U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1998
Commission file number 0-9964
BESICORP GROUP INC.
(Name of small business issuer in its charter)
New York 14-1588329
(State or other jurisdiction
of incorporation or organization) (IRS Employer Identification No.)
1151 Flatbush Road, Kingston, N.Y. 12401
(Address of principal executive offices) (Zip Code)
(914) 336-7700
(Issuer's Telephone Number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
Title of each class: Common Stock, $.10 par value
Name of each exchange on which registered: AMEX Emerging Company Marketplace
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes _X_ No___
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. __X__
The issuer's revenues for its most recent fiscal year: $17,014,256
The aggregate market value of Common Stock, $.10 par value, held by
nonaffiliates based upon the closing AMEX sale price on June 19, 1998 was
approximately $48,594,024.75
<PAGE>
The number of outstanding shares of Common Stock, $.10 par value, on
June 19, 1998 was 2,967,174 Common Shares.
Transactional Small Business Disclosure Format: Yes____ No __X_
<PAGE>
PART III
ITEM 9. DIRECTORS, AND EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS
MICHAEL F. ZINN
Mr. Zinn, 45, President, Chief Executive Officer and Chairman of the
Board of Directors, has guided Besicorp 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 and he is
the cousin of Frederic Zinn. In June 1997, Mr. Zinn entered guilty pleas to
two felony counts in the United States District Court for the Southern
District of New York in connection with contributions made to the 1992 election
campaign of Congressman Maurice Hinchey (the "Campaign Contribution
Proceeding"). Mr. Zinn was fined $36,673 and sentenced to a six month term of
incarceration and a two year term of supervised release thereafter. He resigned
as Chairman of the Board, Chief Executive Officer and President of the Company
in November 1997 and was reappointed to such positions in May 1998.
GERALD A. HABIB
Mr. Habib, 52, has been a director of the Company since May 1994. In
1993 Mr. Habib 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 and has served as president since that
time. 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. Since May 1995
Mr. Habib has also served as vice president of a specialty chemicals company.
Mr. Habib holds a BS in Chemical Engineering from City University of New York
and an MBA from New York University. Mr. Habib is a director of Polymer
Solutions, Inc., a Canadian-based manufacturer of advanced polymer-based
products for the coatings and adhesives industry.
RICHARD E. ROSEN
Mr. Rosen, 50, has been a director of the Company since May 1994. In 1993
Mr. Rosen founded Plato Software, Inc. of Saugerties, NY, a software development
company engaged in marketing accounting software and has held the position of
President since that time. 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 BA in Social Sciences from the University of North Carolina.
<PAGE>
MELANIE NORDEN
Ms. Norden, 51, has been a director of the Company since February
1998. In 1988, Ms. Norden founded BENCHMARKS, a full service consulting firm,
providing consultation, management and planning services in fundraising,
organizational development, conference and event planning and evacuation;
volunteer, board and staff training; and public relations and marketing. Ms.
Norden holds a BA from the State University of New York at Binghamton and
completed an MA Program at Manhattanville College in Purchase, New York.
MICHAEL J. DALEY
Mr. Daley, 43, joined the Company as Financial Manager in August 1987
and was appointed Vice President, Finance & Administration in May 1989,Corporate
Secretary in April 1991, Chief Financial Officer in September 1994, and
Director, Chief Executive Officer and President in November 1997. Concurrent
with Mr. Zinn's reappointment in May 1998, Mr. Daley was appointed Executive
Vice President and continues to serve as Chief Financial Officer. Prior to
joining the Company, Mr. Daley was Assistant Controller managing 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, NY.
STEVEN I. EISENBERG
Mr. Eisenberg, 47, joined the Company in January 1989 as Vice President
of Beta Development Company, was promoted to Vice President, Finance in December
1989 and Senior Vice President and General Manager in April 1991. In July 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. Mr. Eisenberg
holds an MBA (Finance) from Fairleigh Dickinson University and a BS (Economics)
from the State University of New York at Oneonta. Mr. Eisenberg served as a
director of the Company from December 1989 until resigning from the Board in
May 1997. Mr. Eisenberg resigned from the Company in August 1997.
<PAGE>
STEVEN G. NACHIMSON
Mr. Nachimson, 37, joined the Company as Corporate Counsel in May 1995,
and was appointed an executive officer of the Company with the title of
Assistant Secretary in May 1997, and General Counsel and Corporate Secretary in
November 1997. Prior to joining the Company, Mr. Nachimson was an attorney in
private practice with the firm of Samoff, Kaplan, Benton & Franzman, P.C., of
which he was a member from 1991 to 1995 and with which he was associated from
1990 to 1991. From 1986 to 1990 Mr. Nachimson practiced with the law firm of
Moscowitz, Samoff & Benton, P.C. Mr. Nachimson holds a J.D. from State
University of New York at Buffalo School of Law, and an A.B. in Political
Science from Vassar College. Mr. Nachimson resigned from the Company in
May 1998.
