Schedule 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-12
YORK RESEARCH CORPORATION
(Name of Registrant as Specified in Its Charter)
-------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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:
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2. Aggregate number of securities to which transaction applies:
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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):
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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:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
YORK RESEARCH CORPORATION
280 Park Avenue
Suite 2700 West
New York, New York 10017
(212) 557-6200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 18, 2001
The Annual Meeting of the Stockholders of York Research Corporation (a Delaware
corporation) will be held at The Intercontinental Hotel, 111 East 48th Street,
New York, New York, on Wednesday, July 18, 2001 at 10:00 A.M., for the following
purposes:
1. to elect one Class C Director and two Class A Directors;
2. to ratify the appointment of Grant Thornton LLP as the
independent certified public accountants for the fiscal year
ending February 28, 2002;
and to transact such other business as may properly come before the meeting or
adjournments thereof. Additionally, the Board of Directors will discuss the
results of operations for each of the fiscal years ended February 28, 2001 and
2000.
The Board of Directors has fixed the close of business on June 8, 2001 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
/s/ Michael Trachtenberg
Michael Trachtenberg, Secretary
280 Park Avenue
New York, New York 10017
June 25, 2001
YOUR VOTE IS IMPORTANT
o 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.
o As set forth herein, you may vote by mail, by phone, via the Internet
or in person.
YORK RESEARCH CORPORATION
280 Park Avenue
Suite 2700 West
New York, New York 10017
(212) 557-6200
PROXY STATEMENT FOR
2001 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 2001 Annual Meeting of Stockholders of the Company (the "Meeting"). The
Meeting will be held on Wednesday, July 18, 2001 at 10:00 A.M., at The
Intercontinental Hotel, 111 East 48th Street, New York, New York, for the
following purposes: (i) to elect one Class C and two Class A directors (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, 2002 (Item 2). Additionally, the Board of Directors will
discuss the results of operations for each of the fiscal years ended February
28, 2001 and 2000. As of June 25, 2001, 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 on Form 10-K for its fiscal year ended
February 28, 2001 is enclosed herewith. Such report is not to be treated as part
of these proxy soliciting materials.
Stockholders of record at the close of business on June 8, 2001 (the
"Record Date") are entitled to notice of and to vote at the Meeting or any
adjournment thereof.
VOTING BY MAIL, ELECTRONICALLY OR BY TELEPHONE
Please complete, sign, date and return the accompanying Proxy Card
promptly in the enclosed addressed envelope, even if you plan to attend the
Annual Meeting. Postage need not be affixed to the envelope if mailed in the
United States.
Instead of submitting your proxy vote with the paper Proxy Card, you
may be able to vote electronically via the Internet or by telephone. See "Voting
Via the Internet or By Telephone" in the Proxy Statement for further details.
1
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 16,262,697 shares were
issued and outstanding as of May 22, 2001. 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 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 one Class C director and two Class A directors (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, 2002 (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 sole Class C director and the two Class A directors (Item 1), stockholders
may vote in favor of the nominees 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 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.
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VOTING VIA THE INTERNET OR BY TELEPHONE
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BY TELEPHONE BY INTERNET
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Please call toll-free 1-800-PROXIES and follow the Please access the web page at www.voteproxy.com and
instructions. Have your control number and the follow the on-screen instructions. Have your
proxy card available when you call. control number available when you access the web
page. http://www.voteproxy.com/
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o General Information for All Shares Voted Via the Internet or By
Telephone.
Votes submitted via the Internet or by telephone must be received by 12:00
midnight, Eastern Standard Time, on July 17, 2001. Submitting your proxy via the
Internet or by telephone will not affect your right to vote in person should you
decide to attend the Annual Meeting.
The telephone and Internet voting procedures are designed to
authenticate stockholders' identities, to allow stockholders to give their
voting instructions and to confirm that stockholders' instructions have been
recorded properly. Stockholders voting via the Internet should understand that
there may be costs associated with electronic access, such as usage charges from
Internet access providers and telephone companies, which must be borne by the
stockholder.
DELIVERY OF DOCUMENTS TO STOCKHOLDERS
SHARING AN ADDRESS
The Company intends to deliver only one copy of the Proxy Statement to
multiple stockholders sharing an address, unless it receives contrary
instructions from any one or more of such stockholders. Upon written or oral
request, the Company will promptly deliver a separate copy of the Proxy
Statement to a stockholder at a shared address to which a single copy of the
Proxy Statement was delivered. Any such request, or any request for separate
mailings in the future or for one mailing to multiple stockholders sharing an
address if a previous request for multiple copies has previously been made,
should be directed to the Secretary of the Company at the address listed above,
or by calling the Company at the number listed above.
3
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. The directors in one class are 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. The Class B
directors were the last members of the Company's Board elected, at the Annual
Meeting of the Company's Stockholders held on July 21, 1999. One director in
Class C and two directors in Class A are being nominated for election at the
Meeting for terms expiring in 2003 (Class C), for the portion of the term of
such class which remains unexpired, and 2004 (Class A).
