-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CBhZT5vVlwnMbyfuoIdAGol28rjFDhPb4NIzsaJtTwDQ5OwyjaR0GFNTF77XGmXB 8icGKw5qRSGrHw5sx4Ic9Q== 0000942708-97-000014.txt : 19970509 0000942708-97-000014.hdr.sgml : 19970509 ACCESSION NUMBER: 0000942708-97-000014 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970514 FILED AS OF DATE: 19970411 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KINARK CORP CENTRAL INDEX KEY: 0000055805 STANDARD INDUSTRIAL CLASSIFICATION: 3470 IRS NUMBER: 710268502 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-03920 FILM NUMBER: 97578400 BUSINESS ADDRESS: STREET 1: 7060 S YALE CITY: TULSA STATE: OK ZIP: 74136 BUSINESS PHONE: 9184940964 MAIL ADDRESS: STREET 1: 7060 SOUTH YALE STREET 2: STE 603 CITY: TULSA STATE: OK ZIP: 741365723 FORMER COMPANY: FORMER CONFORMED NAME: KIN ARK OIL CO DATE OF NAME CHANGE: 19690601 FORMER COMPANY: FORMER CONFORMED NAME: KIN ARK OIL & GAS CO DATE OF NAME CHANGE: 19680906 DEF 14A 1 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 Filed by the registrant [X] Filed by a party other than the registrant [ ] Check the appropriate box: [ ] Preliminary proxy statement [X] Definitive proxy statement [ ] Definitive additional materials [ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 Kinark Corporation (Name of Registrant as Specified in Its Charter) Paul A. Quiros, First Union Plaza, Suite 1400, 999 Peachtree Street, Atlanta, Georgia 30309; (404) 817-6000 (Name of Person(s) Filing Proxy Statement) 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: Common Stock - $.10 par value per share (2) Aggregate number of securities to which transactions applies: 6,759,386 Shares of Common Stock (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): _________________________________________________________________ (4) Proposed maximum aggregate value of transaction: _________________________________________________________________ (5) Total fee paid: _________________________________________________________________ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: _________________________________________________________________ (2) Form, schedule or registration statement no.: _________________________________________________________________ (3) Filing party: _________________________________________________________________ (4) Date filed: _________________________________________________________________ KINARK CORPORATION LETTERHEAD APPEARS HERE April 14, 1997 ANNUAL MEETING - MAY 14, 1997 Dear Kinark Stockholder: On behalf of the Board of Directors and management, it is my pleasure to invite you to attend the Annual Meeting of Stockholders on Wednesday, May 14, 1997, in Tulsa, Oklahoma. Business matters expected to be acted upon at the meeting are described in detail in the accompanying Notice of the Annual Meeting and Proxy Statement. Members of management will report on the Company's operations, followed by a period for questions and discussion. As customary, a report on the meeting will be included in the Company's second quarter earnings announcement. We hope you can attend the meeting. Regardless of the number of shares you own, your vote is very important. Please ensure that your shares will be represented at the meeting by signing and returning your proxy now, even if you plan to attend the meeting. Thank you for your continued interest in the Company. Sincerely, /s/ Michael T. Crimmins Michael T. Crimmins Chairman of the Board and Chief Executive Officer PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE. KINARK CORPORATION LETTERHEAD APPEARS HERE NOTICE OF ANNUAL MEETING TULSA, OKLAHOMA, MAY 14, 1997 To the Stockholders of KINARK CORPORATION: The annual meeting of stockholders of KINARK CORPORATION, a Delaware corporation (the "Company"), will be held at the DoubleTree Hotel at Warren Place, 6110 South Yale Avenue, Tulsa, Oklahoma, on Wednesday, May 14, 1997, at 9:30 A.M. local time, for the following purposes: 1. To elect seven directors to serve until the 1998 annual meeting of stockholders; and 2. To transact such other business as may properly come before the meeting and any adjournments thereof. The Board of Directors fixed April 1, 1997 as the record date for determining stockholders entitled to notice of and to vote at the meeting. A list of those stockholders will be open for examination at the offices of the Company for a period of ten (10) days prior to the meeting and also will be available for inspection at the meeting. Please sign and date the enclosed proxy card and return it in the enclosed postage-paid envelope as soon as possible. It is important that your shares be represented at the meeting regardless of the number you may hold. If you do attend, you may vote or change your vote in person at the meeting. BY ORDER OF THE BOARD OF DIRECTORS /s/ Carolyn A. Fredrich Carolyn A. Fredrich, Secretary April 14, 1997 KINARK CORPORATION PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 14, 1997 GENERAL INFORMATION This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Kinark