<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
BESICORP GROUP INC.
TO BE HELD
SEPTEMBER 27, 1995
To the Holders of the Common Stock of BESICORP GROUP INC.
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of BESICORP GROUP
INC. (the "Company") will be held at the Wiltwyck Country Club, Lucas Avenue
Extension, Kingston, New York 12401 on Wednesday, September 27, 1995, at 10:00
a.m., for the purpose of considering and acting upon the following matters, all
as described in the accompanying Proxy Statement:
1) To elect a Board of Directors to hold office until the next annual meeting
and until the election and qualification of their respective successors.
2) To approve the appointment of Robbins, Greene, Horowitz, Lester & Co., LLP as
the independent public accountants of the Company for the fiscal year ending
March 31, 1996.
3) To vote upon a resolution submitted by a shareholder of the Company with
respect to an amendment to the Company's By-Laws to provide for the Company's
Board of Directors to consist of a majority of independent non-management
members.
4) To consider and act upon all other matters which may properly come before the
Annual Meeting or any adjournment thereof.
The Board of Directors has set the close of business on August 9, 1995, as the
record date for the purpose of determining the shareholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournment thereof, and only
shareholders of record on that date shall be entitled to notice of and to vote
at said meeting.
YOUR PROXY IS ENCLOSED. YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF
YOU DO NOT EXPECT TO BE PRESENT AND WISH YOUR SHARES TO BE VOTED, YOU ARE
REQUESTED TO DATE, FILL IN, SIGN, AND MAIL THE ENCLOSED PROXY PROMPTLY. A RETURN
ENVELOPE WITH PREPAID POSTAGE IS ENCLOSED FOR YOUR CONVENIENCE. IF YOU ATTEND
THE ANNUAL MEETING, YOUR PROXY WILL BE RETURNED TO YOU UPON REQUEST TO THE
SECRETARY.
By order of the Board of Directors,
Michael J. Daley
Vice President/Chief Financial
Officer/Secretary
Kingston, New York
, 1995
BESICORP GROUP INC.
1151 Flatbush Road
Kingston, New York 12401
<PAGE>
BESICORP GROUP INC.
1151 FLATBUSH ROAD
KINGSTON, NEW YORK 12401
-----------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 27, 1995
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of BESICORP GROUP INC. (the "Company") of proxies for use at
the Annual Meeting of Shareholders of the Company (the "Annual Meeting") to be
held at the Wiltwyck Country Club, Lucas Avenue Extension, Kingston, New York
12401, on Wednesday, September 27, 1995, at 10:00 a.m. and at any adjournments
thereof. This Proxy Statement and the accompanying Proxy Card are being mailed
to shareholders on or about August 23, 1995.
Unless contrary instructions are indicated on the proxy, all valid proxies
received pursuant to this solicitation (and not revoked before they are voted)
will be voted FOR the election of the nominees for director named below and FOR
the approval of the appointment of Robbins, Greene, Horowitz, Lester & Co., LLP
as independent public accountants for the fiscal year ending March 31, 1996. If
a shareholder specifies a different choice on the proxy, such shareholder's
shares of Common Stock will be voted in accordance with such specifications. All
valid proxies received pursuant to this solicitation (and not revoked before
they are voted) will be voted only in accordance with the specifications on such
proxies with respect to the shareholder proposal to amend the Company's By-laws
to provide for the Company's Board of Directors to consist of a majority of
independent non-management members. If no specification is made, the shares will
be voted as an abstention with respect to such shareholder proposal.
Any person giving a proxy in the form accompanying this Proxy Statement has
the power to revoke it at any time before its exercise. A proxy may be revoked
by filing with the Secretary of the Company an instrument revoking it, by
presenting an executed proxy bearing a later date at the Annual Meeting, or by
attending the Annual Meeting and voting in person.
The cost of soliciting proxies will be borne by the Company. Solicitations may
be made by mail, personal interview, telephone and/or telegram by directors,
officers and employees of the Company. Arrangements will be made by the Company
with its transfer agent, Continental Stock Transfer & Trust Company, Two
Broadway, New York, New York 10004, to forward solicitation material to the
beneficial owners of the shares held of record. The Company will reimburse
banks, brokerage firms, other custodians, nominees and fiduciaries for
reasonable expenses incurred in sending proxy material to beneficial owners of
the Company's Common Stock.
