<PAGE>
YORK RESEARCH CORPORATION
280 PARK AVENUE
SUITE 2700 WEST
NEW YORK, NEW YORK 10017
(212) 557-6200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 17, 1997
The Annual Meeting of the Stockholders of York Research Corporation (a
Delaware corporation) will be held at The Intercontinental Hotel, 111 East 48th
Street, New York, New York, on Thursday, July 17, 1997 at 10:00 A.M., for the
following purposes:
1. to elect a director;
2. to ratify the appointment of Grant Thornton LLP as the independent
certified public accountants for the fiscal year ending February 28, 1998;
and to transact such other business as may properly come before the meeting or
adjournments thereof.
The Board of Directors has fixed the close of business on June 13, 1997 as
the time as of which stockholders of record of York Research Corporation who are
entitled to notice of and to vote at such meeting shall be determined.
By Order of the Board of Directors
Michael Trachtenberg
Secretary
280 Park Avenue
New York, New York 10017
June 16, 1997
------------------------
YOUR VOTE IS IMPORTANT
WE ENCOURAGE YOU TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN YOUR PROXY CARD
IN THE ENCLOSED ENVELOPE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING.
<PAGE>
YORK RESEARCH CORPORATION
280 PARK AVENUE
SUITE 2700 WEST
NEW YORK, NEW YORK 10017
(212) 557-6200
PROXY STATEMENT FOR
1997 ANNUAL MEETING OF STOCKHOLDERS
The enclosed proxy is solicited by the Board of Directors (the "Board") of
York Research Corporation, a Delaware corporation (the "Company") for voting at
the 1997 Annual Meeting of Stockholders of the Company (the "Meeting"). The
Meeting will be held on Thursday, July 17, 1997 at 10:00 a.m., at The
Intercontinental Hotel, 111 East 48th Street, New York, New York, for the
following purposes: (i) to elect a Class C director (Item 1); and (ii) to ratify
the selection of Grant Thornton LLP by the Board as independent certified public
accountants for the Company for the fiscal year ending February 28, 1998 (Item
2). As of June 16, 1997, the approximate date on which this Proxy Statement and
the accompanying proxy card will first be mailed to stockholders, the Board had
no knowledge of any other business to be presented to the Meeting, but if any
other business is properly brought before the Meeting, the persons named in the
enclosed form of proxy will vote according to their discretion.
The Company's Annual Report for its fiscal year ended February 28, 1997 is
enclosed herewith. Such report is not to be treated as part of these proxy
soliciting materials.
Stockholders of record at the close of business on June 13, 1997 (the
"Record Date") are entitled to notice of and to vote at the Meeting or any
adjournment thereof.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company, including
expenses in connection with preparing, assembling and mailing this Proxy
Statement and all papers which now accompany or may hereafter supplement it.
Such solicitation will be made by mail and may also be made by personal
solicitation by the Company's regular officers or employees, who will receive no
special compensation therefor. The Company may reimburse brokers or persons
holding stock in their names or in the names of their nominees for their
expenses in sending proxies and proxy materials to beneficial owners.
NUMBER OF SHARES OUTSTANDING AND VOTING RIGHTS
The Company presently has authorized 50,000,000 shares of Common Stock, par
value $.01 per share ("Common Stock"), of which 14,854,132 shares were issued
and outstanding as of May 31, 1997. The Company also has authorized 10,000,000
shares of Class A Common Stock, par value $.01 per share ("Class A Stock"), and
6,000,000 shares of Preferred Stock, par value $.01 per share ("Preferred
Stock"). No shares of Class A Stock or of Preferred Stock were issued and
outstanding on the Record Date.
The holders of shares of Common Stock on the Record Date are entitled to one
vote per share on all matters. A quorum for the Meeting is a majority of the
shares of Common Stock outstanding on the Record Date. Approval by the holders
of a majority of the shares of Common Stock present in person or by proxy and
voting at the Meeting, provided a quorum is present, is required (i) for the
election of the Class C director (Item 1); and (ii) to ratify the selection of
Grant Thornton LLP by the Board as independent certified public accountants for
the Company for the fiscal year ending February 28, 1998 (Item 2).
