SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
THE YORK GROUP, INC.
(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:
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:
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE>
THE YORK GROUP, INC.
8554 KATY FREEWAY, SUITE 200
HOUSTON, TEXAS 77024
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2000
------------------------
To the Stockholders of
The York Group, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of The York Group, Inc. will be held at the West Memorial
Business Park Conference Center, 8584 Katy Freeway, First Floor, Houston, Texas
77024, at 10:00 a.m., local time, on Wednesday, May 17, 2000, for the following
purposes:
1. To elect seven (7) persons to serve as directors on the Board of
Directors until the 2001 annual meeting of stockholders and until their
successors have been elected and have qualified.
2. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment or adjournments thereof.
Stockholders of record at the close of business on March 24, 2000 will be
entitled to notice of, and to vote at, the Annual Meeting, or any adjournment or
adjournments thereof. Stockholders are cordially invited to attend the Annual
Meeting in person. Those who will not attend and who wish their shares voted are
requested to complete, sign, date and mail promptly the enclosed proxy for which
a return envelope is provided.
By Order of the Board of Directors
Cristen L. Cline, SECRETARY
Houston, Texas
April 7, 2000
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED
TO COMPLETE, SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY. IF YOU ATTEND THE
ANNUAL MEETING, YOU CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
<PAGE>
THE YORK GROUP, INC.
8554 KATY FREEWAY, SUITE 200
HOUSTON, TEXAS 77024
------------------------------------
PROXY STATEMENT
------------------------------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The York Group, Inc., a Delaware
corporation ("York" or the "Company"), for use at its annual meeting of
stockholders to be held on Wednesday, May 17, 2000, at the West Memorial
Business Park Conference Center, 8584 Katy Freeway, First Floor, Houston, Texas
77024, at 10:00 a.m., local time, or at any adjournment or adjournments thereof
(such meeting or adjournment(s) thereof referred to as the "Annual Meeting").
Copies of the Proxy, Notice and Proxy Statement are being mailed to stockholders
on or about April 12, 2000.
In addition to solicitation by mail, solicitation of proxies may be made by
personal interview, special letter, telephone or telecopy by the officers,
directors and employees of the Company. Brokerage firms will be requested to
forward proxy materials to beneficial owners of shares registered in their names
and will be reimbursed for their expenses. The cost of solicitation of proxies
will be paid by the Company.
A proxy received by the Company may be revoked by the stockholder giving
the proxy at any time before it is exercised. A stockholder may revoke a proxy
by notification in writing to the Company at 8554 Katy Freeway, Suite 200,
Houston, Texas 77024, Attention: Corporate Secretary. A proxy may also be
revoked by execution of a proxy bearing a later date or by attendance at the
Annual Meeting and voting by ballot. A proxy in the form accompanying this Proxy
Statement, when properly executed and returned, will be voted in accordance with
the instructions contained therein. A PROXY RECEIVED BY THE COMPANY WHICH DOES
NOT WITHHOLD AUTHORITY TO VOTE OR ON WHICH NO SPECIFICATION HAS BEEN INDICATED
WILL BE VOTED (I) FOR ELECTION OF THE NOMINEES NAMED HEREIN TO THE BOARD OF
DIRECTORS OF THE COMPANY, AND (II) IN THE DISCRETION OF THE PROXY HOLDER ON ALL
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING. A majority of the
outstanding shares will constitute a quorum at the Annual Meeting. Abstentions
and broker non-votes are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders. Broker
non-votes are not counted for purposes of determining whether a proposal has
been approved.
At the date of this Proxy Statement, management of the Company does not
know of any business to be presented at the Annual Meeting other than those
matters which are set forth in the Notice accompanying this Proxy Statement. If
any other business should properly come before the Annual Meeting, it is
intended that the shares represented by proxies will be voted with respect to
such business in accordance with the judgment of the persons named in the proxy.
COMMON STOCK OUTSTANDING AND PRINCIPAL HOLDERS THEREOF
The Board of Directors of the Company (the "Board") has fixed the close
of business on March 24, 2000 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Annual Meeting. On that
date, 8,940,950 shares of common stock, par value $0.01 per share, of the
Company ("Common Stock") were outstanding. The holders of such shares will be
entitled to one vote for each share of Common Stock held of record on that date
for each proposition presented at the Annual Meeting.
1
<PAGE>
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information with respect to the shares of
Common Stock (the only outstanding class of voting securities of the Company)
owned of record and beneficially as of March 24, 2000, unless otherwise
specified, by (i) each director and Named Executive Officer (as defined herein),
and (ii) all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
NAME NUMBER PERCENT
- ---------------------------------------- ----------- -------
<S> <C> <C>
Elder Group, Inc.(1).................... 619,600 6.9%
394 Olivewood Court
Rochester, Michigan 48306
Alan H. Elder(2)........................ 869,659 9.7%
Eldon P. Nuss(3)........................ 35,000 *
Kirk P. Pendleton(4).................... 39,500 *
Robert T. Rakich(5)..................... 18,500 *
Roger W. Sevedge(6)..................... 329,104 3.7%
Bill W. Wilcock(7)...................... 353,300 3.8%
Alfred M. Turner III(8)................. 7,900 *
H. Joe Trulove.......................... 284,262 3.2%
Gerald D. Runnels(9).................... 238,352 2.7%
Richard D. Babcock...................... 1,025 *
All directors and executive officers as
a group (17 persons)(10).............. 2,302,402 24.7%
</TABLE>
- ------------
* Less than 1%
(1) Mr. Elder serves as Chairman and has the right to vote all shares of the
Elder Group, Inc.
