<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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-11(c) or Rule 14a-12
</TABLE>
KINMARK CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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:
<PAGE> 2
NOTICE OF ANNUAL MEETING
TULSA, OKLAHOMA, MAY 17, 1995
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, 61st and
South Yale Avenue, Tulsa, Oklahoma, on Wednesday, May 17, 1995 at 9:30 A.M.
local time, for the following purposes:
1. To elect six directors to serve until the 1996 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 March 20, 1995 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 days prior to the meeting and also will be
available for inspection at the meeting.
A copy of the Company's annual report and Form 10-K for the fiscal
year ended December 31, 1994, accompanies the Proxy Statement, but does not
constitute a part of the proxy soliciting material.
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
CAROLYN A. FREDRICH,
Secretary
April 17, 1995
<PAGE> 3
April 17, 1995
ANNUAL MEETING - MAY 17, 1995
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
17, 1995, 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,
Richard E. Baierlein
Chairman of the Board
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.
<PAGE> 4
KINARK CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 1995
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 17,
1995, or any adjournments thereof (the "Annual Meeting"). On March 20, 1995,
the record date for determination of stockholders of the Company entitled to
vote at the Annual Meeting (the "Record Date"), there were 3,746,410 shares of
the Company's common stock, $.10 par value per share, 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 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 17, 1995.
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 (the
"Election of Directors").
Abstentions will have no effect with respect to the Election of
Directors. Under the rules of the American Stock Exchange ("ASE"), 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.
<PAGE> 5
ELECTION OF DIRECTORS
At March 15, 1995 the Board was composed of seven members. On March
27, 1995, Raymond W. Smedley submitted to the Board his resignation as a
director. Due to Mr. Smedley's resignation at a time immediately preceding the
Annual Meeting, the Board approved an amendment to the Bylaws to reduce the
number of directors from seven (7) to six (6). At the 1993 Annual Meeting, the
Company's stockholders approved an amendment to the Certificate to delete the
provision that established three classes of directors, with the term of each
class expiring in successive years. Directors are now elected each year for
one-year terms. At the Annual Meeting, six directors will be elected in
accordance with the Bylaws to serve until the 1996 Annual Meeting. The Board
has nominated the current directors, Richard E. Baierlein, Richard C. Butler,
Paul R. Chastain, Michael T. Crimmins, Harry D. Jones, and Mark E. Walker for
election at the Annual Meeting for a term expiring at the 1996 Annual Meeting,
and each of them has agreed to serve, if elected.
At the Annual Meeting, the shares of Common Stock represented by
proxies 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
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING PAST YEAR FIRST
NAME AND AGE FIVE YEARS AND OTHER INFORMATION ELECTED DIRECTOR
------------ -------------------------------- ----------------
<S> <C> <C>
Richard E. Baierlein (51) President since 1989 of Northbridge 1993
Holdings, Inc. and Deltech Corporation and,
since 1991, of Deltech Polymers Corporation.
Vice President from 1983 until 1989 of
Petrochemicals and Plastics Group of Hoechst
Celanese Corporation. From 1979 until
1983, Vice President of the Film Division of
American Hoechst Corporation. Mr. Baierlein
was appointed to Kinark's Board in March
1993. In July 1993, he was elected Chairman
of the Board and he is a member of the
Executive Committee.
Richard C. Butler (85) Former Chairman of the Board of Peoples 1974
Savings & Loan Association in 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
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C> <C>
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 degree from Hendrix College in
Conway, Arkansas and from the University of
Arkansas at Little Rock. Member of Kinark
Corporation'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 is a member of the Compensation
and Audit Committees.
Paul R. Chastain (60) President and Chief Executive Officer of 1975
the Company since July 1993. 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. Mr.
Chastain is a member of the Executive
Committee.
Michael T. Crimmins (55) Vice President and General Counsel since 1993
1989 of Northbridge Holdings, Inc. and
Deltech Corporation and, since 1991, of
Deltech Polymers 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 a member of the Executive and
Compensation Committees.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C> <C>
Harry D. Jones (57) Consultant to the Company since August 1, 1985
1993. From 1985 until his retirement on
July 31, 1993, President and Chief Operating
Officer of Kinark. From 1979 until 1985,
Group Vice President of Kinark. From
1974-1979 President of Boyles Galvanizing
Company, a subsidiary of Kinark. Mr. Jones
was a vice president and general manager of
Roper Corporation prior to joining the
Company. He is a member of the Compensation
Committee.
Mark E. Walker (39) President since 1991 of Ocean's Window, 1993
Inc., Vice President and Director of Ocean's
Window Travel Services, Inc. since 1994.
