SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
---------------------
February 5, 1999
Date of Report (Date of earliest event reported)
BESICORP GROUP INC.
(Exact name of registrant as specified in its charter)
New York 0-9964 14-1588329
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
Incorporation)
1151 Flatbush Road
Kingston, New York 12401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 336-7700
1
<PAGE>
ITEM 5. OTHER EVENTS
a) Amendment to Agreement and Plan of Merger
On November 23, 1998, Besicorp Group Inc. (the "Company") entered into an
Agreement and Plan of Merger (the "Initial Plan of Merger") by and among the
Company, BGI Acquisition LLC ("Acquisition"), a Wyoming limited liability
company, and BGI Acquisition Corp. ("Merger Sub" and together with Acquisition
"Buyer"), a New York corporation and a wholly owned subsidiary of Acquisition.
The Initial Plan of Merger provides that Merger Sub will be merged with and into
the Company, with the Company being the surviving corporation (the "Surviving
Corporation") and wholly owned by Acquisition (the "Merger"). If the Merger is
consummated, the Company's shareholders will be entitled to receive $34.50 in
cash (subject to upward adjustment if the Base Amount (as defined in the Initial
Plan of Merger) exceeds $105,275,000 (the "Merger Consideration")), without any
interest thereon, for each share of the Company's Common Stock (the "Common
Stock"). The Initial Plan of Merger contemplates that immediately before the
merger, the Company will distribute (the "Spin-Off") to its shareholders on a
pro rata basis all of the shares of common stock of Besicorp Ltd. ("Newco"), a
subsidiary of the Company, which will, among other things, own the Company's
photovoltaic and independent power plant development businesses and have assumed
essentially all of the Company's liabilities and obligations. On January 28,
1999 the Company entered into Amendment No. 1 to the Agreement and Plan of
Merger ("Amendment No.1;" the Initial Plan of Merger as amended by Amendment No.
1, the "Plan of Merger") which modified the Initial Plan of Merger by providing,
among other things, (i) for the extension of the date that the Merger could be
terminated from February 15, 1999 to March 1, 1999 and, upon a request of the
Company, for a further extension from March 1, 1999 to March 15, 1999 (the
"Extension"); provided that if the Merger did not close during the Extension,
the Company would be obligated, unless the Plan of Merger was terminated by the
Company on account of a breach by Buyer of Buyer's obligations pursuant to the
Plan of Merger, to pay Buyer $1.4 million in addition to other amounts, if any,
the Company would be obligated to pay on account of the termination of the Plan
of Merger; (ii) for the substitution, in certain cases, for assets that were to
be contributed to Newco in the Spin-Off of other assets of equal value of the
Company that would otherwise not be contributed to Newco in the Spin-Off and
(iii) that in the case of 100,000 shares of Common Stock held of record by
Martin Enowitz or his assigns which are the subject of a dispute between the
Company and Mr. Enowitz (the "Disputed Shares") , appropriate provision will be
made in the paying agent agreement (or another agreement with the paying agent
for the payment of the Merger Consideration) for the holding in escrow, pending
resolution of such dispute, of (1) the Disputed Shares, (2) the Merger
Consideration payable in respect of such Disputed Shares and (3) any shares of
capital stock of Besicorp Ltd. ("Newco"), a wholly-owned subsidiary of the
Company, distributable with respect to such Disputed Shares. The rights, if any,
of Acquisition, Merger Sub and the Surviving Corporation to the Disputed Shares,
the Merger Consideration payable in respect of such Disputed Shares and any
shares of capital stock of Newco distributable with respect to such Disputed
Shares will be assigned without recourse to the holders of Common Stock issued
and outstanding immediately prior to the effective time of the Merger on a pro
rata basis.
2
<PAGE>
b) Sale of Power Plants
The Company has partnership interests (the "Partnerships") in five power
plants (the "Power Plants") which, pursuant to power purchase agreements (the
"Power Purchase Agreements"), provided capacity and electrical power to Niagara
Mohawk Power Corporation ("Niagara Mohawk"). The Partnerships, Niagara Mohawk
and certain other independent power producers entered into a Master
Restructuring Agreement (the "MRA") in July 1997, which became effective on June
30, 1998, which provided for, among other things, the termination or
restructuring of the Power Purchase Agreements. The Partnerships sold the Power
Plants between November and December 1998 as a result of which the Company will
receive net proceeds of approximately $10.7 million in the aggregate. The
Company no longer has any interests in any power plants (other than as the
holder of shares of stock of Niagara Mohawk).
