As filed with the Securities and Exchange Commission on August 21, 1998
Registration No. 333-61393
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
KINARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 71-0268502
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Kinark Corporation
2250 East 73rd Street
Suite 300
Tulsa, Oklahoma 74136
(918) 494-0964
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Paul R. Chastain
Chief Financial Officer
2250 East 73rd Street
Suite 300
Tulsa, Oklahoma 74136
(918) 494-0964
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
with a copy to:
Paul A. Quiros, Esq.
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
(404) 572-4600
Approximate date of commencement of proposed sale to public: From
time to time after the effective date of the Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. _____
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. __X__
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. _____
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. _____
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. _____
<PAGE>
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
PROSPECTUS
DATED AUGUST 26, 1998
Kinark Corporation
2,239,038 Shares
Common Stock
This Prospectus relates to the offer and sale from time to time of
up to 2,239,038 shares of common stock, $.10 par value per share (the
"Common Stock"), of Kinark Corporation ("Kinark" or the "Company") by
the holders thereof named herein (collectively referred to herein as
the "Selling Shareholders"). The 2,239,038 shares of Common Stock held
by the Selling Shareholders (the "Secondary Shares") were issued in
connection with the Private Placement (as herein defined). The
Company is registering the Secondary Shares under the terms of certain
Registration Rights Agreements, dated as of January 16, 1996, and
March 29, 1996 by and among the Company and the Selling Shareholders
(collectively the "Registration Rights Agreement"), to provide the
Selling Shareholders with freely tradeable securities, but the
registration of such shares does not necessarily mean that any of such
shares will be offered by the Selling Shareholders. See "The Company"
and "Registration Rights."
The Company's Common Stock is listed on the American Stock Exchange
(the "ASE") under the symbol "KIN." Any Secondary Shares offered
pursuant to a Prospectus will be listed on such exchange, subject to
official notice of issuance. At June 30, 1998, the Company had
6,778,345 shares of Common Stock outstanding. On August 7, 1998, the
last reported sale price of the Common Stock on the ASE was $2.875 per
share.
The Selling Shareholders from time to time may offer and sell the
Secondary Shares held by them and registered hereunder directly or
through agents or broker-dealers on terms to be determined at the time
of sale. To the extent required, the names of any agent or broker-dealer
and applicable commissions or discounts and any other required
information with respect to any particular offer will be set forth in an
accompanying supplement to this Prospectus (a "Prospectus Supplement").
See "Plan of Distribution." Each of the Selling Shareholders reserves
the sole right to accept or reject, in whole or in part, any proposed
purchase of the Secondary Shares to be made directly or through agents.
The Company will not receive any of the proceeds from the sale of
Secondary Shares by the Selling Shareholders but has agreed to bear the
expenses of registration of the Secondary Shares under Federal and state
securities laws. See "Use of Proceeds," "Selling Shareholders" and
"Plan of Distribution."
The Selling Shareholders and any agents or broker-dealers that
participate with the Selling Shareholders in the distribution of
Secondary Shares may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), and
any commissions received by them and any profit on the resale of the
Secondary Shares may be deemed to be underwriting commissions or
discounts under the Securities Act. See "Registration Rights" for
indemnification arrangements between the Company and the Selling
Shareholders.
See "Risk Factors" beginning on Page 5 herein for certain factors
relating to an investment in the Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"), pursuant to the Exchange Act. Such reports, proxy
statements and other information filed by the Company may be inspected
and copied at the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
are also available at the regional offices of the Commission located
at Seven World Trade Center, New York, New York 10048 and at 500 West
Madison Street, Chicago, Illinois 60661. Copies of such materials can
be obtained from the Public Reference Section at 450 Fifth Street,
N.W., Washington, D.C., at prescribed rates. The Commission maintains
a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with
the Commission. The address of the Commission's Web site is:
http://www.sec.gov. The Common Stock is listed on the ASE, and such
material can also be inspected and copied at the offices of the ASE,
96 Trinity Place, New York, New York 10006.
The Company has filed with the Commission a Registration Statement
on Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Secondary Shares offered
pursuant to this Prospectus (together with all amendments and exhibits
and schedules thereto, the "Registration Statement"). As permitted by
the rules and regulations of the Commission, this Prospectus does not
contain all of the information set forth in the Registration
Statement. For further information concerning the Company and the
Secondary Shares offered hereby, reference is made to the Registration
Statement, which may be examined without charge at, or copies obtained
upon payment of prescribed fees from, the Commission and its regional
offices at the locations listed above. Any statements contained herein
concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to the copy of such
document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified
in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 001-03920)
with the Commission are incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
(ii) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998; and
(iii) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998; and
(iv) The description of the Common Stock set forth under the
caption "Description of Capital Stock" in the Company's Registration
Statement on Form 3 (File No. 333-4937) filed with the Commission on
October 4, 1996.
All documents and reports filed pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act from the date of this Prospectus and
prior to the termination of the offering of the Common Stock shall be
deemed to be incorporated by reference herein and shall be deemed to
be a part hereof from the date of the filing of such reports and
documents (provided, however, that the information referred to in Item
402(a)(8) of Regulation S-K of the Commission shall not be deemed
specifically incorporated by reference herein). Any statement
contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part
of this Prospectus. All information appearing in this Prospectus is
qualified in its entirety by the information and financial statements
(including notes thereto) appearing in the documents incorporated
herein by reference.
The Company will provide without charge to each person to whom a
copy of this Prospectus or any Prospectus Supplement is delivered, on
written or oral request of such person, a copy of any or all documents
which are incorporated herein by reference (not including the exhibits
to such documents, unless such exhibits are specifically incorporated
by reference in the document which this Prospectus incorporates).
Requests should be directed to: Corporate Secretary, Kinark
Corporation, 2250 East 73rd Street, Suite 300, Tulsa, Oklahoma 74136,
telephone number (918) 494-0964.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed descriptions and the financial information and statements
appearing elsewhere and incorporated by reference in this Prospectus.
Unless the context indicates otherwise, references to the "Company" or
"Kinark" include Kinark Corporation and its subsidiaries.
The Company
Kinark is a diversified company conducting business in the
galvanizing and chemical storage and warehousing areas. Kinark was
incorporated under the laws of the State of Delaware in 1955. Its
current operating subsidiaries consist of Lake River Corporation
("Lake River"), acquired in 1968, North American Warehousing Company
("NAWC"), formed in 1997, and North American Galvanizing Company
("NAGC"), formed in 1996. NAGC merged with Rogers Galvanizing Company
("Rogers") in 1996 and Boyles Galvanizing Company ("Boyles") in 1997,
with NAGC as the survivor company. Rogers was acquired by the Company
during 1996 and Boyles was acquired in 1969.