Copies of the 1995 Annual Report of the Company are being mailed to
shareholders together with this Proxy Statement. The Annual Report contains the
financial statements of the Company for the fiscal years ended March 31, 1995
and March 31, 1994.
Only shareholders of record at the close of business on August 9, 1995, have
the right to receive notice of and to vote at the Annual Meeting and any
adjournments thereof. The total number of authorized shares of capital stock of
the Company is 12,500,000, of which 5,000,000 are shares of Common Stock (the
"Common Stock"), $.10 par value, and 7,500,000 are shares of Preferred Stock
(the "Preferred Stock"), $1.00 par value. Of the shares of Common Stock
authorized for issuance at August 9, 1995, 2,940,655 were issued and
outstanding. Of the shares of Preferred Stock authorized for issuance at August
9, 1995, no shares were issued and outstanding. Each share of Common Stock is
entitled to one vote. The Preferred Stock currently has no voting rights.
Information with respect to the beneficial ownership of shares of Common Stock
of the Company by Directors and Officers of the Company and by certain other
persons is set forth herein under the caption "Beneficial Ownership of Common
Stock."
Under Securities and Exchange Commission ("SEC") rules, the Proxy Card permits
shareholders to abstain on one or more of the proposals or to withhold authority
to vote for one or more nominees for director. In accordance with New York State
law, such abstentions are not counted in determining the votes cast in
connection with the approval of the appointment of auditors and the approval of
the shareholder proposal. Votes withheld in connection with the election of one
or more of the nominees for director will not be counted as votes cast for such
individuals.
1
<PAGE>
The New York Stock Exchange has informed the Company that all of management's
proposals are considered "discretionary" items upon which brokerage firms may
vote in their discretion on behalf of their clients if such clients have not
furnished voting instructions within ten days of the Annual Meeting. However,
the shareholder proposal to amend the Company's By-laws to provide for the
Company's Board of Directors to consist of a majority of independent
non-management members is "non-discretionary," and brokers who have received no
instructions from their clients do not have discretion to vote on this item.
Such "broker non-votes" will not be considered as votes cast in determining the
outcome of the shareholder proposal.
1. ELECTION OF DIRECTORS
It is intended that, unless indicated otherwise thereon, the proxies received
will be voted in favor of the election of the five persons named below (Messrs.
Zinn, Eisenberg, Habib, Harris and Rosen) to serve as Directors until the next
Annual Meeting of Shareholders and until their successors shall be elected and
shall qualify. Although it is expected that each of the nominees will be
available for election, if a nominee is not a candidate at the time the election
occurs, it is intended that such proxies will be voted for the election of a
substitute nominee selected by the Board of Directors unless the number of
Directors has been reduced to the number of nominees then available for
election. In this event, the proxies would be voted for the reduced number of
nominees. Unless otherwise indicated on the enclosed Proxy Card, the votes
represented by any proxy may be voted at the discretion of the person or persons
voting the proxy. The five nominees receiving a plurality of the votes cast by
the shareholders represented at the meeting, in person or by proxy, will be
elected as Directors of the Company.
The Board of Directors held nine meetings in the fiscal year ended March 31,
1995.
ANNUAL MEETING
On September 26, 1994, the Company held its last Annual Meeting of
Shareholders. As of the shareholder record date for such Annual Meeting, there
were 3,080,763 shares of Common Stock outstanding of which 95% were represented
at the meeting and of the shares so represented, 100% were voted at the meeting.
At least 93% of all votes present at the meeting were cast for each Director
then standing for election (Messrs. Zinn, Eisenberg, Habib, Harris, and Rosen).
DIRECTORS AND EXECUTIVE OFFICERS
MICHAEL F. ZINN
Mr. Zinn, 42, President, Chief Executive Officer and Chairman of the Board of
Directors, has guided Besicorp Group Inc. since founding the Company in 1976.
Prior to founding the Company, Mr. Zinn was director of a Federally funded
biomass-to-energy project. Prior to the above appointment, Mr. Zinn was employed
in energy engineering. He has been awarded six U.S. patents.