The following persons have been nominated for election as directors of
the Company in the classes as indicated. Each nominee has consented to his
nomination and has agreed to serve if elected. If, however, either 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 any
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 nominees and the remaining
directors whose terms of office will continue beyond the Meeting, appears below:
Mr. Stanley Weinstein (Class C), 75, 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. Weinstein also serves on the Board of A.B. Watley
Group Inc.
Mr. Robert M. Beningson (Class A), 72, 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 active subsidiaries. Previously, Mr. Beningson was Chairman of the
Board of Directors of the Company between 1968 and 1979.
Judge Frederic S. Berman (Class A), 74, was elected to the Board of
Directors in December, 1998. Judge Berman served as a New York State Supreme
Court Judge from 1976 through 1997, and since 1998 has served as a Judicial
Hearing Officer supervising jury selections in Manhattan Supreme Court and Civil
Court. He also serves as an arbitrator with the National Association of
Securities Dealers. Judge Berman served as a New York City Criminal Court judge
from 1973 to 1976, and prior to that held numerous government positions,
including New York State Senator and Commissioner of New York City's Department
of Rent and Housing Maintenance.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THE NOMINEES NAMED ABOVE
4
The term of office of the following directors will continue beyond the Meeting:
Mr. Howard F. Sommer (Class B), 60, 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. Harvey W. Schultz (Class B), 59, was elected to the Board of
Directors in November, 1998. He currently is a principal at Strategic Urban
Solutions, Inc. and Senior Vice President at Muss Development Company. From 1970
through 1990, Mr. Schultz held various positions with the City of New York,
including as director of the Economic Development Section of the New York City
Department of City Planning, the Director of the Brooklyn Office of City
Planning, the Director of Land Use Planning & Environmental Management for the
New York City Planning Department, Executive Assistant to the Brooklyn borough
President, and the Commissioner of the New York City Department of Environmental
Protection.
Executive Officers
The executive officers of the Company are:
----------------------------------- -----------------------------------------------------------------------------
Name Position
----------------------------------- -----------------------------------------------------------------------------
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 Senior Vice President
----------------------------------- -----------------------------------------------------------------------------
See the description under the heading "ELECTION OF DIRECTORS," above, for
background of Robert M. Beningson.
Michael Trachtenberg, 52, 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, 50, 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
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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, 51, joined the Company in April 1998 and was then
elected Vice President. Mr. Elefante was elected Senior Vice President in April
2000. 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 20 years, where he was responsible for independent power generation,
purchasing and fuels.
There are no family relationships between or among any directors or
executive officers of the Company. Messrs. Beningson and Trachtenberg are
directors of the Company's 85% owned subsidiary, North American Energy
Conservation, Inc. ("NAEC"), which filed for protection under Chapter 11 of the
United States Bankruptcy Code on March 2, 2000.
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 and Mr. Schultz is a
member of the Audit Committee and Judge Berman is a member of the Compensation
Committee. For purposes of their services on the Audit Committee, the members of
such committee should be considered independent, as defined in the applicable
rules of the National Association of Securities Dealers listing standards. In
addition to numerous informal meetings of the Board of Directors during the
year, during the fiscal year ended February 28, 2001, the Board met five times,
the Compensation Committee met three times, the Incentive Stock Option Committee
met three times and the Audit Committee met once. Each of the directors attended
all of the meetings of the Board and each Committee on which he sat during such
year.
REPORT OF THE AUDIT COMMITTEE
The members of the Audit Committee (the "Audit Committee") for the
fiscal year ended February 28, 2001 were Mr. Weinstein, Mr. Sommer and Mr.
Schultz.
The Audit Committee reports as follows:
The Audit Committee of the Board of Directors assists the Board in
fulfilling its oversight responsibilities with respect to the external reporting
process and the adequacy of the Company's internal financial controls. The Audit
Committee is comprised of three members who are independent directors.
6
Specific responsibilities of the Audit Committee are set forth in the
Audit Committee Charter adopted by the Board. The charter is attached to this
proxy statement as Appendix A.
Management is responsible for the Company's internal controls and the
financial reporting process. Grant Thornton LLP ("Grant Thornton"), the
Company's independent certified public accountants, is responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States of America and expressing an opinion on the financial statements.
The Audit Committee's responsibility is to monitor these processes through
review and discussion with management and representatives of Grant Thornton.
The Audit Committee has discussed with Grant Thornton the overall scope
and plans for the independent audit. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles. Discussions about the
audited financial statements included Grant Thornton's views about the quality
and acceptability of the accounting principles, the reasonableness of
significant estimates by management and the accuracy and adequacy of disclosures
in the financial statements. The Audit Committee also discussed with the
auditors other matters required by Statement on Auditing Standards No. 61,
Communications with Audit Committees, as amended by SAS No. 90, Audit Committee
Communications.
Grant Thornton provided to the Audit Committee the written disclosures
required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees. The Audit Committee discussed Grant
Thornton's independence with management and representatives of Grant Thornton,
and has satisfied itself as to the independence of Grant Thornton.