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 Compensation and Audit Committees.
</TABLE>
With the exception of Messrs. Chastain and Jones, 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.
4
<PAGE> 8
THE BOARD OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board.
The Board presently consists of seven directors, five outside members, one
Kinark officer and one former Kinark officer now employed by the Company as a
consultant. The Board members will serve until their successors are elected at
the 1996 Annual Meeting, unless they earlier resign or are removed as provided
in the Bylaws.
The Board met 5 times in 1994. Board meetings are held at each of the
Company's subsidiaries to permit inspection and review of the various
operations and management teams. During 1994, the Directors' overall
attendance for all Board and Committee meetings was 97%. Each incumbent
director attended at least 88% of scheduled Board and the Committee meetings of
which he was a member.
The Board's non-employee members receive an annual retainer of $3,000 and
a fee of $1,000 for attendance at each Board meeting and each Committee meeting
not held during the same twenty-four hour period as Board meetings. The fee
for a telephonic Board or Committee meeting is $500. The employee/Board
members receive no compensation beyond their normal salary for their Board and
Committee services. In addition to directors fees, Mr. Jones received
consulting fees of $105,000 pursuant to a consulting agreement with the
Company. All directors, including employee/Board members, are reimbursed by
the Company for expenses incurred by them in connection with their service on
the Board and Committees. The standing Committees of the Board of Directors
are the Executive Committee, Compensation Committee and Audit Committee. At
its July 30, 1993 meeting, the Board eliminated the Stock Option Committee and
its functions were assigned to the Compensation Committee.
Executive Committee. The Executive Committee, which met 2 times in 1994,
consisted of Messrs. Baierlein, Chastain and Crimmins. The Executive Committee
is delegated authority to act on behalf of the Board in certain operational and
personnel matters, and to approve limited capital expenditures. The Executive
Committee also evaluates the qualifications of Board candidates for
consideration of nomination by the Board of Directors. The current members of
the Executive Committee are Messrs. Baierlein, Chastain and Crimmins.
Compensation Committee. The Compensation Committee consists of four
outside directors, Messrs. Crimmins, Walker, Butler and Jones. The
Compensation Committee considers remuneration of the corporate and subsidiary
officers of the Company, and administers the Company's incentive compensation
plans and 1988 Stock Option Plan. The Compensation Committee held 2 meetings
in 1994.
Audit Committee. The Audit Committee met 3 times in 1994. 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 consists of three outside directors, Messrs.
Butler, Smedley and Walker.
The functions customarily attributable to a nominating committee are
performed by the Executive Committee of the Board.
5
<PAGE> 9
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
Annual Meeting is advanced more than 30 days or delayed more than 60 days from
such anniversary, 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.
6
<PAGE> 10
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of December 31,
1994, 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, former director or nominee for 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:
<TABLE>
<CAPTION>
Amount and Nature Percentage of
Name of Stockholder of Beneficial Ownership Common Stock(1)
- - ------------------- ----------------------- ---------------
<S> <C> <C>
Richard E. Baierlein . . . . . . . . . . . . 346,300 (2) 9.2
Richard C. Butler . . . . . . . . . . . . . . 37,000 (3) 1.0
Paul R. Chastain . . . . . . . . . . . . . . 57,572 (4) 1.5
Michael T. Crimmins . . . . . . . . . . . . . 363,300 (2) 9.7
Harry D. Jones . . . . . . . . . . . . . . . 17,600 0.5
Mark E. Walker . . . . . . . . . . . . . . . 410,530 (5) 11.0
Raymond W. Smedley . . . . . . . . . . . . . 1,600 (6) 0.0
Northbridge Holdings, Inc. . . . . . . . . . 345,300 (2) 9.2
Dimensional Fund Advisors, Inc. . . . . . . . 195,100 (7) 5.2
Fidelity Management & Research Corp. . . . . 278,800 (8) 7.4
Robert G. and Pauline B. Walker
Revocable Trust . . . . . . . . . . . . . . 379,724 (9) 10.1
Quest Advisory Corp. . . . . . . . . . . . . 365,200(10) 9.7
All Kinark Directors and Officers as Group
(10 persons) . . . . . . . . . . . . . . . 905,260(11) 23.8
</TABLE>
_________________
(1) Based on 3,746,410 shares of the Company's Common Stock outstanding as of
March 15, 1995, which does not include 54,625 shares subject to currently
exercisable options as of March 15, 1995, except with respect to the
holders of such currently exercisable options.
