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)
Monique Price & Company, SEC EDGAR Filing Agents
P. O. Box 967 - Covington, LA 70434-0967 (504) 893-8196
(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 O-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:
6,778,345 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 [LOGO] Kinark Corporation
2250 East 73rd Street
Suite 300
Tulsa, Oklahoma 74136-6832
(918) 494-0964
Fax (918) 494-3999
April 9, 1998
ANNUAL MEETING - MAY 8, 1998
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 Friday, May 8, 1998, in New York, NY.
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 [LOGO] Kinark Corporation
2250 East 73rd Street
Suite 300
Tulsa, Oklahoma 74136-6832
(918) 494-0964
Fax (918) 494-3999
NOTICE OF ANNUAL MEETING
NEW YORK, NEW YORK, MAY 8, 1998
To the Stockholders of KINARK CORPORATION:
The annual meeting of stockholders of KINARK CORPORATION, a
Delaware corporation (the "Company"), will be held at the Hotel
Inter-Continental New York, 111 East 48th Street, New York, NY, on
Friday, May 8, 1998, at 9:30 A.M. local time, for the following
purposes:
1. To elect seven directors to serve until the 1999 annual
meeting of stockholders;
and
2. To transact such other business as may properly come before
the meeting and any adjournments thereof.
The Board of Directors fixed March 12, 1998 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 even though you have previously signed
and returned your proxy.
By Order of the Board of Directors
/s/ Carolyn A. Fredrich
Carolyn A. Fredrich,
Secretary
April 9, 1998
<PAGE>
KINARK CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 8, 1998
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 8, 1998, at 9:30 a.m.,
local time, at the Hotel Inter-Continental New York in New York, NY,
or at any adjournments thereof (the "Annual Meeting"). On March 12,
1998, the record date for determination of stockholders of the
Company entitled to vote at the Annual Meeting (the "Record Date"),
there were 6,778,345 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.
No cumulative voting rights are authorized and dissenters' rights
are not applicable to the matters being proposed.
This Proxy Statement and the Form of Proxy will be sent to the
Company's stockholders on or about April 9, 1998.
The Company's principal executive office is located at 2250 East
73rd Street, Suite 300, Tulsa, Oklahoma 74136-6832.
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.
1
<PAGE>
ANNUAL REPORT
The Company's Annual Report to Stockholders and Form 10-K,
covering the fiscal year ended December 31, 1997, 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.
2
<PAGE>
<TABLE>
Nominees For Election as Directors to Serve Until Next Annual Meeting
<CAPTION>
Business Experience During First Year
Name and Age Past Five Years and Other Information Elected Director
<S> <C> <C>
Richard C. Butler (88) Former Chairman of the Board of 1974
Peoples Savings & Loan Association in
Little Rock, Arkansas. From 1963
until 1980, chairman of the Board
and President of Commercial National
Bank in Little Rock. Prior to
1963, Partner in the Little Rock
law firm of House, Holmes, Butler
and Jewell. Served on the Board
of Directors of Coca-Cola Bottling
Co. of Arkansas, Advisory Board
Member of Arkansas Power & Light
Co. and past 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 (63) Appointed Vice President and Chief 1975
Financial Officer of Kinark in
February 1996. 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 of the Company. 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 (58) Appointed Chief Executive Officer 1993
of Kinark in February 1996 and
elected 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 (49) Appointed President of Kinark in 1995
February 1996. Private investor from
May 1995 to February 1996. 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.
</TABLE>
3
<PAGE>
<TABLE>
Nominees For Election as Directors to Serve Until Next Annual Meeting
<CAPTION>
Business Experience During First Year
Name and Age Past Five Years and Other Information Elected Director
<S> <C> <C>
Joseph J. Morrow (58) Chief Executive Officer of Morrow 1996
& Co., Inc. since 1972. Chief
Executive Officer of Proxy Services
Corporation from 1972 to 1992.
Chairman of Proxy Services
Corporation from 1992 to present.