Based on the Audit Committee's discussions with management and
representatives of Grant Thornton and the Audit Committee's review of the
representations of management and the report of Grant Thornton, the Audit
Committee recommended to the Board that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 2001, filed with the Securities and Exchange
Commission.
Stanley Weinstein
Howard F. Sommer
Harvey W. Schultz
COMPENSATION OF DIRECTORS
Directors receive fees for attending Board or Committee meetings. In
Fiscal 2001, 2000 and 1999, Messrs. Weinstein and Sommer each received $24,000.
In both Fiscal 2001 and 2000, Mr. Schultz received $24,000, and he received
$6,000 in Fiscal 1999. In both Fiscal 2001 and 2000, Judge Berman received
$24,000, and he received $4,000 in Fiscal 1999.
The Company has not entered into employment contracts with any of its
named officers or directors, except for Mr. Beningson as described below under
"EXECUTIVE COMPENSATION - Employment Agreement."
7
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, 2001 were Messrs. Weinstein
and Sommer and Judge Berman.
The Compensation Committee reports as follows:
The Compensation Committee of the Board determines the Company's
executive compensation. The Compensation Committee meets during the year as may
be required.
The Compensation Committee believes that compensation of the Company's
key executives should be sufficient to attract and retain highly qualified and
productive personnel and also to provide meaningful incentives for enhanced
productivity and superior performance. It is the policy of the Company that the
three primary components of the Company's total compensation package (salary,
bonuses and grants of stock options) will be considered in the aggregate in
determining the amount of any one component. The Company seeks to reward
achievement of long and short-term individual performance goals, viewed in the
context of both individual projects and Company performance. However, given the
unique nature of each project (particularly considering the context of the
different legal, regulatory, financial, accounting, tax, political and cultural
systems, issues and structures found in various countries in which the Company
develops projects) and the resulting flexible adaptation required in the duties
and tasks performed by the Company's key executives, the Compensation
Committee's criteria for assessing executive performance in any year is
inherently subjective and not subject to specific enumeration of factors,
relative weighting or formulae calculations. The Compensation Committee did not
specifically use any companies in the energy industry as a basis for comparison
when establishing executive compensation.
During Fiscal 2001, the Company's executive compensation generally
included a base salary and long-term incentive compensation in the form of stock
options awarded under the Company's stock option plans, all dependent on
subjective evaluations of performance as noted above. The long-term incentive
option grants are intended to align the interests of employees and stockholders
and thereby to motivate executives as equity owners to contribute at superior
levels in the future and to allow them to share in increased value developed for
stockholders generally.
During Fiscal 1999, the Company entered into a multi-year employment
agreement with its Chairman and Chief Executive Officer, the terms of which are
described below under EXECUTIVE COMPENSATION - Employment Agreement.
In determining to enter into this Employment Agreement, the
Compensation Committee subjectively considered Mr. Beningson's significant
contribution to the management of the Company during the year, including the
closing of the innovative Portfolio Bond Financing, the
8
development and construction of the Big Spring and Trinidad Projects, and the
Company's other promising project development activities.
In December 2000, the Compensation Committee considered appropriate
compensation to be awarded to Mr. Beningson in connection with the Company's
overall settlement with its creditors. The settlement agreement with the
creditors requires Mr. Beningson to reduce his base salary by half, taking the
balance either as deferred compensation or in common stock of the Company, as
well as to agree to a number of other accommodations, including restrictions on
his ability to dispose of any shares owned by him and the execution of a voting
agreement with respect to the election of nominees to the Board of Directors by
the creditor group. After careful deliberation, the Compensation Committee
concluded that the appropriate number of shares to be awarded to Mr. Beningson
for all of the accommodations he had been asked to make would be one million.
The Compensation Committee recommended, and the Board approved, the issuance of
one million restricted shares to Mr. Beningson, and required that the necessary
amendment to Mr. Beningson's employment agreement contain a provision that if
the Employment Agreement is terminated by him or for cause prior to May 20,
2004, a pro rata number of such shares would be returned to the Company. These
shares have not been included in the Summary Compensation Table.
Stanley Weinstein
Howard F. Sommer
Judge Frederic S. Berman
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Beningson, the Chairman and Chief Executive Officer of the Company,
is a shareholder of RRR'S Ventures, Ltd. ("RRR'S"), a corporation in which the
Chief Financial Officer of the Company is also a minor shareholder. RRR'S is a
25% general partner in Warbasse-Cogeneration Technologies Partnership, L.P.
("WTCP"), a limited partner in RV Associates L.P. ("RVA") (which in turn is a
minority partner in B-41 Associates, L.P. ("B-41LP")), and a 10% general partner
in York Cogen Partners L.P. ("YCP"), a limited partner in B-41LP. Mr. Beningson
controls 15% of the common stock and is a director of NAEC, the Company's
discontinued energy marketing subsidiary.