(2) Includes 619,600 shares owned directly by Elder Group, Inc., of which Mr.
Elder serves as Chairman and has the right to vote all shares; 107,192
shares owned directly by EFI LLC, of which Mr. Elder serves as managing
member; and 10,000 shares owned by a trust in the name of Mr. Elder's
children to which Mr. Elder disclaims beneficial ownership.
(3) Includes 5,000 shares that may be acquired within the next 60 days upon the
exercise of outstanding stock options.
(4) Includes 37,500 shares that may be acquired within the next 60 days upon
the exercise of outstanding stock options.
(5) Includes 12,500 shares that may be acquired within the next 60 days upon
the exercise of outstanding stock options.
(6) Includes 164,552 shares owned by a revocable living trust of which Mr.
Sevedge is sole trustee; 164,552 shares owned by a revocable living trust
in the name of Mr. Sevedge's spouse of which Mr. Sevedge's spouse is sole
trustee and as to which Mr. Sevedge disclaims beneficial ownership.
(7) Includes 247,000 shares that may be acquired within the next 60 days upon
the exercise of outstanding stock options.
(8) Includes 7,900 shares that may be acquired within the next 60 days upon the
exercise of outstanding stock options.
(9) Includes 3,000 shares owned by the spouse of Mr. Runnels, as to which
shares Mr. Runnels disclaims beneficial ownership, and 5,400 shares that
may be acquired within the next 60 days upon the exercise of outstanding
stock options.
(10) Includes an aggregate of 363,960 shares that may be acquired within the
next 60 days upon the exercise of outstanding stock options.
2
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 24, 2000, the persons named below were, to our knowledge, the
only beneficial owners of more than 5% of the Company's Common Stock, determined
in accordance with Rule 13d-3 of the Securities and Exchange Commission, other
than Alan H. Elder and Elder Group, Inc., whose beneficial ownership of such
Common Stock is described above.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ------------------------------------- --------------------- ----------
<S> <C> <C>
Dalton, Griener, Hartman, Maher & Co. 588,300 6.58%
1100 Fifth Avenue South, Suite 301
Naples, FL 34102
Dimensional Fund Advisors, Inc....... 506,050 5.66%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Fleet Boston Corporation............. 451,500(2) 5.05%
One Federal Street
Boston, MA 02110
</TABLE>
- ------------
(1) Based solely on a Schedule 13G filed with the SEC.
(2) According to the Schedule 13G, Fleet Boston Corporation filed the schedule
pursuant to Rule 13d-1(b)(ii)(G). The relevant subsidiaries are Fleet Trust
& Investment Services Company, Fleet National Bank, and Fleet Investment
Advisors.
PROPOSAL -- ELECTION OF DIRECTORS
GENERAL
Seven (7) directors are to be elected at the Annual Meeting. The Company
recommends voting for the election of each nominee for director listed below.
The persons named in the accompanying proxy intend to vote each properly signed
and submitted proxy for the election of each nominee listed below to the Board
of Directors unless authority to vote in the election of directors is withheld
on such proxy. If, for any reason any nominee should become unavailable for
election, the proxy may be voted for a substitute nominee selected by the Board
of Directors, or the Board may be reduced accordingly. The Board is not aware of
any circumstances likely to render any nominee unavailable for election.
Directors are elected by a plurality of votes cast at the Annual Meeting. The
number of nominees named is fewer than the number of director positions on the
Board; however, the proxy may not be voted for a greater number of persons than
the number of nominees named.
Unless otherwise specified, all properly signed proxies received by the
Company will be voted for the election of the nominees listed below to hold
office until the 2001 annual meeting of the stockholders and until each of their
respective successors is elected and qualified.
3
<PAGE>
THE COMPANY RECOMMENDS VOTING "FOR" THE NOMINEES.
NOMINEES FOR DIRECTOR
The following table sets forth the name, age and principal position of each
nominee listed on the enclosed proxy for director to hold office until the 2001
annual meeting of stockholders.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------------------- --- ------------------------------------------------
<S> <C> <C>
Robert T. Rakich........................ 62 Chairman of the Board
Thomas J. Crawford...................... 46 Executive Vice President, Chief Operating
Officer and Director
Alan H. Elder........................... 36 Director
Eldon P. Nuss........................... 66 Director
Kirk P. Pendleton....................... 60 Director
Roger W. Sevedge........................ 63 Director
H. Joe Trulove.......................... 62 Senior Vice President and Director
</TABLE>
ROBERT T. RAKICH has been a director of the Company since April 1996 and
has served as Chairman of the Board of Directors since May 1998. Mr. Rakich has
served as President and Chief Operating Officer of Business Men's Assurance Co.,
an insurance and financial services company, since November 1995. Mr. Rakich was
President and Chief Executive Officer of Laurentian Capital Corporation, an
insurance and financial services firm, from 1987 through November 1995. Mr.