Currently a Director of 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 (58) President of JHS Associates, Ltd. 1996
since June 1992 and a partner in
Trinity International Partners, a
private financial firm, since June
1993. Co-host of CNN's "Crossfire",
a news/public affairs discussion
program, from March 1992 until
February 1998. 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 (42) President and Director since 1991 1993
of Ocean's Window, Inc. President
and Director of 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.
</TABLE>
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.
4
<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 four times in 1997 (including regularly scheduled
and special telephonic meetings). During 1997, each of the
directors attended at least eighty-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 one occasion.
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.
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.
Non-employee directors receive no compensation for committee
services beyond their annual fee. 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 a 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 generally 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. Although the Executive
Committee did not meet in 1997, the Board approved the nominees for
directors.
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 two meetings in 1997.
5
<PAGE>
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 1997.
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 ("SEC").
The Company's Bylaws require that the notice contain certain
information with respect to the proposed nominee or business and the
stockholder giving the notice. The Executive Committee will
consider nominees proposed by stockholders in compliance with this
procedure. 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 March
31, 1998, 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:
<TABLE>
<CAPTION>
Amount and Nature Percentage of
Name of Stockholder of Beneficial Ownership Common Stock (1)
- - ----------------------------------------- ----------------------- -----------------
<S> <C> <C>
Richard C. Butler 98,500 (2) 1.5
Paul R. Chastain 48,968 (3) 0.7
Michael T. Crimmins 791,956 (4) 11.6
Ronald J. Evans 280,712 (5) 3.9
Joseph J. Morrow 1,841,568 (6) 27.1
John H. Sununu 170,000 (7) 2.5
Mark E. Walker 414,530 (8) 6.1
Steel Partners 448,450 (9) 6.6
Robert G. and Pauline B. Walker
Revocable Trust 345,724 (10) 5.1
All Kinark Directors and Officers as Group
(8 persons) 3,657,534 (11) 51.4
_________________
</TABLE>
6
<PAGE>
(1) Based on 6,778,345 shares of the Company's Common Stock
outstanding as of March 31, 1998, 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 November 1997
filed with the SEC. Includes 75,600 shares held by the Richard
C. Butler Revocable Trust of which Mr. Butler is Managing
Co-trustee. Mr. Butler disclaims beneficial ownership of these
shares. Includes 8,000 shares held by Maumelle Gardens, Inc.,
of which Mr. Butler owns 60%. Mr. Butler disclaims beneficial
ownership of these shares. The shares listed include 10,000
shares of Common Stock underlying exercisable options held by
Mr. Butler. The stockholder's address is 2250 E. 73rd Street,
Tulsa, Oklahoma 74136.
(3) Information based on Form 5 of Mr. Chastain for February 1998
filed with the SEC. Includes presently exercisable stock
options to acquire 26,000 Shares. The stockholder's address is
2250 East 73rd Street, Tulsa, Oklahoma 74136.
(4) Information based on Form 5 of Mr. Crimmins for February 1998
filed with the SEC. Includes presently exercisable stock
options to acquire 25,000 Shares. The stockholder's address is
2250 East 73rd Street, Tulsa, Oklahoma 74136.
(5) Information based on Form 5 of Mr. Evans for February 1998
filed with the SEC. Includes presently exercisable stock
options to acquire 250,000 Shares. The stockholder's address is
2250 East 73rd Street, Tulsa, Oklahoma 74136.
(6) Information based on Form 4 of Mr. Morrow for September 1997
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 include
10,000 shares of Common Stock underlying exercisable options
held by him. The stockholder's address is 2250 East 73rd
Street, Tulsa, Oklahoma 74136.
(7) Information based on Form 4 of Governor Sununu for July 1997
filed with the SEC. The shares listed for Governor Sununu
include 10,000 shares of Common Stock underlying exercisable
options held by him. The stockholder's address is 2250 East
73rd Street, Tulsa, Oklahoma 74136.
(8) Information based on Form 4 of Mr. Walker for December 1996
and July 1997 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
include 10,000 shares of Common Stock underlying exercisable
options held by Mr. Walker. The stockholder's address is 2250
East 73rd Street, Tulsa, Oklahoma 74136.
