<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section
240.14a-12
YORK RESEARCH CORPORATION
- --------------------------------------------------------------------------------
(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)(1)
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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(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>
YORK RESEARCH CORPORATION
280 Park Avenue
Suite 2700 West
New York, New York 10017
(212) 557-6200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
October 15, 1998
The Annual Meeting of the Stockholders of York Research Corporation (a
Delaware corporation) will be held at The Palace Hotel, 455 Madison Avenue, New
York, New York, on Thursday, October 15, 1998 at 9:30 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, 1999;
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 September 15,
1998 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
September 15, 1998
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
1998 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 1998 Annual Meeting of Stockholders of the Company (the "Meeting"). The
Meeting will be held on Thursday, October 15, 1998 at 9:30 a.m., at The Palace
Hotel, 455 Madison Avenue, New York, New York, for the following purposes: (i)
to elect a Class A 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, 1999 (Item 2). As of September
17, 1998, 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, 1998
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 September 15, 1998
(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.
<PAGE>
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 15,008,388 shares were
issued and outstanding as of August 31, 1998. 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 A 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, 1999 (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 with the directions given. Regarding the election of
the Class A 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 A is being nominated for election at the Meeting.
2
<PAGE>
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. Robert M. Beningson (Class A), 69, 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.
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. Stanley Weinstein (Class C), 72, 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.
Mr. Howard Sommer (Class B), 58, was elected to fill a vacancy on the
Board of Directors in September, 1997. In September 1995, Mr. Sommer was elected
the President and Chief Executive Officer of New York Community Investment
Company L.L.C., an equity fund created and funded by eleven major banks in new
York City. Beginning in 1973, as President of U.S. Capital Corporation and
Fundex Capital Corporation, he managed finance and investment company activities
that provided over $100 million in funding to small businesses. Prior to that
time, Mr. Sommer served in a management capacity for IBM and Xerox Corporation.
Mr. H. Clifton Whiteman, who had served as a Director of the Company
since July, 1991, resigned from the Board of Directors in June, 1997, and has
been excluded from all information on directors included in this proxy statement
for the year ended February 28, 1998.
3
<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
- ------------------------------------ -------------------------------------------
Vito L. Elefante Vice President
- ------------------------------------ -------------------------------------------
- ------------------------------------ -------------------------------------------
</TABLE>
See the description under the heading "ELECTION OF DIRECTORS," above,
for background of Robert M. Beningson.
Michael Trachtenberg, 49, a Certified Public Accountant, joined the
Company in January 1987 and was elected Vice President, Chief Financial Officer
and Secretary in March 1987 and Executive Vice President in April 1990. 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, 47, 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.
Mr. Vito L. Elefante, 48, joined the Company in April 1998 and was then
elected Vice President. Prior to joining York, Mr. Elefante was Vice President
of Edison Mission Energy New York, Inc. and Executive Director of Brooklyn navy
Yard Cogeneration Partners, L.P. Prior to that, Mr. Elefante worked at Long
Island Lighting Company for twenty years, where he was responsible for
independent power generation, purchasing and fuels. Mr. Elefante is excluded
from the Compensation Table as he joined the Company subsequent to February 28,
1998.
There are no family relationships between or among any directors or
executive officers of the Company.
4
<PAGE>
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 Sommer 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, 1998, the Board met five (5) times, the
Compensation Committee met one (1) time, the Incentive Stock Option Committee
met one (1) time and the Audit Committee met one (1) 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
Directors receive fees for attending Board or Committee meetings. In
both Fiscal 1998 and Fiscal 1997, Mr. Weinstein received $24,000. Mr. Sommer
received $10,000 in Fiscal 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The fees for outside Directors are set by the Board, of which Mr.
Beningson is a member.
REPORT OF THE COMPENSATION COMMITTEE
The members of the Compensation Committee (the "Compensation
Committee") for the fiscal year ended February 28, 1998 were Mr. Weinstein and
Mr. Sommer.
The Committee reports as follows:
Compensation Philosophy and Objectives
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
5
<PAGE>
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,
Stanley Weinstein
Howard Sommer
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. Mr. Beningson is also a 15% shareholder in North
American Energy conservation, Inc. ("NAEC"), the Company's energy marketing
subsidiary.
At February 28, 1998, WCTP was indebted to the Company for
approximately $5,620,000 related to operations and maintenance services from
current and prior years, of which approximately $3,747,292 was paid subsequent
to year end, for approximately $2,651,000 for loans to WCTP and for professional
services paid on behalf of WCTP, and for approximately $29,369,000 related to
the transfer of assets to WCTP, and indebted to YCP for $28,522,000.