Rakich also serves as a director of Business Men's Assurance Company of America,
Jones & Babson and BMA Financial Services, Inc.
THOMAS J. CRAWFORD joined the Company as Executive Vice President, Chief
Operating Officer and a director on February 28, 2000. Prior to joining the
Company, Mr. Crawford served as Executive Vice President of Lozier Corporation,
a manufacturer of store fixtures, from June 1997 to February 1999. Mr. Crawford
previously served as Vice President of Strategy and Business Development for
Batesville Casket Co. from January 1996 to June 1997 and as Vice President of
Marketing from June 1993 to January 1996.
ALAN H. ELDER has been a director of the Company since October 1999. Mr.
Elder has served as Chairman of the Elder Group, Inc. since 1993. He served as
Chairman of Elder Davis, Inc. from 1990 until 1997, when Elder Davis, Inc. was
acquired by the Company. Mr. Elder serves as chairman and a director of Vandor
Corporation and a director for Elderlite Express, Inc. which are both York
suppliers. Mr. Elder also serves as the chairman of Finckensher America U.C. Mr.
Elder is the son-in-law of Mr. Kirk Pendleton.
ELDON P. NUSS joined the Company in October 1990 as President and Chief
Executive Officer, and served as President until March 1996 and as Chief
Executive Officer until October 1996. He has been a director since September
1990 and served as Chairman of the Board from January 1996 to May 1998. Mr. Nuss
was President, Chief Executive Officer and a director of PMI Industries, Inc., a
Houston-based manufacturer of diverse metal products, from 1975 through June
1990.
KIRK P. PENDLETON has been a director of the Company since December 1992.
Mr. Pendleton is Chairman and Chief Executive Officer of Cairnwood, Inc., a
private investment firm, where he has served in various capacities since 1983.
He also serves as a director of AMCAP Fund, Inc., American Variable Annuity
Fund, Europacific Growth Fund, Fundamental Investors, Inc., New World Fund and
New Perspective Fund. Mr. Pendleton is the father-in-law of Mr. Alan Elder.
ROGER W. SEVEDGE has been a director of the Company since February 1998.
Mr. Sevedge is part owner of Artco Casket Company, Inc. ("Artco"), a York
distributor, and has served as Artco's President since 1980. Mr. Sevedge was
also a stockholder and an officer of Star Manufacturing Corporation, a company
which purchased casket components manufactured by York and assembled the
components into finished caskets, until its acquisition by York in April 1999.
H. JOE TRULOVE has been a director of the Company since October 1999. Mr.
Trulove was a major stockholder in West Point Casket Company which was acquired
by the Company in May 1997. Since May 1997, Mr. Trulove has served in various
positions with the Company, most recently, as Senior Vice
4
<PAGE>
President York Distributors Association Distribution Channel and Independent
Vault Sales and Channel Development.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board met or acted by written consent thirteen (13) times in 1999. The
Board has an Executive Committee on which Messrs. Rakich, Pendleton and Wilcock
currently serve, an Audit Committee on which Messrs. Nuss, Pendleton, Rakich and
Sevedge currently serve, and a Human Resources Committee on which Messrs.
Pendleton and Rakich currently serve. The Audit Committee, which met two (2)
times in 1999, recommends to the Board the engagement of the Company's
independent public accountants and reviews with such accountants the plans for
and the results and scope of their auditing engagement. The Human Resources
Committee, which met three (3) times in 1999, reviews the compensation of
executive officers and other key employees and makes recommendations to the
Board with respect thereto, including the granting of stock options. The Human
Resources Committee also serves as the nominating committee for the Board of
Directors. The Executive Committee, which met three (3) times in 1999, acts on
behalf of the full Board between Board meetings and serves as a sounding board
on general management issues or matters that affect the Company as a whole. All
incumbent directors attended at least 75% of the meetings of the Board and the
meetings of the committees on which they served in 1999.
DIRECTOR COMPENSATION
Each director who is not an employee of the Company received an annual
retainer of $5,000 and fees of $1,000 per meeting of the Board or a committee
thereof (other than any committee meeting held in conjunction with a meeting of
the Board). Mr. Rakich, in his capacity as Chairman of the Board, also receives
a $3,000 monthly retainer. In addition, each director is entitled to
reimbursement for reasonable expenses incurred in attending Board or committee
meetings or the discharge of any special projects assigned to a director by the
Board. In April 1997, the Board approved The York Group, Inc. Non-Employee
Director Cash and Equity Compensation Plan (the "Director Compensation Plan").
The Director Compensation Plan allows each non-employee director to receive the
annual retainer and meeting fees in cash, shares of Company stock, or one-half
in cash and one-half in shares of Company stock. The Director Compensation Plan
also allows each non-employee director to receive the annual retainer and
meeting fees currently, or to defer such fees until such director ceases to be a
director or upon death or disability. In addition, directors who (i) are not, or
have not been, employees of the Company, and (ii) do not receive remuneration,
directly or indirectly, from the Company, will receive automatic grants of
nonqualified stock options under the Company's 1996 Independent Director Stock
Option Plan. These directors receive an option to purchase 5,000 shares upon
their initial election to the Board and an option to purchase 2,500 shares upon
each reelection to the Board, up to a maximum aggregate limit of options to
purchase 15,000 shares under the Company's 1996 Independent Director Stock
Option Plan.
