SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)(1)
KINARK CORPORATION
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(Name of issuer)
COMMON STOCK, $.10 PAR VALUE
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(Title of class of securities)
494474109
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(CUSIP number)
STEVEN WOLOSKY, ESQUIRE
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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(Name, address and telephone number of person
authorized to receive notices and communications)
OCTOBER 19, 1995
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Check the following box if a fee is being paid with the statement o. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note. six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
(Page 1 of 19 Pages)
Exhibit Index Appears on Page 8
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
STEEL PARTNERS II, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 503,600
OWNED BY
EACH
REPORTING
PERSON WITH
---------------------------------------------------------
8 SHARED VOTING POWER
-0-
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
503,600
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
503,600
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.4%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
STEEL PARTNERS SERVICES, LTD.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
NEW YORK
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 27,500(2)
OWNED BY
EACH
REPORTING
PERSON WITH
---------------------------------------------------------
8 SHARED VOTING POWER
-0-
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
27,500(2)
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
27,500(2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.7%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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(2) Represents Shares in a securities portfolio owned by a foreign
investment company that is managed on a discretionary basis by Steel Partners
Services, Ltd.
<PAGE>
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
WARREN LICHTENSTEIN
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 531,150(3)
OWNED BY
EACH
REPORTING
PERSON WITH
---------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
531,150(3)
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
531,150(3)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
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14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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(3) Includes 503,600 Shares owned by Steel Partners II, L.P. and 27,500
Shares managed by Steel Partners Services, Ltd., entities controlled by Warren
G. Lichtenstein and Lawrence Butler.
<PAGE>
================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LAWRENCE BUTLER
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 533,100(4)
OWNED BY
EACH
REPORTING
PERSON WITH
---------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
533,100(4)
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
533,100(4)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
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14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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(4) Includes 503,600 Shares owned by Steel Partners II, L.P. and 27,500
Shares managed by Steel Partners Services, Ltd., entities controlled by Warren
G. Lichtenstein and Lawrence Butler.
<PAGE>
This constitutes Amendment No. 5 ("Amendment No. 5") to Schedule 13D filed
by the undersigned on March 25, 1995 (the "Schedule 13D"). Except as
specifically amended by this Amendment No. 5, the Schedule 13D, as amended,
remains in full force and effect. Defined terms shall have the meaning specified
in the Schedule 13D, except as otherwise provided herein.
Item 4 is amended to include the following:
Item 4. Purpose of Transaction.
The Reporting Persons met with the Board of Directors of the Issuer on
October 16, 1995. At the meeting, the Reporting Persons presented a further
financing proposal to the Board and answered each of the Board's questions with
respect thereto. The Board, in a letter dated October 17, 1995 (a copy of which
is attached hereto), requested the Reporting Persons to put the terms of their
further proposal in writing and to be available for questions from the Issuer on
the afternoon of October 23, 1995. The Reporting Persons delivered a written
copy of such financing proposal to the Issuer on October 19, 1995 by letter (a
copy of which is attached hereto). An officer of the Issuer contacted the
Reporting Persons on October 23, 1995 to advise them that the Issuer had
established a Special Committee of the Board of Directors, and that the Special
Committee would contact the Reporting Persons regarding their further financing
proposal.
Item 7. Material to be Filed as Exhibits.
1. Joint Filing Agreement (previously filed).
2. Letter sent by the Reporting Persons to the Issuer on September
13, 1995 with attached Term Sheet for the proposed debt and equity
financing referred to in Item 4 (previously filed).
3. Letter sent by counsel to the Reporting Persons to the Issuer on
October 2, 1995 (previously filed).
4. Letter sent by the Issuer to the Reporting Persons on October 17,
1995.
5. Response sent by the Reporting Persons to the Issuer on October
19, 1995.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: October 24, 1995 STEEL PARTNERS II, L.P.
By: Steel Partners Associates, L.P.
General Partner
By: Steel Partners, Ltd. General
Partner
By: /s/ Warren G. Lichtenstein
---------------------------
Warren G. Lichtenstein,
Chief Executive Officer
STEEL PARTNERS SERVICES, LTD.