Corporation ("Kinark" or the "Company") for use at the Annual Meeting of Stockholders to be held on May 14, 1997, at 9:30 a.m., local time, at the DoubleTree Hotel in Tulsa, Oklahoma, or at any adjournments thereof (the "Annual Meeting"). On April 1, 1997, the record date for determination of stockholders of the Company entitled to vote at the Annual Meeting (the "Record Date"), there were 6,759,386 shares of the Company's common stock outstanding (the "Common Stock"), each share of which entitles the holder thereof to one vote on all matters. The holders of a majority of the Common Stock present in person or represented by proxy will constitute a quorum for transaction of business at the Annual Meeting. Abstentions and broker non-votes are counted to determine the presence or absence of a quorum at the Annual Meeting. This Proxy Statement and the Form of Proxy will be sent to the Company's stockholders on or about April 14, 1997. The Company's principal executive office is located at 7060 South Yale Avenue, Suite 603, Tulsa, Oklahoma, 74136-3324. The Company's Amended and Restated Bylaws (the "Bylaws") require the affirmative vote of a majority of the shares of Common Stock represented at the Annual Meeting and entitled to vote thereon to elect the directors nominated for election at the Annual Meeting, as set forth in this Proxy Statement. Abstentions will have no effect with respect to the election of directors. Under the rules of the American Stock Exchange, brokers who hold shares of Common Stock in street name for customers have "discretionary" authority to vote on certain items in their discretion, on behalf of their clients, if they do not receive instructions within ten days of the Annual Meeting. The brokers will have discretionary authority to vote on the election of directors. You may revoke your proxy at any time before it is voted by executing and filing, with the Company or its proxy solicitor, a revocation of your proxy or a subsequently dated proxy or by voting in person at the Annual Meeting. Shares represented by properly executed proxies will be voted at the Annual Meeting as specified, unless such proxies are subsequently revoked as provided above. If no choice is specified on a valid, unrevoked proxy, the shares will be voted as recommended by the Board. Proxies will also authorize the shares represented thereby to be voted on any matters not known as of the date of this Proxy Statement that may properly be presented for action at the Annual Meeting. ANNUAL REPORT The Company's Annual Report to Stockholders and Form 10-K, covering the fiscal year ended December 31, 1996, including audited financial statements is enclosed herewith, but neither the report nor the financial statements are incorporated in this Proxy Statement or are deemed to be a part of the material for the solicitation of proxies. ELECTION OF DIRECTORS Seven directors, constituting the entire Board of Directors, are to be elected at the Annual Meeting, in accordance with the Bylaws, to serve until the next Annual Meeting or until their respective successors have been elected. The seven current directors, Richard C. Butler, Paul R. Chastain, Michael T. Crimmins, Ronald J. Evans, Joseph J. Morrow, John H. Sununu and Mark E. Walker have been nominated for reelection at the Annual Meeting for a term expiring at the next Annual Meeting, and each of them has agreed to serve, if elected. The shares of Common Stock represented by proxies at the Annual Meeting will be voted in favor of (unless otherwise directed) the election of the nominees named below. While it is not anticipated, if any nominee is unable or should decline to serve as a director at the date of the Annual Meeting, such proxies will be voted for persons proposed by the Board. NOMINEES FOR ELECTION AS DIRECTORS TO SERVE UNTIL NEXT ANNUAL MEETING Business Experience During Past Five Years and Other First Year Name and Age Information Elected Director Richard C. Butler (87) Former Chairman of the 1974 Board of Peoples Savings & (Photo of Mr. Butler Loan Association in appears) Little Rock, Arkansas. From 1963 until 1980, chairman of the Board and President of Commercial National Bank in Little Rock. Prior to 1963, Partner in the Little Rock law firm of House, Holmes, Butler and Jewell. Served on the Board of Directors of Coca-Cola Bottling Co. of Arkansas, Advisory Board Member of Arkansas Power & Light Co. and past President of First Arkansas Development Finance Corporation. Past President of the Little Rock Chamber of Commerce and member of numerous charitable and educational organizations in Arkansas. Awarded honorary degrees from Hendrix College in Conway, Arkansas and from the University of Arkansas at Little Rock. Member of Kinark's Board from 1974 to 1979, and later served as an Advisory Board Member. In May 1993, he was appointed to Kinark's Board and elected to the Board in July 1993 and is Chairman of the Audit Committee. Paul R. Chastain (62) Appointed Vice President and 1975 Chief Financial