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(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
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(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 Exhcange 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 Exhcnage 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:
6,712,209 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 Exhange
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:
________________________________________________________________________________
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ANNUAL MEETING - MAY 15, 2002
Dear Kinark Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
on Wednesday, May 15, 2002 at 11:00 a.m. The meeting will be held at the
American Stock Exchange in New York City.
The business expected to be conducted at the meeting is presented in
the accompanying Notice of the Annual Meeting and Proxy Statement. Members of
management will report on the Company's operations. After the business
presentation, the Directors and Management will be available for your questions.
Your vote is important. Please ensure that your shares will be
represented at the meeting by signing and returning your Proxy Card now, even if
you plan to attend the meeting.
On behalf of the Board of Directors, thank you for your continued
interest in the Company. We look forward to seeing you at the annual meeting.
Ronald J. Evans
President and Chief Executive Officer
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD
IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.
NOTICE OF ANNUAL MEETING
NEW YORK, NY, MAY 15, 2002
To the Stockholders of KINARK CORPORATION:
The Annual Meeting of the Stockholders of KINARK CORPORATION (the
"Company"), will be held at the American Stock Exchange in the Boardroom -- 14th
Floor, 86 Trinity Place, New York, NY on Wednesday, May 15, 2002 at 11:00 A.M.
local time, for the following purposes:
1. ELECTION OF DIRECTORS. To elect eight directors to serve for a term of
one year.
2. RATIFICATION OF AUDITORS. To ratify the Board of Directors appointment
of Deloitte & Touche LLP as our independent accountants for the year
ending December 31, 2002.
3. OTHER BUSINESS. To transact such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
The Board of Directors fixed April 1, 2002 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. A copy of the Company's Annual Report
for the year ended December 31, 2001, is enclosed with this Notice.
Please sign and date the enclosed proxy card and return it promptly in the
enclosed postage-paid envelope. 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 through you have
previously signed and returned your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Paul R. Chastain,
Vice President & Secretary
April 9, 2002
KINARK CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 2002
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 May 15,
2002, at 11:00 a.m., local time, at the American Stock Exchange in New York
City, N.Y., or at any adjournments thereof (the "Annual Meeting"). On April 1,
2002, the record date for determination of stockholders of the Company entitled
to vote at the Annual Meeting (the "Record Date"), there were 6,680,825 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 accompanying Proxy are being mailed to the
Company's stockholders on or about April 9, 2002.
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 for
election of the Directors 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.
ANNUAL REPORT
The Company's Annual Report to Stockholders and Form 10-K, covering the
fiscal year ended December 31, 2001, including audited financial statements are
enclosed with this Proxy Statement, 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.
PROPOSAL 1
ELECTION OF DIRECTORS
Eight directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting, in accordance with the Bylaws, to serve until the
2003 Annual Meeting or until their respective successors have been elected. All
of the current directors, Linwood J. Bundy, Paul R. Chastain, Ronald J. Evans,
Gilbert L. Klemann, II, Patrick J. Lynch, 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 2003 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.
LINWOOD J. BUNDY (59), first elected to Kinark's Board in 2000. Since
1993 President, Chief Executive Officer and member of the Board of Directors of
Bundy, Inc., a privately-owned development, entertainment and investment company
located in Iowa. From 1978 to 1998, President and Chief Executive Officer of
Iowa State Ready Mix Concrete, Inc., a privately-owned concrete company located
in Ames, Iowa. Past owner of Hallet Materials, a sand and gravel operation in
Iowa and Texas (1986-1998). Mr. Bundy serves on the Board of Directors of
Firststar Bank in Ames, Iowa. He is a past member of the Board of Trustees of
Mary Greeley Medical Center, a member of the Order of the Knoll, an Iowa State
University Foundation, and past member of a number of civic and professional
organizations in Iowa. He is a member of the Audit and Compensation Committees.
PAUL R. CHASTAIN (67), first elected to Kinark's Board in 1975, was
appointed Vice President and Chief Financial Officer of Kinark in February 1996
and Secretary in January 2000. 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.