During the fiscal year ended February 28, 1997, the Company
purchased from Mr. Beningson, for one dollar, 85% of the outstanding shares
of NAEC. 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.
6
<PAGE>
At February 28, 1998, Mr. Beningson was indebted to the Company for
$5,971,500 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
$399,000 related to the exercise of options and certain advances. All these
amounts are non-interest bearing and are payable on demand.
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.
On May 31, 1998 Mr. Beningson paid $275,000 of the long-term note he
owes to the Company. Also on May 31, 1998, an agreement was reached to
facilitate and maximize the private placement financing being used for the
construction and completion of the Company's Big spring and Trinidad projects,
which closed on August 4, 1998. As a result of the financing, funds were also
made available for general corporate purposes such as development of future
projects. The agreement was between the Company, YCP and the minority interests
in YCP and B-41LP. Pursuant to this agreement, the minority interests agreed to
assign and subordinate their interests in various cash flows from the Brooklyn
Navy Yard and Warbasse facilities to the bond holders. In addition, the minority
interests in B-41LP have agreed as of January 1, 1998 to forgo completely their
25.3% interest in the royalty to be received from the BNY facility. This royalty
will continue through December 31, 2001 at a projected total amount of
approximately $6 million per year. In exchange the Company transferred the
balance of the note due from the Chairman of $5,696,500 to the minority
interests.
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.
7
<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>
02/26/93 100.000 100.000 100.000
03/31/93 106.000 103.016 102.680
04/30/93 110.000 98.892 100.754
05/28/93 116.000 104.839 100.065
06/30/93 104.000 105.513 97.714
07/30/93 102.000 105.697 100.723
08/31/93 98.000 111.198 101.348
09/30/93 104.000 114.316 102.970
10/29/93 102.000 116.955 102.956
11/30/93 92.000 113.267 101.436
12/31/93 94.000 116.601 101.583
01/31/94 91.000 120.316 102.734
02/28/94 73.000 119.014 100.091
03/31/94 80.000 111.719 93.975
04/29/94 68.000 110.261 89.552
05/31/94 64.000 110.392 88.964
06/30/94 60.000 106.043 87.329
07/29/94 64.000 108.555 85.536
08/31/94 79.000 115.155 86.633
09/30/94 66.000 114.995 91.241
10/31/94 52.000 116.997 91.163
11/30/94 70.000 112.895 88.383
12/30/94 64.000 113.093 89.167
01/31/95 92.000 113.482 87.983
02/28/95 96.000 119.284 90.113
03/31/95 96.000 123.021 88.870
04/28/95 88.000 127.019 88.662
05/31/95 84.000 130.140 92.916
06/30/95 99.000 140.626 97.944
07/31/95 88.000 150.676 103.543
08/31/95 96.000 153.620 103.095
09/29/95 92.000 157.377 104.964
10/31/95 116.000 156.160 104.965
11/30/95 94.000 159.812 110.582
12/29/95 86.000 158.833 120.398
01/31/96 102.000 159.904 118.584
02/29/96 102.000 166.188 121.122
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
Date Company Index Market Index Peer Index
- ------------------------------ ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
03/29/96 112.000 166.547 123.402
04/30/96 130.000 180.164 123.956
05/31/95 158.000 188.371 151.287
06/28/96 170.000 179.459 158.392
07/31/96 146.000 163.271 144.065
08/30/96 164.000 172.626 155.830
09/30/96 174.000 185.568 169.586
10/31/96 156.000 183.602 176.096
11/29/96 154.000 194.770 182.896
12/31/96 152.000 194.495 178.501
01/31/97 168.000 208.473 214.372
02/28/97 148.000 197.318 194.387
03/31/97 128.000 184.562 188.395
04/30/97 120.000 190.079 155.009
05/30/97 123.000 211.544 157.776
06/30/97 124.000 218.109 170.686
07/31/97 100.000 240.864 172.559
08/29/97 126.000 240.253 176.066
09/30/97 153.000 255.302 199.731
10/31/97 140.000 241.528 199.374
11/28/97 128.000 242.028 207.119
12/31/97 135.000 237.894 221.189
01/30/98 117.000 245.076 208.363
02/27/98 124.000 268.418 210.031
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<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, 1998.