Officer of (Photo of Mr. Chastain Kinark in February 1996. appears) President and Chief Executive Officer of Kinark from July 1993 to February 1996. Chairman and Chief Executive Officer of Kinark from June 1991 through July 1993. Co- Chairman and Co-Chief Executive Officer of Kinark from June 1990 through June 1991. From 1976 until June 1990, Executive Vice President and Treasurer. From 1973 until 1976, Vice President of Finance and Secretary of the Company. Mr. Chastain's previous experience included six years with Allis-Chalmers and nine years with Litton Industries. He is a member of the Compensation Committee. Michael T. Crimmins (57)Appointed Chief Executive 1993 Officer of Kinark in (Photo of Mr. Crimmins February 1996 and elected appears) Chairman of the Board of Kinark in May 1995. From 1989 to 1995, Vice President and General Counsel of Northbridge Holdings, Inc. and Deltech Corporation. Vice President - General Counsel from 1988 until 1989 of the Advanced Technology Group of Hoechst Celanese Corporation. From 1976 until 1987, Assistant Secretary and Associate General Counsel of American Hoechst Corporation. Mr. Crimmins is an attorney admitted to the bars of the States of New York and New Jersey. Mr. Crimmins was appointed to Kinark's Board in March 1993 and elected to the Board in July 1993. He is Chairman of the Executive Committee. Ronald J. Evans (48) Appointed President of Kinark in 1995 February 1996. Private investor (Photo of Mr. Evans from May 1995 to February 1996. appears) From July 1989 to May 1995, Vice President and General Manager of Deltech Corporation. From January 1989 to July 1989, Vice President of Sales and Marketing for Deltech Corporation. Manager from 1976 to 1989 for Hoechst Celanese Corporation. Mr. Evans was appointed to Kinark's Board in May 1995 and elected to the Board in June 1996. He is a member of the Executive Committee. Joseph J. Morrow (57) Chief Executive Officer of 1996 Morrow & Co., Inc. since (Photo of Mr. Morrow 1972. Chief Executive appears) Officer of Proxy Services Corporation from 1972 to 1992. Chairman of Proxy Services Corporation from 1992 to present. Currently a Director of Telephone Access, Inc. Digital Vision, Inc., and U.S. Agents Holding Corp. Mr. Morrow was elected to Kinark's Board in June 1996. He is a member of the Compensation and Audit Committees. John H. Sununu (57) President of JHS Associates, 1996 Ltd. since June 1992 and a (Photo of Mr. Sununu partner in Trinity Inter- appears) national Partners, a private financial firm, since June 1993. Co-host of CNN's "Crossfire", a news/public affairs discussion program, since March 1992. From January 1989 until March 1992, Chief of Staff to the President of the United States. From January 1983 to January 1989, Governor of the State of New Hampshire. From 1963 until his election as Governor, President of JHS Engineering Company and Thermal Research Inc. Helped establish and served as chief engineer for Astro Dynamics Inc. from 1960 until 1965. From 1968 until 1973, Governor Sununu was Associate Dean of the College of Engineering at Tufts University and Associate Professor of Mechanical Engineering. Served on the Advisory Board of the Technology and Policy Program at MIT from 1984 until 1989. A member of the National Academy of Engineering and the Board of Trustees for the George Bush Presidential Library Foundation. Governor Sununu was elected to Kinark's Board in June 1996. He is a member of the Audit Committee. Mark E. Walker (41) President and Director since 1993 1991 of Ocean's Window, Inc. (Photo of Mr. Walker President and Director of appears) Ocean's Window Travel Services since 1995. Manager from 1985 until 1992 for DSC Communications Corporation. Manager from 1978 until 1984 for Texas Instruments Incorporated. Mr. Walker was appointed to Kinark's Board in March 1993 and elected to the Board in July 1993. He is a member of the Executive Committee and Chairman of the Compensation Committee. With the exception of Messrs. Chastain, Crimmins and Evans, none of the directors are, or have been, employed by any parent, subsidiary or other affiliate of the Company. There are no family relationships between any directors or executive officers. The election of the nominees requires the affirmative vote of a majority of the shares of Common Stock represented at the Annual Meeting and entitled to vote thereon. THE BOARD RECOMMENDS THAT YOU VOTE FOR THE NOMINEES LISTED ABOVE. BOARD OF DIRECTORS AND COMMITTEES The business of the Company is managed under the direction of the Board of Directors. The Board of Directors presently consists of seven directors, with four outside members and three Kinark officers. The Board meets on a regularly scheduled basis during the Company's fiscal year to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings. The Board met eight times in 1996 (including regularly scheduled and special telephonic meetings). During 1996, each of the directors attended at least ninety-six percent of the aggregate number of meetings of the