STEVEN I. EISENBERG
Mr. Eisenberg, 45, joined the Company on January 26, 1989 as Vice President of
Beta Development Company, was elected Director and Vice President, Finance on
December 12, 1989 and Senior Vice President and General Manager on April 15,
1991. On July 27, 1995 Mr. Eisenberg was promoted to Executive Vice President
and Chief Operating Officer. Prior to joining the Company, Mr. Eisenberg was
Vice President -- Corporate Finance for Keith, Marshall & Co. from 1984 to 1989,
where he was involved with corporate finance and private placement activities.
Prior to that, Mr. Eisenberg was Vice President and District Manager at Chemical
Business Credit Corp., an affiliate of Chemical Bank, where he was responsible
for new business and administrative activities. Mr. Eisenberg holds an MBA
(Finance) from Fairleigh Dickinson University and a BS (Economics) from the
State University of New York at Oneonta.
GERALD A. HABIB
Mr. Habib, 49, was appointed Director by the Board of Directors on May 6,
1994. In 1990 Mr. Habib co-founded The Berkshire Group, a Shokan, NY investment
banking and consulting concern that provides business development and merger and
acquisition services to chemical and process clients. From 1986 to 1990 he
served as director of planning and development for NL Chemicals, a multinational
specialty chemical company. Mr. Habib also served as a vice president for
Elitine Corporation, a technology licensing company, and as a business manager
and manager of planning for Olin Chemicals. Mr. Habib holds a BS in Chemical
Engineering from City University of New York and an MBA from New York
University.
2
<PAGE>
HAROLD HARRIS
Mr. Harris, 72, was appointed Director by the Board of Directors on May 6,
1994. He returned to the Board of Directors after a hiatus of eight years,
having first joined on January 28, 1983. Mr. Harris is a private investor and
owner of a Cape Cod land development company. Mr. Harris retired from Avnet
Inc., of New York City, as vice president, where he worked on mergers and
acquisitions. Prior to that, Mr. Harris was vice president of Avnet's
subsidiary, Channel Master, a manufacturer and distributor of communications
antennas and accessories, of Ellenville, NY, where he headed the sales and
engineering departments. Mr. Harris is a former president of the United States
Antenna Manufacturers Association, and in 1964 was a member of the first U. S.
trade mission to Yugoslavia.
RICHARD E. ROSEN
Mr. Rosen, 47, was appointed Director by the Board of Directors on May 6,
1994. In 1993 Mr. Rosen founded Plato Software, Inc. of Saugerties, NY, a
software development company engaged in marketing accounting software. From 1991
to 1993, Mr. Rosen owned and operated Rosebud Consulting Services, which
provided analysis, development, and implementation of computer software systems
to medium-sized businesses. From 1985 to 1991 Mr. Rosen was general manager of
Rosebud Shoes in New York City. Mr. Rosen holds a BS in Social Sciences from the
University of North Carolina.
MICHAEL J. DALEY
Mr. Daley, 40, joined the Company as Financial Manager in August 24, 1987 and
was appointed Vice President, Finance & Administration on May 15, 1989,
Corporate Secretary on April 15, 1991 and Chief Financial Officer on September
26, 1994. Prior to joining the Company, Mr. Daley was Assistant Controller in
charge of partnership accounting for Parliament Hill Corporation, a syndicator
of limited partnerships investing in oil and gas exploration in the continental
United States. Mr. Daley's prior experience includes management positions in
accounting and finance with several companies in the insurance industry. Mr.
Daley holds a BS in Accounting from St. Francis College of Brooklyn, New York.
COMMITTEES OF THE BOARD
The Board of Directors has Compensation, Audit, and Special Litigation
Committees. The Compensation Committee currently consists of Messrs. Habib,
Harris, and Rosen. The Compensation Committee is delegated all the powers and
authority of the Board of Directors of the Corporation with respect to all
matters regarding compensation of the executive officers of the Corporation. No
awards were made under the 1993 Incentive Plan during the fiscal year ended
March 31, 1995. There were two Compensation Committee meetings during the fiscal
year ended March 31, 1995. In addition, the Committee acted at various times by
written consent during the course of the year.
The Audit Committee, consisting of Messrs. Habib, Harris, and Rosen, was
formed on May 6, 1994 and arranges for the annual audit of the financial
statements of the Company. There were no Audit Committee meetings during the
fiscal year ended March 31, 1995.