In Fiscal 2001, 2000 and 1999, RVA was allocated approximately
$622,000, $555,000 and $547,000, respectively, of the interest income on a note
issued by WCTP to YCP. Also, in Fiscal 2001, 2000 and 1999, RRR'S received from
WCTP $631,000, $495,000 and $491,000, respectively, for general partner and
administrative fees. The Company's Chief Financial Officer received an aggregate
of $86,000, $90,000 and $86,000 in Fiscal 2001, 2000 and 1999, respectively,
from RRR'S and WCTP. In addition, since RRR'S has a 25% interest in WCTP, it has
the potential for substantial future distributions from WCTP after all senior
debt, including the notes payable to affiliates of Company, have been paid in
full.
9
At February 28, 2001, WCTP was indebted to the Company for $14,064,482
related to operations and maintenance services and other related receivables,
$13,697,585 for interest receivable from WCTP and for $57,331,000 related to the
Warbasse Facility.
At February 28, 2001, Mr. Beningson owed no amounts to the Company. 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). On May 31, 1998, he paid $275,000 of this long-term note he owed to the
Company. Also on May 31, 1998, an agreement was reached to facilitate and
maximize the Company's Portfolio Bond Financing. The agreement was between the
Company, YCP, and the minority interests in YCP and B-41LP. Pursuant to this
agreement, the minority interests have agreed to assign and subordinate their
interests in various cash flows from the Brooklyn Navy Yard and Warbasse
facilities to the bondholders.
In addition, the minority interests in B-41LP have agreed as of January
1, 1998 to forego completely their 25.3% interest in the royalty to be received
from the Brooklyn Navy Yard facility. This royalty will continue through
December 31, 2001. In exchange, the Company transferred the balance of the note
due from the Chairman of $5,696,500 to the minority interest.
At February 28, 2001, Mr. Trachtenberg is indebted to the Company for
$468,095 related to the exercise of options and certain advances. Mr. Paladino
is indebted to the Company for $416,879 related to the exercise of options and
certain advances. These amounts bear interest at 6.47% per annum and are payable
over ten years pursuant to notes. Mr. Trachtenberg is a director of NAEC.
The Company recognizes that potential conflicts of interest may arise
by reason of the fact that Mr. Beningson is a stockholder of RRR'S, which is a
20% limited partner of RVA and a 10% general partner of YCP, 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.
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).
Comparison of Five - Year Cumulative Total Returns
Performance Graph for
York Research Corporation
Produced on 05/18/2001 including data to 01/28/2001
Date Company Market Market Peer Peer
Index Index Count Index Count
02/28/1996 100.000 100.000 5207 100.000 72
10
Date Company Market Market Peer Peer
Index Index Count Index Count
02/29/1996 100.000 99.338 5207 100.538 72
03/29/1996 109.804 99.546 5252 102.431 72
04/30/1996 127.451 107.678 5298 103.002 71
05/31/1996 154.902 112.584 5352 125.713 69
06/28/1996 166.667 107.260 5420 131.616 69
07/31/1996 143.137 97.579 5458 119.458 69
08/30/1996 160.784 103.172 5488 129.213 70
09/30/1996 170.588 110.905 5495 140.621 70
10/31/1996 152.941 109.719 5543 146.019 71
11/29/1996 150.980 116.389 5594 151.658 69
12/31/1996 149.020 116.223 5598 148.011 69
01/31/1997 164.706 124.574 5586 177.755 67
02/28/1997 145.098 117.884 5601 161.184 67
03/31/1997 125.490 110.260 5608 156.215 66
04/30/1997 117.647 113.560 5590 128.532 66
05/30/1997 120.588 126.383 5585 130.826 63
06/30/1997 121.569 130.308 5569 141.531 62
07/31/1997 98.039 143.892 5567 143.084 62
08/29/1997 123.529 143.519 5558 145.985 61
09/30/1997 150.000 152.482 5545 165.565 60
10/31/1997 137.255 144.235 5560 165.269 59
11/28/1997 125.490 144.532 5584 171.694 59
12/31/1997 132.353 141.870 5540 183.359 58
01/30/1998 114.706 146.218 5512 172.562 59
02/27/1998 121.569 160.161 5495 174.486 59
03/31/1998 125.490 166.261 5456 188.046 59
04/30/1998 118.627 169.098 5437 196.938 59
05/29/1998 107.843 159.946 5429 188.122 61
06/30/1998 95.098 170.006 5407 190.362 59
07/31/1998 82.353 167.768 5382 195.483 59
08/31/1998 65.686 133.903 5338 159.580 59
09/30/1998 78.431 151.386 5281 179.450 57
10/30/1998 57.843 158.465 5189 165.560 55
11/30/1998 59.804 174.650 5153 156.562 54
12/31/1998 52.941 196.467 5100 164.831 52
01/29/1999 70.098 224.567 5047 159.295 49
02/26/1999 70.588 204.759 5018 150.155 48
03/31/1999 77.451 220.186 4955 149.562 45
04/30/1999 96.078 227.711 4928 154.199 45