<TABLE>
<CAPTION>
- ----------------- -------- --------------------------------------- -------------------------------------------------------------
- ----------------- -------- --------------------------------------- -------------------------------------------------------------
Annual Compensation Long-Term Compensation
--------------------- ------------------------
Awards Payouts
---------- -------
- ----------------- -------- ------------ --------- ---------------- ------------ ------------- ----------- ----------------------
Restr All Other
Other Stock Options/ LTIP Compensation
Salary Bonus Compensation Awards SAR's Payouts ($)(3)
Name Year ($) ($) ($)(1) ($) (#)(2) ($)
---- ------- ---- ---- ------- ---- ------- ---
- ----------------- -------- ------------ --------- ---------------- ------------ ------------- ----------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ROBERT M. 1998 400,681 0 0 0 0 0 18,568
BENINGSON 1997 400,681 0 0 0 0 0 18,875
Chairman, 1996 400,681 0 0 0 0 0 12,109
President &
Chief Executive
Officer
- ----------------- -------- ------------ --------- ---------------- ------------ ------------- ----------- ----------------------
MICHAEL 1998 210,000 0 0 0 0 0 20,044
TRACHTENBERG 1997 199,231 100,000 0 0 0 0 23,418
Executive Vice 1996 190,000 0 0 0 0 0 14,699
President &
Chief Financial
and Accounting
Officer
- ----------------- -------- ------------ --------- ---------------- ------------ ------------- ----------- ----------------------
ROBERT C. 1998 210,000 0 0 0 0 0 20,044
PALADINO 1997 193,846 100,000 0 0 0 0 23,418
Executive Vice 1996 179,538 0 15,000 0 0 0 14,699
President
- ----------------- -------- ------------ --------- ---------------- ------------ ------------- ----------- ----------------------
- ----------------- -------- ------------ --------- ---------------- ------------ ------------- ----------- ----------------------
</TABLE>
(1) Forgiveness of indebtedness.
(2) The Company does not grant SAR's.
(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, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -------------------- --------------------------------------------------------------------- ------------------------------------
- -------------------- --------------------------------------------------------------------- ------------------------------------
Individual Grants
-----------------
- -------------------- ------------- ------------------------ ------------- ---------------- ------------------------------------
Alternative Grant Date Present
Options % of Total Options Exercise Value
Granted Granted to Employees Price Expiration ($)
Name (#) in Fiscal Year ($/Share) Date
- ---- --- -------------- --------- ----
- -------------------- ------------- ------------------------ ------------- ---------------- ------------------------------------
<S> <C> <C> <C> <C> <C>
ROBERT M. BENINGSON 0 N/A N/A N/A N/A
- -------------------- ------------- ------------------------ ------------- ---------------- ------------------------------------
MICHAEL 0 N/A N/A N/A N/A
TRACHTENBERG
- -------------------- ------------- ------------------------ ------------- ---------------- ------------------------------------
ROBERT C. PALADINO 0 N/A N/A N/A N/A
- -------------------- ------------- ------------------------ ------------- ---------------- ------------------------------------
</TABLE>
10
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information on option exercises in
Fiscal 1997 by the named executive officers and the value of such officers
unexercised options at February 28, 1998.
<TABLE>
<CAPTION>
- -------------------- -------------- ------------- -------------------------------- ------------------------------
Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired on Value at Fiscal Year End (#) At Fiscal Year End ($)(1)
Exercise Realized ------------------------- -------------------------
Name (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
---- --- ------- ----------- ------------- ----------- -------------
- -------------------- -------------- ------------- ---------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ROBERT M. BENINGSON 0 0 1,725,000 0 4,093,000 0
- -------------------- -------------- ------------- ---------------- --------------- --------------- --------------
MICHAEL 25,000 121,872 214,000 26,000 560,750 86,250
TRACHTENBERG
- -------------------- -------------- ------------- ---------------- --------------- --------------- --------------
ROBERT C. PALADINO 4,000 15,000 177,000 15,000 478,125 48,125
- -------------------- -------------- ------------- ---------------- --------------- --------------- --------------
- -------------------- -------------- ------------- ---------------- --------------- --------------- --------------
</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.
Years of Service (2)
--------------------
<TABLE>
<CAPTION>
- ------------ -------------- ------------- ----------- ----------------- -------------- ---------------------
Remuneration 10 15 20 25 30 35+
- ------------ --------- --------- -------- ----------- ---------- --------
(1)
- ------------ -------------- ------------- ----------- ----------------- -------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
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 42 for Robert M. Beningson, 11 for Robert C. Paladino,
and 15 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.
11
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Based on its review of Forms 3, 4 and 5 submitted to it by its Directors and
Executive Officers, the Company is not aware of any non-compliance with the
reporting provisions of Section 16 by its Directors or Executive Officers.
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 408,535 shares remain outstanding under the Plan
as of August 31, 1998.