c) Recent Litigation
In January 1999, Alan Fenster ("Fenster") commenced an action in the
New York Supreme Court, New York County, against the Company, Merger Sub,
Acquisition, Josephthal & Co., Inc., the financial advisor to the Company with
respect to the Merger, and each of the members of the Board of Directors of the
Company (the "Board"). In the complaint Fenster indicates that he is seeking
class certification. The complaint alleges that the Merger Consideration is
inadequate and less than the Company's intrinsic value, that in adopting the
Plan of Merger the Board has been unduly influenced by Michael F. Zinn (the
Chairman of the Board, Chief Executive Officer and President of the Company) and
the Board has breached its fiduciary duty to its shareholders; the complaint
also alleges that Mr. Zinn and the other members of the Board will receive an
unlawful additional consideration that the remaining shareholders will not
receive: the escrow fund of $6,000,000 that is to be established pursuant to the
Plan of Merger, that, according to the complaint, has been established primarily
to benefit them, the acceleration of certain of their options and warrants, and
bonuses for certain members of senior management. Fenster is seeking, among
other things, to enjoin the Merger, as well as unspecified compensatory damages
and an order that the defendants shall take appropriate measures to maximize
shareholder value. The Company has not yet answered the complaint. Management
believes that there are meritorious defenses to this action.
In December 1998, Energy Investment Research, Inc. ("EIR") commenced an
action in the New York Supreme Court, Westchester County, against the Company.
The complaint alleges among other things, that the Company is obligated to pay
EIR 1.5% of all net cash and/or securities received by the Company from its
general partnership interests in the Carthage and South Glen Falls Partnerships
(the "Projects"). EIR seeks, among other things, declaratory judgment that it is
entitled to 1.5% of the distributions from the MRA relating to the Projects, and
has asked for payments in excess of $750,000. Management believes that there are
meritorious defenses to this action.
3
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
2.2 Amendment No. 1 dated January 28, 1999 to the Agreement and Plan of
Merger (the "Initial Plan of Merger") by and among the Company, BGI
Acquisition LLC, and BGI Acquisition Corp.
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BESICORP GROUP INC.
/s/Michael J. Daley
---------------------
Michael J. Daley, Executive Vice President
and Chief Financial Officer
Dated: February 5, 1999
Kingston, New York
5
This AMENDMENT NO. 1 TO THE AGREEMENT AND PLAN OF MERGER (this
"Amendment") is entered into this 28th day of January, 1999, by and among BGI
Acquisition LLC, a Wyoming limited liability company ("Parent"), BGI Acquisition
Corp., a New York corporation ("Purchaser"), and Besicorp Group Inc., a New York
corporation formed under the name Bio-Energy Systems Inc. (the "Company").
RECITALS:
A. Parent, Purchaser and the Company are parties to an Agreement and
Plan of Merger (the "Initial Plan") dated November 23, 1998.
B. Capitalized terms used in this Amendment have the meanings ascribed
to them by the Initial Plan.
A G R E EM E N T S
Therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Base Amount. Clause (ii) of Section 2.2.1(b)(A) of the Initial Plan
is hereby amended to read in its entirety as follows:
to the extent not received in cash, the amount of a claimed tax
refund for fiscal year 1998 not to exceed $3,909,
2. Enowitz Shares. Section 2.3.7 of the Initial Plan is hereby amended
to read in its entirety as follows:
In the case of 100,000 shares of Common Stock held of record
by Martin Enowitz or his assigns which the Company represents are the
subject of a dispute between the Company and Mr. Enowitz (the "Disputed
Shares"), appropriate provision will be made in the Paying Agent
Agreement, or another agreement with the Paying Agent, for the holding
in escrow pending resolution of the dispute of (1) the Disputed Shares,
(2) the Merger Consideration payable in respect of such Disputed Shares
and (3) any shares of capital stock of BL distributable with respect to
such Disputed Shares. Purchaser agrees that the rights, if any, of
Purchaser, Parent and the Surviving Corporation to the Disputed Shares,
the Merger Consideration payable in respect of such Disputed Shares and
any shares of capital stock of BL distributable with respect to such
Disputed Shares, if any, will be assigned without recourse to the
Paying Agent for the benefit of the holders of Common Stock issued and
outstanding immediately prior to the Effective Time on a pro rata
basis.