PROXIES
The proxy solicited by this Proxy Statement may be revoked by the
stockholder giving such proxy at any time before the proxy is exercised, and the
giving of such proxy will not affect the right of any stockholder to vote in
person should he or she find it convenient to attend the Meeting. The shares
represented by all properly executed proxies received in time for the Meeting
will be voted in accordance
<PAGE>
with the directions given. Regarding the election of the Class C director (Item
1), stockholders may vote in favor of the nominee or abstain. With respect to
the ratification of the appointment of Grant Thornton LLP as independent
certified public accountants (Item 2), stockholders may vote in favor of the
proposal, against the proposal or may abstain from voting. With respect to both
Items 1 and 2, if the stockholder abstains from voting, the shares are
considered present at the meeting for such item but, since they are not
affirmative votes for the item, they will have the same effect as votes against
the item. With respect to broker non-votes on items 1 and 2, the shares are not
considered present at the meeting for such items and they are therefore not
counted in respect of such items. Such broker non-votes do have the practical
effect of reducing the number of affirmative votes required to achieve a
majority for such item by reducing the total number of shares from which the
majority is calculated.
ITEM 1.
ELECTION OF DIRECTORS
The Company's Board of Directors is classified into three classes of
directors: Class A, Class B and Class C. A director in each class is elected at
each Annual Meeting of Stockholders to hold office for a three-year term and
until successors of such class are elected and have qualified. A director in
Class C is being nominated for election at the Meeting.
The following person has been nominated for election as director of the
Company in the class indicated. The nominee has consented to his nomination and
has agreed to serve if elected. If, however, the nominee should not be available
for election, the persons named as proxies may vote for other persons in their
discretion. Management has no reason to believe that the nominee will be
unavailable for election. The Company does not have a nominating committee.
A brief statement setting forth the age (at the Record Date), the principal
occupation during the past five years, the year in which first elected as a
director and other information concerning the nominee and the remaining
directors whose terms of office will continue beyond the Meeting, appear below:
MR. STANLEY WEINSTEIN (Class C), 71, was elected to fill a vacancy on the
Board of Directors in May, 1995. Until 1991, Mr. Weinstein was a partner at
Deloitte and Touche, certified public accountants, and since such date, has been
an independent consultant.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THE NOMINEE NAMED ABOVE
The term of office of the following directors will continue beyond the
Meeting:
MR. ROBERT M. BENINGSON (Class A), 68, was elected a director of the Company
in October 1981. In February 1982, Mr. Beningson was elected Chairman of the
Board, President and Chief Executive Officer of the Company. Mr. Beningson is
Chief Executive Officer and Chairman of the Board of each of the Company's
subsidiaries. Previously, Mr. Beningson was Chairman of the Board of Directors
of the Company between 1968 and 1979.
MR. H. CLIFTON WHITEMAN (Class B), 71, was elected to the Board of Directors
in July 1991. From March 1982 through March 1989, Mr. Whiteman served as
Executive Vice President of The Bank of Tokyo Trust Company. Following his
retirement in April 1989, he was a consultant to The Bank of Tokyo Group in New
York City until April 1992. Mr. Whiteman serves on the Board of Directors of CB
Bancshares, Inc.
2
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company are:
<TABLE>
<CAPTION>
NAME POSITION
- - --------------------------------------------------- ---------------------------------------------------
<S> <C>
Robert M. Beningson................................ Chairman of the Board, President and Chief
Executive Officer
Michael Trachtenberg............................... Executive Vice President, Chief Financial and
Accounting Officer and Secretary
Robert C. Paladino................................. Executive Vice President
</TABLE>
See the description under the heading "ELECTION OF DIRECTORS," above, for
background of Robert M. Beningson.
Michael Trachtenberg, 48, a Certified Public Accountant, joined the Company
in January 1987 and was elected Vice President, Chief Financial Officer and
Secretary in March 1987. From November 1985, until joining the Company Mr.
Trachtenberg was a financial consultant in private practice. Prior thereto, Mr.