Board and of the committees on which they served. In addition to these meetings, the Board of Directors acted by unanimous written consent on six occasions. DIRECTOR'S COMPENSATION Directors who are also employees of the Company receive no compensation beyond their normal salary for their Board and Committee services. All directors, including employee/Board members, are reimbursed by the Company for travel expenses incurred by them in connection with their attendance at Board or Committee meetings or other business of the Company. During 1996 the Compensation Committee of the Board recommended changes in the compensation of non-employee directors and such changes were adopted, effective July 1, 1996. Under this revised compensation arrangement, non- employee directors receive an annual fee of $13,000, payable in four quarterly installments, which fee is subject to increase if the Company's stock trades at or above a designated target level for a period of four consecutive weeks. As of the Record Date, the annual non-employee director fee remained fixed at $13,000. In addition, under the 1996 Stock Option Plan, which plan was approved by a vote of the Company's stockholders at the 1996 Annual Meeting, each non-employee director who is serving as such on July 1 of each year receives an automatic grant of options to purchase 5,000 shares of the Company's Common Stock (the "Non-Employee Director Options"). Under the 1996 Stock Option Plan, the exercise price of Non-Employee Director Options is 100% of the fair market value of the Company's Common Stock on the date of the grant. Non-Employee Director Options are not exercisable until six months following the date of the grant and such options cease to be exercisable ten years after the date of the grant. COMMITTEES OF THE BOARD The Board of Directors has established standing Executive, Audit and Compensation Committees. The membership of each of these Committees is determined from time to time by the Board. EXECUTIVE COMMITTEE. The Executive Committee is delegated authority to act on behalf of the Board in certain operational and personnel matters, and to approve capital expenditures within limits authorized by the Board. The functions customarily attributable to a nominating committee are performed by the Executive Committee, which evaluates the qualifications of Board candidates for consideration of nomination by the Board of Directors. Messrs. Crimmins, Evans, and Walker are the present members of the Executive Committee and Mr. Crimmins acts as Chairman. The Executive Committee held two meeting in 1996. COMPENSATION COMMITTEE. The Compensation Committee considers remuneration of the corporate and subsidiary officers of the Company, and administers the Company's incentive compensation plans and its 1996 Stock Option Plan. Messrs. Chastain, Morrow, and Walker are the present members of the Compensation Committee. Messrs. Morrow and Walker are outside directors and Mr. Walker acts as Chairman. The Compensation Committee held three meetings in 1996. AUDIT COMMITTEE. The Audit Committee reviews the scope of the annual audit and recommendations of the independent audit firm as well as reviewing the internal audit functions of the Company. The Audit Committee is composed entirely of directors who are not employees of the Company or any of its subsidiaries. Messrs. Butler, Morrow, and Sununu are the present members of the Audit Committee and Mr. Butler acts as Chairman. The Audit Committee held two meetings in 1996. The Company's Bylaws require that a stockholder who desires to nominate a candidate for election to the Board at the Annual Meeting or present business to be considered at the Annual Meeting must give the Board advance notice of such nomination or proposed business. To be timely, a stockholder's notice must be received at the principal executive offices of the Company not less than 90 days prior to the meeting. However, in the event that the date of the next annual meeting is advanced more than 30 days or delayed more than 60 days from the date of the anniversary of the preceding year's annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the date notice of such meeting is first given to stockholders in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document filed by the Company with the Securities and Exchange Commission. The Company's Bylaws require that the notice contain certain information with respect to the proposed nominee and the stockholder giving the notice. The Company will furnish on request to any stockholder a copy of the relevant section of the Bylaws. SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT The following table sets forth certain information as of April 1, 1997, regarding the beneficial ownership of the Company's Common Stock by (a) all persons who are beneficial owners of five percent or more of the Common Stock, (b) each director of the Company, (c) each executive officer of the Company and (d) all directors and officers of the Company as a group. Unless otherwise