In February 1996, the Company sold substantially all of the assets
and certain liabilities of its packaging subsidiary, Kinpak, Inc.
("Kinpak"). Kinpak had produced proprietary household cleaning
products and provided contract packaging of private label anti-freeze
and windshield washer fluid.
The Company conducts its galvanizing operations through its NAGC
operating subsidiary. NAGC is principally engaged in hot dip
galvanizing of metal products. NAGC galvanizes iron and steel
products by immersing them in molten zinc which produces an alloyed
metal surface that provides corrosion protection for up to 50 years.
The galvanizing process provides effective corrosion protection of
fabricated steel which is used in numerous markets such as
petrochemical, highway and transportation, energy, utilities,
communications, irrigation, pulp and paper, waste water treatment,
food processing, recreation and original equipment manufacturing.
NAGC operates eleven plants in six states and galvanizes products for
over 2,000 customers nationwide. Based on the number of its operating
plants, NAGC is one of the largest independent hot dip galvanizing
companies in the United States. Its galvanizing plants are located in
Tulsa, Oklahoma; Kansas City, Missouri; St. Louis, Missouri;
Nashville, Tennessee; Louisville, Kentucky; Denver, Colorado; Hurst,
Texas; and Houston, Texas.
The Company conducts its chemical storage and public warehousing
operations through its Lake River and NAWC operating subsidiaries.
During 1997, the Company formed NAWC as a separate subsidiary to
operate the public warehousing business previously conducted by Lake
River.
Lake River, located in Chicago, is a bulk liquid terminal operation
with 197 tanks providing 21 million gallons of on-site bulk liquid
storage capacity; another 36 tanks with an aggregate storage capacity
of 23 million gallons are considered in a decommissioned status due to
low demand for large capacity tanks. During 1997, Lake River
employees handled 29 barges, 1,422 rail cars, and 8,521 transport
trucks to service over 49 million gallons of product throughput for
its customers. Lake River also operates two bag filling lines used
for bulk chemical bagging and three drum filling lines which handle
flammables, caustics, food grade products, and miscellaneous specialty
chemicals.
Bulk liquid storage facilities are leased to customers for various
terms generally ranging from one month to three years.
Lake River's facilities provide integrated storage, formulating,
packaging, and distribution services. Lake River's service-based bulk
liquid storage business does not require it to take title to any of
the customer's products that it handles.
NAWC, located in Chicago, provides 320,000 square feet of public
warehousing space that facilitates the distribution of customers'
products in the Chicago-Midwest region. NAWC handles dry and liquid
general merchandise and chemicals and its services include container
loading for export shipment.
The principal executive offices of the Company are located at 2250
East 73rd Street, Suite 300, Tulsa, Oklahoma 74136 and its telephone
number at such location is (918) 494-0964.
Risk Factors
Prospective investors should carefully consider the matters
discussed under "Risk Factors" prior to making an investment decision
regarding the Secondary Shares offered hereby.
Securities to be Offered
This Prospectus relates to offer and sale from time to time of up
to 2,239,038 Secondary Shares by the Selling Shareholders, some of
whom may be deemed affiliates of the Company. The Secondary Shares
are being registered by the Company as set forth under the terms of
the Registration Rights Agreement. The Company will not receive any
proceeds from the sale of the Secondary Shares but has
agreed to bear the expenses of registration under Federal and state
securities laws. The Selling Shareholders must pay any expenses or
commissions on the sale of Secondary Shares.
The Secondary Shares were issued in connection with a private
placement of 2,239,038 shares of Common Stock at a purchase price of
$2.50 a share (the "Private Placement"). Sales pursuant to the
Private Placement closed in January and March 1996, with gross
proceeds to the Company of $5,797,595. The Company used these
proceeds to acquire 68.9% of the outstanding capital stock of Rogers
for $5,736,800. The Company acquired the remaining shares of the
Rogers stock with the proceeds of a rights offering to its
stockholders which closed in November 1996.
The Company is registering the Secondary Shares for sale as
required by the Registration Rights Agreement to provide the holders
thereof with freely tradeable securities, but the registration of such
shares does not necessarily mean that any of such shares will be
offered or sold by the Selling Shareholders.
RISK FACTORS
Prospective investors should carefully consider, among other
factors, the matters described below prior to making an investment
decision regarding the Secondary Shares offered hereby.
Concentration Of Ownership In Management - Certain Anti-Takeover Effects
The members of the Board of Directors and senior management of the
Company currently own approximately 3,314,034 shares of Common Stock,
or 48.9% of the issued and outstanding Common Stock. Assuming the
sale of all 2,239,038 Secondary Shares offered hereby, the members of
the Board of Directors and senior management of the Company would
beneficially own approximately 1,354,996 shares or 20.0% of the Common
Stock. Although the sale of all of the Secondary Shares offered
hereby by certain members of the Board of Directors would reduce the
ownership by senior management and the Board as noted above, the
remaining Common Stock ownership, together with various provisions of
the Company's Restated Certificate of Incorporation (the
"Certificate") may tend to deter non-negotiated tender offers or other
efforts to obtain control of the Company and thereby deprive
stockholders of opportunities to sell shares of Common Stock at prices
higher than those prevailing in the market. There can be no assurance
that any Secondary Shares will be sold pursuant to this Prospectus and
the percentage of ownership may continue at the higher level. See
"Description of Capital Stock - Certain Certificate, Bylaw and
Corporate Law Provisions."
Benefits of Offering to Certain Shareholders
Certain of the Selling Shareholders are officers and/or directors
of the Company and are considered affiliates under Rule 144 which,
among other things, limits the amount of shares of Common Stock that
may be sold by such affiliates. Once the Secondary Shares are
registered and for as long as the Registration Statement of which this
Prospectus is a part is effective, Selling Shareholders, including
Messrs. Morrow, Crimmins and Evans and Governor Sununu, officers
and/or directors of the Company, will not be subject to the provisions
of Rule 144, including the volume limitations, and may sell any or all
of the Secondary Shares subject to this Prospectus at their
discretion. See "Selling Shareholders."
Operations
Galvanizing is a business that is closely tied to the economic
growth of several industries such as highway and transportation,
communications and energy. During recessionary periods in these
industries, the demand for galvanizing can decline which could have a
material adverse effect on the Company's financial condition and
results of operations. Profitability in the galvanizing industry is
also dependent to a certain extent on zinc prices and pricing
structures are directly related to zinc prices. Increases in zinc
prices lead to increased costs and prices for galvanizing and
decreases in zinc prices lead to reductions in galvanizing costs and
prices. The Company may not be able to raise prices to cover
adequately increases in costs due to increases in zinc prices which
could have a material adverse effect on the Company's financial
condition and results of operations. Equipment at the Company's
galvanizing plants requires periodic replacement due to age or
obsolescence. These replacement costs may adversely affect the
profitability of these galvanizing operations.