The Special Litigation Committee, consisting of Messrs. Habib, Harris, and
Rosen, was formed on May 6, 1994 and has all the powers and authority of the
Board of Directors of the Company with respect to all matters affecting the
interest of the Company in the shareholder's derivative action described below
in "Legal Proceedings". The Committee held ten meetings during the fiscal year
ended March 31, 1995.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Under the rules of the SEC, a person who directly or indirectly has or shares
voting power and/or investment power with respect to a security is considered to
be a beneficial owner of the security. Shares as to which voting power and/or
investment power may be acquired within 60 days are also considered to be
beneficially owned under these rules. The information in the table is as of July
20, 1995, and is based on data furnished to the Company by, or on behalf of, the
persons referred to in the table.
The following table sets forth information with respect to (i) each person
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) known to the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock, its only class of voting securities, (ii) the ownership of Common Stock
by each current director and nominee, (iii) the ownership of Common Stock by the
Chief Executive Officer and each other executive officer named below in the
"Summary Compensation Table" and (iv) the ownership of Common Stock by all
current directors and executive officers of the Company as a
3
<PAGE>
group. Except as otherwise provided in the footnotes to the table, the
beneficial owners have sole voting and investment power as to all securities.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON PERCENT OF COMMON STOCK
NAME OF BENEFICIAL OWNER STOCK BENEFICIALLY OWNED (1)(2) BENEFICIALLY OWNED (1)(2)
------------------------------- ------------------------------ -------------------------
<S> <C> <C>
Michael F. Zinn
1151 Flatbush Road
Kingston, New York 12401 1,690,367 (3) 56.62%(3)
Steven I. Eisenberg 128,000 (4) 4.31%(4)
Gerald A. Habib -- *
Harold Harris 18,844 *
Richard E. Rosen -- *
Michael J. Daley 32,500 (4) 1.10%(4)
Richard P. Lewandowski (5) -- *
Directors and executive officers
as a group (6 persons) 1,869,711 61.79%
</TABLE>
- -------
* Less than 1 per cent.
(1) Except as described in the footnotes below, all of the above shareholders
were both the beneficial shareholders and shareholders of record of the shares
listed as of July 20, 1995.
(2) Assumes exercise of all presently exercisable options and warrants.
(3) Includes 45,000 shares that Mr. Zinn has the right to acquire pursuant to
warrants which are presently exercisable and 107,000 shares held in the name of
his immediate family.
(4) Includes shares that Mr. Eisenberg (28,000) and Mr. Daley (12,500) have the
right to acquire pursuant to options granted under the Company's Incentive Stock
Option Plan (the "ISO Plan"), which options are presently exercisable.
(5) Mr. Lewandowski, whose name appears in the Summary Compensation Table as an
executive officer, was removed as Vice President, Technology, effective March
29, 1995. The address for Mr. Lewandowski is 23B Coxing Road, Cottekill, New
York 12419.
The Company's executive officers and directors and holders of more than 10% of
the Company's Common Stock are required under Section 16(a) of the Exchange Act
to file reports of ownership of Company securities and changes in ownership with
the SEC. The Company believes that during the fiscal year ended March 31, 1995
the executive officers and directors and holders of more than 10% of the
Company's Common Stock complied with all applicable Section 16(a) filing
requirements, except that (i) Messrs. Habib, Harris, and Rosen, directors of the
Company, filed initial Form 3's on June 24, 1994, the report for which was due
May 16, 1994, and (ii)Richard P. Lewandowski, a former executive officer of the
Company, reported on September 30, 1994 prior sales activity, the report for
which was due June 10, 1994. The late filings of these reports were the result
of unintentional oversights that were corrected immediately upon their
discovery.