Trachtenberg was Vice President-Finance and Chief Financial Officer of S&S
Corrugated Paper Machinery Co., Inc. From 1980 to 1984, Mr. Trachtenberg held
various positions with Carter Day Industries, Inc., an agricultural equipment
manufacturer and energy and environmental systems company, culminating in his
appointments as Vice President, Treasurer and Chief Financial Officer.
Robert C. Paladino, 46, joined the Company in January 1987 and was elected
Executive Vice President in April 1990. From October 1980 until joining the
Company , Mr. Paladino was Senior Vice President and General Counsel of NPS
Technologies Group, Inc., an engineering and construction company serving the
electric utility industry. From 1974 to 1980, Mr. Paladino held various
positions with the Edison Electric Institute, the national organization for the
investor-owned electric utility industry, culminating in his appointment as
Director of Fossil Fuels and Assistant to the President.
There are no family relationships between or among any directors or
executive officers of the Company.
COMMITTEES AND MEETINGS OF THE BOARD
The Board has three committees--the Compensation Committee, the Incentive
Stock Option Committee and the Audit Committee. The Compensation Committee
reviews the performance of employees of the Company and determines their
compensation. The Incentive Stock Option Committee administers the stock option
plans of the Company. The Audit Committee oversees the accounting, reporting and
audit practices established by management of the Company. Messrs. Weinstein and
Whiteman are members of all three Committees. In addition to numerous informal
meetings of the Board of Directors during the year, during the fiscal year ended
February 28, 1997, the Board met two times, the Compensation Committee met one
time, the Incentive Stock Option Committee did not meet and the Audit Committee
met one time. Each of the directors attended all of the meetings of the Board
and each Committee on which he sat during such year.
COMPENSATION OF DIRECTORS
Non-employee directors receive no fees for attending Board or Committee
meetings. However, both Mr. Whiteman and Mr. Weinstein serve as consultants to
York and render advice, consultation and reports to York on such matters as are
requested by the executive officers or the Board of Directors. In both Fiscal
1997 and 1996, Mr. Whiteman received $24,000. Mr. Weinstein received $24,000 in
Fiscal 1997 and $18,000 in Fiscal 1996. Also during Fiscal 1996, Mr. Weinstein
received warrants to purchase 20,000 shares of common stock at $5.44 per share,
the market price at the time of grant. Mr. Whiteman is indebted to the Company
for $125,000 related to a demand loan which bears interest at prime.
3
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
THE MEMBERS OF THE COMPENSATION COMMITTEE ARE MR. Weinstein and Mr.
Whiteman. Mr. Whiteman and Mr. Weinstein provide consulting services to the
Company. Compensation for these services is determined by agreement with Mr.
Beningson, the Chief Executive Officer of the Company, whose compensation is set
by the Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE
The members of the Compensation Committee (the "Compensation Committee") for
the fiscal year ended February 28, 1997 were Messrs. Whiteman and Weinstein.
The Committee reports as follows:
COMPENSATION PHILOSOPHY AND OBJECTIONS
The guiding principal by which the Committee develops and administers annual
and long-term compensation plans is to align the interests and goals of
executive management with those of the Company's shareholders. The key elements
of this philosophy are:
1. Establishing base salary plans which provide cash compensation that
is commensurate with the operating, financial and strategic goals of the
Company. The salaries of executive officers are listed in the Summary
Compensation Table. Each of these officers' salaries is reviewed
periodically, giving appropriate consideration to the following factors: (a)
The individual's performance and contribution, during the period, to the
Company's goals; (b) his experience; (c) his level of responsibility for
corporate results and functions; (d) internal equity; and (e) external pay
practices.
2. Providing meaningful equity-based incentives for executives and
others in the Company to encourage and reward effective management and
employee performance, resulting in long-term corporate financial success, as
measured by stock price appreciation. Stock option grants only have value to
recipients if the price of York's stock appreciates in value from the date
the options are granted, a benefit in which York stockholders participate as
well.
The Company's 1993 Incentive Stock Option Plan (the "ISO Plan") is a
"qualified" plan under Section 422 of the Internal Revenue Code of 1986, as
amended, which was approved by the Company's Stockholders at the Special Meeting
in lieu of Annual Meeting held on September 23, 1993. The ISO Plan utilizes
vesting periods to encourage key officers and employees to continue in the
employ of the Company.