noted, the persons named below have sole voting and investment power with respect to such shares: Amount and Nature Percentage of Name of Stockholder of Beneficial Ownership Common Stock(1) Richard C. Butler 87,600 (2) 1.3 Paul R. Chastain 47,178 (3) 0.7 Michael T. Crimmins 766,600 (4) 11.3 Ronald J. Evans 150,750 (5) 2.2 Joseph J. Morrow 1,576,532 (6) 23.3 John H. Sununu 165,000 (7) 2.4 Mark E. Walker 409,530 (8) 6.1 Steel Partners II, L.P. 529,050 (9) 7.8 Robert G. and Pauline B. Walker Revocable Trust 345,724 (10) 5.1 All Kinark Directors and Officers as Group (8 persons) 3,213,695 (11) 46.4 _________________ (1) Based on 6,759,386 shares of the Company's Common Stock outstanding as of April 1, 1997, plus any currently exercisable stock options or stock options which become exercisable within 60 days. (2) Information based on Form 4 of Mr. Butler for December 1996 filed with the Securities and Exchange Commission ("SEC"). Includes 8,000 shares held by Maumelle Gardens, Inc., of which company Mr. Butler owns 60%. Mr. Butler disclaims beneficial ownership of these shares. The shares listed also include 5,000 shares of Common Stock underlying exercisable options held by Mr. Butler. The stockholders address is 7060 South Yale Avenue, Tulsa, Oklahoma 74136. (3) Information based on Form 4 of Mr. Chastain for November 1996 filed with the SEC. Includes presently exercisable stock options to acquire 24,500 shares of Common Stock. The stockholder's address is 7060 South Yale Avenue, Tulsa, Oklahoma 74136. (4) Information based on Form 4 of Mr. Crimmins for November 1996 filed with the SEC. The stockholder's address is 7060 South Yale Avenue, Tulsa, Oklahoma 74136. (5) Information based on Form 4 of Mr. Evans for November 1996 filed with SEC. Includes presently exercisable stock options to acquire 120,750 shares of Common Stock. The stockholder's address is 7060 South Yale Avenue, Tulsa, Oklahoma 74136. (6) Information based on Form 5 of Mr. Morrow for December 1996 filed with the SEC. The shares listed for Mr. Morrow include 55,536 shares owned by his wife. Mr. Morrow disclaims beneficial ownership of these shares. The shares listed also include 5,000 shares of Common Stock underlying exercisable options held by him. The stockholder's address is 7060 South Yale Avenue, Tulsa, Oklahoma 74136. (7) Information based on Form 4 of Governor Sununu for July 1996 filed with the SEC. The shares listed for Governor Sununu include 5,000 shares of Common Stock underlying exercisable options held by him. The stockholder's address is 7060 South Yale Avenue, Tulsa, Oklahoma 74136. (8) Information based on Form 4 of Mr. Walker for December 1996 filed with the SEC. Includes 8,000 shares of Common Stock owned by a trust for Mr. Walker's son of which Mr. Walker is trustee, and 345,724 shares owned by the Robert G. and Pauline B. Walker Revocable Trust. Mr. Walker disclaims beneficial ownership of such shares and shares of Common Stock owned by other members of the Walker family. The shares listed also include 5,000 shares of Common Stock underlying exercisable options held by Mr. Walker. The stockholder's address is 7060 South Yale Avenue, Tulsa, Oklahoma 74136. (9) Information based on the joint Schedule 13D of Steel Partners II, L.P. and Warren Lichtenstein, as amended on March 31, 1997, and filed with the SEC. According to their amended Schedule 13D, Steel Partners II, L.P. beneficially owns 529,000 shares and Mr. Lichtenstein beneficially owns 529,050 shares. Mr. Lichtenstein has sole voting and dispositive power with respect to the 50 shares owned by him individually and the 529,000 shares owned by Steel Partners II, L.P. by virtue of his authority to vote and dispose of such shares. The stockholders' address is 750 Lexington Avenue, 27th Floor, New York, New York 10022. (10)Information based on the joint Schedule 13D of the Robert G. And Pauline B. Walker Revocable Trust, the Pauline B. Walker Revocable Trust A and the Robert G. Walker Irrevocable Trust B, as amended on December 14, 1996, and filed with the SEC. The Robert G. And Pauline B. Walker Revocable Trust, together with two affiliated trusts, the Pauline B. Walker Revocable Trust A and the Robert G. Walker Irrevocable Trust B, beneficially own 345,724 shares. Pauline B. Walker is the sole trustee of all three trusts. The address for the trusts is 2301 N. Central Expressway, Suite 140, Plano, Texas 75075. (11)All directors and officers as a group held in the aggregate presently exercisable stock options to acquire 167,375 shares. On the Record Date, directors and officers as a group owned 3,046,320 shares, or 45.1% of the 6,759,386 shares outstanding and entitled to vote, not including presently exercisable stock options. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE
Long Term Compensation Awards Payouts Other Securities All Annual Under- Other Compen-Restricted lying Compen- Name and Bonussation Stock Options/ LTIP sation Principal PositionYearSalary (A) (B) Award(s)SARs(#) Payouts (C) Michael T. Crimmins,1996$50,000$10,000 -- --100,000 -- -- Chairman and CEO1995 -- -- -- -- -- -- -- 1994 -- -- -- -- -- -- -- Paul R. Chastain,1996$141,600$10,000 -- -- -- -- $8,496 Vice President and CFO1995141,600 -- -- -- -- -- 8,496 1994 141,200 --3,623 -- 6,000 -- 8,472 Ronald J. Evans,1996$90,577$15,000 -- -- 250,000 -- -- President 1995 -- -- -- -- -- -- 1994 -- -- -- -- -- -- _______________ (A) Annual bonus amounts are earned and accrued during the fiscal years indicated, and paid in the next following year. (B) Group health insurance premiums paid by the Company for the named employee. (C) All Compensation shown in this column represents the Company's matching contributions to its 401(k) defined contribution retirement plan, Mr. Crimmins and Mr. Evans are not eligible to participate in 401(k) defined contribution plan until 1997.
OPTION GRANTS IN LAST FISCAL YEAR
Number of % of Total Potential Realization Individual Grants Securities Options at Assumed Annual Rates Underlying Granted To Exercise of Stock Price Appreciation Options Employees in Price Expiration for Option Term(1) Name Granted(#) Fiscal Year ($/Share) Date 5% 10% Michael T. Crimmins (2) 100,000 28.6% $3.50 7/18/06 $220,115 $557,795 Ronald J. Evans (3) 233,000 66.5% 2.50 4/03/06 $366,334 $928,330 Ronald J. Evans (3) 17,000 4.9% 3.50 7/18/06 $37,420 $94,944 ____________ (1) The assumed values result from certain prescribed rates of stock price appreciation. Values were calculated based on a ten-year exercise period for all grants. The actual value of the option grants is dependent on future performance of the Common Stock and overall stock market conditions. There is no assurance that the values reflected in this table will be achieved. The Company did not use an alternative formula for a grant date valuation, as it is not aware of any formula which will determine with reasonable accuracy a present value based on future unknown or volatile factors. (2) Options become exercisable over a four year period, with 25% of the shares becoming exercisable on each anniversary of the grant date. (3) Options become exercisable over a two year period, with 25% of the shares becoming exercisable six months after the grant date, and 25% of the shares becoming exercisable every six months thereafter, until fully exercisable.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE
Number of Securities Shares Underlying Unexercised Value of Unexercised Acquired Value Options at Fiscal Year-End In-the-Money Options at on Exercise Realized (Shares) Fiscal Year-End ($) Name (#) ($) (A) Exercisable Unexercisable Exercisable Unexercisable Paul R. Chastain (B) 0 0 20,000 0 0 0 Paul R. Chastain (C) 0 0 3,000 3,000 0 0 Michael T. Crimmins (D) 0 0 0 100,000 0 $31,250 Ronald J. Evans (E) 0 0 58,250 174,750 $76,453 $229,359 Ronald J. Evans (F) 0 0 0 17,000 0 0 ____________ (A) Market value of underlying securities at December 31, 1996 minus the exercise price of "in-the-money" options. (B) Option granted July 13, 1988 pursuant to the Company's 1988 Stock Option Plan at an exercise price of $4.4375 was not "in- the-money" at December 31, 1996. (C) Option granted February 16, 1994 pursuant to the Company's 1988 Stock Option Plan at an exercise price of $4.50 was not "in-the-money" at December 31, 1996. (D) Option granted July 18, 1996 pursuant to the Company's 1996 Stock Option Plan at an exercise price of $3.50. (E) Option granted April 3, 1996 pursuant to the Company's 1988 Stock Option Plan at an exercise price of $2.50. (F) Option granted July 18, 1996 pursuant to the Company 1996 Stock Option Plan at an exercise price of $3.50. _______________________
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS The Compensation Committee of the board establishes the general compensation policies of the Company and the compensation plans and specific compensation levels for executive officers. The Compensation Committee is presently comprised of Messrs. Chastain, Morrow, and Walker. All decisions by the Compensation Committee relating to the compensation of the Company's executive officers are reviewed by the full Board. In accordance with SEC rules designed to enhance disclosure of com- panies' policies toward executive compensation, the following is a report submitted by the Compensation Committee members addressing the Company's compensation policy as it related to the named executive officers for fiscal 1996. The Company's objective is to ensure that executive compensation is directly linked to ongoing improvement in corporate performance and increasing shareholder value. The following objectives are guidelines for compensation decisions: JOB CLASSIFICATION. The Company assigns a job grade to each salaried position, and each job grade has a salary range which is based on national salary surveys. These salary ranges are reviewed annually to determine parity with national compensation trends, and to ensure that the Company maintains a competitive compensation structure. COMPETITIVE SALARY BASE. Actual salaries are based on individual performance