(2) Information based on Form 3 of Mr. Baierlein and Form 4 of Mr. Crimmins
filed with the SEC. Includes 345,300 shares of Common Stock owned by
Northbridge Holdings, Inc. ("Northbridge"). As a result of their
positions with Northbridge, Messrs. Baierlein and Crimmins may be deemed
the beneficial owners of the shares owned by Northbridge, although they
disclaim such beneficial ownership. The address for Northbridge and
Messrs. Baierlein and Crimmins is 16 South Jefferson Road, Whippany, New
Jersey 07981. Northbridge pledged 236,000 shares of Common Stock to
Altair Corporation pursuant to the terms of promissory notes representing
consideration for such shares and other assets. These notes have been
paid in full and the shares have been released from the pledge.
(3) Information based on Form 4 of Mr. Butler filed with the SEC. Includes
3,000 shares held by Maumelle Gardens, Inc., of which company Mr. Butler
owns 60%. Mr. Butler disclaims beneficial ownership of these shares.
7
<PAGE> 11
(4) Includes presently exercisable stock options as of March 15, 1995 to
acquire 46,500 Shares. The stockholder's address is 7060 South Yale
Avenue, Tulsa, Oklahoma 74136.
(5) Information based on Form 5 of Mr. Walker filed with the SEC. Includes
5,000 shares of Common Stock owned by a trust for Mr. Walker's son, of
which Mr. Walker is trustee, and 379,724 shares owned by the Robert G. and
Pauline B. Walker Revocable Trust (the "Trust"). Mr. Walker provides
investment advice to the Trust and receives certain compensation from the
Trust. Mr. Walker disclaims beneficial ownership of the Trust's shares
and shares of Common Stock owned by other members of the Walker family.
The stockholder's address is 2301 N. Central Expressway, Suite 140, Plano,
Texas 75075.
(6) Information based on Form 4 of Mr. Smedley filed with the SEC. Mr.
Smedley resigned from the Board as of March 27, 1995.
(7) Information based on Schedule 13G of Dimensional Fund Advisors, Inc.
("Dimensional") filed with the SEC. Dimensional, a registered investment
advisor, is deemed to have beneficial ownership of these shares of Common
Stock, all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company, or in
series of the DFA Investment Trust Company, a Delaware business trust, or
the DFA Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans, for all of which Dimensional serves
as an investment manager. Dimensional disclaims beneficial ownership of
all such shares. The stockholder's address is 1299 Ocean Avenue, Santa
Monica, California 90401.
(8) Information based on Schedule 13G of Fidelity Management & Research filed
with the SEC. The stockholder is a wholly-owned subsidiary of FMR Corp.,
both of whom are located at 82 Devonshire Street, Boston, Massachusetts
02109.
(9) Information based on Schedule 13D filed with the SEC. The stockholder's
address is 2301 N. Central Expressway, Suite 140, Plano, Texas 75075
(10) Information based on Schedule 13G of Quest Advisory Corp., Quest Advisory
Co, a general partnership, and Charles M. Royce filed with the SEC. The
stockholder's address is 1414 Avenue of the Americas, New York, NY 10019.
(11) All directors and officers as a group held in the aggregate presently
exercisable stock options to acquire 54,625 shares as of March 15, 1995.
On the record date, directors and officers as a group owned 850,635
shares, or 22.7% of the 3,746,410 shares outstanding and entitled to vote,
not including presently exercisable stock options.
8
<PAGE> 12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Restricted
Name and Principal Other Annual Stock Options/ All Other
Position Year Salary Bonus(A) Compensation(B) Awards(s) SARs(#) LTIP Payouts Compensation(C)
- - ------------------ ---- ------ -------- --------------- --------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paul R. Chastain, 1994 $141,200 $ - $ 3,623 $ - 6,000 $ - $ 8,472
President & CEO 1993 137,500 16,074 4,655 - - - 8,250
1992 134,334 - 3,966 - - - 8,040
Harry D. Jones, 1994 $ - $ - $ - $ - $ - $ - $114,500
President & COO 1993 94,461(D) - 2,620 - - - 58,193
1992 132,657 - 3,966 - - - 7,959
</TABLE>
_______________
(A) Annual bonus amounts are earned and accrued during the fiscal years
indicated, and paid subsequent to the end of each fiscal year.
(B) Group health insurance premiums paid by the Company for the named
employee.
(C) All compensation shown in this column for Mr. Chastain consists of
Company matching contributions to the Company's 401(k) defined
contribution retirement plan. Compensation shown in this column for Mr.
Jones consists of Company matching contributions to the Company's 401(k)
defined contribution retirement plan except for $50,000 for 1993 and
$105,000 for 1994, which represents consulting fees paid to Mr. Jones
pursuant to his consulting agreement with the Company, effective August
1, 1993, and directors fees paid to Mr. Jones of $2,750 and $9,500 for
1993 and 1994, respectively.