Sincerely,
H. Clifton Whiteman
Stanley Weinstein
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Beningson is President and a major shareholder of RRR'S Ventures, Ltd.
("RRR'S"), in which the Chief Financial Officer of the Company is also a minor
shareholder, which is a 25% general partner in Warbasse-Cogeneration
Technologies Partnership L.P. ("WCTP"). RRR'S is also a limited partner in RV
Associates L.P. ("RVA"), which in turn is a minority partner in B-41 Associates
L.P. ("B-41 LP"), a limited partnership which is 74.7% owned by the Company.
RRR'S is also a 10% general partner in York Cogen Partners L.P. ("YCP"), a
limited partner in B-41 LP.
4
<PAGE>
At February 28, 1997, WCTP was indebted to the Company for approximately
$2,006,000 related to operations and maintenance services from current and prior
years, of which approximately $1,583,625 was paid subsequent to year end, for
approximately $2,500,000 for loans to WCTP and for professional services paid on
behalf of WCTP, and for approximately $28,810,000 related to the transfer of
assets to WCTP, and indebted to YCP for $28,522,000.
At February 28, 1997, approximately $62,000 was due to the Company from
RRR'S as a result of general partner and administrative fees due to RRR'S by YCP
offset by the cumulative effect of expenses paid by the Company on behalf of
RRR'S.
In Fiscal 1993, RVA received a distribution of $2,000,000 from B-41 LP which
is expected to be charged against capital, concurrent with future allocations of
income.
During the fiscal year ended February 28, 1997, the Company purchased from
Mr. Beningson, for one dollar, 85% of the outstanding shares of North American
Energy Conservation, Inc. ("NAEC"), in conjunction with which the Company has
been arranging wholesale electric power transactions. Mr. Beningson continues to
own the remaining 15%. In fiscal 1997, prior to the acquisition, the Company
recognized approximately $924,000 as reimbursement of cost from NAEC.
At February 28, 1997, Mr. Beningson was indebted to the Company for
$6,971,500 related to the exercise of warrants and purchase of common shares in
prior years, Mr. Trachtenberg was indebted to the Company for $214,860 related
to the exercise of options, and Mr. Paladino was indebted to the Company for
$130,000 related to the exercise of options and an advance. All these amounts
are non-interest bearing and are payable on demand. At February 28, 1997, Mr.
Whiteman is indebted to the Company for $125,000 related to a demand loan which
bears interest at prime.
In March 1997, B-41LP settled all its obligations to Sanwa Business Credit
Corporation ("SBCC") for a cash payment of $2,750,000. SBCC, in exchange for
this cash payment, gave up all its interest in the future cash flow from the
Brooklyn Navy Yard Project and has no continuing interest in any of the
Company's projects or assets. In settling this obligation, B-41LP caused RVA and
its partners to lose tax benefits that they would have been able to utilize.
Therefore, the Company compensated RVA for its lost tax benefits in the total
amount of $4 million. The form of this transaction with RVA and its partners was
the exercise of 500,000 pre-existing warrants at $6 per share, for a total of
$3,000,000, and the transfer of $1,000,000 of the note receivable from the
Chairman to an entity designated by the Chairman.
In the year ended February 28, 1997, the Company recorded $11,000,000 of
fees for services rendered through February 28, 1997 to WCTP and RVA, two
partnerships of which a company controlled by Mr. Beningson is the general
partner. This amount was included in service revenues. These fees were recorded
pursuant to a services agreement between WCTP, RVA, CTI and the Company. The
services included ongoing negotiations of consolidation agreements with Con
Edison and Edison Mission Energy, aiding in resolving various contract issues
concerning WCTP's and RVA's power purchase agreements with Con Edison, and
various issues related to the progress of the Brooklyn Navy Yard Project.