As is typical in the galvanizing and chemicals businesses, the
Company's subsidiaries will have environmental compliance costs
associated with past, present and future operations. The Company is
committed to complying with all federal, state and local environmental
laws and regulations and using its best management practices to
anticipate and satisfy future requirements. As previously reported in
1995, Boyles participated in the final cleanup of a former galvanizing
plant site in Philadelphia and received notice from the EPA that it
had demonstrated to the EPA's satisfaction that all requirements
relating to the performance of the response action plan for this site
had been completed. Cleanup consisted primarily of soil removal at a
cost of approximately $85,000. In March 1998, the Company was
informed that the Department of Justice had filed a lawsuit naming
NAGC and Boyles in a CERCLA Cost Recovery Action for approximately
$480,000 in connection with the clean-up of a former galvanizing site
in Philadelphia, Pennsylvania. In May 1998, the parties reached an
agreement to settle this claim. As a result, the Company recorded a
charge to cost of sales of $158,000 for the quarter ended March 31,
1998, for the estimated net impact of the settlement. The parties are
drafting a consent decree to finalize agreement on the terms and
conditions of the settlement. NAGC received notice in April 1997 from
the Illinois Environmental Protection Agency that NAGC was a
potentially responsible party under CERCLIS in connection with the
clean-up of an abandoned site formerly owned by Sandoval Zinc Co.
Sandoval operated a secondary zinc smelter at the site until 1985 and
NAGC is included as one of 59 entities that arranged for the treatment
and disposal of hazardous substances at Sandoval. The Company is in
the process of determining the proportional share of substances that
NAGC shipped to Sandoval, and does not believe based on current
information that the ultimate resolution of this matter will have a
material effect on the Company's financial position or results of
operations. Although management has committed resources to
discovering and eliminating environmental issues as they arise, the
Company does not have sufficient information to attempt to quantify
these potential costs except as described above.
On July 1, 1998, NAGC decided to discontinue galvanizing services
to one of its largest customers which accounted for approximately 8%
of NAGC's 1997 sales. This action was based on NAGC's decision not to
provide galvanizing services to this customer which plans to compete
directly with NAGC in the hot dip galvanizing market.
Lake River conducts its terminal storage operations on 5 parcels
of land leased from the Metropolitan Water Reclamation District of
Greater Chicago (the "District"). The leases for 4 of these parcels
have expiration dates between December 31, 1999 and June 30, 2001.
The Company is currently negotiating with the District to renew these
leases.
Debt Restrictions
The terms of the Company's existing bank term loan and revolving
credit facility restrict certain aspects of the Company's operations.
These restrictions include specified minimum values for the net worth
and working capital and a maximum debt to net worth ratio for the
Company, and limitations on incurring additional debt or capital
expenditures or engaging in acquisitions and dispositions by the
Company. Among the foregoing, the most restrictive covenant is the
requirement that the aggregate expenditures for capital expenditures,
debt and interest not exceed the aggregate of earnings before
interest, taxes, depreciation and amortization (EBITDA). While the
Company has maintained continuous compliance with all of the required
financial covenants of the credit facility, there can be no assurance
that the Company will be able to continue to comply with these
restrictions without disrupting its business.
Competition
The independent hot dip galvanizing market is highly competitive.
NAGC competes with other independent galvanizing companies, captive
galvanizing facilities operated by manufacturers, and alternative
forms of corrosion protection such as paint. Competition is driven
primarily by price, turn-around service time, and the quality of the
finished galvanized product. NAGC has been subject to increasing
price pressure from its competitors in certain of its geographic
markets. Although prices have improved, the continued profitability
of NAGC and hence the Company, will depend in part on NAGC's ability
to maintain current prices. There can be no assurance that these
prices can be maintained. During the past three years, competitors
have built new galvanizing facilities in certain of NAGC's geographic
markets. The Company believes that competitors may continue to add
capacity in these markets due to increased construction activity
utilizing galvanized structures. Increased presence and capacity of
such competitors could have a material adverse effect on the Company's
financial condition and results of operations. See "The Company."
Government Regulation
The Company's operations are subject to various government
regulations, including those related to occupational safety and health
(OSHA), workers' compensation and environmental matters. Like its
competitors in the galvanizing and chemicals businesses, the Company
and its subsidiaries will have regulatory compliance costs associated
with past, present and future operations, but the Company cannot
presently quantify the cost of complying with these regulations.
While neither the Company, nor any of its subsidiaries, is presently
the subject of any material claim or investigation with respect to
these regulations, there can be no assurance that the cost of
complying with these regulations in the future will not have a
material adverse effect on the Company or its subsidiaries.
Current Developments
The Company has determined that its primary computer systems are
structured to accommodate the Year 2000 and beyond, and the operation
of these systems will not be affected by the upcoming change in the
millennium. The Company's operations are highly dependent on the
reliable performance of its computer-based information, control and
accounting systems. For this reason, during 1997 Kinark undertook a
review of its company-wide computer support facilities to assess the
extent of Year 2000 issues, if any. Going forward, in addition to
monitoring the Year 2000 compliance readiness of its own computer
systems, the Company will continue to assess the compliance readiness
of its major customers, key suppliers and service providers. The
Company believes that the cost of this ongoing assessment should not
exceed $100,000 and will not have a material impact on the results of
its operations, liquidity, and capital resources.
THE COMPANY
Kinark is a diversified company conducting business in the
galvanizing and chemical storage and warehousing areas. Its current
operating subsidiaries consist of Lake River, NAWC and NAGC.
The Company conducts its galvanizing operations through its NAGC
operating subsidiary, which is principally engaged in hot dip
galvanizing of metal products. NAGC galvanizes iron and steel
products by immersing them in molten zinc which produces an alloyed
metal surface that provides corrosion protection for up to 50 years.
The galvanizing process provides effective corrosion protection of
fabricated steel which is used in numerous markets such as
petrochemical, highway and transportation, energy, utilities,
communications, irrigation, pulp and paper, waste water treatment,
food processing, recreation and original equipment manufacturing.