By: /s/ Warren G. Lichtenstein
---------------------------
Warren G. Lichtenstein,
Chief Executive Officer
/s/ Warren G. Lichtenstein
---------------------------
WARREN G. LICHTENSTEIN
/s/ Lawrence Butler
---------------------------
LAWRENCE BUTLER
<PAGE>
EXHIBIT INDEX
Exhibit Page
1. Joint Filing Agreement previously filed
2. Letter sent by the Reporting Persons previously filed
to the Issuer on September 13, 1995
with attached Term Sheet for the
proposed debt and equity financing
3. Letter sent by Counsel to the previously filed
Reporting Persons to the Issuer on
October 2, 1995
4. Letter sent by the Issuer to the
Reporting Persons on October 17,
1995.
5. Response sent by the Reporting
Persons to the Issuer on October 19,
1995.
EXHIBIT 4
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October 17, 1995
PERSONAL AND CONFIDENTIAL
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Steel Partners II, L.P.
c/o Mr. Warren Lichtenstein
750 Lexington Avenue - 27th Floor
New York, New York 10022
Dear Mr. Lichtenstein:
Thank you for your interest in assisting Kinark Corporation ("Kinark"
or the "Company") with the financing of its acquisition of Rogers Galvanizing
Company ("Rogers"). Others have also expressed an interest in assisting Kinark
to acquire Rogers. In an effort for the Board of Directors of Kinark (the
"Board") to fairly evaluate all proposals, the Board has decided to seek final
proposals from all potential investors who have expressed an interest in
assisting Kinark with this financing. These final proposals are requested to be
delivered to the Company by 5:00 p.m. (Tulsa time) on Thursday, October 19, 1995
(see the instructions set forth below). The Board will review all proposals
thoroughly, seek counsel from financial and other advisors and meet together to
consider all proposals on Monday, October 23, 1995.
The Board of Directors of Kinark currently contemplates that the funds
necessary to complete the acquisition of Rogers will be obtained through a
rights offering to existing shareholders, together with a standby commitment or
investment by an investor or investors to be selected by the Board. The Board
has not determined at this time whether the best interests of Kinark's
shareholders would favor an investment beyond a pro rata offering of rights to
shareholders, coming in the form of equity, debt, or a combination of equity and
debt, and intends to determine this issue in connection with its review of the
offers received. To enable the Board to review and compare the competing offers
from potential investors, we ask that your offer contain at least the following
information:
1. The maximum amount you are willing to commit or invest and
the source of funding.
2. The proposed form of your investment, whether debt or equity,
including all terms of any instruments, warrants or securities to be
received by you. If you would consider
<PAGE>
alternative forms of investments, please describe all such
alternatives.
3. Your plans for funding any "gap" between the maximum amount
you are willing to invest and the $9.8 million needed by Kinark to
complete the acquisition of Rogers.
4. Whether shareholders other than yourself would be offered an
over-subscription privilege, i.e., permitted to purchase more than
their proportionate share of the securities to be offered and, if so,
whether existing shareholders would be limited in the amount of
securities they could acquire.
5. Whether you would be willing to participate with other
investors giving standby commitments and, if so, whether the relative
investment of each of the participating investors, including yourself,
would be allocated among the standby investors equally, in proportion
to their existing holdings of company stock, or in some other manner.
6. If other investors participate in a standby commitment, the
minimum amount you would consider committing or investing.
7. Whether you would require any designees to be elected to the
Board of Directors of Kinark as a condition to completing the
investment, and, if so, the number of designees or how the number of
designees would be determined.
8. The other conditions to a firm commitment and investment,
such as due diligence, additional financing, or representations,
warranties and covenants of Kinark.
9. Your identity and the identity of any of your affiliates or
any persons constituting a "group" with you under the federal
securities laws, including the beneficial owners of any instruments or
securities to be received in the transaction.
10. Whether you would agree to give minority shareholders any
assurances or protections beyond those afforded by applicable law.
11. Any other information that you think the Board should
consider to positively evaluate your proposal.
Further, to assure that a fair and nondiscriminatory evaluation is
available for all potential investors, the Board
<PAGE>
intends to follow certain established procedures in reviewing your offer and the
offers of other potential investors. This procedure, to which you should
strictly adhere, is outlined as follows:
(a) All offers to provide financial assistance to the
Company to complete the acquisition of Rogers must be received by
the Company at the address on the first page of this letter no
later than 5:00 p.m. (Tulsa time) Thursday, October 19, 1995.
Please address your letters to me.
(b) The Undersigned is coordinating Kinark's efforts to
finalize the terms of an investment and to complete the
acquisition of Rogers. Consequently, you should contact me if you
need any additional information or have any questions about this
letter.
(c) I am and other representatives of Kinark will be
available at any time to answer questions or to provide relevant
information to the extent consistent with Kinark's duties under
Federal securities laws and Delaware law.