The Company recognizes that potential conflicts of interest may arise by
reason of the fact that Mr. Beningson controls RRR'S and RVA, and is President
and Chief Executive Officer of the Company. Mr. Beningson has advised the
Company that in all transactions between or affecting any affiliated entity and
the Company he will act in the best interests of the stockholders of the
Company, as determined by the Board of Directors of the Company, excluding
himself.
5
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the change in the Company's cumulative total
shareholder return on its common shares with the Center for Research on Stock
Prices (CRSP) Index for NASDAQ Stock Market (U.S. and Foreign) and the CRSP
Index for NASDAQ Stocks (SIC 4900-4999 U.S. and Foreign).
<TABLE>
<CAPTION>
DATE COMPANY INDEX MARKET INDEX PEER INDEX
- - --------- -------------- ------------ -----------
<S> <C> <C> <C>
02/28/92 100.000 100.000 100.000
03/31/92 93.617 95.371 97.613
04/30/92 87.234 91.302 93.638
05/29/92 108.511 92.479 92.266
06/30/92 85.106 88.902 85.391
07/31/92 70.213 91.871 88.111
08/31/92 119.149 89.124 86.820
09/30/92 121.277 92.266 88.282
10/30/92 125.532 95.711 88.046
11/30/92 117.021 103/210 90.705
12/31/92 121.277 107.087 94.018
01/29/93 121.277 110.274 96.547
02/26/93 106.383 106.317 98.582
03/31/93 112.766 109.523 101.224
04/30/93 117.021 105.139 99.325
05/28/93 123.404 111.461 98.646
06/30/93 110.638 112.178 96.328
07/30/93 108.511 112.374 99.294
08/31/93 104.255 118.222 99.911
09/30/93 110.638 121.537 101.509
10/29/93 108.511 124.343 101.496
11/30/93 97.872 120.420 99.997
12/31/93 100.000 123.963 100.142
01/31/94 96.808 127.914 101.277
02/28/94 77.660 126.529 98.671
03/31/94 85.106 118.775 92.642
04/29/94 72.340 117.225 88.282
05/31/94 68.085 117.363 87.702
06/30/94 63.830 112.740 86.090
07/29/94 68.085 115.411 84.323
08/31/94 84.043 122.427 85.404
09/30/94 70.213 122.257 89.947
10/31/94 55.319 124.385 89.870
11/30/94 74.468 120.025 87.130
12/30/94 68.085 120.236 87.902
01/31/95 97.872 120.649 86.735
02/28/95 102.128 126.817 88.835
03/31/95 102.128 130.788 87.609
04/28/95 93.617 135.038 87.404
05/31/95 89.362 138.355 91.599
06/30/95 105.319 149.502 96.554
07/31/95 93.617 160.187 102.074
08/31/95 102.128 163.316 101.633
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
09/29/95 97.872 167.310 103.476
10/31/95 123.404 166.017 103.477
11/30/95 100.000 169.898 109.013
12/29/95 91.489 168.856 118.690
01/31/96 108.511 169.988 116.902
02/29/96 108.511 176.675 119.404
03/29/96 119.149 177.051 121.651
04/30/96 138.298 191.519 122.198
05/31/96 168.085 200.248 149.141
06/28/96 180.851 190.778 156.145
07/31/96 155.319 173.570 142.042
08/30/96 174.468 183.501 153.641
09/30/96 185.106 197.251 167.204
10/31/96 165.957 195.162 173.622
11/29/96 163.830 207.037 180.327
12/31/96 161.702 206.722 175.994
01/31/97 178.723 221.509 211.347
02/28/97 157.447 209.680 191.644
</TABLE>
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the Company's
Chief Executive Officer and the remaining most highly paid executive officers
for the three fiscal years ended February 28, 1997.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AWARDS PAYOUTS
------------------------ -------------
<CAPTION>
RESTR
OTHER STOCK OPTIONS/ LTIP
SALARY BONUS COMPENSATION AWARDS SAR'S PAYOUTS
NAME YEAR ($) ($) ($)(1) ($) (#)(2) ($)
- - ------------------------------------ --------- --------- --------- ------------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
ROBERT M. BENINGSON 1997 480,681 0 0 0 0 0
Chairman, President & 1996 400,681 0 0 0 0 0
Chief Executive 1995 371,082 0 0 0 375,000 0
Officer
MICHAEL TRACHTENBERG 1997 199,231 100,000 0 0 0 0
Executive Vice 1996 190,000 0 0 0 0 0
President & Chief 1995 190,000 0 0 0 100,000 0
Financial and
Accounting Officer
ROBERT C. PALADINO 1997 193,846 100,000 0 0 0 0
Executive Vice 1996 179,538 0 15,000 0 0 0
President 1995 164,924 0 0 0 50,000 0
<CAPTION>
<S> <C>
ALL OTHER
COMPEN-
SATION
NAME ($)(3)
- - ------------------------------------ -----------
<S> <C>
ROBERT M. BENINGSON 18,875
Chairman, President & 12,109
Chief Executive 19,737
Officer
MICHAEL TRACHTENBERG 23,418
Executive Vice 14,699
President & Chief 18,863
Financial and
Accounting Officer
ROBERT C. PALADINO 23,418
Executive Vice 14,699
President 16,180
</TABLE>
- - ------------------------
(1) Forgiveness of indebtedness.