NAGC operates eleven plants in six states and galvanizes products for
over 2,000 such customers nationwide. Based on the number of its
operating plants, NAGC is one of the largest independent hot dip
galvanizing companies in the United States. Its galvanizing plants
are located in Tulsa, Oklahoma; Kansas City, Missouri; St. Louis,
Missouri; Nashville, Tennessee; Louisville, Kentucky; Denver,
Colorado; Hurst, Texas; and Houston, Texas.
Zinc, the primary raw material in the galvanizing process, is a
widely available commodity in the open market. The London Metal
Exchange price of zinc for three month delivery was $.48 per pound at
the beginning of 1997; it reached a high of $.76 per pound in the 3rd
quarter, and closed the year at $.50 per pound. For the first six
months of 1998, the market price for zinc ranged from $.44 to $.50 a
pound. To reduce the impact of zinc price fluctuations, the Company
periodically utilizes long-term fixed price purchase contracts. NAGC
has a broad customer base with its five largest customers, on a
combined basis, accounting for approximately 25% of the Company's
consolidated sales in 1997. The backlog of orders at NAGC is
generally nominal due to the short time requirement involved in the
galvanizing process. Inventory and working capital requirements have
remained relatively stable.
The Company conducts its chemical storage and public warehousing
operations through its Lake River and NAWC operating subsidiaries.
During 1997, the Company formed NAWC as a separate subsidiary to
operate the public warehousing business previously conducted by Lake
River.
Lake River, located in Chicago, is a bulk liquid terminal operation
with 197 tanks providing 21 million gallons of on-site bulk liquid
storage capacity; another 36 tanks with an aggregate storage capacity
of 23 million gallons are considered in a decommissioned status due to
low demand for large capacity tanks. During 1997, Lake River
employees handled 29 barges, 1,422 rail cars, and 8,521 transport
trucks to service over 49 million gallons of product throughput for
its customers. Lake River also operates two bag filling lines used
for bulk chemical bagging and three drum filling lines which handle
flammables, caustics, food grade products, and miscellaneous specialty
chemicals.
Bulk liquid storage facilities are leased to customers for various
terms generally ranging from one month to three years. Lake River's
facilities provide integrated storage, formulating, packaging, and
distribution services. Lake River's service-based bulk liquid storage
business does not require it to take title to any of the customer's
products that it handles.
NAWC, located in Chicago, provides 320,000 square feet of public
warehousing space that facilitates the distribution of customers'
products in the Chicago-Midwest region. NAWC handles dry and liquid
general merchandise and chemicals and its services include container
loading for export shipment. One customer, that accounted for 55% of
NAWC's sales in 1997 (and 4.7% of the Company's consolidated sales),
will terminate its use of NAWC's facilities during the third quarter
of 1998. NAWC will not renew a warehouse lease scheduled to expire
August 31, 1998, as part of its planned cost reduction measures to
offset partially the loss of this major account.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
18,000,000 shares of Common Stock, $.10 par value per share. As of
May 31, 1998, the Company had issued or reserved for issuance
7,865,345 shares of Common Stock, 6,778,345 of which were outstanding
and 1,087,000 of which were reserved for issuance pursuant to the
Company's Stock Option Plans. Holders of Common Stock are entitled to
one vote per share on all matters on which the holders of Common Stock
are entitled to vote and do not have cumulative voting rights. The
holders of Common Stock are entitled to receive such dividends as may
be declared from time to time by the Board of Directors. The Company
has a longstanding policy of not paying cash dividends on the Common
Stock in order to reinvest earnings to support its business
operations. The terms of the Company's secured credit facilities also
restrict the payment of dividends on the Common Stock in certain
default situations. See "Common Stock Dividends and Price Range."
Holders of Common Stock have no preemptive, conversion,
redemption or sinking fund rights. In the event of a liquidation,
dissolution or winding-up of the Company, holders of Common Stock are
entitled to share equally and ratably in the assets of the Company, if
any, remaining after the payment of all debts and liabilities of the
Company. The outstanding shares of Common Stock are fully paid and
nonassessable.
CERTAIN CERTIFICATE, BYLAW AND CORPORATE LAW PROVISIONS
The provisions of the Company's Restated Certificate of
Incorporation (the "Certificate"), the Company's Amended and Restated
Bylaws (the "Bylaws") and the Delaware General Corporation Law
("DGCL") summarized in the following paragraphs may be deemed to have
anti-takeover effects and may delay, defer or prevent a tender offer
or takeover attempt that a stockholder might consider to be in such
stockholder's best interest, including those attempts that might
result in a premium over the market price for the shares held by
stockholders, and may make removal of management more difficult.
Authorized but Unissued Stock. The Company has authorized but
unissued shares of Common Stock available for future issuance without
stockholder approval. These additional shares may be utilized for a
variety of corporate purposes, including future public offerings to
raise additional capital, corporate acquisitions and employee benefit
plans. The existence of authorized but unissued and unreserved Common
Stock may enable the Board of Directors to issue shares to persons
friendly to current management, which could render more difficult or
discourage any attempt to obtain control of the Company by means of a
proxy contest, tender offer, merger or otherwise, and thereby protect
the continuity of the Company's management.
The Board of Directors may also create and issue, without
stockholder approval, rights or options entitling the holders thereof
to purchase from the Company shares of the Company's Common Stock.
Number of Directors. The Certificate provides that the number of
directors of the Company shall be as provided in the Bylaws, but may
not be less than three and shall be seven if the Bylaws do not provide
a number. The Bylaws currently provide that the maximum number of
directors which shall constitute the entire Board of Directors shall
be seven, with the exact number of directors to be established by
resolution of the Board from time to time. The maximum number of
directors may be increased or decreased from time by amendment of the
Bylaws, subject to the provisions of the Certificate.
Advance Notice Requirements for Stockholder Proposals and
Director Nominations. The Bylaws establish advance notice procedures
with regard to stockholder proposals and the nomination, other than by
or at the direction of the Board of Directors or a committee thereof,
of candidates for election as directors. These procedures provide
that the notice of stockholder proposals and stockholder nominations
for the election of directors at any annual meeting of stockholders
must be in writing and be received at the principal executive offices
of the Company not less than 90 days in advance of the annual meeting.
The requirement to deliver notice to the Corporation a set number of
days in advance of an annual meeting will mean that such notice must
be delivered such number of days in advance of the first anniversary
of the preceding year's annual meeting; provided, however, that in the
event that the date of the annual meeting is advanced by 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 day on which notice of such meeting is
first given to stockholders. For the purposes of this Section, notice
of an annual meeting shall be deemed to first be given to stockholders
when disclosure of such date is first made in a press release reported
by the Dow Jones News Services, Associated Press or comparable
national news services or in a document publicly filed by the
Corporation with the Commission pursuant to Sections 13, 14 and 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Chairman of an annual meeting will, if the facts warrant,
determine and declare to the annual meeting that business was not
properly brought before the meeting and if he should so determine, he
will so declare to the annual meeting and any such business not
properly brought before the annual meeting will not be transacted. At
any special meeting of the stockholders, only such business will be
conducted as has been brought before the meeting by or at the
direction of the Board of Directors.