05/28/1999 97.059 221.523 4910 157.424 45
06/30/1999 97.059 241.109 4897 177.625 44
07/30/1999 83.333 237.063 4896 178.434 43
08/31/1999 78.431 246.049 4878 169.296 43
09/30/1999 65.686 246.468 4846 168.474 43
10/29/1999 61.765 266.620 4849 166.970 43
11/30/1999 58.823 299.966 4846 166.982 42
12/31/1999 58.823 366.268 4832 166.074 41
11
Date Company Market Market Peer Peer
Index Index Count Index Count
01/31/2000 52.941 354.433 4798 164.485 40
02/29/2000 47.059 423.837 4813 158.260 40
03/31/2000 26.471 412.123 4825 161.787 40
04/28/2000 23.529 346.844 4858 159.888 40
05/31/2000 16.667 305.028 4855 150.448 39
06/30/2000 22.549 357.233 4857 144.769 39
07/31/2000 17.647 338.004 4867 147.881 38
08/31/2000 17.157 377.828 4901 144.482 37
09/29/2000 14.706 329.920 4869 151.886 35
10/31/2000 15.686 302.232 4820 150.697 35
11/30/2000 10.784 232.513 4782 145.908 36
12/29/2000 17.157 221.025 4713 169.663 35
01/31/2001 26.961 247.901 4653 161.620 36
02/28/2001 35.294 192.131 4617 166.068 36
--------------------------------------------- -------------------------------------------------------------------------
Legend
--------------------------------------------- -------------------------------------------------------------------------
CRSP Total Returns Index for: 1996 1997 1998 1999 2000 2001
----------------------------- ---- ---- ---- ---- ---- ----
--------------------------------------------- ----------- ------------ ------------ ----------- ------------ ----------
York Research Corporation 100 145.1 121.6 70.6 47.1 53.3
--------------------------------------------- ----------- ------------ ------------ ----------- ------------ ----------
Nasdaq Stock Market 100 117.9 160.2 204.8 423.8 192.1
(US & Foreign)
--------------------------------------------- ----------- ------------ ------------ ----------- ------------ ----------
Nasdaq Stocks 100 161.2 174.5 150.2 158.3 166.1
(SIC 4900-4999 US & Foreign)
Electric, gas and sanitary services
-----------------------------------------------------------------------------------------------------------------------
Notes:
A. The lines represent index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is
used.
D. The index level for all series was set to $100.0 on 02/28/1996.
-----------------------------------------------------------------------------------------------------------------------
12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the
Company's Chief Executive Officer and the remaining executive officers of the
Company for the fiscal years ended February 28, 2001, 2000 and 1999.
------------------------------------------ --------------------------------------- -------------------------------------------------
Annual Compensation Long-Term Compensation
Awards Payouts
------------------------------------------ --------------------------------------- -------------------------------------------------
Other Restricted LTIP Options/ All Other
Name Year Salary ($) Bonus($) Compensation Stock Payouts SAR's Compensation
---- ----- ---------- -------- ($)(1) Awards ($) (#) (2) ($) (3)
------------ ($) ------- -------- ------------
----------
---------------------------------- ------- ---------- ----------- --------------- ---------- ----------- ---------- ---------------
ROBERT M. BENINGSON 2001 425,758 0 0 0 0 0 21,947
Chairman, President & Chief 2000 425,681 0 0 0 0 0 27,089
Executive Officer 1999 404,848 0 0 0 0 0 23,211
---------------------------------- ------- ---------- ----------- --------------- ---------- ----------- ---------- ---------------
MICHAEL TRACHTENBERG 2001 240,093 0 0 0 0 0 20,000
Executive Vice President/Chief 2000 240,000 0 0 0 0 0 20,000
Financial and Accounting Officer 1999 231,346 125,000 0 0 0 0 18,944
---------------------------------- ------- ---------- ----------- --------------- ---------- ----------- ---------- ---------------
ROBERT C. PALADINO 2001 240,093 0 0 0 0 0 20,000
Executive Vice President 2000 240,000 0 0 0 0 0 20,000
1999 226,153 100,000 30,000 0 0 0 18,944
---------------------------------- ------- ---------- ----------- --------------- ---------- ----------- ---------- ---------------
VITO L. ELEFANTE 2001 175,075 0 0 0 0 0 20,000
Senior Vice President 2000 175,000 0 0 0 0 0 27,089
1999 178,461 25,000 0 0 0 0 1,244
---------------------------------- ------- ---------- ----------- --------------- ---------- ----------- ---------- ---------------
(1) Forgiveness of indebtedness.
(2) The Company does not grant SAR's.
(3) Represents the value of the Company's contribution to the ESOP
allocable to executives' accounts for such year.
