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:
_________________________________________________________________
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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.<PAGE>
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.
<PAGE>
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:
<PAGE>
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.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C> <C><C> <C> <C> <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$15,000 -- -- 250,000 -- --
President 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
_______________
(A) Annual bonus amounts are earned and accrued during the fiscal years indicated, and paid in the next following year.
(B) Group health insurance premiums paid by the Company for the named employee.
(C) All Compensation shown in this column represents the Company's matching contributions to its 401(k) defined contribution
retirement plan, Mr. Crimmins and Mr. Evans are not eligible to participate in 401(k) defined contribution plan until
1997.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of % of Total Potential Realization
Individual Grants Securities Options at Assumed Annual Rates
Underlying Granted To Exercise of Stock Price Appreciation
Options Employees in Price Expiration for Option Term(1)
Name Granted(#) Fiscal Year ($/Share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
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 $94,944
____________
(1) The assumed values result from certain prescribed rates of stock price appreciation. Values were calculated based on a
ten-year exercise period for all grants. The actual value of the option grants is dependent on future performance of the
Common Stock and overall stock market conditions. There is no assurance that the values reflected in this table will be
achieved. The Company did not use an alternative formula for a grant date valuation, as it is not aware of any formula
which will determine with reasonable accuracy a present value based on future unknown or volatile factors.
(2) Options become exercisable over a four year period, with 25% of the shares becoming exercisable on each anniversary of the
grant date.
(3) Options become exercisable over a two year period, with 25% of the shares becoming exercisable six months after the grant
date, and 25% of the shares becoming exercisable every six months thereafter, until fully exercisable.
</TABLE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Value Options at Fiscal Year-End In-the-Money Options at
on Exercise Realized (Shares) Fiscal Year-End ($)
Name (#) ($) (A) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
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.
_______________________
</TABLE>
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
<PAGE>
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.
<PAGE>
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<PAGE>
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**