(d) If you wish to obtain additional information beyond what
is available publicly, then you must execute a confidentiality
agreement which is satisfactory to Kinark.
(e) The Company will not provide any investor with access to
any offers received from other investors.
(f) The Board would ask that you be available during the
afternoon of October 23, 1995, in case questions concerning your
proposal arise or if the Board wishes to negotiate further with
you, depending on the nature of the other proposals. To this end,
please provide in your proposal an indication of your willingness
to be available during this time and a telephone number where you
can be reached.
Please feel free to call me if you have any questions regarding
this letter.
Sincerely,
/s/ Paul R. Chastain
-----------------------
Paul R. Chastain, President
EXHIBIT 5
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STEEL PARTNERS II, L.P.
750 Lexington Avenue
27th Floor
New York, New York 10022
October 19, 1995
To: The Board of Directors
Kinark Corporation
7060 South Yale Avenue
Tulsa, Oklahoma 74101
Att'n: Paul R. Chastain, President
Gentlemen:
In response to your letter of October 17, 1995 (the "Letter") to Steel
Partners II, L.P. ("Steel") and based upon the indication of the Board of
Directors of Kinark Corporation ("Kinark"), set forth in the Letter, that it
prefers to obtain the funds necessary to complete the Rogers acquisition through
a rights offering to existing shareholders, together with a standby commitment,
Steel hereby submits the following proposal. The item numbers below are
generally responsive to the item numbers in the Letter.
1. Steel understands that Kinark proposes to proceed with its
contemplated offering to shareholders of non-transferable rights to purchase
additional shares of the Company's common stock (the "Rights Offering"). Steel
also proposes that each Right carry with it the right to subscribe at the
Subscription Price for additional shares that are not
<PAGE>
otherwise purchased through the exercise of Rights ("the Oversubscription
Privilege"). If the number of shares subscribed for pursuant to the
Oversubscription Privilege exceeds the number of shares available, the shares
subject to the Oversubscription Privilege would be allocated, on a pro rata
basis, in proportion to the number of shares that are subscribed for by
shareholders participating in the Oversubscription Privilege. In connection with
the Rights Offering, and as further described below, Steel hereby commits to act
as a "standby" purchaser, for an aggregate of $6 million in total, inclusive of
the aggregate price paid for any and all shares for which it subscribes pursuant
to the Rights Offering (including shares subscribed for pursuant to the
Oversubscription Privilege). The source of funds for this commitment shall be
working capital available to Steel. The within proposal is not subject to any
financing or due diligence condition.
2. Steel prefers, as suggested by the foregoing, to invest in Kinark
on an equity basis only. Steel would consider other alternatives for its
investment; however, since Steel believes an appropriate Rights Offering is in
the best interests of all Company shareholders, no such alternatives are
presented with this proposal. The within proposal does not contemplate that
Steel would receive any commitment or other fees, whether in
<PAGE>
the form of warrants or otherwise, for acting as a standby purchaser in the
Rights Offering.
3. It is Steel's understanding that Kinark estimates that
approximately $9.8 million is needed, in all, to purchase all outstanding
capital stock of Rogers, and that approximately $5.4 million is needed to
consummate the existing contract to acquire a majority of its outstanding shares
pursuant to the existing stock purchase agreements with the Simpson Inter Vivos
Trusts. Whether there will be a "gap" between the funds to be raised in the
contemplated Rights Offering, and the funds required to consummate the purchase
of all outstanding Rogers capital stock, cannot, of course, be known at this
time. But it appears obvious that such a gap, if any, will be appreciably
smaller than $3.8 million, i.e., the maximum possible amount which the Company
could require if Steel's equity proposal is accepted. Based upon its knowledge
of the financial markets, Steel believes that, if Kinark determines to accept
the within proposal, the Company will have a substantially strengthened balance
sheet and, in all likelihood, would be able to fund the balance required to
acquire the minority interests in Rogers through traditional bank financing
(based, of course, on a much stronger balance sheet) and/or the redeployment of
existing equity. Nevertheless, Steel confirms its willingness to use its
<PAGE>
best efforts to provide financing in an amount equal to the shortfall, if any,
should the same prove necessary. Steel is prepared to discuss this minor issue,
and attempt to come to a definitive agreement with respect to it now, or leave
it for discussion for another time.