contributions within a competitive salary range for each position established through job evaluation and market comparisons. The salary of each subsidiary president and corporate officer, except the chief executive officer, is reviewed annually by the chief executive officer who may recommend an increase for approval by the Compensation Committee. The chief executive officer's salary is determined by the Board based on a review and recommendation by the Compensation Com- mittee. However, the current chief executive officer has agreed to serve as such at a salary below that which would otherwise be recommended by the Compensation Committee. ANNUAL INCENTIVE COMPENSATION. The Company's officers are eligible to participate in an annual incentive compensation plan with awards based primarily on achievement of performance targets for net earnings. This objective focuses corporate decisions toward consistent and steady earnings growth. Awards are subject to decrease or increase on the basis of the Company's performance and at the discretion of the Compensation Committee. STOCK OPTION PROGRAM. The purpose of this program is to provide additional incentives to employees to work to maximize shareholder value. The stock option program may utilize vesting periods to encourage key employees to continue in the employ of the Company. The number of options granted is determined by the subjective evaluation of the executive's ability to influence the Company's long-term growth and profitability. All options have been granted at the current market price at the time of the grant. The Compensation Committee, which must include at least two outside directors, works to achieve overall compensation objectives for key employees. The Compensation Committee believes that its objectives of linking executive compensation to corporate performance results in alignment of compensation with corporate goals and shareholder interest. When performance goals are met or exceeded, shareholders' value is increased and executives are rewarded commensurately. The Committee believes that compensation levels during 1996 adequately reflect the Company's compensation goals and policies. Compensation Committee Paul R. Chastain Joseph J. Morrow Mark E. Walker COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The members of the Compensation Committee are Messrs. Walker (chairman), Morrow and Chastain. The Company's 1996 Stock Option Plan and Rule 16b-3 of the Securities Exchange Act of 1934, as amended, require that at least two of the Compensation Committee members be outside directors and Messrs. Walker and Morrow are the outside directors currently on the Committee. Mr. Chastain currently serves as Vice President and Chief Financial Officer of the Company, and has served the Company in various executive positions and as a director since 1973. The Board of Directors believes that Mr. Chastain's participation in the deliberations of the Committee provides a beneficial continuity and knowledge, and that no conflicts of interest exist. Mr. Chastain did not participate in any option grant decisions during 1996. COMPANY PERFORMANCE The following performance graph compares cumulative total stockholder returns on the Company's Common Stock compared to the Dow Jones Diversified Industrials Index and the Dow Jones Equity Market Index calculated at the end of each fiscal year, December 31, 1992 through December 31, 1996. The graph assumes $100 was invested December 31, 1991, in the Company's Common Stock and in each of the referenced indices and assumes the reinvestment of dividends. (GRAPH APPEARS HERE) Dow Jones Measurement Period Dow Jones Diversified (Fiscal Year Kinark Equity Industrials Covered) Corporation Market Index Index 1991 100.0 100.0 100.0 1992 47.0 108.6 116.4 1993 37.1 119.4 142.2 1994 32.0 120.3 130.4 1995 29.0 166.5 170.8 1996 37.6 176.3 221.0 RELATED PARTY TRANSACTIONS Mr. Joseph J. Morrow, a director of the Company and a nominee for reelection, purchased 1,759,083 shares of Common Stock in the Company's private placement in January 1996. Mr. Morrow is the chief executive officer of Morrow & Co., Inc., which provides proxy solicitation and other stockholder related services to the Company. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, re- quires the Company's executive officers and directors and persons who beneficially own more than ten percent of a registered class of the Company's equity securities, to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than ten-percent beneficial owners also are required by rules promulgated by the SEC to furnish the Company with copies of all Section 16(a) forms they file. Based solely on review of the copies of such reports furnished to the Company, the Company believes that, during the last fiscal year, its executive officers, directors and greater than ten-percent beneficial owners complied with all applicable Section 16(a) filing requirements, except that one report with respect to three transactions was inadvertently not timely filed by a director