Approval of Business Combinations. The Certificate provides that
subject to certain exceptions summarized below and in addition to any
affirmative vote required by law or by the Certificate, approval of
any Business Combination (as hereinafter defined) requires the
affirmative vote of at least two-thirds of the outstanding Voting
Shares (as hereinafter defined). For these purposes, "Business
Combination" shall mean:
(a) Any merger or consolidation of the Company or any subsidiary
with or into (i) any Interested Stockholder (as hereinafter defined)
or (ii) any other corporation which is, or after such merger or
consolidation would be, an Interested Stockholder or an affiliate of
an Interested Stockholder;
(b) Any sale, lease, exchange, mortgage, pledge, transfer or
other disposition to or with any Interested Stockholder or any
affiliate of any Interested Stockholder of any assets of the Company
or any subsidiary having an aggregate Fair Market Value (as
hereinafter defined) of $1,000,000 or more in one transaction or a
series of related transactions;
(c) The issuance or transfer by the Company or any subsidiary of
any securities of the Company or any subsidiary to any Interested
Stockholder or any affiliate of any Interested Stockholder in exchange
for cash, securities or other property (or a combination thereof)
having an aggregate Fair Market Value of $1,000,000 or more in one
transaction or a series of related transactions; or
(d) The adoption of any plan for the liquidation or dissolution
of the Company proposed by or on behalf of an Interested Stockholder
or any affiliate of any Interested Stockholder.
"Voting Shares" means all issued and outstanding shares of equity
securities and all rights to acquire any equity securities which are
generally entitled to vote in election of directors.
The two-thirds voting requirement will not apply to a particular
Business Combination if (i) any noncash consideration to be paid to
holders of Common Stock in such Business Combination is in the same
form and bears the same percentage to the total consideration as
previously paid by the Interested Stockholder in connection with its
acquisition of beneficial ownership of shares of Common Stock of the
Company and (ii) the aggregate amount of cash and the Fair Market
Value of noncash consideration, determined as of the date of the
consummation of the Business Combination, to be received per share by
the holders of Common Stock in such Business Combination is at least
equal to the highest of the following:
(a) The highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any Voting Shares acquired by it (1) within
the two-year period immediately prior to the date of the first public
announcement of the proposed Business Combination or (2) in the
transaction in which it became an Interested Stockholder, whichever is
higher;
(b) The Fair Market Value per share of Common Stock on the date
of the first public announcement of the proposed Business Combination
or on the date on which the Interested Stockholder became an
Interested Stockholder, whichever is higher; and
(c) The per share book value of the Common Stock as reported at
the end of the fiscal quarter immediately preceding the date of the
first public announcement of the proposed Business Combination.
The two-thirds voting requirement will also not apply to a
particular Business Combination if the Business Combination has been
approved by two-thirds of the directors of the Company.
"Fair Market Value" will mean: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
principal United States securities exchange registered under the
Exchange Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding
the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use,
or if no such quotations are available, the Fair Market Value on the
date in question of a share of such stock as determined by a majority
of the whole Board of Directors in good faith; and (ii) in the case of
property other than cash or stock, the Fair Market Value of such
property on the date in question as determined in good faith by a
majority of the whole Board of Directors.
"Interested Stockholder" means any Person (other than the Company
or any corporation of which a majority of each class of equity
securities is owned, directly or indirectly, by the Company) which, as
of the record date for the determination of stockholders entitled to
notice of and to vote on a Business Combination, or immediately prior
to the consummation of any such transaction:
(a) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares;
(b) is an affiliate of the Company and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding Voting Shares; or
(c) is an assignee of or successor in interest to any shares of
capital stock of the Company which were at any time within two years
prior thereto beneficially owned by any Interested Stockholder, and
such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act.
A majority of the whole Board of Directors shall have the power
and duty to determine on the basis of information known to them
whether a person is an Interested Stockholder, the number of Voting
Shares beneficially owned by any person, whether a person is an
affiliate of another, whether a person has the power to vote or
dispose of Voting Shares or to direct the voting or disposition of
Voting Shares, whether the assets subject to any Business Combination
or the consideration received for the issuance or transfer of
securities by the corporation or any subsidiary or any Business
Combination has an aggregate Fair Market Value of $1,000,000 or more,
or whether a person has the right to acquire beneficial ownership of
Voting Shares. The affirmative vote of the holders of at least two-thirds
of the Voting Shares shall also be required to amend, repeal or
adopt any provisions inconsistent with the two-thirds votes required
for Business Combinations.
Section 203 of the DGCL. Subject to certain exclusions
summarized below, Section 203 of the DGCL ("Section 203") prohibits
any "Interested Stockholder" from engaging in a "Business Combination"
with a Delaware corporation for three years following the date such
person became an Interested Stockholder. For purposes of this
subsection, "Interested Stockholder" generally includes: (a) (i) any
person who is the beneficial owner of 15% or more of the outstanding
voting stock of the corporation or (ii) any person who is an affiliate
or associate of the corporation and who was the beneficial owner of
15% or more of the outstanding voting stock of the corporation at any
time within three years before the date on which such person's status
as an Interested Stockholder is determined; and (b) the affiliates and
associates of such person. For purposes of this subjection and
subject to certain exceptions, a "Business Combination" includes (i)
any merger or consolidation of the corporation or a majority-owned
subsidiary of the corporation, (ii) the sale, lease, exchange,
mortgage, pledge, transfer or other disposition of assets of the
corporation or a majority-owned subsidiary of the corporation having
an aggregate market value equal to 10% or more of either the aggregate
market value of all assets of the corporation determined on a
consolidated basis or the aggregate market value of all the
outstanding stock of the corporation, (iii) any transaction that
results in the issuance or transfer by the corporation or a
majority-owned subsidiary of the corporation of any stock of
the corporation or the subsidiary to the Interested Stockholder, except
pursuant to transaction that effects a pro rata distribution to all
stockholders of the corporation, (iv) any transaction involving the
corporation or a majority-owned subsidiary of the corporation that has
the effect of increasing the proportionate share of the stock of any class
or series, or securities convertible into the stock of any class or
series, of the corporation or the subsidiary that is owned by the
Interested Stockholder, and (v) any receipt by the Interested
Stockholder of the benefit (except proportionately as a stockholder)
of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation or a majority-owned
subsidiary of the corporation.