JOSEPH P. NOVARRO
Mr. Novarro, 56, joined the Company in 1994 as Technical Manager and
was appointed Vice President, Project Development in February 1997. In
November 1997, Mr. Navarro was appointed an executive officer of the Company
retaining the same title. Prior to joining the Company, Mr. Novarro was the
Engineer/Project Manager at Kamine Development Corp. Before that he held
various management positions during a 25-year career at Long Island
Lighting Company. Mr. Novarro holds a BS in Electrical Engineering from
Manhattan College and completed his postgraduate studies at the Oak Ridge
School of Reactor Technology.
JAMES E. CURTIN
Mr. Curtin, 48, joined the Company as Corporate Controller in August
1995 and was appointed an executive officer of the Company with the title of
Vice President and Controller in November 1997. Prior to joining the Company,
Mr. Curtin was Director of Financial Reporting for ENSERCH Engineering
Engineers and Constructors from 1994 to 1995, and held several financial
management positions with Ebasco Services, Incorporated, an engineering,
construction and consulting firm, from 1981 to 1994. Mr. Curtin holds a BBA
in Accounting Practice from Pace University.
FREDERIC M. ZINN
Mr. Zinn, 41, joined the Company as a temporary executive with the title of
Vice President in November 1997. He was appointed an executive officer of the
Company holding the title of Senior Vice President and General Counsel in
May 1998. Prior to joining the Company, Mr. Zinn was the President of
Zinn & LeBovic, a Professional Law Corporation, from 1992 to 1997. Before
that, Mr. Zinn was General Counsel at JTE Real Estate Group, Inc. from 1989
to 1992; Associate Attorney at Palmieri, Tyler, Weiner, Wilhelm & Waldron
from 1986 to 1988; and Associate Attorney at Hart, King & Coldren from 1982 to
1986. Mr. Zinn received a BA in Economics from the University of California at
Davis and a JD from the UCLA School of Law. He is a cousin of Michael Zinn.
<PAGE>
Director Compensation
Directors of the Company who are also employees are not paid any fees
or compensation for their services as members of the Company's Board of
Directors or any committee thereof.
Pursuant to the compensation program as modified in November 1997, each
Director who is not an employee of the Company ("Outside Director") receives an
annual retainer of $36,000 and per diem fees for each Board or Committee meeting
attended at the rate of $1,000 for each meeting in excess of two hours. Each
Committe Chairman receives an additional $3,000 annual stipend. Each Outside
Director has the right, upon notice to the Company, to receive payment of
director's fees in cash or in the Company's common stock. Further, for each year
of Board service, an Outside Director is issued a five year warrant (exercisable
in full one year after the date of issuance)dated the first day of the fiscal
year to purchase 2,500 shares of the Company's Common Stock at a price equal to
the market price of the Company's stock on the date of issuance. Upon the
resignation or retirement of a director, any unvested warrant grants shall
expire in full, with any vested warrant grants continuing to be exercisable in
accordance with the applicable warrant agreement. In addition, each Outside
Director was granted options to purchase 2,500 shares of stock at the exercise
price of $.10 per share. These options may be exercised up to and including
December 31, 1998. With respect to Messrs Rosen and Habib, any shares purchased
pursuant to the options shall be subject to the Company's right to repurchase at
the exercise price in the event such person's Board service terminates for any
reason other than death or permanent disability prior to March 31, 1998. With
respect to Ms. Norden any shares purchased pursurant to the options shall be
subject to the Company's right to repurchase at the exercise price in the event
Board service terminates for any reason other than death or permanent
disability prior to February 13, 2000. Outside Directors are also reimbursed
for reasonable expenses relating to their duties.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years ended March 31,
1998, 1997 and 1996, the compensation awarded or paid to, or earned by, the
Company's two Chief Executive Officers and three of the executive officers
(referred to collectively with the Chief Executive Officer as the "Named
Executives").