MANAGEMENT REMUNERATION
The following table sets forth the aggregate compensation, paid or accrued
during the fiscal years ended March 31, 1995, 1994, and 1993 of the chief
executive officer and each other executive officer of the Company whose total
annual salary and bonus exceeded $100,000 for services in all capacities:
4
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- ------------
RESTRICTED ALL OTHER
NAME AND STOCK AWARDS COMPENSATION ($)
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (1) (2), (3)
------------------------------------------- --- ---------- --------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Michael F. Zinn 1995 333,717 500,000 12,991
President and CEO
1994 199,756 616,344 14,587
1993 78,337 673,577 427,500 3,036
Steven I. Eisenberg 1995 152,325 225,868 21,447(4)
Senior Vice President and General Manager
1994 151,426 173,172 31,343(4)
1993 101,686 415,500 150,000 3,263
Michael J. Daley 1995 83,846 16,000 1,244
Vice President,
Chief Financial Officer, Corporate Secretary
1994 75,000 32,500 46,094(4)
1993 63,519 36,600 30,000 763
Richard P. Lewandowski 1995 100,000 42,500 48,094(5)
Vice President, Technology
1994 129,603 10,000 12,594
1993 41,673 28
</TABLE>
(1) Since the Company was experiencing significant cash flow problems, on August
21, 1992, the Board of Directors authorized, in lieu of cash compensation which
the Board determined was appropriate to compensate certain key individuals at
competitive levels, the issuance of shares of Common Stock as additional
compensation for their services to the Company. Shares granted are subject to
restrictions which lapse to the extent of one-third of the award shares on the
third anniversary, an additional one-third on the fourth anniversary and the
remaining one-third on the fifth anniversary of the award. During the
restriction period, the Company has the right to purchase from the grantee all
of the award shares at the original grant value, deemed to be $.375 per share,
increased by 10% per year, upon termination of employment. During the
restriction period the award shares may not be sold, assigned, pledged, or
otherwise transferred. If dividends are paid on the Common Stock during the
restriction period, they will also be paid on the award shares.
Prior to November 22, 1993, the Company's Common Stock was quoted on the NASD
OTC Bulletin Board, which did not provide closing market price information.
Therefore, the values in the Restricted Stock Awards column were computed using
the high bid price on August 21, 1992.
(2) Premium paid by the Company on life insurance policies covering the named
individuals amounting to $94 each in Fiscal 1995 (plus an additional $10,000
each for Mr. Zinn and Mr. Eisenberg), $94 each in Fiscal 1994 (plus an
additional $10,000 each for Mr. Zinn and Mr. Eisenberg), $113 each in Fiscal
1993 except $28 for Mr. Lewandowski.
(3) The Company's contribution to the Company's qualified 401(k) Plan is as
follows for the named individuals for Fiscal 1995: Mr. Zinn, $2,897; Mr.
Eisenberg, $4,000; and Mr. Daley, $1,150; for Fiscal 1994: Mr. Zinn, $4,493; Mr.
Eisenberg, $4,647; and Mr. Daley, $1,000; and for Fiscal 1993: Mr. Zinn, $2,923;
Mr. Eisenberg, $3,150; and Mr. Daley, $650.
(4) The Company has a long-term deferred compensation plan, pursuant to which
incentive compensation was provided to certain key employees based on the future
operating performance of certain projects. Pay-outs made from the Company's
long-term compensation plan for the named individuals for Fiscal 1995: Mr.
Eisenberg, $7,353; and for Fiscal 1994: Mr. Eisenberg, $16,602 and Mr. Daley,
$45,000.
(5) As part of the assets acquired from SunWize Energy Systems, Inc., an
Illinois corporation, under a revised agreement, the Company obtained an
employment agreement with Mr. Lewandowski which was extended by the Company
through November 1996. Consideration under this agreement, in addition to the
$100,000 base salary, included bonuses based on operating performance of certain
subsidiaries and the granting of 48,000 shares of the Company's Common Stock.
Upon completion of the acquisition in Fiscal 1995, Mr. Lewandowski received
48,000 shares valued at $48,000, the value of the shares at the time of the
original agreement. In January 1995 all of the 48,000 shares were repurchased by
the Company at the then market value of $312,000. For Fiscal 1994 the Company
paid $12,500 for living expenses to Mr. Lewandowski during relocation.
5
<PAGE>
The Company, at this time, is compensating its outside Directors (Messrs.
Habib, Harris and Rosen) in the total amount of $20,000 each per year. In
addition, Directors on the Special Litigation Committee receive $500 for each
full day worked and $250 for each half day worked, plus reimbursement of
reasonable out-of-pocket expenses. The Company, at this time, does not
compensate its inside Directors for their services on committees.