Section 203 does not apply to a Business Combination if (i)
before a person became an Interested Stockholder, the board of
directors of the corporation approved either the transaction in which
the Interested Stockholder became an Interested Stockholder or the
Business Combination, (ii) upon consummation of the transaction that
resulted in the person becoming an Interested Stockholder, the
Interested Stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (other
than certain excluded shares), or (iii) following a transaction in
which the person became an Interested Stockholder, the Business
Combination is (a) approved by the board of directors of the
corporation and (b) authorized at a regular or special meeting of
stockholders (and not by written consent) by the affirmative vote of
the holders of at least two-thirds of the outstanding voting stock of
the corporation not owned by the Interested Stockholder.
SHARES AVAILABLE FOR FUTURE SALE
At June 30, 1998, approximately 4,539,307 shares of Common Stock
were eligible to be sold in the public market without any
restrictions. Pursuant to this Prospectus, a total of 2,239,038
additional shares of Common Stock will be eligible to be sold in the
public market. See "Plan of Distribution". This represents an
approximately 49% increase in the number of shares of Common Stock of
the Company eligible to be sold in the public market. Additional
shares of Common Stock may be available for sale in the public markets
from time to time pursuant to the following: (i) as of June 30, 1998,
the Company had outstanding options for an aggregate of 287,000 shares
of Common Stock granted pursuant to its 1988 Stock Option Plan, and
(ii) as of June 30, 1998, outstanding options for an aggregate of
217,000 shares of Common Stock granted pursuant to its 1996 Stock
Option Plan (800,000 shares are reserved for issuance under this
plan).
The Secondary Shares acquired in the Private Placement ("Restricted
Shares") are "restricted" securities within the meaning of Rule 144
promulgated under the Securities Act ("Rule 144") and may not be sold
in the absence of registration under the Securities Act unless an
exemption from registration is available, including exemptions
contained in Rule 144. As described below under "Registration Rights,"
the Company granted the Selling Shareholders certain registration
rights with respect to their Secondary Shares.
In general, under Rule 144 as currently in effect, if one year has
elapsed since the later of the date of acquisition of Restricted
Shares from the Company or any "affiliate" of the Company, as that
term is defined under the Securities Act, the acquiror or subsequent
holder thereof is entitled to sell within any three-month period a
number of shares that does not exceed the greater of (i) 1% of the
then outstanding number of shares of Common Stock or (ii) the average
weekly trading volume of the Common Stock during the four calendar
weeks preceding the date on which notice of the sale is filed with the
Commission. Sales under Rule 144 are also subject to certain manner of
sale provisions, notice requirements and the availability of current
public information about the Company. If two years have elapsed since
the date of acquisition of Restricted Shares from the Company or from
any affiliate of the Company, and the acquiror or subsequent holder
thereof is deemed not to have been an affiliate of the Company at any
time during the 90 days preceding a sale, such person would be
entitled to sell such shares in the public market under Rule 144(k)
without regard to the volume limitations, manner of sale provisions,
public information requirements or notice requirements described
above. As defined in Rule 144, an "affiliate" of an issuer is a person
that directly or indirectly, through the use of one or more
intermediaries, controls, is controlled by, or is under common control
with, such issuer.
As of June 30, 1998, Joseph J. Morrow, one of the Selling
Shareholders and a director of the Company, beneficially owned,
directly or indirectly, shares of Common Stock aggregating
approximately 27% of the Common Stock outstanding. As of such date,
Michael T. Crimmins, one of the Selling Shareholders and chief
executive officer and a director of the Company, beneficially owned
shares of Common Stock aggregating approximately 12.0% of the
outstanding Common Stock (as of such date); Ronald J. Evans, one of
the selling Shareholders and president and a director of the Company,
beneficially owned shares of Common Stock aggregating approximately
3.9% of the outstanding Common Stock (as of such date); and John H.
Sununu, one of the Selling Shareholders and a director of the Company,
beneficially owned, directly or indirectly, shares of Common Stock
aggregating approximately 2.8% of the outstanding Common Stock (as of
such date). Each of Messrs. Morrow, Crimmins and Evans and Governor
Sununu is considered an affiliate under Rule 144. Once the Secondary
Shares are registered and for as long as the Registration Statement of
which this Prospectus is a part is effective, Selling Shareholders,
including Messrs. Morrow, Crimmins and Evans and Governor Sununu, will
not be subject to the provisions of Rule 144, including the volume
limitations, and may sell any or all of the Secondary Shares subject
to this Prospectus.
No prediction can be made as to the effect, if any, that future
sales of shares of Common Stock, or the availability of shares for
future sale, will have on the market price prevailing from time to
time.
Sales of substantial amounts of shares of Common Stock (including
shares issued upon exercise of stock options), or the perception that
such sales could occur, could adversely affect prevailing market
prices for the shares.
REGISTRATION RIGHTS
The Company has filed the Registration Statement of which this
Prospectus is a part pursuant to its obligations under the
Registration Rights Agreement. The following summary does not purport
to be complete and is qualified in its entirety by reference to each
of the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the Company granted
the Selling Shareholders (and certain entities controlled by them)
certain "demand" and "piggyback" registration rights with respect to
the Secondary Shares acquired by them in connection with the Private
Placement. With certain limitations, these registration rights grant
the Selling Shareholders (and certain entities controlled by them)
opportunities to demand registration of all or any portion of their
respective Restricted Shares and the right to have such Restricted
Shares registered incidentally to any registration being conducted by
the Company of shares of Common Stock or securities substantially
similar to shares of Common Stock. These registration rights will be
satisfied upon the effectiveness of the Registration Statement of
which this Prospectus is a part. The Company has no obligation under
the Registration Rights Agreement to retain any underwriter to effect
the sale of the Secondary Shares.
Pursuant to the Registration Rights Agreement, the Company agreed
to pay all expenses of effecting the registration of the Secondary
Shares (other than underwriting discounts and selling commissions)
pursuant to the Registration Statement. The Company also agreed to
indemnify the Selling Shareholders and their respective partners and
officers against certain losses, claims, damages or liabilities
pursuant to the Securities Act or any other statute or common law,
including any amount paid in settlement of any litigation, commenced
or threatened, if such settlement is effected with the Company's
written consent and for certain reasonable expenses insofar as any
such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated or necessary to make the
statements therein not misleading, unless made in reliance on and in
conformity with information provided in writing to the Company by the
Selling Shareholder seeking to enforce such indemnification. Each of
the Selling Shareholders agreed to indemnify the Company and each of
its respective directors and officers, and any person who controls the
Company against losses, claims, damages and expenses arising under the
securities laws insofar as such loss, claim, damage or expense relates
to written information furnished to the Company by such Selling
Shareholder for use in the Registration Statement or Prospectus or any
amendment or supplement thereto, to the extent of the proceeds of this
offering received by such Selling Shareholder.