(9) Information based on amended joint Schedule 13D of Steel
Partners II, L.P., and Warren Lichtenstein dated August 5, 1997,
and filed with the SEC. According to the amended Schedule 13D,
Steel Partners II, L.P. beneficially owns 448,400 shares, and
Mr. Lichtenstein beneficially owns 448,450 shares. Mr.
Lichtenstein has sole voting and dispositive power with respect
7
<PAGE>
to the 50 shares owned by him individually and the 448,400
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, NY 10022.
(10) Information based on 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
filed with the SEC dated December 14, 1996. 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 343,500 shares.
On the Record Date, directors and officers as a group owned
3,314,034 shares, or 48.9% of the 6,778,345 shares outstanding
and entitled to vote, not including presently exercisable stock
options.
<TABLE>
EXECUTIVE COMPENSATION
Summary Compensation Table
<CAPTION>
Long Term Compensation
------------------------------------------------------
Annual Compensation Awards Payouts
------------------------------------------ -------------------------- -----------------------
Securities All
Name Other Under- Other
and Annual Restricted lying Compen-
Principal Bonus Compen- Stock Options/ LTIP sation
Position Year Salary (A) sation Award(s) SARs(#) payouts (B)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael T. Crimmins, 1997 $ 50,000 $ - - - - - $ 2,988
Chairman and CEO 1996 $ 50,000 10,000 - - 100,000 - -
1995 - - - - - - -
Paul R. Chastain, 1997 $141,600 $ - - - - - $ 8,815
Vice President and CFO 1996 141,600 10,000 - - - - 8,496
1995 141,600 - - - - - 8,496
Ronald J. Evans, 1997 $100,000 $ - - - - - $ 5,225
President 1996 90,577 15,000 - - 250,000 - -
1995 - - - - - - -
_______________
(A) Annual bonus amounts are earned and accrued during the fiscal
years indicated, and paid in the next following year.
(B) 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 were not eligible to participate
in the 401(k) defined contribution plan until 1997.
</TABLE>
8
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<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
Name Granted(#) Fiscal Year ($/Share) Date 5% 10%
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
There were no grants to executive officers in 1997.
</TABLE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Value Options at Fiscal Year-End In-the-Money Options at
on Exercise Realized (Shares) Fiscal Year-End ($)
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 4,500 1,500 0 0
Michael T. Crimmins (D) 0 0 25,000 75,000 0 $ 0
Ronald J. Evans (E) 0 0 174,750 58,250 $87,375 $29,125
Ronald J. Evans (F) 0 0 12,750 4,250 0 0
____________
(A) Market value of underlying securities at December 31, 1997
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, 1997.
(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, 1997.
(D) Option granted July 18, 1996 pursuant to the Company's 1996
Stock Option Plan at an exercise price of $3.50 was not
"in-the-money" at December 31, 1997.
(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 was not "in-the-money"
at December 31, 1997.
_______________________
</TABLE>
9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board reviews 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
companies' policies toward executive compensation, the following is
a report submitted by the Compensation Committee members addressing
the Company's compensation policy as it related to the named
executive officers for fiscal 1997.
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 president and chief executive officer
who may recommend an increase for approval by the Compensation
Committee. The chief executive officer's salary is determined by
the Board based on a review and recommendation by the
Compensation Committee. 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. There were no incentive awards to
the Company's officers for 1997. 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.
10
<PAGE>
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 1997 adequately
reflect the Company's compensation goals and policies.
Compensation Committee
Paul R. Chastain
Joseph J. Morrow
Mark E. Walker
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. Walker
(chairman), Morrow and Chastain.
The Company's 1996 Stock Option Plan and Rule 16b-3 of the
Securities Exchange Act of 1934, as amended, require that at least
two of the Compensation Committee members be outside directors and
Messrs. Walker and Morrow are the outside directors currently on the
Committee. Mr. Chastain currently serves as Vice President and
Chief Financial Officer of the Company, and has served the Company
in various executive positions and as a director since 1973. The
Board of Directors believes that Mr. Chastain's participation in the
deliberations of the committee provides a beneficial continuity and
knowledge, and that no conflicts of interest exist. Mr. Chastain
did not participate in any option grant decisions during 1997.