5
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions of the persons
who are not nominees for director and who are executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------------------- --- ---------------------------------------------------------
<S> <C> <C>
Bill W. Wilcock......................... 56 President and Chief Executive Officer
George L. Foley, Jr..................... 59 Executive Vice President
Alfred M. Turner III.................... 50 Senior Vice President Marketing and Sales
Sandra A. Matson........................ 47 Senior Vice President Casket Operations
David F. Beck........................... 47 Vice President Finance, Chief Financial Officer and
Treasurer
Robert T. Monteleone.................... 44 Vice President Human Resources
Gerard K. Nichols....................... 58 Vice President Manufacturing/Engineering Metal Products
Gerald D. Runnels....................... 59 Vice President National Accounts and Distribution
Richard D. Babcock...................... 56 Vice President Marketing, Advance Funeral Planning and
Communications
G. Bruce Broussard...................... 56 Vice President and Controller
Cristen L. Cline........................ 33 General Counsel and Secretary
</TABLE>
BILL W. WILCOCK joined the Company in March 1996 as President and a
director and became Chief Executive Officer in October 1996. Mr. Wilcock
previously served as President of AlliedSignal Braking Systems Americas from
1991 to 1994 and as Vice President Planning, Automotive Sector, for
AlliedSignal, Inc. from 1995 to February 1996. The Company has announced that
Mr. Wilcock will be leaving the Company, but will continue in his position until
a successor is named. After the appointment of a new Chief Executive Officer, he
will be available for any needed consultation on strategic and operational
issues.
GEORGE L. FOLEY, JR. was elected Executive Vice President of the Company in
January 1996. Mr. Foley served in various executive officer capacities with the
Company from September 1990 until January 1996. Mr. Foley served as a director
of the Company from September 1990 until April 1997.
ALFRED M. TURNER, III joined the Company in June 1997 as Senior Vice
President Marketing and Sales. Mr. Turner previously served as Group Vice
President of Sales Operations of Frigidaire Company from April 1994 to June
1997. Prior to that, Mr. Turner served as Vice President of Marketing of
Broyhill Furniture Industries from June 1992 until April 1994.
SANDRA A. MATSON joined the Company in June 1997 as Vice President Quality,
Information Systems and Distribution. Ms. Matson previously served as Director
of Quality Systems of Bosch Braking Systems Americas (formerly AlliedSignal
Braking Systems Americas) from April 1996 to June 1997. Prior to April 1996, Ms.
Matson served in positions of increasing responsibility with AlliedSignal
Braking Systems Americas for more than four years.
DAVID F. BECK joined the Company in October 1990 as Vice President Finance
and Chief Financial Officer and was elected Treasurer in January 1996. Prior to
joining the Company, Mr. Beck served in various financial and accounting
positions with the Company's predecessors for six years.
ROBERT T. MONTELEONE joined the Company in July 1998 as Vice President
Human Resources. Mr. Monteleone previously served as Director of Human Resources
and Organizational Development for Sara Lee Bakery from January 1995 to January
1998. Prior to January 1995, Mr. Monteleone held various positions in the Human
Resources Department at The Dial Corporation for nine years.
GERARD K. NICHOLS joined the Company in June 1993 as Director of
Engineering and was elected Vice President Manufacturing/Engineering Metal
Products in February 1995. For more than five years prior to joining the
Company, Mr. Nichols held various manufacturing and procurement positions with
Service Corporation International.
6
<PAGE>
GERALD D. RUNNELS served as President and Chief Executive Officer of
Houston Casket Company, d/b/a York Southwest Casket Company ("Houston
Casket"), a York distributor, from December 1983 until January 1997, when York
acquired substantially all of the assets of Houston Casket. Since January 1997,
Mr. Runnels has served in various executive officer capacities with the Company,
most recently as the Vice President of National Accounts and Distribution. Mr.
Runnels served as a director of York from September 1990 until April 1997.
RICHARD D. ("DICK") BABCOCK joined the Company in November 1998 as Vice
President Marketing, Advance Funeral Planning and Communications. Previously,
Mr. Babcock served as President of Independent Funeral Professionals, Inc., a
company providing business and marketing support to funeral home owners from
March 1997 until November 1998. In January 1999, the Company purchased
substantially all of the assets of Independent Funeral Professionals, Inc. Prior
to March 1997, Mr. Babcock served as Vice President, Marketing with Homesteaders
Life Company for six years.
G. BRUCE BROUSSARD joined the Company in August 1999 as Vice President and
Controller. Mr. Broussard previously served as Controller for Baker Petrolite
Corporation, a division of Baker Hughes Incorporated, from 1997 to 1998, and as
Vice President, Finance and Administration and Secretary for Drilex Systems from
1994 until its acquisition by Baker Hughes Incorporated in 1997.