(2) The Company does not grant SAR's. In Fiscal 1995, all grants were qualified
stock options.
(3) Represents the value of the Company's contribution to the ESOP allocable to
executives' accounts for such year.
OPTION GRANTS
Presented below is more information concerning the option awards shown on
the Summary Compensation Table for the fiscal year ended February 28, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------ ALTERNATIVE
OPTIONS % OF TOTAL OPTIONS EXERCISE GRANT DATE
GRANTED GRANTED TO EMPLOYEES PRICE EXPIRATION PRESENT VALUE
NAME (#) IN FISCAL YEAR ($/SHARE) DATE ($)
- - ------------------------------------------- ------------- ----------------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
ROBERT M. BENINGSON........................ 0 N/A N/A N/A N/A
MICHAEL TRACHTENBERG....................... 0 N/A N/A N/A N/A
ROBERT C. PALADINO......................... 0 N/A N/A N/A N/A
</TABLE>
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information on option exercises in Fiscal
1996 by the named executive officers and the value of such officers unexercised
options at February 28, 1997.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)(1)
EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------------------------- ----------- --------- ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
ROBERT M. BENINGSON........................ 0 0 2,325,000 0 8,630,500 0
MICHAEL TRACHTENBERG....................... 35,000 196,875 193,000 72,000 802,175 352,950
ROBERT C. PALADINO......................... 5,000 32,000 156,000 40,000 632,275 192,475
</TABLE>
- - ------------------------
(1) Value calculated is the difference between closing price on the date of
exercise or fiscal year end, respectively, and the exercise price.
PENSION PLAN TABLE
The following table shows estimated annual retirement benefits payable to
executive officers and employees.
<TABLE>
<CAPTION>
YEARS OF SERVICE (2)
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REMUNERATION(1) 10 15 20 25 30 35+
- - --------------------------------------------------- --------- --------- --------- --------- --------- ---------
50,000............................................ 3,200 4,125 5,200 6,250 7,500 8,750
100,000............................................ 8,200 11,625 15,200 18,250 21,675 24,175
150,000............................................ 13,200 19,125 25,200 30,750 36,675 40,425
200,000............................................ 18,200 26,625 35,200 43,250 51,675 56,675
250,000............................................ 23,200 34,125 45,200 55,750 66,675 72,925
</TABLE>
- - ------------------------
(1) Based on highest five year average and includes annual salary and cash
bonus, if any. Benefits are not subject to deduction for social security.
(2) The years of credited service for individuals listed in the Summary
Compensation Table are 41 for Robert M. Beningson, 10 for Robert C.
Paladino, and 14 for Michael Trachtenberg.
IRS regulations limit the amount of compensation credited for Pension Plan
purposes to $150,000 per year, subject to cost of living increases.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
On one occasion, Mr. Robert Paladino, an officer of the Company, filed a
Form 4 one month late, which reported the exercise of options and the gift of
those shares to a charity.