SELLING SHAREHOLDERS
As described elsewhere herein, "Selling Shareholders" are those
persons (or their permitted transferees) who received Secondary Shares
in the Private Placement. With the exception of Messrs. Morrow,
Crimmins and Evans and Governor Sununu, directors and affiliates
of the Company, none of the Selling Shareholders is employed by or
affiliated with the Company.
The following table provides the names of and the number and
percentage of shares of Common Stock beneficially owned by each
Selling Shareholder, the number of Secondary Shares offered hereby and
the number and percentage of shares of Common Stock beneficially owned
by each Selling Shareholder upon completion of this Offering, assuming
each Selling Shareholder sells all of his Secondary Shares pursuant to
this Prospectus. Since the Selling Shareholders may sell all, some, or
none of their Secondary Shares, no estimate can be made of the actual
aggregate number of Secondary Shares that are to be offered hereby or
that will be owned by each Selling Shareholder upon completion of the
offering to which this Prospectus relates.
<TABLE>
The Secondary Shares offered by this Prospectus may be offered from time to time by the Selling
Shareholders named below:
<CAPTION>
Beneficial Ownership Prior to Beneficial Ownership
Offering After the Offering
Number of
Percentage of Secondary Percentage of
Number of Shares of Shares Number of Shares of
Name Shares of Common Stock Offered Shares of Common Stock
Common Stock Outstanding(1) Hereby Common Stock(2) Outstanding(1)(2)
<S> <C> <C> <C> <C> <C>
Joseph J. Morrow (3) 1,841,568 27.1 1,759,038 82,530 1.5
Michael T. Crimmins (4) 816,956 12.0 20,000 796,956 11.7
Ronald J. Evans (5) 280,716 3.9 20,000 260,716 3.7
Richard P. McCoy 200,000 3.0 200,000 0 *
JHS Associates, Ltd. (6) 170,000 2.5 160,000 10,000 *
A.G. Edwards IRA, custodian for
Thomas J. Ficker 40,000 * 40,000 0 *
Edmund A. Schwesinger 20,000 * 20,000 0 *
Ralph K. Bazuro 20,000 * 20,000 0 *
* Represents less than 1% of the outstanding Common Stock
(1) Based on 6,778,345 shares of Common Stock issued and outstanding as of
May 31, 1998. Includes shares of Common Stock that may be
acquired upon the exercise of stock options exercisable within 60
days. Unless otherwise indicated each stockholder's address is
2250 East 73rd Street, Tulsa, Oklahoma 74136.
(2) Assumes all Secondary Shares offered pursuant to this Prospectus
are sold. There can be no assurance however that any of such
shares will be sold.
(3) Information based on Form 4 of Mr. Morrow for September 1997 filed
with the Commission. Includes 312,000 shares held in a trust of
which Mr. Morrow is a beneficiary, 55,536 shares of Common Stock
owned by Mr. Morrow's wife. Mr. Morrow disclaims beneficial
ownership of these shares. Includes 10,000 shares of Common Stock
purchasable upon exercise of stock options that are currently
exercisable or exercisable within 60 days.
(4) Information based on Form 5 of Mr. Crimmins for February 1998 filed
with the Commission. Includes 50,000 shares of Common Stock
purchasable upon exercise of stock options that are currently
exercisable.
(5) Information based on Form 5 of Mr. Evans for February 1998 filed
with the Commission. Includes 250,000 shares of Common Stock
purchasable upon exercise of stock options that are currently
exercisable.
(6) Information based on Form 4 of John H. Sununu for July 1997 filed
with the Commission. Includes 10,000 shares of Common Stock
underlying exercisable options held by Governor Sununu, a director
of the Company and president of JHS Associates, Ltd.
</TABLE>
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time of
the Secondary Shares by the Selling Shareholders. The Company has
registered the Secondary Shares for sale to provide the Selling
Shareholders with freely tradeable securities, but registration of
such shares does not necessarily mean that any of such shares will be
offered or sold by the Selling Shareholders. The Company will not
receive any proceeds from the offering of the Secondary Shares by the
Selling Shareholders.
The Secondary Shares may be sold from time to time to purchasers
directly by any of the Selling Shareholders. Alternatively, the
Selling Shareholders may from time to time offer the Secondary Shares
through dealers or agents, who may receive compensation in the form of
commissions from the Selling Shareholders and/or the purchasers of
Secondary Shares for whom they may act as agent. Without limiting the
foregoing, such sales may be in the form of secondary distributions,
exchange distributions, block trades, ordinary brokerage transactions
or a combination of such methods of sale. The Selling Shareholders and
any dealers or agents that participate in the distribution of
Secondary Shares may be deemed to be "underwriters" within the meaning
of the Securities Act and any profit on the sale of Secondary Shares
by them and any commissions received by any such dealers or agents
might be deemed to be underwriting commissions under the Securities
Act.
At the time a particular offering of Secondary Shares is made, a
Prospectus Supplement, if required, will be distributed that will set
forth the name and names of any dealers or agents and any commissions
and other terms constituting compensation from the Selling
Shareholders and any other required information. The Secondary Shares
may be sold from time to time at varying prices determined at the time
of sale or at negotiated prices.
In order to comply with the securities laws of certain states, if
applicable, the Secondary Shares may be sold only through registered
or licensed brokers or dealers. In addition, in certain states, the
Secondary Shares may not be sold unless they have been registered or
qualified for sale in such state or an exemption from such
registration or qualification requirement is available and is complied
with.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is
ChaseMellon Shareholder Services, L.L.C., Ridgefield Park, New Jersey.
LEGAL MATTERS
The legality of the Secondary Shares offered hereby has been passed
upon for the Company by King & Spalding, Atlanta, Georgia.
EXPERTS
The consolidated financial statements and related financial
statement schedule incorporated in this Prospectus by reference from
Kinark Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated
herein by reference. The financial statements and financial statement
schedule referred to above have been incorporated by reference, and
have been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
No dealer, salesman or any other
person has been authorized to give
any information or to make any 2,239,038 SHARES
representations other than those
contained in this Prospectus, and any
information or representation not
contained herein must not be relied
upon as having been authorized by the
Company. This Prospectus does not
constitute an offer to sell or
solicitation of an offer to buy any
securities other than the securities
to which it relates, or an offer to
sell or a solicitation of an offer to
buy any securities other than the
securities to which it relates, or an
offer to sell or a solicitation of an
offer to buy such securities in any
jurisdiction in which such offer or
solicitation may not be legally made.