The Company previously had an Incentive Stock Option Plan (the "ISO Plan,
which expired March 12, 1992, provided for the granting of "incentive stock
options" within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended (the "Code"). The ISO Plan expired on March 12, 1992. In
addition, in December 1992 the Board of Directors approved the adoption of the
1993 Incentive Plan (the "Plan") to provide for up to 1,000,000 shares of Common
Stock to be available for issuance to employees, officers, directors and
consultants of the Company. The shares covered by the Plan may be issued
pursuant to incentive stock options, non-statutory stock options, stock
appreciation rights or dividend payments at the discretion of the committee
administering the Plan. The Plan was approved by the shareholders effective on
January 1, 1993 and expires on December 31, 2002. No awards were granted under
the Plan during Fiscal 1995.
The following table provides information related to options and warrants
exercised by the named executive officers during Fiscal 1995 and the number and
value of options and warrants held at fiscal year end. The Company does not have
any outstanding SAR's.
<TABLE>
AGGREGATED OPTION/WARRANT EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/WARRANT VALUES
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTION/WARRANTS IN-THE-MONEY OPTIONS/
AT FY-END (#) WARRANTS AT FY-END ($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
--------------------- --------------- ----------------- -------------- -----------------------
<S> <C> <C> <C> <C>
Michael F. Zinn -- -- 45,000/0 270,625/0
Steven I. Eisenberg -- -- 28,000/0 81,900/0
Michael J. Daley 6,000 28,500 12,500/0 32,625/0
Richard P. Lewandowski -- -- -- --
</TABLE>
Outstanding options under the ISO Plan remain exercisable for 10 years after
the date they were granted. At July 20, 1995, there were three employees
participating in the ISO Plan and a total of 43,500 shares were subject to such
options at an average exercise price of $4.42 per share. All of such options are
presently exercisable, and will expire on dates ranging from December 6, 1995 to
November 6, 2000.
CERTAIN TRANSACTIONS
As of March 31, 1995 and 1994, two corporations owned by the Company's
President (the "Corporations") owed the Company $10,217 and $7,209,
respectively. These amounts represent the net balances due to the Company, which
provides accounting services to the Corporations. The Corporations provide to
the Company airport usage and plane services valued at $74,914, $58,657 and
$3,693 for the years ended March 31, 1995, 1994 and 1993, respectively. During
Fiscal 1994, the Company purchased an airplane from one of the Corporations at a
purchase price of $57,290, which the Company uses for business transportation.
The President of the Company had personally guaranteed approximately $441,236
and $853,926 of the Company's bank borrowings as of March 31, 1995 and 1994,
respectively. As collateral for his guarantees of the Company's indebtedness,
the President has a security interest in various assets, patents, and personal
property owned by the Company.
LEGAL PROCEEDINGS
On March 29, 1993, James Lichtenberg commenced a shareholder's derivative
action now pending in New York Supreme Court, Ulster County, entitled
Lichtenberg v. Michael F. Zinn, et al. The Company is named as nominal defendant
in this shareholder's derivative action, which also names as defendants Michael
F. Zinn, Steven I. Eisenberg, and Martin E. Enowitz, who were directors and
officers at the time the action was filed. The complaint alleges that the
directors breached their fiduciary duties to the Company by, among other things,
the issuance of stock to themselves in lieu of cash compensation, allegedly for
inadequate consideration, and by the accounting treatment given to the Company's
interest in various partnerships which own and operate cogeneration facilities,
which alleg-
6
<PAGE>
edly depressed the price of the Company's stock. The plaintiff is seeking an
award of damages to the Company, including punitive damages and interest, an
accounting, the appointment of independent members to the Board of Directors,
the cancellation of shares allegedly improperly granted, and the award to the
plaintiff of costs and expenses of the lawsuit. The defendants have filed
answers denying the material allegations of the complaint. The Company believes
that meritorious defenses have been asserted, and that the outcome of the action
will have no material adverse impact upon the Company. On May 6, 1994 the Board
of Directors of the Company formed a Special Litigation Committee ("SLC")
comprised of independent, outside directors to investigate the allegations made
in the action and determine if continued prosecution of the action is in the
best interest of the Company. On March 28, 1995, after an extensive
investigation of the allegations made in the complaint, the SLC issued a
resolution finding that the continued prosecution of the derivative action was
not in the best interest of the Company. By further resolution dated April 27,
1995, the SLC instructed the Company's outside counsel to take the necessary
steps in court to seek to have the action dismissed. Pursuant to resolution of
the SLC, on May 18, 1995, a motion to dismiss the action based on the
recommendation of the SLC was filed with the Court and a decision is pending.
2. APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company recommends that shareholders vote at the
meeting to approve the appointment of Robbins, Greene, Horowitz, Lester & Co.,
LLP as independent public accountants of the Company for the fiscal year ending
March 31, 1996.
A representative of Robbins, Greene, Horowitz, Lester & Co., LLP is expected
to be present at the meeting. The representative will be given the opportunity
to make a statement at the meeting and is expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote of yes to this proposal. The
favorable vote of a majority of shares of Common Stock represented in person or
by proxy at the meeting will be required for such approval.
3. SHAREHOLDER PROPOSAL
The Company has received a request from a shareholder for inclusion of the
following proposal:
Proposal to Amend By-Laws Regarding Composition of Board of Directors
A shareholder of the Company proposes an amendment of the By-laws "to provide
that the Board of Directors shall consist of a majority of independent
non-management directors. For these purposes, the definition of independent
non-management director shall mean a director who: (i) has not been employed by
the Company or an affiliate in an executive capacity within the past three
years, (ii) is not, and is not employed with a company or firm that is, a paid
advisor or consultant to the Company, (iii) is neither employed by nor has a
substantial contractual relationship with a significant customer or supplier of
the Company or an affiliate, (iv) has no personal services/contract(s) with the
Company, (v) is not personally related to any current director of the Company,
and (vi) is neither employed by nor has a substantial contractual relationship
with a tax-exempt entity that receives significant contributions from the
Company."
The following is a statement of the proponent in support of this resolution:
"The purpose of this proposal is to assure that the Board of Directors
includes a significant number of independent non-management directors who we
believe will facilitate clear and objective decision making. A Board of
Directors must formulate corporate policies and monitor the activities of
management in implementing those policies. Given those functions, we believe
that it is in the best interest of all stockholders if at least a majority of
our representatives be independent.
"The benefits of such independence we think are well accepted. The New York
Stock Exchange, for instance, requires each of its listed companies to have at
least two members of the board of directors and all members of the audit
committee who meet New York Stock Exchange standards of independence. We believe
that a majority of directors of publicly held companies are not employees of the
companies on whose boards they serve. In addition, The Business Roundtable in
its publication Corporate Governance and American Competitiveness recently noted
that the board of directors of public corporations 'should be composed
predominantly of independent directors who do not hold management
responsibilities within the corporation.' A variety of occupational backgrounds
(i.e. corporate executives from a diversity of industries, public service,
academia, law and finance) is, in our opinion, an integral element of a model
board of directors. As noted by The Roundtable, directors must be 'able to work
as a cohesive team,
7
<PAGE>
while preserving their ability to effectively differ with each other' and be
able to exercise judgment 'in ways that are both supportive and challenging to
the corporation.'
"It is our belief that a board having a majority of independent directors is
the shareholders' best assurance that performance is enhanced and that director
accountability is maintained. Indeed, with such an assurance, we believe, that
need for direct shareholder involvement in any other corporate governance matter
is significantly reduced provided that the company's performance remains
satisfactory.
"SUPPORT FOR THIS PROPOSAL, in our opinion, will be a constructive
contribution by shareholders toward an improved corporation."
The foregoing is a statement prepared by the proponent of the proposal. The
Board of Directors of the Company disclaims any representation as to the
accuracy of the statements made by the proponent therein.
Certain members of the Board of Directors who are beneficial owners of shares
of Common Stock entitled to vote at the meeting have informed the Company that
they intend to vote their respective shares against such proposal. The favorable
vote of a majority of shares of Common Stock represented in person or by proxy
at the meeting will be required for approval. The members of the Board of
Directors and certain members of their families who intend to vote against the
shareholder proposal own 60.7% of the Company's outstanding shares of Common
Stock.