STOCK OPTION PLANS
The Company has a 1982 Incentive Stock Option Plan (the "1982 ISO Plan")
which is a "qualified" plan under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). All 1,400,000 qualified stock options authorized
under the 1982 ISO Plan have been granted. The Plan expired on April 26, 1992.
Options to purchase 492,583 shares remain outstanding under the Plan as of May
31, 1997.
The York Research Corporation 1993 Incentive Stock Option Plan (the "1993
ISO Plan") authorizes the granting from time to time of options to purchase
shares of the Company's Common Stock ("Options") to officers and employees of
and consultants to the Company and its subsidiaries ("Employees"), up to a
maximum of 3,000,000 shares of Common Stock in the aggregate. Non-employee
Directors
8
<PAGE>
of the Company are not eligible to receive options under the 1993 ISO Plan.
Options may either be "incentive stock options" ("ISO's") under Section 422 of
the Internal Revenue Code of 1986, or may be non-qualified options. In the case
of ISO's granted under the ISO Plan, the exercise price of each ISO must not be
less than the fair market value of the Common Stock of the Company on the date
the ISO is granted, except that, in the case of an ISO granted to any person
whose stock ownership at the time of the grant exceeds 10% of the combined
voting power of all classes of stock of the Company or any subsidiary ("10%
Holder"), the exercise price must be at least 110% of the fair market value of
the Common Stock on the date of grant. The term "fair market value" for purposes
of the 1993 ISO Plan is the closing price of a share of Common Stock of the
Company as reported by NASDAQ. With respect to non-qualified options, the
exercise price is set by the Incentive Stock Option Committee ("ISO Committee"),
but will not be less than the par value per share of the Company's common stock.
The 1993 ISO Plan provides that each option agreement shall specify a period
during which the Option is exercisable of not more than 10 years from the date
of grant except that Options granted to 10% Holders shall not be exercisable
after the expiration of five years from the date of grant. Options are
exercisable until the date of termination of employment unless the ISO Committee
agrees to extend the option period for up to three months beyond the employment
termination date. The ISO Committee also determines when each Option granted
under the 1993 ISO Plan will become exercisable. Payment for shares upon
exercise of Options may be in cash, an exchange of shares of the Company's
Common Stock if deemed acceptable to the ISO Committee, a promissory note for
such part of the purchase price as is deemed acceptable to the ISO Committee,
the terms of any such promissory note to be determined by the ISO Committee or
by any combination of the foregoing. Options to purchase 1,226,244 shares remain
outstanding under the 1993 ISO Plan as of May 31, 1997.
EMPLOYEE STOCK OWNERSHIP PLAN
During 1988, the Company adopted an Employee Stock Ownership Plan ("ESOP").
The ESOP purchases shares of Common Stock from the Company and, occasionally, on
the open market. To purchase these shares the ESOP borrowed the funds from the
Company. The repayment of these loans is expected from future employer
contributions to the Plan and ESOP third party funding (including sales of
shares). The Company contributed approximately $525,000, $413,000 and $373,000
to the ESOP during Fiscal 1997, 1996, and 1995, respectively.
Mr. Whiteman is the Trustee of the ESOP. The shares that are held by the
ESOP are allocated annually to individual employees according to a formula set
forth in the ESOP.
EMPLOYEE SAVINGS PLAN
In 1988, the Company adopted the York Research Corporation 401(k) Plan (the
"401(k) Plan"). The 401(k) Plan allows employees of the Company to defer a
portion of their earnings on a pre-tax basis through contributions to the 401(k)
Plan. The Company may at its discretion make a contribution to the 401(k) Plan.
To date, the Company has elected not to contribute to the 401(k) Plan.
DEFINED BENEFIT PLAN
The Company has a defined benefit pension plan covering substantially all
employees not covered by a collective bargaining agreement. The benefits are
based on years of service and the highest consecutive five years of the
employees' compensation. The Company's funding policy is to contribute annually
the amount necessary to satisfy the Internal Revenue Service's funding
standards. Contributions are intended to provide, not only for benefits
attributed to service to date, but also for those expected to be earned in the
future.