CRISTEN L. CLINE joined the Company in July 1997 as General Counsel and
Secretary. Prior to joining the Company, Ms. Cline served as Corporate Counsel
to Keystone International, Inc. from March 1996 to July 1997. Prior to that
time, Ms. Cline practiced law with Vinson & Elkins, L.L.P. law firm, Houston,
Texas from October 1991 to March 1996.
HUMAN RESOURCES COMMITTEE REPORT1
The Human Resources Committee of the Board (the "Committee") is
responsible for establishing and administering the compensation policies
applicable to the Company's executive officers and other key employees.
The Company's compensation objectives include attracting and retaining the
best possible executive talent, motivating executive officers to achieve the
Company's performance objectives, rewarding individual performance and
contributions, and linking executives' and stockholders' interests through
equity-based plans.
Executive compensation at the Company consists of three key components:
base salary, annual incentive compensation and stock options, each of which is
intended to complement the others, and, taken together, to satisfy the Company's
compensation objectives. The Committee's policies with respect to each of the
three components are discussed below.
BASE SALARY. In the early part of each fiscal year, the Committee reviews
the base salary of the Chief Executive Officer ("CEO") and other executive
officers of the Company and approves annual base salaries for each of the
executive officers. The Committee, in determining the appropriate base salaries
of its executive officers, generally considers the level of executive
compensation in similarly sized companies. In addition, the Committee takes into
account (i) the performance of the Company and the roles of the individual
executive officers with respect to such performance, and (ii) the particular
executive officer's specific responsibilities and the performance of such
executive officer in those areas of responsibility. In 1997, the Company
retained the services of Hay Group to formulate and establish a consistent
executive compensation arrangement, which arrangement the Company implemented in
1998.
ANNUAL INCENTIVE COMPENSATION. In 1999, the Company maintained a bonus
program which provided direct financial incentives in the form of an annual cash
bonus to executive officers to incent such officers to achieve and exceed the
Company's annual goals which were based on a targeted amount of overall
- ------------
1 Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference
other SEC filings (including this proxy statement) in their entirety, this
Human Resources Committee Report shall not be incorporated by reference into
such filings and shall not be deemed to be "filed" with the SEC except as
specifically provided otherwise.
7
<PAGE>
earnings. Bonus amounts were also based on the Committee's review of each
executive officer's specific responsibilities and the performance of such
officers in those areas of responsibility.
STOCK OPTIONS. The Company currently maintains four stock option plans,
three of which are for employee participation, and only one of which, the 1996
Employee Stock Option Plan, is currently used for the issuance of stock options.
The primary objective of the stock option program is to link the interests of
the executive officers and other selected employees of the Company to those of
the Company's stockholders through the grant of stock options. The aggregate
number of options recommended by the Committee is based on practices of
comparable companies and each individual's expected long-term contribution to
the success of the Company.
NAMED EXECUTIVE OFFICERS. Consistent with the Company's compensation
program outlined above, compensation for each of the Named Executive Officers
consists of a base salary, annual bonus and stock options. The base salaries for
the Named Executive Officers for 1999 were believed to be at levels consistent
with amounts paid to executives with comparable qualifications, experience and
responsibilities of other similarly sized companies. For 1999, no bonuses were
paid to any Named Executive Officer as a result of the Company not achieving its
minimum annual earnings goals.
CHIEF EXECUTIVE OFFICER. Consistent with the Company's compensation
program outlined above, compensation for the CEO consists of a base salary,
annual bonus and stock options. The base salary for the CEO for 1999 was
believed to be at a level consistent with amounts paid to executives with
comparable qualifications, experience and responsibilities of other similarly
sized companies. A cash bonus was not paid to the CEO as a result of the Company
not achieving its minimum annual earnings goals.
Human Resources Committee: Kirk P. Pendleton and Robert T. Rakich
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, no member of the Committee was an officer or employee
of the Company or any of its subsidiaries, or was formerly an officer of the
Company or any of its subsidiaries.
No executive officer of the Company served as (i) a member of the
compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served on the
Committee, (ii) a director of another entity, one of whose executive officers
served on the Committee, or (iii) a member of the compensation committee (or
other board committee performing equivalent functions) of another entity, one of
whose executive officers served as a director of the Company.
COMPENSATION TABLES
The following tables set forth compensation information for the chief
executive officer and the four most highly compensated executive officers of the
Company ("Named Executive Officers") during the Company's fiscal years 1999,
1998 and 1997 for services rendered during such years to the Company or any of
its subsidiaries.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION(1)
ANNUAL ----------------
COMPENSATION SECURITIES
FISCAL --------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
--------------------------- ------ ---------- --------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
($) ($) (#) ($)
Bill W. Wilcock......................... 1999 289,923 -- 32,000 3,695
President and Chief Executive 1998 278,339 150,000 38,000 3,451
Officer 1997 268,600 150,000 55,000 71,381
Alfred M. Turner III.................... 1999 165,297 -- 6,500 4,788
Senior Vice President Marketing 1998 162,157 40,000 6,500 2,383
and Sales 1997(2) 86,154 50,000 10,000 58,569
H. Joe Trulove.......................... 1999 152,190 -- -- 4,872
Senior Vice President 1998 152,964 -- -- 5,224
1997(3) 105,617 -- -- 1,491
Gerald D. Runnels....................... 1999 150,000 -- -- 2,958
Vice President National Accounts 1998 150,000 -- 4,500 3,016
and Distribution 1997(4) 141,346 28,000 6,000 1,308
Richard D. Babcock...................... 1999 145,000 -- 2,500 84,053
Vice President Marketing, Advance 1998(5) 22,308 -- -- 22
Funeral Planning and Communications
</TABLE>
- ------------
(1) For 1999, includes (i) the Company's matching contribution pursuant to The
York Group, Inc. 401(k) Plan and Trust of $2,000, $4,298, $3,750, and $2,250
for Messrs. Wilcock, Turner, Trulove, and Runnels, respectively, (ii) group
term life insurance premiums paid by the Company for Messrs. Wilcock,
Turner, Trulove, Runnels, and Babcock in the amount of $1,695, $490, $1,122,
$708, and $673, respectively, and (iii) $83,380 in relocation expenses
reimbursed to Mr. Babcock.