The name and address of the proponent of the shareholder proposal and the
number of shares of voting securities held by such proponent will be furnished
to any person, either orally or in writing as requested, promptly upon the
receipt of any oral or written request therefor.
The effect of approval of this proposal would be to require that persons other
than management have direct representation on, and potentially control of, the
Board of Directors of the Company.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be included in the Company's proxy
statement and form of proxy relating to the Company's 1995 Annual Meeting must
be received no later than April 21, 1996, by the Secretary of the Company at the
Company's address set forth on the first page of this Proxy Statement.
OTHER BUSINESS
As far as it is known or has been determined, no business other than the
matters referred to herein will come before the Annual Meeting. However, it is
intended that the proxy solicited herein will be voted on any other matters that
may properly come before the meeting in the discretion of the person or persons
voting such proxy.
By Order of the Board of Directors
Michael J. Daley
Vice President/Chief Financial
Officer/Secretary
Kingston, New York
, 1995
8
<PAGE>
BESICORP GROUP INC.
NOTE: FOR ALL HOLDERS WHO ACQUIRED SHARES PRIOR TO THE 10-FOR-1 REVERSE STOCK
SPLIT OF THE COMPANY'S COMMON STOCK EFFECTIVE APRIL 16, 1991, THE NUMBER OF
SHARES WHICH YOU ARE ENTITLED TO VOTE, AS IDENTIFIED HEREON, IS AS ADJUSTED TO
REFLECT SUCH REVERSE STOCK SPLIT.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
Please fold at perforation before detaching
BESICORP GROUP INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael F. Zinn, Michael J. Daley and Karen
Keator, and each of them, with full power of substitution, the proxies of the
undersigned to vote all shares of Common Stock of BESICORP GROUP INC. (the
"Company") which the undersigned would be entitled to vote if personally present
at the Annual Meeting of Shareholders of the Company, to be held at the Wiltwyck
Country Club, Lucas Avenue Extension, Kingston, New York 12401 on Wednesday,
September 27, 1995 at 10:00 a.m. and at all adjournments thereof, in accordance
with the directions on the reverse side hereof with respect to the following
matters:
1. Election of Directors:
NOMINEES: Michael F. Zinn, Steven I. Eisenberg, Gerald A. Habib, Harold Harris,
Richard E. Rosen
2. Appointment of Robbins, Greene, Horowitz, Lester & Co., LLP, as the
independent public accountants of the Company for the fiscal year ending March
31, 1996.
3. Shareholder proposal with respect to an amendment to the Company's By-Laws to
provide for the Company's Board of Directors to consist of a majority of
independent non-management members.
4. Such other matters as may properly come before the meeting.
SEE REVERSE SIDE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2:
Please mark your votes as in this example. /x/
<TABLE>
<CAPTION>
<S> <C>
1. ELECTION OF DIRECTORS: / / FOR all nominees as listed below/ / WITHHOLD AUTHORITY to vote
(except as marked to the contrary below.) for all nominees listed below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, DRAW A LINE THROUGH THE NOMINEE'S NAME.)
Michael F. Zinn, Steven I. Eisenberg, Gerald A. Habib, Harold Harris, Richard E. Rosen
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
2. TO APPROVE THE APPOINTMENT OF ROBBINS, GREENE, HOROWITZ, LESTER & CO., LLP, AS THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 1996.
3. TO APPROVE A SHAREHOLDER PROPOSAL WITH RESPECT TO AN AMENDMENT TO THE COMPANY'S BY-LAWS TO PROVIDE FOR THE COMPANY'S
BOARD OF DIRECTORS TO CONSIST OF A MAJORITY OF INDEPENDENT NON-MANAGEMENT MEMBERS.
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C>
2. FOR AGAINST ABSTAIN
/ / / / / /
3. / / / / / /
4. / / / / / /
- -------------------------
</TABLE>
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2 AND WILL BE VOTED AS AN ABSTENTION FOR PROPOSAL
3.
Please be sure to sign and date this Proxy.
<TABLE>
<CAPTION>
<S> <C>
Shareholder sign here Date
- --- ---------- ------
Co-owner sign here Date
- --- ---------- ------
</TABLE>
NOTE: Please sign exactly as the
name appears on this card. When
shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by president or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
/ /