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the information indicated as of May 31, 1997,
as to all persons known by the Board of Directors to be the beneficial owners of
more than five percent of the Corporation's Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS (1)
- - ---------------------------------------------------------------------------- ------------------ -------------
<S> <C> <C>
Robert M. Beningson......................................................... 3,491,000(1)(2) 21.1%
280 Park Avenue
Suite 2700 West
New York, NY 10017
H. Clifton Whiteman......................................................... 1,224,020(1)(4) 8.2%
280 Park Avenue
Suite 2700 West
New York, NY 10017
York Research Corporation................................................... 1,108,820 7.5%
Employee Stock Ownership Plan
280 Park Avenue
Suite 2700 West
New York, NY 10017
</TABLE>
- - ------------------------
See note references below.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the information indicated as of May 31, 1996
with respect to common stock of the Company beneficially owned by directors and
officers of the Company and by directors and officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS (1)
- - ------------------------------------------------------------ -------------------- -------------
<S> <C> <C>
Robert M. Beningson......................................... 3,491,000(2) 21.1%
Stanley Weinstein........................................... 20,000(3) (3)
H. Clifton Whiteman......................................... 1,224,020(4) 8.2%
Michael Trachtenberg........................................ 276,434(5) 1.8%
Robert C. Paladino.......................................... 202,000(6) 1.3%
Directors and officers as a group (5) persons............... 5,213,454 30.5%
</TABLE>
- - ------------------------
(1) The Percent of Class is based upon 14,854,132 issued and outstanding shares
of common stock as of the May 31, 1997 plus the shares that underlie
unexercised warrants or options held by the individuals.
(2) Includes 1,324,000 shares owned directly plus warrants to purchase 1,150,000
shares of common stock, options to purchase 575,000 shares of common stock
and 442,000 shares owned by RRR'S Ventures, Ltd., a corporation controlled
by Mr. Beningson.
(3) Includes warrants to purchase 20,000 shares of common stock. Less than 1%
ownership.
(4) Includes 75,200 shares owned directly by Mr. Whiteman, warrants to purchase
40,000 shares of common stock, and 1,108,820 shares held by the ESOP of
which Mr. Whiteman is the trustee.
(5) Includes 36,434 shares owned directly by Mr. Trachtenberg and options to
purchase 240,000 shares of common stock.
(6) Includes 2,600 shares owned directly by Mr. Paladino and options to purchase
198,000 shares of common stock.
10
<PAGE>
ITEM 2.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board recommends that the stockholders ratify its selection of Grant
Thornton LLP, independent certified public accountants, to audit the accounts of
the Company for its fiscal year ending February 28, 1998. Grant Thornton LLP has
served as the independent certified public accountant for the Company since
November, 1991. A representative of Grant Thornton LLP will be present at the
Meeting, will have the opportunity to make a statement if he or she desires to
do so and will be available to respond to appropriate questions raised at the
Meeting.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR SUCH RATIFICATION
OTHER MATTERS
The Board does not intend to bring any other matters before the Meeting and,
at the time of filing this Proxy statement with the Securities and Exchange
Commission, is not aware that any other matters are to be presented for action
at the Meeting by others. If any other matters properly come before the Meeting,
it is intended that the shares represented by proxies will be voted with respect
thereto in accordance with the judgment of the person or persons voting the
proxies on such matters.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
In order for stockholder proposals to be eligible for inclusion in the
Company's proxy material relating to its 1998 Annual Meeting of Stockholders,
they must be received by the Company no later than February 16, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
Robert M. Beningson
President and Chairman of the Board
11
<PAGE>
YORK RESEARCH CORPORATION
-----------------------------------
SUPPLEMENT DATED
JUNE 12, 1997
TO
PROXY STATEMENT
DATED JUNE 16, 1997
On June 12, 1997, after the Proxy Statement for the Annual Meeting of the
Stockholders of York Research Corporation (the "Corporation") to be held on July
17, 1997 had been printed, Mr. H. Clifton Whiteman, a Class B director of the
Corporation, resigned. The remaining directors of the Corporation, Mr. Robert
Beningson, the Corporation's Chairman and Chief Executive Officer, and Mr.
Stanley Weinstein, will select a replacement for Mr. Whiteman to serve the
balance of his term.