(D) Mr. Jones resigned as President and Chief Operating Officer effective
July 31, 1993. This amount for 1993 includes payment for accrued
vacation and for the cancellation of a stock option for 5,000 shares, as
well as salary through July 31, 1993.
9
<PAGE> 13
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUE
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money
Options Options
at FY-End # at FY-End $
----------- -----------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise # Realized (A) $ Unexercisable Unexercisable
---- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Paul R. Chastain ----- ------ 20,000/0 $ 0(B)/0
Paul R. Chastain ----- ------ 25,000/0 $1,562(C)/0
Paul R. Chastain ----- ------ 0/6000 0(D)/0
</TABLE>
____________
(A) Market value of underlying securities at December 31, 1994, minus the
exercise price of "in-the-money" options.
(B) Option granted 7/13/88 pursuant to the Company's 1988 Stock Option Plan at
an exercise price of $4.4375 was not "in-the-money" at December 31, 1994.
(C) Option granted 9/16/86 pursuant to the Company's 1978 Stock Option Plan at
an exercise price of $3.1875.
(D) Option granted 2/16/94 pursuant to the Company's 1988 Stock Option Plan at
an exercise price of $4.50 was not "in-the-money" at December 31, 1994.
_______________________
EXECUTIVE SEVERANCE AGREEMENTS
The Company has severance agreements with two key executives of the
Company, Mr. Chastain and Kawyn L. Zilm. These agreements provide for
payments of compensation and all normal employee benefit plans if a
"change of control" of the Company occurs, coupled with a "change in
status" of these employees, as such terms are defined in the severance
agreements. In 1991, the Board of Directors determined that the severance
agreements would not be extended beyond their then current expiration
dates of December 31, 1995. Should the executive resign or be terminated
as a result of a change of control, he is entitled to a severance payment
of twice his annual compensation (including but not limited to salary) and
compensation for the value of unexercised stock options. The approximate
cumulative dollar amounts that would have been payable to Messrs. Chastain
and Zilm had a change of control occurred and the other requirements of
the severance agreements been met and they resigned or had been terminated
on December 31, 1994, other than for cause, are $324,224, and $180,102,
respectively.
10
<PAGE> 14
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 was
comprised during fiscal 1994 of Messrs. Butler, Crimmins, Jones 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 recently adopted rules designed to enhance disclosure
of companies' 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
1994.
The Company's objective is to ensure that executive compensation be
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 Committee.
The chief executive officer's base salary was not increased in 1994.
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. The Company did not achieve its financial performance
objectives for 1994 resulting in no incentive awards for any of the
Company's officers.
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
11
<PAGE> 15
determined by the subjective evaluation of the executive's ability to
influence the Company's long-term growth and profitability. All options
are granted at the current market price at the time of the grant. The
Compensation Committee, which must include at least three 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 1994 adequately reflect the Company's compensation goals and policies.
Compensation Committee
Michael T. Crimmins, Chairman
Richard C. Butler
Harry D. Jones
Mark E. Walker
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The 1988 Stock Option Plan has been administered by the Compensation
Committee consisting of Messrs. Crimmins, Walker, Butler and Jones, since
August 1, 1993. Mr. Jones acts as a consultant to the Company.
COMPANY PERFORMANCE
The following graph shows a five year comparison of cumulative total
returns for the Company, the Dow Jones Diversified Industrials Index, and the
Dow Jones Equity Market Index. The comparison assumes $100 was invested
December 31, 1989, in the Company's Common Stock and in each of the foregoing
indices and assumes the reinvestment of dividends.
12
<PAGE> 16
PERFORMANCE GRAPH
The following performance graph compares cumulative total stockholder
returns on the Company's common stock compared to the Dow Jones Equity Market
Index and the Dow Jones Industrial Diversified Sector calculated at the end of
each fiscal year, December 31, 1990 through December 31, 1994. The graph
assumes $100 was invested on December 31, 1989, in the Company's Common Stock
and each of referenced indices and assumes reinvestment of dividends.