(2) Mr. Turner joined the Company in June 1997.
(3) Mr. Trulove joined the Company in May 1997.
(4) Mr. Runnels joined the Company in January 1997.
(5) Mr. Babcock joined the Company in November 1998.
1999 OPTION GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
PERCENTAGE ASSUMED RATES OF STOCK
NUMBER OF OF TOTAL PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM
OPTIONS EMPLOYEES PRICE EXPIRATION ------------------------
NAME GRANTED IN 1999 PER SHARE DATE 5% 10%
---- ---------- ----------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Bill W. Wilcock......................... 32,000 33.4% $ 7.625 2/24/09 $ 153,450 $ 388,873
Alfred M. Turner III.................... 6,500 6.8 $ 7.625 2/24/09 $ 31,170 $ 78,990
H. Joe Trulove.......................... -- 0.0 -- -- -- --
Gerald D. Runnels....................... -- 0.0 -- -- -- --
Richard D. Babcock...................... 2,500 2.6 $ 6.440 8/25/09 $ 10,125 $ 25,659
</TABLE>
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 FISCAL YEAR END FISCAL YEAR END(1)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
(#) ($) (#) (#) ($) ($)
Bill W. Wilcock......................... -- -- 179,600 195,400 -- --
Alfred M. Turner III.................... -- -- 5,300 17,700 -- --
H. Joe Trulove.......................... -- -- -- -- -- --
Gerald D. Runnels....................... -- -- 3,300 7,200 -- --
Richard D. Babcock...................... -- -- -- 2,500 -- --
</TABLE>
- ------------
(1) No options are In-the-Money using a value based upon a closing price of
$4.31 per share at December 31, 1999.
9
<PAGE>
PERFORMANCE GRAPH
The following performance graph provided by Media General Financial
Services, Inc. compares the performance of the Common Stock since April 2, 1996,
the first day of public trading of the Common Stock, to the Russell 2000 Index
and a peer group index consisting of two companies: Hillenbrand Industries, Inc.
and Matthews International Corporation. Most of the Company's peers are
subsidiaries or divisions of larger public companies or privately held
companies. As a result, the above two companies, which each have a substantial
portion of their business in manufacturing for the death care industry, are the
only two companies to which the Company may realistically compare itself.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
FISCAL YEAR ENDING
-------------------------------------------------
04/02/96 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- --------
York Group Inc 100.00 117.54 148.02 58.34 27.14
Customer Selected Stock List 100.00 98.64 142.22 162.93 96.78
Russell 2000 Index 100.00 110.84 135.60 131.80 157.62
10
<PAGE>
EMPLOYMENT ARRANGEMENTS
In connection with the acquisition in January 1997 of Houston Casket, Mr.
Runnels executed (i) a non-competition agreement pursuant to which the Company
pays to Mr. Runnels $50,000 annually for a period of five years from the date of
the acquisition, and (ii) an employment agreement with a five-year term at a
base salary of $150,000 per year. If his employment is terminated by the Company
without cause prior to the expiration of the employment agreement, Mr. Runnels
shall be entitled to salary continuation during the remaining term of the
agreement. In February 2000, in connection with the renegotiation of certain
promissory notes and subordinated convertible promissory notes made by the
Company to Houston Casket and North Texas Casket Company, the Company and Mr.
Runnels agreed to extend the term of the non-competition agreement by an
additional three years.
Pursuant to an agreement between Mr. Turner and the Company, if Mr.
Turner's employment is terminated without cause prior to December 31, 2000, Mr.
Turner shall be entitled to (i) salary continuation for six (6) months, and (ii)
except in the event of a voluntary termination, a bonus equal to 30% of his 1999
salary prorated with respect to the date of termination. Mr. Turner also is
entitled to a minimum bonus of 25% of his 2000 salary if he remains employed by
the Company at the time the 2000 executive bonuses are awarded by the Company.
CERTAIN TRANSACTIONS
In January 1997, the Company acquired substantially all of the assets of
Houston Casket, a corporation of which Gerald D. Runnels was a 50% stockholder,
and North Texas Casket Company ("NTCC"), a wholly-owned subsidiary of Houston
Casket. The aggregate purchase price paid to Houston Casket and NTCC was
approximately $9.1 million, which was paid by a combination of cash, promissory
notes, subordinated convertible promissory notes and the assumption of certain
liabilities of Houston Casket and NTCC. In 1999, the Company paid $308,000 in
interest to Houston Casket related to the promissory notes and the subordinated
convertible promissory notes. See "Employment Arrangements".