Neither the delivery of this
Prospectus nor any sale made
hereunder shall under any
circumstances create any implication
that the information herein is
correct as of any date subsequent to
the date hereof.
TABLE OF CONTENTS
Prospectus Summary 3
Risk Factors 5
The Company 7
Description of Capital Stock 8
Certain Certificate, Bylaw and Corporate Law Provisions 8
Shares Available for Future Sale 12
Registration Rights 13
Selling Shareholders 14
Plan of Distribution 15
Transfer Agent and Registrar 16
Legal Matters 16
Experts 16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses (other than underwriting commissions) of the
sale of the shares of Common Stock are as follows:
Registration Fee $
AMEX Application Fee
Legal Fees and Expenses
Accounting Fees and Expenses
Miscellaneous Disbursements
Total
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Certificate of Incorporation (the
"Certificate") contains a provision which, subject to certain
exceptions described below, eliminates the liability of a director to
the Company or its stockholders for monetary damages for any breach of
duty as a director. This provision does not eliminate the liability
of the director (i) for violations of his duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in
good faith or involving intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware General Corporation
Law (the "Delaware Corporation Law") relating to unlawful dividends
and distributions, or (iv) for any transaction from which the director
derived an improper personal benefit.
The Certificate and the Amended and Restated Bylaws (the "Bylaws")
of the Company require the Company to indemnify any person who was,
is, or is threatened to be made a named defendant or respondent in any
threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of
service by such person as a director, officer, employee or agent of
the Company or any other corporation for which he served as such at
the request of the Company. Such persons are entitled to be
indemnified against judgments, penalties, fines, settlements, and
reasonable expenses actually incurred by the director in connection
with the proceeding, except that no payments may be made with respect
to liability which is not eliminated pursuant to the provision of the
Certificate described in the preceding paragraph. Such persons are
also entitled to have the Company advance any such expenses prior to
final disposition of the proceeding, upon delivery of a written
undertaking to repay the amounts advanced if it is ultimately
determined that the standard of conduct has not been met.
In addition to the Certificate and Bylaws of the Company, Section
145(c) of the Delaware Corporation Law requires the Company to
indemnify any director who has been successful on the merits or
otherwise in defending any proceeding described above. The Delaware
Corporation Law also provides that a court may order indemnification
of a director if it determines that the director is fairly and
reasonably entitled to such indemnification.
The Company has the power, under the Certificate and Bylaws, to
obtain insurance on behalf of any director, officer, employee, or
agent of the Company against any liability asserted against or
incurred by such person in any such capacity, whether or not the
Company has the power to indemnify such person against such liability
at that time under the Certificate and Bylaws.
II-1
<PAGE>
Item 16. EXHIBITS
The following documents are filed as exhibits to this Registration
Statement:
3.1 The Company's Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to the
Company's Pre-Effective Amendment No. 1 to Registration
Statement on Form S-3 (Reg. No. 333-4937) filed on June
7, 1996).
3.2 The Company's Amended and restated Bylaws (incorporated
by reference to Exhibit 3.2 to the Company's Quarterly
Report on Form 10-Q dated March 31, 1996).
4.1 Provisions in the Company's Restated Certificate of
Incorporation and Amended and Restated Bylaws defining
the rights of holders of the Company's Common Stock.
5.1 Opinion of King & Spalding as to the legality of the
securities being registered. *
23.1 Consent of Deloitte & Touche LLP, independent auditors
of the Company.
23.2 Consent of King & Spalding (contained in the opinion
included at Exhibits 5.1). *
24.1 Power of Attorney of certain officers and directors of
the Company (included on the signature page). *
* Previously filed
ITEM 17. UNDERTAKINGS.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section
10(a) (3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement;
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<PAGE>
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, as amended (the "Securities Act")
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
2. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act each
filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and
controlling persons of the registrant as described in Item 15 or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
4. The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.
(b) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Tulsa, Oklahoma, State of
Oklahoma, on August 21, 1998.
KINARK CORPORATION
By: /s/ Paul R. Chastain
Paul R. Chastain, Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following in the
capacities and on the dates indicated.
Signature Title Date
*
____________________
Michael T. Crimmins Chief Executive Officer
(principal executive officer)
and Chairman of the Board August 21, 1998
*
______________________
Ronald J. Evans President and Director August 21, 1998
/s/ Paul R. Chastain
______________________
Paul R. Chastain Vice President, Chief
Financial Officer
(principal financial officer
and principal accounting
officer) and Director August 21, 1998
*
______________________
Richard C. Butler Director August 21, 1998
*
______________________
Joseph J. Morrow Director August 21, 1998
*
______________________
John H. Sununu Director August 21, 1998
______________________
Mark E. Walker Director August __, 1998
* By: /s/ Paul R. Chastain
---------------------------------
Paul R. Chastain, Attorney-in-Fact
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<PAGE>
EXHIBIT INDEX
Ex. No. Description
3.1 The Company's Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to the Company's
Pre-Effective Amendment No. 1 to Registration Statement on
Form S-3 (Reg. No. 333-4937) filed on June 7, 1996).
3.2 The Company's Amended and Restated Bylaws (incorporated by
reference to Exhibit 3.2 to the Company's Quarterly Report
on Form 10-Q dated March 31, 1996).
4.1 Provisions in the Company's Restated Certificate of
Incorporation and Bylaws defining the rights of holders of
the Company's Common Stock.
5.1 Opinion of King & Spalding as to the legality of the
securities being registered. *
23.1 Consent of Deloitte & Touche LLP, independent auditors of
the Company.
23.2 Consent of King & Spalding (contained in the opinion
included at Exhibit 5.1). *
24.1 Power of Attorney of certain officers and directors of the
Company (included on the signature page). *
* Previously filed.
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Exhibit 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Pre-Effective
Amendment No. 1 to Registration Statement No. 333-61393 of Kinark
Corporation on Form S-3 of our report dated February 20, 1998 (except
as to the first paragraph of the Contingencies footnote for which
the date is March 6, 1998), appearing in the Annual Report on Form
10-K of Kinark Corporation for the year ended December 31, 1997 and
to the reference to us under the heading "Experts" in the Prospectus,
which is part of such Registration Statement.
\s\ Deloitte & Touche LLP
Deloitte & Touche LLP
Tulsa, Oklahoma
August 21, 1998