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, 1997. The graph assumes $100 was invested
December 31, 1992, in the Company's Common Stock and in each of the
referenced indices and assumes the reinvestment of dividends.
[DELETED STOCK PERFORMANCE GRAPH]
KINARK CORPORATION
STOCK RETURN CALCULATION
KINARK STOCK
SHARE WEIGHTED
DATE PRICE RETURN VALUE
31-Dec-92 4.766 0 100.0
31-Dec-93 3.766 -21.0% 79.0
31-Dec-94 3.25 -13.7% 68.2
31-Dec-95 2.94 -9.5% 61.7
30-Dec-96 3.8125 29.7% 80.0
31-Dec-97 3 -21.3% 62.9
DOW JONES EQUITY MARKET INDEX
31-Dec-92 494.27 0 100.0
31-Dec-93 543.43 9.9% 109.9
31-Dec-94 547.62 0.8% 110.8
31-Dec-95 757.78 38.4% 153.3
30-Dec-96 802.41 5.9% 162.3
31-Dec-97 1244.11 55.0% 251.7
DOW JONES INDUSTRIAL DIVERSIFIED SECTOR
31-Dec-92 422.57 0 100.0
31-Dec-93 516.34 22.2% 122.2
31-Dec-94 473.58 -8.3% 112.1
31-Dec-95 620.17 31.0% 146.8
30-Dec-96 802.41 29.4% 189.9
31-Dec-97 1051.1 31.0% 248.7
11
<PAGE>
RELATED PARTY TRANSACTIONS
Mr. Joseph J. Morrow, a director of the Company and a nominee for
reelection, purchased 1,759,083 shares of Common Stock in the
Company's private placement in January 1996. Mr. Morrow is the
chief executive officer of Morrow & Co., Inc., which provides proxy
solicitation and other stockholder related services to the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors and persons
who beneficially own more than ten percent of a registered class of
the Company's equity securities, to file reports of securities
ownership and changes in such ownership with the SEC. Officers,
directors and greater than ten-percent beneficial owners also are
required by rules promulgated by the SEC to furnish the Company with
copies of all Section16(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.
INDEPENDENT AUDITORS
Deloitte & Touche, LLP audited the Company's financial statements
for the fiscal year ended December 31, 1997, and the Board of
Directors has approved the engagement of that firm to serve as the
Company's auditors for 1998. 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 1999 Annual
Meeting of Stockholders must be received by the Company by January
9, 1999. Such proposals should be directed to Kinark Corporation,
Attention: Secretary, 2250 East 73rd Street, Suite 300, Tulsa,
Oklahoma 74136. No stockholder proposals were received for
inclusion in this Proxy Statement.
12
<PAGE>
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 9, 1998
13
<PAGE>
KINARK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF THE DIRECTORS
For the Annual Meeting of Stockholders on May 8,1998
The undersigned, a stockholder of record of Kinark Corporation (the
"Company") on March 12, 1998 (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 8, 1998, and at any adjournments or
postponements thereof, on the following matters.
(Continued, and to be marked, dated and signed, on the reverse side)
The invalidity, illegality or unenforceability of any particular
provision 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.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW.
Please mark
your votes as
indicated in
this example [ X ]
1. 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, Mark E. Walker.
FOR all nominees WITHHOLD
listed (except as AUTHORITY
marked to the for all nominees
contrary) listed
[ ] [ ]
INSTRUCTIONS: To vote FOR or WITHHOLD AUTHORITY to vote for the election of
all candidates, check the appropriate 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:__________________, 1998
____________________________________
(Signature)
____________________________________
(Signature if held Jointly)
_____________________________________
(Title or authority (if applicable))
**THIS IS YOUR PROXY CARD**
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY, USING THE ENCLOSED ENVELOPE.