4. Steel is prepared to participate with other purchasers who, like
Steel, are willing to provide standby commitments. However, since Steel does not
know whether there are such purchasers, or the number thereof, Steel reserves
the right to modify the within proposal based upon the level of participation by
others and whether they are existing shareholders or not. Steel would be willing
to participate in a standby commitment in which participations are made
proportionate to the current stock ownership of each such participant. Steel
would also consider other bases to allocate standby commitments.
5. In the event that Kinark locates other standby purchasers, Steel
would be willing to invest less than the $6 million contemplated hereby, based,
of course, on the level of interest expressed by others and/or the level of
their current holdings in the Company.
<PAGE>
6. For its agreement to provide a standby commitment of $6 million, and
on the assumption it is the sole standby purchaser, Steel would request (a) the
right to designate two (2) directors on a Board to be comprised of not more than
eight (8) directors and (b) the right to designate one (1) director on an
Executive Committee of the Board to be comprised of not more than three (3)
directors. In the event that the Company takes down the full $6 million
contemplated hereby, and on the assumption it is the sole standby purchaser,
Steel would request (a) the right to designate two (2) directors on a Board to
be comprised of not more than six (6) directors (or three (3) directors on a
Board to be comprised of not more than nine (9) directors) and (b) the right to
designate one (1) director on an Executive Committee of the Board to be
comprised of not more than three (3) directors. Steel's designated
representatives would be affiliated with it.
7. Consummation of the within proposal is contingent upon Kinark's
obtaining all necessary and appropriate consents and approvals, including
consents from its board of directors and its shareholders, if required. The
within offer is subject to each of the conditions as set forth in the
registration statement filed by Kinark with the Securities and Exchange
Commission ("Commission") on September 15, 1995, other than the condition that
no stockholder shall own beneficially after the Rights
<PAGE>
Offering more than 20% of the outstanding shares of the Company's common stock.
For purposes of submitting this proposal, Steel has assumed (i) that there have
been no material adverse changes in the Company's financial condition, business
or prospcsts and (ii) that there have been no undisclosed related party
contracts or transactions.
8. For information concerning Steel and its ownership in Kinark,
reference is made to its Schedule 13D, as amended, as filed with the Commission.
9. Steel would consider providing minority shareholder assurances in
addition to those contained under the Delaware General Corporate Law and the
American Stock Exchange rules, including, without limitation, that Steel or its
designees on the Board (i) shall not receive any fees from Kinark other than
customary directors fees paid to outside directors and (ii) shall not engage in
any related party transactions. Steel will also review and address any other
specific concerns that Kinark might identify.
The within proposal reflects the discussion we had with Kinark's Board
of Directors, at its meeting of October 16, 1995. We believe that this proposal
fully addresses the issues and
<PAGE>
questions raised that day. However, as before, Steel remains ready, willing and
interested to continue to meet with the Board of Directors or any designated
committee thereof to discuss the within proposal, any of its prior proposals or
how an alternative transaction could be structured to ensure that Kinark has the
necessary funds to complete the Rogers transaction, on terms and conditions
which are the best available to Kinark and its shareholders.
Steel reiterates its request that it be treated equally with any and
all other parties which are or may be interested in providing standby
commitments or other forms of financing to Kinark. Among other things, because
he is financially interested in the outcome, we request that the Company confirm
in writing that Mr. Crimmins will be excluded from Kinark's review of this and
any other competing proposals which the Company may receive.
Kinark's Board of Directors has again raised concerns about Steel's
ability to consummate the within proposal within the time frame required by the
Rogers transaction. For the record, Steel reconfirms that it is ready and, since
it submitted its proposal on September 13, 1995, that it has been ready to
negotiate and quickly conclude a transaction with Kinark which is in the best
interests of all Kinark shareholders. The within
<PAGE>
proposal is made on the understanding that Kinark wishes and intends to proceed
with a rights offering, substantially as contemplated in its September 15, 1995
registration statement. If for any reason Kinark decides not to proceed with its
rights offering as contemplated, Steel requests that Kinark immediately advise
Steel of that fact so that Steel may offer other alternatives to the Board of
Directors, including, without limitation, proposals comparable to or better than
proposals or opportunities discussed with other investors as to which Steel has
no knowledge.
Steel's representatives, Warren Lichtenstein and Lawrence Butler,
remain available at any time to answer any questions of the Board of Directors
with regard to its proposals. We can be reached at (212) 446-5217. Very truly
yours,
Steel Partners II, L.P.
By: /s/ Lawrence Butler
-------------------
Lawrence Butler