OPTION GRANTS IN LAST FISCAL YEAR
------------------------------ -------------------------------------------------------------------------------- ---------------
Individual Grants
------------------------------ -------------------------------------------------------------------------------- ---------------
% of Total Options Exercise Price Expiration Alternative
Name Number of Shares Granted to ($/Share) Date Grant Date
---- Underlying Employees in Fiscal ------------- ------------ Present
Options Granted Year Value ($)
---------------- -------------------------- ---------
------------------------------ -------------------- --------------------- -------------------- ---------------- ---------------
ROBERT M. BENINGSON 1,000,000 50% .997 12/5/05 490,000
500,000 .860 1/8/06 215,000
------------------------------ -------------------- --------------------- -------------------- ---------------- ---------------
MICHAEL TRACHTENBERG 150,000 8% .906 12/5/10 102,000
100,000 .780 1/7/11 59,000
------------------------------ -------------------- --------------------- -------------------- ---------------- ---------------
ROBERT C. PALADINO 200,000 10% .906 12/5/10 136,000
100,000 .780 1/7/11 59,000
------------------------------ -------------------- --------------------- -------------------- ---------------- ---------------
VITO L. ELEFANTE 75,000 4% .906 12/5/10 51,000
50,000 .780 1/7/11 29,500
------------------------------ -------------------- --------------------- -------------------- ---------------- ---------------
13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information on option exercises in
Fiscal 2001 by the named executive officers and the value of such officers'
unexercised options at February 28, 2001.
--------------------------------- -------------- ------------ ------------------------------ ----------------------------------
Shares Value of Unexercised
Name Acquired on Value Unexercised Options at In-the-Money Options
---- Exercise Realized Fiscal Year End (#) At Fiscal Year End ($) (1)
-------- ($) ------------------- --------------------------
(#) ---- Exercisable Unexercisable Exercisable Unexercisable
--- ------------------------- --------------------------
--------------------------------- -------------- ------------ ------------------------------ ----------------------------------
ROBERT M. BENINGSON 0 0 2,125,000 0 1,948,000 0
--------------------------------- -------------- ------------ ------------- ---------------- ----------------- ----------------
MICHAEL TRACHTENBERG 0 0 255,500 299,500 0 348,600
--------------------------------- -------------- ------------ ------------- ---------------- ----------------- ----------------
ROBERT C. PALADINO 0 0 185,500 349,500 0 415,800
--------------------------------- -------------- ------------ ------------- ---------------- ----------------- ----------------
VITO L. ELEFANTE 0 0 25,000 150,000 0 174,300
--------------------------------- -------------- ------------ ------------- ---------------- ----------------- ----------------
(1) Value calculated is the difference between the closing price at fiscal
year-end 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)
------------------------------------------------------------------------------------------------------------------
Remuneration (1) 10 15 20 25 30 35+
------------- -- -- -- -- -- ---
-------------------------- ----------- ------------- -------------- --------------- -------------- ---------------
50,000 3,200 4,125 5,200 6,250 7,500 8,750
100,000 8,200 11,625 15,200 18,250 21,675 24,175
150,000 13,200 19,125 25,200 30,750 36,675 40,425
200,000 18,200 26,625 35,200 43,250 51,675 56,675
250,000 23,200 34,125 45,200 55,750 66,675 72,925
-------------------------- ----------- ------------- -------------- --------------- -------------- ---------------
(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 44 for Robert M. Beningson, 13 for Robert C.
Paladino, 17 for Michael Trachtenberg and 3 for Vito L. Elefante. Vito
L. Elefante is 20% vested.
IRS regulations limit the amount of compensation credited for Pension
Plan purposes to $170,000 per year, subject to cost of living increases.
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.
14
Employment Agreement
On December 9, 1998, the Company entered into an Employment Agreement
with Mr. Beningson, its Chairman and Chief Executive Officer. This Agreement has
a term of 6 years, and will be terminated upon Mr. Beningson's death, disability
or acts taken by Mr. Beningson constituting a felony under applicable law. The
Agreement may be terminated by Mr. Beningson if he is assigned duties
inconsistent with his position, if the Company fails to keep in effect certain
benefit plans or upon a change of control of the Company.
Under this Agreement, Mr. Beningson's base compensation is $425,000 per
year. In addition, Mr. Beningson is to be paid incentive compensation based on
the pre-tax earnings of Company as follows: 1% of pre-tax earnings between $4
million and $6 million, 1.5% of pre-tax earnings between $6 million and $10
million, 2% of pre-tax earnings between $10 million and $15 million, and 3% of
pre-tax earnings in excess of $15 million. In addition, upon Mr. Beningson's
involuntary termination by the Company or by his death or disability, the
Company will pay Mr. Beningson's base salary for one year, and 50% of his base
salary for an additional 9 years, but in no event after Mr. Beningson has
reached age 80.
In December, 2000, the Company authorized an amendment to Mr.
Beningson's Employment Agreement to reduce his base compensation to $212,500 per
year. In consideration of this reduction as well as other agreements required of
Mr. Beningson by the Company's creditors, the Company issued Mr. Beningson one
million shares of Common Stock, and agreed to include such shares in the first
registration statement filed by the Company on a form which is appropriate for
inclusion of such shares. Mr. Beningson also agreed to return to the Company a
pro rata percentage of such shares if the Employment Agreement is terminated by
him or for cause prior to May 20, 2004.