Summary Compensation Table
<TABLE>
<CAPTION>
<S>
Long-Term
Compensation
Name Securities All Other
and Underlying Compen-
Principal Annual Compensation Options (#) sation
Position Year Salary ($) Bonus ($) (1) --($)---
<C> <C> <C> <C> <C>
Michael F. Zinn(5) 1998 229,249 586,250(6) 3,400(3)
CEO and 1997 350,794 293,792 14,750(2)(3)
President 1996 350,000 250,000 39,000 14,620(2)(3)
Michael J. Daley(5) 1998 148,459 111,033 4,900(3)
CEO, President, CFO 1997 91,462 21,000 1,300(3)
& Corporate Secretary 1996 85,000 15,000 3,000 1,000(3)
Steven I. Eisenberg 1998 92,613 235,013(4) 1,150(3)
EVP & COO 1997 174,858 223,670(4) 14,750(2)(3)
1996 163,077 318,367(4) 13,500 14,620(2)(3)
Steven I. Nachimson 1998 91,346 15,000 3,900(3)
General Counsel and 1997 64,327 12,000 0
Corporate Secretary 1996 49,538 6,000 0
Joseph P. Novarro 1998 98,654 35,000 2,445(3)
Vice President, 1997 78,152 25,000 1,782(3)
Project Development 1996 69,500 21,500 520(3)
</TABLE>
(1)In January 1996 Messrs. Zinn and Eisenberg were granted non-statutory options
under the Amended and Restated 1993 Incentive Plan ("1993 Plan") to purchase
restricted shares of the Company's Common Stock at $7.00 per share. All options
were exercised by Messrs. Zinn and Eisenberg, and the restrictions were
scheduled to lapse in January 2001. Upon Mr. Eisenberg's resignation from the
Company and in accordance with the Stock Agreement, the Company repurchased
1,500 shares received as a result of the exercise of options for $11,976.48,
representing the repurchased price of $7.00 per share plus a rate of return
based on the prime rate. At March 31, 1998 the aggregate 19,000 restricted
shares of Common Stock held by Mr. Zinn had a net value of $418,000 based upon
a market value of $551,000, less the purchase price of $133,000. The Company
did not repurchase Mr. Zinn's shares. If such repurchase had been effected, the
repurchase price to be paid by the Company would have been calculated in the
same manner that the repurchase price for Mr. Eisenberg's shares was
calculated.
<PAGE>
(2) Includes premiums of $10,000 paid by the Company on life insurance policies
for Messrs. Zinn and Eisenberg in each of Fiscal 1997 and 1996.
(3) Includes the Company's matching contribution to its qualified 401(k) Plan to
the named individuals as follows: for Fiscal 1998: Mr. Zinn, $3,400; Mr. Daley,
$4,900; Mr. Eisenberg, $1,150; Mr. Nachimson, $3,900; and Mr. Novarro, $2,445;
for Fiscal 1997: Mr. Zinn, $4,750; Mr. Daley, $1,300; Mr. Eisenberg, $4,750; and
Mr. Novarro, $1,782; for Fiscal 1996: Mr. Zinn, $4,620; Mr. Daley, $1,000; Mr.
Eisenberg $4,620; and Mr. Novarro, $520.
(4) The Company had a 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 compensation
plan for the named individuals are as follows: for Fiscal 1998: Mr. Eisenberg,
$3,750; for Fiscal 1997: Mr. Eisenberg, $7,500; and for Fiscal 1996: Mr.
Eisenberg, $68,691. Mr. Eisenberg resigned from the Company effective August
1997.
(5) During Fiscal 1998, Mr. Zinn served the Company as CEO for the period April
1 through November 11, 1997; Mr. Daley served as CEO from November 11, 1997
through March 31, 1998.
(6) Includes bonus of $280,000 which was earned by Mr. Zinn in Fiscal 1997 and
paid in Fiscal 1998.
Stock Options
Under the 1993 Plan up to 1,000,000 shares of Common Stock may be
issued to officers, directors, employees and consultants of the Company. Awards
under this plan may be in the form of statutory stock options, non-statutory
stock options, stock appreciation rights ("SARs"), dividend payment rights or
options to purchase restricted stock. As disclosed above, during Fiscal 1998,
options to acquire 7,500 shares were granted to the Outside Directors under this
plan.
The following table provides information related to options and
warrants exercised by the Named Executives during Fiscal 1998 and the number and
value of options and warrants held at fiscal year end. The Company does not have
any outstanding SARs.
Aggregated Option/Warrant Exercises in Last Fiscal Year
and Fiscal Year-end Option/Warrant Values
<TABLE>
<S> <C> <C> <C> <C>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/Warrants Options/Warrants
Number of at FY-End at FY-End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
Michael F. Zinn 0 $0 25,000/0 $678,125/$0
Michael J. Daley 0 $0 9,500/3,000 $224,875/$78,000
Steven I. Eisenberg 28,000 $666,400 0/0 0/0
Steven G. Nachimson 0 0 0/2,000 0/$52,000
Joseph P. Novarro 0 0 0/2,000 0/$52,000
</TABLE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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 above in the
"Summary Compensation Table" and (iv) the ownership of Common Stock by all
current directors and executive officers of the Company as a group. Except as
otherwise provided in the footnotes to the table, the beneficial owners have
sole voting and investment power as to all securities.