Under a management agreement between the Company and Vandor Corporation, of
which Bruce E. Elder was a director and of which Alan H. Elder is now a
director, Vandor Corporation provides manufacturing/warehouse space, utilities,
direct and supervisory labor, consultation and marketing services to the
Company. Pursuant to this agreement, the Company paid to Vandor Corporation
approximately $350,000 in 1999.
In April 1999, the Company acquired Star Manufacturing Corporation, a
corporation of which Roger W. Sevedge was a 46% stockholder. The aggregate
purchase price paid to Star Manufacturing Corporation was approximately $4
million, which was paid by a combination of $2 million paid at closing and a
deferred cash payment of $2 million due on or before March 31, 2000. Pursuant to
the purchase agreement, York also agreed to pay Artco Casket Company, Inc., of
which Roger W. Sevedge is part owner and President, $138,000 annually for seven
(7) years, so long as Artco meets its annual purchase requirements under its
Distribution Agreement with the Company, as described hereafter. In connection
with the acquisition of Star Manufacturing Corporation, the Company entered into
a Distribution Agreement with Artco Casket Company, Inc. pursuant to which Artco
agrees to purchase from 80% to 90% (depending on the year during the term) of
its requirements for finished caskets from the Company for a period of seven (7)
years.
On January 4, 1999, the Company acquired substantially all of the assets of
Independent Funeral Professionals, Inc. ("IFP"), a corporation of which
Richard D. Babcock was the sole stockholder, in exchange for assumption by the
Company of certain liabilities of IFP totaling $523,000.
Pursuant to an agreement between the Company and Elder Group, Inc., Alan H.
Elder provides strategic planning consulting services to the Company. Pursuant
to this Agreement, in 1999, the Company paid to Elder Group, Inc. $60,000.
11
<PAGE>
Pursuant to lease agreements between H. Joe Trulove and the Company for
manufacturing and/or distribution facilities in Birmingham, Alabama, and Bowling
Green, Kentucky, in 1999, the Company paid $73,000 in lease payments to Mr.
Trulove.
Pursuant to a lease agreement between Richmond Center, LLC, of which Alan
H. Elder is the managing member, and Elder Davis, Inc., a wholly owned
subsidiary of the Company for a manufacturing facility in Richmond, Indiana, the
Company paid $318,903 in lease payments to Richmond Center, LLC in 1999.
The Company sells finished caskets and casket components in the ordinary
course of business to various companies and organizations with which some of the
Company's directors, executive officers and stockholders are affiliated. The
following table sets forth the gross sales for 1999 of York products to
companies affiliated with directors, executive officers and greater than 5%
stockholders.
<TABLE>
<CAPTION>
NAME OF PURCHASER (NAME OF DIRECTOR, YEAR ENDED
EXECUTIVE OFFICER OR 5% STOCKHOLDER) DECEMBER 31, 1999
- ---------------------------------------- -----------------
<S> <C>
Yorktowne Caskets, Inc. (George L.
Foley, Jr.)(1)........................ $15,145,000
Artco Casket Company, Inc. (Roger W.
Sevedge)(2)........................... 11,893,000
Star Manufacturing Corporation (Roger W.
Sevedge)(3)........................... 565,000(4)
</TABLE>
- ------------
(1) Mr. Foley is part owner of this entity.
(2) Mr. Sevedge is part owner and President of this entity.
(3) Mr. Sevedge was part owner and President of this entity until its
acquisition by the Company in April 1999.
(4) This number reflects purchases up to and including the date of acquisition
of Star Manufacturing Corporation by the Company.
The Company also purchases goods and services from companies affiliated
with directors and/or stockholders in the ordinary course of business at the
seller's normal prices. The following table sets forth the purchases for 1999 by
York from companies affiliated with directors, executive officers and greater
than 5% stockholders.
<TABLE>
<CAPTION>
NAME OF SELLER (NAME OF DIRECTOR, YEAR ENDED
EXECUTIVE OFFICER OR 5% STOCKHOLDER) DECEMBER 31, 1999
- ---------------------------------------- -----------------
<S> <C>
Vandor Corporation (Alan H. Elder)(1)... $ 869,000
Elderlite Express, L.P. (Alan H.
Elder)(2)............................. 597,000
Yorktowne Caskets, Inc. (George L.
Foley, Jr.)(3)........................ 273,000
Artco Casket Company, Inc. (Roger W.
Sevedge)(4)........................... 150,000
Star Manufacturing Corporation (Roger W.
Sevedge)(5)........................... 70,000(6)
</TABLE>
- ------------
(1) Mr. Elder currently serves as Chairman and a director of this entity.
(2) Mr. Elder and his brother hold a majority interest in Elderlite Express,
Inc., the General Partner and majority owner (77.1%) of this entity, and Mr.