<PAGE>
3. Further Assurances and Related Matters. Section 3.4 of the Initial
Plan is hereby amended to read in its entirety as follows:
Further Assurances and Related Matters. If, at any time after
the Effective Time, BL shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things
are necessary, desirable or proper (i) to vest, perfect or confirm, of
record or otherwise, in BL or its Subsidiaries its right, title and
interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets contributed to any of the Distributed
Subsidiaries in connection with the Distribution or (ii) otherwise
carry out the Distribution, the Surviving Corporation will upon
reasonable request of BL execute and deliver all such deeds, bills of
sale, assignments and assurances and do all such other acts and things
as may be necessary, desirable or proper to carry out the Distribution.
If, at any time prior to the Distribution, Purchaser or the Company
shall consider or be advised that the composition of the Retained
Assets would be unduly expensive or impractical to, the Surviving
Corporation, assets of equal value that were to be distributed to BL
pursuant to the Distribution may be substituted for such of the
Retained Assets as may be necessary in order to prevent the composition
of the Retained Assets from having such an effect on the Surviving
Corporation, subject to the approval of Parent and the Company, which
approval will not be reasonably refused, in which case the Retained
Assets shall be deemed to include the assets so excluded from the
Distribution and the Retained Assets shall be deemed to exclude the
assets so substituted and the parties hereto shall execute any
agreements, instruments, waivers or assurances or any take any other
actions as are necessary, desirable or proper in connection with such
substitution. Any expenses incurred by the Surviving Corporation under
this Section 3.4 shall be paid by BL.
4. Right to Terminate. Section 7.1.2 (a) of the Initial Plan is hereby
amended to read in its entirety as follows:
subject to Section 7.5 hereof, the Effective Time shall not
have occurred at or before 11:59 p.m. on March 1, 1999 (the
"Termination Date"); provided, however, that the right to terminate
this Agreement under this Section 7.1.2 shall not be available to any
party whose failure to fulfill any of its obligations under this
Agreement has been the cause of the failure of the Effective Time to
have occurred as of such time; or
<PAGE>
5. Right to Change Termination Date. The Plan of Merger is hereby
amended inserting Section 7.5 as follows:
7.5 Right to Change Termination Date. The Company has the
right (the "Extended Right"), in its sole discretion, exercisable at
any time prior to 11:59 pm on February 26, 1999, by written notice to
Parent, to extend the Termination Date to 11:59 pm on March 15, 1999,
in which case for all purposes pursuant to the Agreement the
Termination Date shall be deemed to mean March 15, 1999; provided,
however, that if the Company exercises the Extended Right and the
Agreement is terminated thereafter prior to the Effective Time pursuant
to Section 7.1.1, Section 7.1.2 (unless the failure of Parent or
Purchaser to fulfill any of their obligations under this Agreement has
been the cause of the failure of the Effective Time to have occurred as
of such time), Section 7.1.3 or Section 7.1.4(c), the Company shall be
obligated to pay to Parent immediately, in addition to any amounts, if
any, owing pursuant to Section 7.4 hereof, a sum of $1,400,000 in cash
by wire transfer of same-day funds to an account designated by Parent.
6. Effect of Amendment. Except as amended by this Amendment, the
Initial Plan shall remain in full force and effect. This Amendment shall not
constitute a waiver or amendment of any provision of the Initial Plan not
referred to herein.
7. Entire Agreement. This Amendment, the Initial Plan, the
Confidentiality Agreement referred to in Section 5.2 to the Initial Plan and the
instruments to be delivered by the parties pursuant to the provisions of the
Initial Plan constitute the entire Initial Plan between the parties and shall be
binding upon and inure to the benefit of the parties hereto and their respective
legal representatives, successors and permitted assigns.
8. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.
9. Applicable Law. This Amendment shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of New York applicable to contracts
made in that State.
10. Assignability. This Amendment shall not be assignable by either
party without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties have executed this Amendment on the
date first above written.
PARENT:
BGI ACQUISITION LLC
By: /S/ James Haber
------------
James Haber, President of the
Sole Manager of BGI Acquisition LLC
PURCHASER:
BGI ACQUISITION CORP.
By: /s/ James Haber
-----------
James Haber
Its: President
THE COMPANY:
BESICORP GROUP, INC.
By: /s/ Michael F. Daley
----------------
Michael F. Daley
Its: Executive Vice President