Under the rules of the Securities and Exchange Commission ("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 17, 1998, and is based on
data furnished to the Company by, or on behalf of, the persons referred to in
the table.
<TABLE>
<S> <C> <C>
Number of Shares
Name of of Common Stock Percent of Common Stock
Beneficial Owner Beneficially Owned (1)(2) Beneficially Owned (1)(2)
Michael F. Zinn 1,677,236 (3) 56.1% (3)
Gerald A. Habib 5,000 (4) *
Richard E. Rosen 5,000 (4) *
Michael J. Daley 14,234 (5) *(5)
Steven I. Eisenberg 0 *
Steven G. Nachimson 0 *
Joseph P. Novarro+ 200 *
Melanie Norden 2,500(6) *
Current Directors and executive
officers as a group
(6 persons) 1,704,170 56.8%
* Less than 1 percent.
</TABLE>
<PAGE>
(1) Except as described below, such persons have the sole power to vote and
direct the disposition of such shares.
(2) Assumes exercise of all presently exercisable options and warrants.
(3) Includes 25,000 shares that Mr. Zinn has the right to acquire pursuant to
warrants which are presently exercisable and 77,456 shares held in the name of
his immediate family.
(4) Includes 2,500 shares that Messrs. Habib and Rosen have the right to
acquire pursuant to warrants which are presently exercisable.
(5) Includes 2,500 shares that may be acquired by Mr. Daley pursuant to
currently exercisable options.
(6) Represents 2,500 shares that Ms. Norden has the right to acquire pursuant to
warrants which are presently exercisable.
The address for each of the individuals identified above is: 1151
Flatbush Road, Kingston, New York 12401.
<PAGE>
ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of March 31, 1998 and 1997, entities owned by Michael Zinn, the
Company's President, owed the Company $47,662 and $37,005, respectively, net of
airport usage and plane services (the "Services") performed by such entities
on behalf of the Company. The cost of these Services were recorded for the
fiscal years ended March 31, 1998 and 1997 as $31,939 and $90,621, respectively.
The Company, pursuant to applicable law and governing documents, had
advanced certain legal expenses on behalf of certain officers and directors in
connection with the Campaign Contribution Proceeding, a shareholder
derivative lawsuit encaptioned, "Lichtenberg vs. Michael Zinn, et al." commenced
in New York Supreme Count (the "Lichtenberg Litigation") and a shareholder
derivation lawsuit captioned, "John Bansbach vs. Michael Zinn, et al."
commenced in New York Supreme Court (the "Bansbach Litigation").
As of March 31, 1998 and 1997, such advances on behalf of Mr. Zinn in
connection with the Campaign Contribution Proceeding were an aggregate of
$338,517 and $208,250, respectively. Of such sum, Mr. Zinn has agreed to
reimburse the Company $186,000 and as of July 29, 1998, had reimbursed the
Company $45,000. The $141,000 balance does not bear interest. In addition, the
Company had advanced legal fees and disbursements of approximately $217,663
incurred in connection with such proceeding on behalf of certain directors,
officers, and current and former employees and their spouses who were
actual or potential witnesses in this matter.
In connection with the Lichtenberg Litigation, the Company had advanced
as of March 31, 1998 an aggregate of $731,579 in legal fees and disbursements on
behalf of the Company and Messrs. Zinn, Eisenberg and Enowitz (directors and
officers or former directors and/or officers of the Company).
In connection with the Bansbach Litigation, the Company had advanced as
of March 31, 1998 an aggregate of $136,994 in legal fees and disbursements on
behalf of the Company and Messrs. Zinn, Daley, Habib, Harris and Rosen (director
and officers or former directors of the Company).
With regard to the legal actions described above, the Company, in
accordance with applicable law and to the extent required, has received
executed undertakings from each indemnified party for whom legal costs have been
advanced.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10
per cent of any registered class of the Company's equity securities, to file
with the SEC and the American Stock Exchange reports of ownership of the Common
Stock of the Company. Reporting persons are required by SEC regulation to
furnish the Company with copies of all such reports that they file. To the best
of the Company's knowledge, during the fiscal year ended March 31, 1998, its
officers, directors and greater than 10 per cent beneficial owners filed all
required Section 16(a) reports on a timely basis.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment No.1 to the Annual
Report on Form 10-KSB to be signed on its behalf by the undersigned, thereunto
duly authorized.
BESICORP GROUP, INC, Registrant
By: /s/ Michael F. Zinn
Michael F. Zinn
President (principal
executive officer) Dated: July 29, 1998
/s/ Michael J. Daley
Michael J. Daley Dated: July 29, 1998
Chief Financial Officer
(principal financial Officer)
/s/ James E. Curtin
James E. Curtin
Vice President, Controller
(principal accounting officer) Dated: July 29, 1998