(GRAPH)
<TABLE>
<CAPTION>
Measurement Period Kinark Dow Jones Equity Dow Jones Industrial
(Fiscal Year Covered) Corporation Market Index Diversified Sector
--------------------- ----------- ------------ ------------------
<S> <C> <C> <C>
1989 100 100 100
1990 84 96 93
1991 213 127 115
1992 100 138 134
1993 79 152 164
1994 68 153 150
</TABLE>
13
<PAGE> 17
<TABLE>
<CAPTION>
KINARK CORPORATION
STOCK RETURN CALCULATION
KINARK STOCK
SHARE WEIGHTED
DATE PRICE RETURN VALUE
---- ----- ------ --------
<S> <C> <C> <C>
31-Dec-89 4.75 0% 100.0
31-Dec-90 4.016 -15.5% 84.5
31-Dec-91 10.141 152.5% 213.5
30-Dec-92 4.766 -53.0% 100.3
31-Dec-93 3.766 -21.0% 79.3
31-Dec-94 3.25 -13.7% 68.4
</TABLE>
<TABLE>
DOW JONES EQUITY MARKET INDEX
<S> <C> <C> <C>
31-Dec-89 357.68 0% 100.0
31-Dec-90 343.64 -3.9% 96.1
31-Dec-91 455.10 32.4% 127.2
30-Dec-92 494.27 8.6% 138.2
31-Dec-93 543.43 9.9% 151.9
31-Dec-94 547.62 0.8% 153.1
</TABLE>
<TABLE>
DOW JONES INDUSTRIAL DIVERSIFIED SECTOR
<S> <C> <C> <C>
31-Dec-89 315.52 0% 100.0
31-Dec-90 293.28 -7.0% 93.0
31-Dec-91 363.14 23.8% 115.1
30-Dec-92 422.57 16.4% 133.9
31-Dec-93 516.34 22.2% 163.6
31-Dec-94 473.58 -8.3% 150.1
</TABLE>
14
<PAGE> 18
RELATED PARTY TRANSACTIONS
On July 1, 1993, the Company and Harry Jones entered into a Termination of
Employment Agreement, providing for Mr. Jones' resignation as president and
chief operating officer of the Company, effective July 31, 1993. Pursuant to
this agreement, the Company canceled his stock options to acquire 5,000 shares
and entered into a three year consulting arrangement with Mr. Jones.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
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 for two executive
officers who inadvertently failed to file in a timely manner Form 5s reporting
the grant of 9,000 shares of Common Stock pursuant to the 1988 Stock Option
Plan.
INDEPENDENT AUDITORS
Deloitte & Touche audited the Company's financial statements for the
fiscal year ended December 31, 1994, and the Board of Directors has approved
the engagement of that firm to serve as the Company's auditors for 1995 and
1996. 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 1996 Annual Meeting of Stockholders
must be received by the Company by January 18, 1996. Such proposals should be
directed to Kinark Corporation, Attention: Corporate 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
15
<PAGE> 19
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.
Mellon Securities Transfer Services has been retained to receive and
tabulate proxies and to provide representatives to act as inspectors of
election for this Annual Meeting of Stockholders.
By order of the Board of Directors
Carolyn A. Fredrich, Secretary
Tulsa, Oklahoma
April 17, 1995
16
<PAGE> 20
APPENDIX A
KINARK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF THE DIRECTORS
For the Annual Meeting of Stockholders on May 17, 1995
The undersigned, a stockholder of record of Kinark Corporation (the
"Company") on March 20, 1995 (the "Record Date"), hereby appoints Paul R.
Chastain and Carolyn A. Fredrich, 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 17, 1995, and at any adjournments or postponements thereof, on the
following matters.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE REVERSE SIDE)
<PAGE> 21
<TABLE>
KINARK CORPORATION (LOGO)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1.
<S> <C>
1. Election of the following INSTRUCTIONS: To vote FOR or WITHHOLD
nominees as Directors: Richard AUTHORITY to vote for the election
E. Baierlien, Richard C. of all candidates, check the
Butler, Paul R. Chastain, appropriate box hereon. To withhold
Michael T. Crimmins, Harry D. Jones, authority to the election of any
and Mark E. Walker. candidate(s), write the name(s) of
such candidate(s) in the following
space:
FOR all nominees WITHHOLD
listed (except as AUTHORITY -----------------------------------
marked to the for all nominees IF NO BOX IS MARKED HEREON, THE
contrary) listed 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
2. In their discretion, upon such IN THE SPACE PROVIDED ABOVE.
other matters as may properly come
before the Annual Meeting. Please sign below exactly as name appears on
this Proxy. If share are registered in more
than one name, all such persons should sign.
A corporation should in its full corporation
name by a duly authorized officer, stating his
title. Trustees, guardians, executors and
administrators should sign 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.
DATE: , 1995
---------------------------------------
--------------------------------------------------
(Signature)
--------------------------------------------------
(Signature if held Jointly)
--------------------------------------------------
(Title or authority (if applicable))
**THIS IS YOUR PROXY CARD**
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
</TABLE>