Elder serves as a director of this entity. The Company has entered into,
effective July 31, 1997, an agreement with Elderlite Express, L.P. pursuant
to which the Company must transport with Elderlite Express, L.P. an annual
minimum amount of freight. Effective December 31, 1999 Elderlite Express,
Inc. assumed the rights and obligations of Elderlite Express, L.P. under the
agreement.
(3) Mr. Foley is part owner of this entity.
(4) Mr. Sevedge is part owner and President of this entity.
(5) Mr. Sevedge was part owner and President of this entity until its
acquisition by the Company in April 1999.
(6) This number reflects purchases up to and including the date of acquisition
of this entity by the Company.
12
<PAGE>
The Company believes that the terms of the transactions described above
were at least as favorable to the Company as could have been obtained with
unaffiliated third parties, and the Company intends to maintain this policy on
similar transactions in the future.
AUDITORS
Arthur Andersen LLP, a certified public accounting firm, has served as the
independent auditor of the Company for ten (10) years. Formal action is not
proposed to be taken at the Annual Meeting with respect to the continued
engagement of Arthur Andersen LLP inasmuch as no such action is legally
required. A representative of Arthur Andersen LLP plans to attend the Annual
Meeting and will be available to answer appropriate questions. The
representative also will have an opportunity to make a statement at the meeting
if he so desires, although it is not expected that any statement will be made.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, and written representations from reporting persons that no Form 5
was required, the Company believes that Messrs. Pendleton, Rakich, Nuss and
Wilcock each filed late one Form 4 reporting one transaction(s).
OTHER MATTERS
The Board knows of no other matters than those described above which are
likely to come before the Annual Meeting. If any other matters properly come
before the meeting, persons named in the accompanying form of proxy intend to
vote such proxy in accordance with their best judgment on such matters.
PROPOSALS AND NOMINATIONS FOR NEXT ANNUAL MEETING
Any proposals of holders of Common Stock intended to be presented at the
annual meeting of stockholders of the Company to be held in 2001 must be
received by the Company no later than January 8, 2001 to be included in the
proxy statement relating to that meeting. Any stockholder desiring to bring
business before such annual meeting of stockholders of the Company to be held in
2001 in a form other than a stockholder proposal must provide written notice
that is received by the Company no later than February 22, 2001. Any notices
required by this section should be addressed to The York Group, Inc., Attn:
Corporate Secretary, 8554 Katy Freeway, Suite 200, Houston, Texas 77024.
By Order of the Board of Directors
Cristen L. Cline, SECRETARY
April 7, 2000
THE COMPANY WILL FURNISH WITHOUT CHARGE ADDITIONAL COPIES OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 TO INTERESTED
SECURITY HOLDERS ON REQUEST. THE COMPANY WILL FURNISH TO ANY SUCH PERSON ANY
EXHIBITS DESCRIBED IN THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF
REASONABLE FEES RELATING TO THE COMPANY'S FURNISHING SUCH EXHIBITS. REQUESTS FOR
COPIES SHOULD BE DIRECTED TO THE SECRETARY AT THE COMPANY'S ADDRESS PREVIOUSLY
SET FORTH.
13
<PAGE>
FRONT SIDE OF PROXY
PROXY THE YORK GROUP, INC. PROXY
8554 KATY FREEWAY, SUITE 200
HOUSTON, TEXAS 77024
ANNUAL MEETING OF STOCKHOLDERS MAY 17, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David F. Beck and Cristen L. Cline, or
either of them, attorneys-in-fact and proxies of the undersigned, with full
power of substitution, to vote in respect of the undersigned's shares of the
Common Stock of The York Group, Inc. ("Company") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be held
on May 17, 2000, at 10:00 a.m., local time, on Wednesday, May 17, 2000, at the
West Memorial Business Park Conference Center, 8584 Katy Freeway, First Floor,
Houston, Texas 77024, and at any adjournment(s) thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH ON THE
REVERSE SIDE.
This proxy, when properly executed will be voted in the manner directed
herein by the undesigned stockholder(s). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE DIRECTOR NOMINEES SET FORTH ON THE REVERSE SIDE AND IN THE
DISCRETION OF THE PROXY HOLDER ON ALL OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE MEETING. All prior proxies are hereby revoked.
(Please vote, sign and date on reverse side and return promptly)
- --------------------------------------------------------------------------------
[BACK SIDE OF PROXY CARD]
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of the following nominees as directors:
1) Thomas J. Crawford 4) Kirk P. Pendleton 6) Robert T. Sevedge
2) Alan H. Elder 5) Robert T. Rakich 7) Howard J. Trulove
3) Eldon P. Nuss
[ ] FOR ALL [ ] WITHHELD ALL [ ] FOR ALL EXCEPT
____________________
Nominee Exception(s)
2. In their discretion, on such other business as may properly be presented at
the meeting.
(Please sign exactly as your name
appears hereon. When signing as
attorney, executor, administrator,
trustee, guardian, etc., give full
title as such. For joint accounts,
each joint owner should sign.)
PLEASE COMPLETE, SIGN, DATE AND RETURN
PROMPTLY THE PROXY CARD USING THE
ENCLOSED ENVELOPE.
___________________________________
___________________________________
Signature(s)
Dated: ________________________, 2000
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE
