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 (Amendment No. )
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)
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
_____ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
_____ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
_____ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock - $.10 par value per share
(2) Aggregate number of securities to which transactions applies:
6,746,215 Shares of Common Stock
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: 1
________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________
_____ 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:
___________________________________________________________
1 Set forth the amount on which the filing fee is calculated and
state how it was determined.
<PAGE>
Kinark Corporation
2250 East 73rd Street
Suite 300
Tulsa, Oklahoma 74136-6832
(918) 494-0964
Fax (918) 494-3999
April 8, 1999
ANNUAL MEETING - MAY 12, 1999
Dear Kinark Stockholder:
On behalf of the Board of Directors and management, it is my
pleasure to invite you to attend the Annual Meeting of Stockholders on
Wednesday, May 12, 1999, in Tulsa, Oklahoma.
Business matters expected to be acted upon at the meeting are
described in detail in the accompanying Notice of the Annual Meeting
and Proxy Statement. Members of management will report on the
Company's operations, followed by a period for questions and
discussion. As customary, a report on the meeting will be included in
the Company's second quarter earnings announcement.
We hope you can attend the meeting. Regardless of the number of
shares you own, your vote is very important. Please ensure that your
shares will be represented at the meeting by signing and returning
your proxy now, even if you plan to attend the meeting.
Thank you for your continued interest in the Company.
Sincerely,
/s/ Michael T. Crimmins
Michael T. Crimmins
Chairman of the Board and
Chief Executive Officer
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.
<PAGE>
Kinark Corporation
2250 East 73rd Street
Suite 300
Tulsa, Oklahoma 74136-6832
(918) 494-0964
Fax (918) 494-3999
NOTICE OF ANNUAL MEETING
TULSA, OKLAHOMA, MAY 12, 1999
To the Stockholders of KINARK CORPORATION:
The annual meeting of stockholders of KINARK CORPORATION, a
Delaware corporation (the "Company"), will be held at the DoubleTree
Hotel at Warren Place, 6110 South Yale Avenue, Tulsa, Oklahoma, on
Wednesday, May 12, 1999, at 9:30 A.M. local time, for the following
purposes:
1. To elect seven directors to serve until the 2000 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 15, 1999 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 8, 1999
1
<PAGE>
KINARK CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 12, 1999
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 12, 1999, at 9:30 a.m., local time,
at the DoubleTree Hotel in Tulsa, Oklahoma, or at any adjournments
thereof (the "Annual Meeting"). On March 15, 1999, the record date
for determination of stockholders of the Company entitled to vote at
the Annual Meeting (the "Record Date"), there were 6,746,215 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 12, 1999.
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.
2
<PAGE>
ANNUAL REPORT
The Company's Annual Report to Stockholders and Form 10-K, covering
the fiscal year ended December 31, 1998, 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 2000 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 2000
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.
Nominees For Election as Directors to Serve Until Next Annual Meeting
The experience and background of each of the nominees are set forth
below.
Richard C. Butler, first elected Director in 1974 - Mr. Butler, 89,
has been former Chairman of the Board of Peoples Savings & Loan
Association in Little Rock, Arkansas. In May 1993, he was appointed
to Kinark's Board and elected to the Board in July 1993. 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. Mr. Butler is Chairman of the
Audit Committee.
Paul R. Chastain, first elected Director in 1975 - Mr. Chastain,
64, was appointed Vice President and Chief Financial Officer of Kinark
in February 1996. Mr. Chastain served as 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; and 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, first elected Director in 1993 - Mr. Crimmins,
59, was appointed Chief Executive Officer of Kinark in February 1996
and elected Chairman of the Board of Kinark in May 1995. From 1989 to
1995, Mr. Crimmins served as Vice President and General Counsel of
Northbridge
3
<PAGE>
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, first elected Director in 1995 - Mr. Evans, 50,
was appointed President of Kinark in 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.
Joseph J. Morrow, first elected Director in 1996 - Mr. Morrow, 59,
is Chief Executive Officer of Morrow & 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, first elected Director in 1996 - Mr. Sununu, 59, is
president of JHS Associates, Ltd. 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, first elected Director in 1993 - Mr. Walker, 43, is
President and Director since 1991 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.
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. 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 1998 (including regularly scheduled and
special telephonic meetings). During 1998, each of the directors
attended one hundred percent of the aggregate number of meetings of
the Board and of the committees on which he served.
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, approved
by 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. The Executive Committee
held two meetings in 1998.
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 non-employee directors and Mr. Walker acts as Chairman.
The Compensation Committee held one meeting in 1998.
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 one meeting in 1998.
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 15,
1999, 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 103,500 (2) 1.5
Paul R. Chastain 29,969 (3) 0.4
Michael T. Crimmins 827,502 (4) 12.3
Ronald J. Evans 281,546 (5) 4.2
Joseph J. Morrow 1,846,568 (6) 27.4
John H. Sununu 175,000 (7) 2.6
Mark E. Walker 419,530 (8) 6.2
Steel Partners II, L. P. 442,250 (9) 6.5
Robert G. and Pauline B. Walker
Revocable Trust 345,724 (10) 5.1
All Kinark Directors and Officers as Group
(8 persons) 3,695,149 (11) 52.0
_________________
</TABLE>
6
<PAGE>
(1) Based on 6,746,215 shares of the Company's Common Stock
outstanding as of March 15, 1999 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 July 1998 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 15,000 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 1999
filed with the SEC. Includes presently exercisable stock options
to acquire 6,000 Shares. The stockholder's address is 2250 East
73rd Street, Tulsa, Oklahoma 74136.
(4) Information based on Form 5 of Mr. Crimmins for February 1999
filed with the SEC. Includes presently exercisable stock options
to acquire 50,000 Shares. The stockholder's address is 2250 East
73rd Street, Tulsa, Oklahoma 74136.
(5) Information based on Form 5 of Mr. Evans for February 1999
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 July 1998 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 15,000
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 1998
filed with the SEC. The shares listed for Governor Sununu include
15,000 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 July 1998 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 15,000 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 December 1, 1998, and filed
with the SEC. According to the amended Schedule 13D, Steel Partners
II, L.P. beneficially owns 442,200 shares, and Mr. Lichtenstein
beneficially owns 442,250 shares. Mr. Lichtenstein has sole voting
and dispositive power with respect
7
<PAGE>
to the 50 shares owned by him individually and the 442,200 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 368,500 shares. On
the Record Date, directors and officers as a group owned 3,326,649
shares, or 49.3% of the 6,746,215 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, 1998 $ 50,000 $ - - - - - $ 3,150
Chairman and CEO 1997 50,000 - - - - - 2,988
1996 50,000 10,000 - - 100,000 - -
Paul R. Chastain, 1998 $141,600 $ - - - - - $ 8,177
Vice President and CFO 1997 141,600 - - - - - 8,815
1996 141,600 10,000 - - - - 8,496
Ronald J. Evans, 1998 $100,000 $ - - - - - $ 6,300
President 1997 100,000 - - - - - 5,225
1996 90,577 15,000 - - 250,000 - -
_______________
(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>
OPTION GRANTS IN LAST FISCAL YEAR
There were no grants to executive officers in 1998.
<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 6,000 0 0 0
Michael T. Crimmins (C) 0 0 50,000 50,000 0 0
Ronald J. Evans (D) 0 0 233,000 0 0 0
Ronald J. Evans (E) 0 0 17,000 0 0 0
____________
(A) Market value of underlying securities at December 31, 1998
minus the exercise price of "in-the-money" options.
(B) 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, 1998.
(C) 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, 1998.
(D) Option granted April 3, 1996 pursuant to the Company's 1988
Stock Option Plan at an exercise price of $2.50 was not "in-the-
money" at December 31, 1998.
(E) 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, 1998.
_______________________
</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 1998.
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. The Company's officers and
subsidiary presidents 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. In 1998, there were no incentive awards,
except to the president of the Terminal and Warehousing
subsidiaries.
Stock Option Program. The purpose of this program is to provide
additional incentives to employees to work to maximize shareholder
value. The stock option program may utilize vesting periods to
encourage key employees to continue in the employ of the Company.
The number of options granted is determined by the subjective
evaluation of the executive's ability to influence the Company's
long-term growth and profitability. All options have been granted
at the current market price at the time of the grant. The
Compensation Committee, which must include at least two outside
directors, works to achieve overall compensation objectives for key
employees.
The Compensation Committee believes that its objectives of linking
executive compensation to corporate performance results in alignment
of compensation with corporate goals and shareholder interest.
10
<PAGE>
When performance goals are met or exceeded, shareholders' value is
increased and executives are rewarded commensurately. The Committee
believes that compensation levels during 1998 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 non-employee directors and
Messrs. Walker and Morrow are the non-employee 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 does
not and did not during 1998 participate in any option grant decisions.
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, 1993
through December 31, 1998. The graph assumes $100 was invested
December 31, 1993, 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-93 3.766 0 100.0
31-Dec-94 3.25 -13.7% 86.3
31-Dec-95 2.94 -9.5% 78.1
30-Dec-96 3.8125 29.7% 101.2
30-Dec-97 3 -21.3% 79.7
31-Dec-98 2.125 -29.2% 56.4
DOW JONES EQUITY MARKET INDEX
31-Dec-93 543.13 0 100.0
31-Dec-94 547.12 0.7% 100.7
31-Dec-95 753.24 37.7% 138.7
30-Dec-96 926.76 23.0% 170.6
30-Dec-97 1241.45 34.0% 228.6
31-Dec-98 1597.09 28.6% 294.1
DOW JONES INDUSTRIAL DIVERSIFIED SECTOR
31-Dec-93 515.6 0 100.0
31-Dec-94 472.9 -8.3% 91.7
31-Dec-95 619.28 31.0% 120.1
30-Dec-96 801.22 29.4% 155.4
30-Dec-97 1050.25 31.1% 203.7
31-Dec-98 1208.22 15.0% 234.3
11
<PAGE>
RELATED PARTY TRANSACTIONS
Mr. Joseph J. Morrow, a director of the Company and a nominee for
reelection, 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, 1998, and it is the intention
of the Board of Directors to approve the engagement of that firm to
serve as the Company's auditors for 1999. 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 2000 Annual
Meeting of Stockholders must be received by the Company by February
11, 2000. 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., 445 Park Avenue, New York, New York 10022, 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 8, 1999
13
<PAGE>
KINARK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF THE DIRECTORS
For the Annual Meeting of Stockholders on May 12, 1999
The undersigned, a stockholder of record of Kinark Corporation (the
"Company") on March 15, 1999 (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 12, 1999, 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.
- - ------------------------------------------------------------------------------
FOLD AND DETACH HERE
ANNUAL
MEETING OF
STOCKHOLDERS
KINARK CORPORATION
May 12, 1999, 9:30 a.m.
Tulsa DoubleTree Hotel
at Warren Place
6110 S. Yale Avenue
Tulsa, Oklahoma 74316
<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 INSTRUCTIONS: To vote FOR or WITHHOLD
listed (except as AUTHORITY AUTHORITY to vote for the election of all
marked to the for all candidates, check the appropriate box
contrary) nominees hereon. To withhold authority to the
listed 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: ________________________________________________________ 1999
____________________________________________________________________
(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.
- - -------------------------------------------------------------------------------
FOLD AND DETACH HERE
Annual Meeting
of
Kinark Corporation Stockholders
Wednesday, May 12, 1999
9:30 a.m.
Tulsa DoubleTree Hotel
at Warren Place
6110 S. Yale Avenue
Tulsa, Oklahoma 74136
