such
Non-Employee Director additional Deferred Stock Units on each
Dividend Date. The number of such additional Deferred Stock Units
shall be determined by (i) multiplying the total number of Deferred
Stock Units (including fractional
4
<PAGE>
Deferred Stock Units) credited to the Stock Account immediately
prior to the Dividend Date by the amount of the dividend per share
and (ii) dividing the product by the Fair Market Value Per Share as
of the date preceding the Dividend Date.
(c) In the event of any change in the outstanding Shares upon which the
stock equivalency hereunder is based, by reason of a merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares, or any other change
in corporate structure or in the event any dividend is paid in
Shares or other property, the number of Deferred Stock Units
credited to the Stock Account shall be adjusted in such manner as a
majority of the Board shall determine to be fair under the
circumstances. In the case of dividends payable in property, the
amount paid shall be based on the fair market value of the property
at the time of distribution of the dividend, as determined by a
majority of the Board.
8. DISTRIBUTION
(a) Except as otherwise provided herein, a lump sum distribution from a
Non-Employee Director's Cash Account shall be made in an amount
equal to the balance of that account no later than thirty (30) days
after the earlier of the Non-Employee Director's (i) resignation
from the Board, (ii) failure to be reelected to the Board, (iii)
retirement, (iv) death in accordance with paragraph 10 of this
Agreement or (v) disability as determined by a majority of the
Board, unless the distributions are accelerated in accordance with
paragraph 9 hereof.
(b) Except as otherwise provided herein, a lump sum distribution from a
Non-Employee Director's Stock Account shall be made in Shares equal
to the number of Deferred Stock Units then credited to the Stock
Account no later than thirty (30) days after the earlier of the
Non-Employee Director's (i) resignation from the Board, (ii) failure
to be reelected to the Board, (iii) retirement, (iv) death in
accordance with paragraph 10 of this Agreement or (v) disability as
determined by a majority of the Board, unless the distributions are
accelerated in accordance with the provisions of paragraph 9 hereof.
(c) The provisions of the Plan shall apply to and be binding upon the
beneficiaries, distributees, personal representatives and any other
successors in interest of the Non-Employee Director.
(d) The Company shall be entitled to deduct from all distributions
hereunder any taxes required to be withheld by federal, state or
local law. Such deductions may be made by withholding Shares with a
Fair Market Per Share equal to the amount of such taxes.
5
<PAGE>
9. ACCELERATION OF DISTRIBUTION.
(a) Notwithstanding any other provision of the Plan, if a
Change-in-Control occurs and at any time after the occurrence of
such Change-in-Control either of the following events occurs:
1) the Non-Employee Director ceases for any reason to be a
director of the Company; or
2) the Plan is terminated;
then the Deferred Stock Units then credited to the Stock Account
shall be converted to Shares as provided in paragraph 8(b) above,
and such Shares and the Non-Employee Director's Cash Account shall
be paid to such Non-Employee Director. Such payment shall be made by
the Company as promptly as practicable, but not more than thirty
(30) days following the date on which the right to such payment
arose.
(c) This paragraph 9 may not be amended or modified after the occurrence
of a Change-in-Control.
10. BENEFICIARIES.
Each Non-Employee Director may designate any person, persons or entity to
receive such benefits as may be payable under the Plan upon or after the
Non-Employee Director's death, and such designation may be changed from
time to time by the Non-Employee Director. Each designation will revoke
all prior designations by the same Non-Employee Director. In the absence
of a valid Beneficiary designation, or if, at the time any benefit payment
is due to a Beneficiary, there is no living Beneficiary validly named or
the Board is unable to locate the designated Beneficiary, the Company
shall pay such benefit payments to the Non-Employee Director's spouse, if
then living, but otherwise to the Non-Employee Director's estate.
11. NONTRANSFERABILITY OF SHARES OR DEFERRED STOCK UNITS.
No Shares or Deferred Stock Units shall be pledged, hypothecated or
transferred by a Non-Employee Director other than by will or the laws of
descent and distribution.
12. AMENDMENT AND TERMINATION.
The Board, or any committee to the extent authorized by the Board, may
make such modifications to the Plan as it shall deem advisable, without
approval of the shareholders of the Company, except as such shareholder
approval may be
6
<PAGE>
required under the listing requirements of any securities exchange
registered under the Exchange Act on which are listed any of the Company's
equity securities.
13. TERM.
The Plan shall continue in effect without limit unless and until the Board
otherwise determines.
14. COMPLIANCE WITH SEC REGULATIONS.
It is the Company's intent that the Plan comply with the provisions of
Section 16 of the Exchange Act and the rules promulgated thereunder. To
the extent that any provision of the Plan is later found not to be in
compliance with Section 16 or such rules, such provision shall be deemed
to be null and void.
15. MISCELLANEOUS.
(a) Neither the Plan nor any action taken hereunder shall be construed
as giving any Non-Employee Director any right to continue to serve
as a director of the Company or otherwise to be retained in the
service of the Company.
(b) No Shares shall be issued hereunder unless and until counsel for the
Company shall be satisfied such issuance will be in compliance with
applicable federal, state and other securities laws and regulations.
(c) The expenses of the Plan shall be borne by the Company.
(d) Neither a Non-Employee Director nor any other person shall have any
interest in any fund or in any specific asset of the Company by
reason of amounts credited to the Cash and Stock Accounts of such
Non-Employee Director, nor the right to exercise any of the rights
or privileges of a shareholder with respect to any Deferred Stock
Unit credited to the Stock Account, nor the right to receive any
distribution under the Plan except as expressly provided herein. The
rights of the Non-Employee Director shall be those of an unsecured
general creditor of the Company.
(e) In accordance with the provision of the Plan, the grant of Deferred
Stock Units thereunder and the obligation of the Company to deliver
Shares shall be subject to all applicable federal and state laws,
rules and regulations and to such approvals by any governmental or
regulatory agency or national securities exchange as may be
required. The Company shall not be required to issue or deliver any
certificates for Shares prior to the completion of any registration
or qualification of such Shares under any federal or state law or
any ruling or regulation of any governmental body or national
securities
<PAGE>
exchange which the Company shall, in its sole discretion, determine
to be necessary or advisable.
(f) This Plan shall be interpreted by and all questions arising in
connection therewith shall be determined by a majority of the Board,
whose interpretation or determination, when made in good faith,
shall be conclusive and binding.
ATTEST/WITNESS: THE YORK GROUP, INC.
___________________________ By: ________________________
Print Name: Print Name:
- --------------------------- ----------------------------
Date: ______________________
[SEAL]
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE YORK GROUP, INC. 1997 SECOND QUARTER REPORT ON FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 29,395
<SECURITIES> 0
<RECEIVABLES> 21,347
<ALLOWANCES> 1,953
<INVENTORY> 30,067
<CURRENT-ASSETS> 84,130
<PP&E> 52,815
<DEPRECIATION> 19,338
<TOTAL-ASSETS> 127,412
<CURRENT-LIABILITIES> 19,659
<BONDS> 29,586
0
0
<COMMON> 85
<OTHER-SE> 71,171
<TOTAL-LIABILITY-AND-EQUITY> 127,412
<SALES> 86,446
<TOTAL-REVENUES> 86,446
<CGS> 65,850
<TOTAL-COSTS> 65,850
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 31
<INTEREST-EXPENSE> 213
<INCOME-PRETAX> 10,955
<INCOME-TAX> 4,108
<INCOME-CONTINUING> 6,847
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,847
<EPS-PRIMARY> 0.82
<EPS-DILUTED> 0.82
</TABLE>