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. All 1,400,000 qualified stock options authorized under
the 1982 ISO Plan have been granted. The 1982 ISO Plan expired on April 26,
1992. Options to purchase 201,983 shares remain outstanding under the 1982 ISO
Plan as of February 28, 2001.
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 ("1993 Plan 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. 1993 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 1993 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
15
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 1993 Plan Options granted to 10%
Holders shall not be exercisable after the expiration of five years from the
date of grant. 1993 Plan 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 1993 Plan Option granted under the 1993 ISO Plan will
become exercisable. Payment for shares upon exercise of 1993 Plan 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 2,059,523 shares remain outstanding under the
1993 ISO Plan as of February 28, 2001.
The York Research Corporation 1999 Incentive Stock Option Plan (the
"1999 ISO Plan") authorizes the granting from time to time of options to
purchase shares of the Company's Common Stock ("1999 Plan Options") to
Employees, up to a maximum of 2,500,000 shares of Common Stock in the aggregate
under the 1999 ISO Plan. Non-Employee Directors of the Company are not eligible
to receive options under the 1999 ISO Plan. 1999 Plan Options may either be
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 1999 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 a 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 1999 ISO Plan is the last sales 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 ISO Committee, but will
not be less than the par value per share of the Company's common stock. The 1999
ISO Plan provides that each option agreement shall specify a period during which
the 1999 Plan 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. 1999 Plan 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 1999 Plan Option
granted under the 1999 ISO Plan will become exercisable. Payment for shares upon
exercise of 1999 Plan 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 to be determined by the ISO Committee or by any combination of the
foregoing.
The 1999 ISO Plan provides for proportionate changes in 1999 Plan
Options in the event of a change in capitalization of the Company. In the event
of a Change in Control (as defined in the 1999 ISO Plan), all outstanding
Options will immediately become exercisable, and holders of 1999 Plan Options
will be entitled to receive a cash payment equal to the excess, if any, of (x)
(A) in the case of a non-qualified 1999 Plan Option, the greater of (1) the Fair
Market Value (as
16
defined in the 1999 ISO Plan), on the date preceding the date of surrender, of
the shares subject to the 1999 Plan Option or portion thereof surrendered or (2)
the Adjusted Fair Market Value (as defined in the 1999 ISO Plan) of the shares
subject to the 1999 Plan Option or portion thereof surrendered or (B) in the
case of an ISO, the Fair Market Value, on the date preceding the date of
surrender, of the shares subject to the 1999 Plan Option or portion thereof
surrendered, over (y) the aggregate purchase price for such shares under the
1999 Plan Option or portion thereof surrendered. Options to purchase 2,295,000
shares remain outstanding under the 1999 ISO Plan as of February 28, 2001.
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 $404,000, $708,000 and
$678,000 to the ESOP during Fiscal 2001, 2000, and 1999, respectively. Mr.
Weinstein was the Trustee of the ESOP as of February 28, 2001. Mr. Trachtenberg
replaced Mr. Weinstein as Trustee in May, 2001. 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.
17
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth the information indicated as of February
28, 2001, 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.
-------------------------------------------- ----------------------------------- -----------------------------
Name of Beneficial Owner Amount and Nature of
------------------------ Beneficial Ownership Percent of Class (1)
-------------------- --------------------
-------------------------------------------- ----------------------------------- -----------------------------
Robert M. Beningson 5,486,520 (2) 28.7
280 Park Avenue - Suite 2700 West
New York, New York 10017
-------------------------------------------- ----------------------------------- -----------------------------
Stanley Weinstein 815,895 (3) 5.0
280 Park Avenue - Suite 2700 West
New York, New York 10017
-------------------------------------------- ----------------------------------- -----------------------------
See note references below
Security Ownership of Management
The following table sets forth the information indicated as of February
28, 2001 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:
---------------------------------------- -------------------------------------- --------------------------------------
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership Percent of Class (1)
------------------------ -------------------- --------------------
---------------------------------------- -------------------------------------- --------------------------------------
Robert M. Beningson 5,486,520 (2) 28.7
Stanley Weinstein 815,895 (3) 5.0
Howard F. Sommer 62,000 (4) (9)
Harvey W. Schultz 40,000 (5) (9)
Frederic S. Berman 40,000 (5) (9)
Michael Trachtenberg 300,000 (6) 1.8
Robert C. Paladino 197,000 (7) 1.2
Vito L. Elefante 30,000 (8) (9)
All directors and officers as 6,971,415 35.2
a group (8 persons)
---------------------------------------- -------------------------------------- --------------------------------------
(1) The Percent of Class is based upon 16,262,697 issued and outstanding
shares of common stock as of the February 28, 2001 plus the shares that
underlie unexercised warrants or options held by the individuals that
are vested or will vest within 60 days from the date as of which
information is presented in the table.