of the Company. INDEPENDENT AUDITORS Deloitte & Touche, LLP audited the Company's financial statements for the fiscal year ended December 31, 1996, and the Board of Directors has approved the engagement of that firm to serve as the Company's auditors for 1997. Representatives of Deloitte & Touche are expected to be present at the Annual Meeting and will be afforded the opportunity to make a statement if they desire to do so and to be available to respond to appropriate questions. STOCKHOLDER PROPOSALS Any proposals of stockholders intended to be considered by the Company for inclusion in the proxy materials for the 1998 Annual Meeting of Stockholders must be received by the Company by January 12, 1998. Such proposals should be directed to Kinark Corporation, Attention: Secretary, 7060 South Yale Avenue, Tulsa, Oklahoma 74136. No stockholder proposals were received for inclusion in this Proxy Statement. OTHER MATTERS Management is not aware of any other business to be presented at the meeting. However, should any additional matters properly come before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment. The enclosed proxy confers discretionary authority to take action with respect to any additional matters which may come before the meeting. All expenses in connection with solicitation of proxies will be borne by the Company. In addition to solicitation by mail, proxies may be solicited personally by telephone, telecopy or telegraph by Company officers and employees. The Company has also retained Morrow & Co., Inc., 909 Third Avenue, New York, New York 10022-4799, to assist in such solicitation for a fee of $7,500 plus customary out-of-pocket expenses. Brokers, banks, nominees, fiduciaries and other custodians will be requested to solicit beneficial owners of shares and will be reimbursed for their expenses. ChaseMellon Shareholder Services, L.L.C. has been retained to receive and tabulate proxies and to provide a representative to act as inspector of election for this Annual Meeting of Stockholders. By order of the Board of Directors /s/ Carolyn A. Fredrich Carolyn A. Fredrich, Secretary Tulsa, Oklahoma April 14, 1997 APPENDIX - FORM OF PROXY CARD KINARK CORPORATION THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 14, 1997 The undersigned, a stockholder of record of Kinark Corporation (the "Company") on April 1, 1997 (the "Record Date"), hereby appoints Ronald J. Evans and Paul R. Chastain, or either of them with full power of substitution, as proxies for the undersigned, to vote all shares of common stock, $.10 par value per share (the "Common Stock"), of the Company, which the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held on May 14, 1997, and at any adjournments or postponements thereof, on the following matters. The invalidity, illegality or unenforceability of any particular pro- vision of this Proxy shall be construed in all respects as if such invalid, illegal or unenforceable provision were omitted without affecting the validity, legality or enforceability of the remaining provisions hereof. (Continued, and to be marked, dated and signed, on the reverse side) THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW. 2. Election of the following nominees as Directors: Richard C. Butler, Paul R. Chastain, Michael T. Crimmins, Ronald J. Evans, Joseph J. Morrow, John H. Sununu and Mark E. Walker. FOR all nominees WITHHOLD INSTRUCTIONS: To vote FOR or WITHHOLD listed (except as AUTHORITY to AUTHORITY to vote for the election of marked to the vote for all all candidates, check the appropriate contrary) nominees listed box hereon. To withhold authority to the election of any candidate(s), write [ ] [ ] the name(s) of such candidate(s) in the following space: __________________. IF NO BOX IS MARKED HEREON, THE UNDERSIGNED WILL BE DEEMED TO VOTE FOR EACH CANDIDATE EXCEPT THAT THE UNDERSIGNED WILL NOT BE DEEMED TO CONSENT TO THE ELECTION OF ANY CANDIDATE WHOSE NAME IS WRITTEN IN THE SPACE PROVIDED ABOVE. 2. In their discretion, upon such other matters as may properly come before the Annual Meeting. Please sign below exactly as name appears on this Proxy. If shares are registered in more than one name, all such persons should sign. A corporation should sign in its full corporate name by a duly authorized officer, stating his title. Trustees, guardians, executors and administrators should sign in their official capacity, giving their full title as such. If a partnership, please sign in the partnership name by authorized persons. Make sure that the name on your stock certificate(s) is exactly as you indicate below. Dated:_______________________________, 1997 ______________________________________________ (Signature) [mailing label here] ______________________________________________ (Signature if held Jointly) ______________________________________________ (Title or authority (if applicable) PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY, USING THE ENCLOSED ENVELOPE. **THIS IS YOUR PROXY CARD** -----END PRIVACY-ENHANCED MESSAGE-----