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 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 1,571,723
shares remain outstanding under the 1993 ISO Plan as of August 31, 1998.
12
<PAGE>
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 $ $593,000, $525,000 and
$413,000 to the ESOP during Fiscal 1998, 1997, and 1996, respectively.
Mr. Weinstein 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.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
- -----------------------------------------------
The following table sets forth the information indicated as of August
31, 1998, 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.
13
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class (1)
---------------- -------------------- ---------
- ------------------------------------------------ ----------------------------- -----------------------------
<S> <C> <C>
Robert M. Beningson 3,564,000 (2) 21.3
280 Park Avenue
Suite 2700 West
New York, NY 10017
- ------------------------------------------------ ----------------------------- -----------------------------
Stanley Weinstein 1,006,714 (3) 6.7
280 Park Avenue
Suite 2700 West
New York, NY 10017
- ------------------------------------------------ ----------------------------- -----------------------------
York Research Corporation 966,714 6.4
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
August 31, 1998 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 3,564,000 (2) 21.3
Stanley Weinstein 1,006,714 (3) 6.7
Howard Sommer 20,000 (4) ( 7 )
Michael Trachtenberg 277,000 (5) 1.8
Robert C. Paladino 195,000 (6) 1.3
Vito Elefante - 0 - ( 7 )
Directors and officers as 5,062,714 29.4
a group (6) persons
- -------------------
- ------------------------------------------------- ---------------------------------------------- --------------------
- ------------------------------------------------- ---------------------------------------------- --------------------
</TABLE>
14
<PAGE>
(1) The Percent of Class is based upon 15,008,388 issued and outstanding
shares of common stock as of the August 31, 1998 plus the shares that
underlie unexercised warrants or options held by the individuals.
(2) Includes 824,000 shares owned directly plus warrants to purchase
1,150,000 shares of common stock, options to purchase 575,000 shares of
common stock and 1,015,000 shares owned by RRR'S Ventures, Ltd., a
corporation controlled by Mr. Beningson.
(3) Includes warrants to purchase 40,000 shares of common stock, and
966,714 shares held by the ESOP of which Mr. Weinstein is the trustee.
(4) Includes warrants to purchase 20,000 shares of common stock.
(5) Includes 37,000 shares owned directly by Mr. Trachtenberg and options
to purchase 240,000 shares of common stock.
(6) Includes 3,000 shares owned directly by Mr. Paladino and options to
purchase 192,000 shares of common stock.
(7) Less than 1% ownership.
15
<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, 1999. 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 1999 ANNUAL MEETING
In order for stockholder proposals to be eligible for inclusion in the
Company's proxy material relating to its 1999 Annual Meeting of Stockholders,
they must be received by the Company no later than May 22,1999.
By Order of the Board of Directors
Robert M. Beningson
President and Chairman of the Board
16
<PAGE>
YORK RESEARCH CORPORATION
PROXY FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
October 15, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael Trachtenberg and Robert M.
Beningson, and each of them, the proxy or proxies of the undersigned with full
power of substitution, to vote and act in his name, place and stead at the 1998
Annual Meeting of Stockholders of York Research Corporation (the "Company") to
be held at The New York Palace Hotel, 455 Madison Avenue, New York, New York, on
Thursday, October 15, 1998 at 9:30 A.M., local time and at any adjournment or
adjournments thereof, with such powers as the undersigned would have if he were
personally present thereat, as follows:
1. Election of a Director in the Class indicated for the term set forth in
the Proxy Statement.
___ FOR all nominees listed ___ WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary
ROBERT M. BENINGSON (Class A)
2. Proposal to ratify the appointment of Grant Thornton LLP as the
independent certified public accountants of the Company for the fiscal
year ending February 28, 1999.
For ___ Against ___ Abstain ___
4. In their discretion, upon any other business which may property come
before the Meeting.
The Proxies Shall Vote For Proposals 1 and 2 Unless Contrary Instructions Are
Given Herein
Dated _________________, 1998
-----------------------------
Stockholder's Signature
-----------------------------
Signature if held jointly
NOTE: Please sign your name or names exactly
as set forth above. When shares are held by
joint tenants, both should sign. If signing
as attorney, executor, administrator,
trustee or guardian, or in any similar
capacity, please indicate the capacity in
which you are acting. Proxies executed by a
corporation should be signed in full
corporate name by a duly authorized officer
and should bear the corporate seal. Proxies
executed by a partnership should be signed
in partnership name by an authorized person.
--------------------------------------------
--------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
--------------------------------------------
--------------------------------------------