18
(2) Includes 1,430,000 shares owned directly, warrants to purchase 700,000
shares of common stock, options to purchase 2,125,000 shares of common
stock and 1,231,520 shares indirectly owned through affiliated
entities. Mr. Beningson disclaims beneficial ownership of the
indirectly owned shares.
(3) Includes 1,000 shares owned directly plus warrants to purchase 80,000
shares of common stock, and 734,895 shares held by the ESOP of which
Mr. Weinstein was the trustee.
(4) Includes 2,000 shares owed directly and warrants to purchase 60,000
shares of common stock.
(5) Includes warrants to purchase 40,000 shares of common stock..
(6) Includes 36,000 shares owned directly by Mr. Trachtenberg and options
to purchase 264,000 shares of common stock.
(7) Includes 3,000 shares owned directly by Mr. Paladino and options to
purchase 194,000 shares of common stock.
(8) Includes options to purchase 30,000 shares of common stock..
(9) Less than 1% ownership.
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, 2002. 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.
Audit Fees
The aggregate fees billed by Grant Thornton LLP for professional
services rendered for the audit of the Company's annual financial statements for
Fiscal 2001 and the reviews of the financial statements in the Company's Form
10-Q's for Fiscal 2001 were $310,000.
All Other Fees
All other fees were $273,463, and related primarily to tax services and
separate audits required of the Company's subsidiaries. The Audit Committee
believes that the provision of such services is compatible with maintaining
Grant Thornton LLP's independence.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR SUCH RATIFICATION
19
OTHER MATTERS
The Board will discuss the Company's results of operations for each of
its fiscal years ended February 28, 2001 and 2000, but does not intend to bring
any other matters before the Meeting. At the time of filing this Proxy statement
with the Securities and Exchange Commission, the Company 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.
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.
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
For stockholder proposals to be eligible for inclusion in the Company's
proxy material relating to its 2002 Annual Meeting of Stockholders, the Company
must receive them no later than February 18, 2002. Notice of a stockholder
proposal for the 2002 Annual Meeting of Stockholders will in any event be deemed
untimely if such stockholder does not provide notice thereof to the Company no
later than May 6, 2002.
By Order of the Board of Directors
/s/ Robert M. Beningson
Robert M. Beningson
President and Chairman of the Board
20
Appendix A
Audit Committee Charter
Organization
There shall be a committee of the board of directors to be known as the
audit committee. The audit committee shall be composed of directors who are
independent of the management of the corporation and are free of any
relationship that, in the opinion of the board of directors, would interfere
with their exercise of independent judgment as a committee member.
Statement of Policy
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the corporation, and the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit committee to
maintain free and open means of communication between the directors, the
independent auditors, and the financial management of the corporation.
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
o Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the corporation and its
divisions and subsidiaries.
o Meet with the independent auditors and financial management of the
corporation to review the scope of the proposed audit for the current
year and the audit procedures to be utilized, and at the conclusion
thereof review such audit, including any comments or recommendations of
the independent auditors.
o Review with the independent auditors, and the company's financial and
accounting personnel, the adequacy and effectiveness of the accounting
and financial controls of the corporation, and elicit any
recommendations for the improvement of such internal control procedures
or particular areas where new or more detailed controls or procedures
are desirable. Particular emphasis should be given to the adequacy of
such internal controls to expose any payments, transactions, or
procedures that might be deemed illegal or
21
otherwise improper. Further, the committee periodically should review
company policy statements to determine their adherence to the code of
conduct.
o Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the
shareholders. Any changes in accounting principles should be reviewed.
o Provide sufficient opportunity for the independent auditors to meet
with the members of the audit committee without members of management
present. Among the items to be discussed in these meetings are the
independent auditors' evaluation of the corporation's financial and
accounting personnel, and the cooperation that the independent auditors
received during the course of the audit.
o Review accounting and financial human resources and succession planning
within the company.
o Submit the minutes of all meetings of the audit committee to, or
discuss the matters discussed at each committee meeting with, the board
of directors.
o Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if,
in its judgment, that is appropriate.
o Review the financial statements contained in the quarterly reports to
shareholders with management and the independent certified public
accountants.
22
YORK RESEARCH CORPORATION
PROXY FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
July 18, 2001
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 2001 Annual Meeting of Stockholders of York Research Corporation (the
"Company") to be held at The Intercontinental Hotel, 111 East 48th Street, New
York, New York, on Wednesday, July 18, 2001, at 10:00 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 contrary) to vote for all nominees
Stanley Weinstein (Class C) Robert M. Beningson (Class A)
Judge Frederic S. Berman (Class A)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT
----------- NOMINEE'S NAME BELOW
--------------------------------------------------------------
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, 2002.
For _____ Against _____ Abstain _____
3. In their discretion, upon any other business which may properly come before
the Meeting.
The Proxies Shall Vote For Proposals 1 and 2 Unless Contrary Instructions Are
Given Herein
Dated , 2001
--------------------------
-----------------------------------------
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
======================================================================