RONALD J. EVANS (53), first appointed to Kinark's Board in 1995, was
appointed President of Kinark in February 1996 and Chief Executive Officer in
November 1999. Private investor from May 1995 to February 1996. From July 1989
to May 1995, Vice President and General Manager of Deltech Corporation, a
privately-owned specialty chemicals producer. From January 1989 to July 1989,
Vice President of Sales and Marketing for Deltech Corporation. Manager from 1976
to 1989 for Hoechst Celanese Corporation. He is a member of the Executive
Committee.
GILBERT L. KLEMANN, II (51), Senior Vice President and General Counsel of
Avon Products Inc. since January 2001. During 2000, Mr. Klemann was of Counsel
for the international law firm of Chadbourne & Parke LLP, New York City. From
1991 to 1999, Mr. Klemann was an Executive Officer and General Counsel of
Fortune Brands, Inc. (formerly American Brands, Inc.), a publicly-owned consumer
products holding company, where he also was a member of the Board of Directors.
Prior to 1990 he was a partner in the law firm of Chadbourne & Parke LLP. Mr.
Klemann was appointed to the Board of Directors of Kinark Corporation in August
2000 and serves on the Company's Compensation Committee.
PATRICK J. LYNCH (64), Private investor and formerly Senior Vice
President and Chief Financial Officer of Texaco Inc., a publicly-owned oil and
petrochemicals company, from 1997 to 2001. For more than five years, Mr. Lynch
was actively engaged in the business of Texaco Inc. or one of its subsidiaries
or affiliated companies. He is a member of the Trustees of The American
Petroleum Institute, The Conference Board Financial Executives and CFO Advisory
Council, and serves as a Trustee for Iona College in New Rochelle, New York. Mr.
Lynch was appointed to the Board of Directors of Kinark Corporation in February
2001 and serves on the Company's Audit Committee.
JOSEPH J. MORROW (62), first elected to Kinark's Board in 1996, was
appointed Non-Executive Chairman of the Board of Kinark in November 1999. Chief
Executive Officer of Morrow & Co., Inc., a privately-owned proxy solicitation
firm, 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. He is a member of the
Executive Committee.
JOHN H. SUNUNU (62), first elected to Kinark's Board in 1996, is
President of JHS Associates, Ltd. since June 1992 and a former partner in
Trinity International Partners, both private financial firms, and served as
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. He is
a member of the Executive Committee.
MARK E. WALKER (46), first elected to Kinark's Board in 1993, is
President and Director since 1991 of Ocean's Window, Inc., a privately-owned
recreation services firm and 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. He
is a member of the Executive, Audit and Compensation Committees.
With the exception of Messrs. Chastain 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.
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 eight 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 necessary between
scheduled meetings.
The Board met seven times in 2001 (including regularly scheduled and
special telephonic meetings). All of the incumbent directors attended at least
88% of the total meetings of the Board of Directors and the committees on which
they were members.
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 $20,000, payable in
quarterly installments and receive no additional compensation for committee
services beyond their annual fee. A director may elect to receive the annual fee
in cash or shares of the Company's common stock, or a combination thereof. Under
the Company's 1996 Stock Option Plan, 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. Evans, Morrow, Sununu, and Walker are the present members of the
Executive Committee and Mr. Sununu acts as Chairman. The Executive Committee
held three meetings in 2001.
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 Plans. Messrs.
Bundy, Klemann and Walker are the present members of the Compensation Committee
and Mr. Walker acts as Chairman. The Compensation Committee met three (3) times
in 2001.
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 control 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. Bundy, Lynch and Walker are the present members of the
Audit Committee and Mr. Walker acts as Chairman. The Audit Committee held one
meeting in 2001.
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 April 1, 2002,
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:
AMOUNT AND NATURE OF PERCENTAGE OF
NAME OF STOCKHOLDER BENEFICIAL OWNERSHIP COMMON STOCK (1)
------------------- -------------------- ----------------
Linwood J. Bundy 113,642 (2) 1.7
Paul R. Chastain 38,967 (3) 0.6
Ronald J. Evans 330,989 (4) 4.8
Gilbert L. Klemann, II 81,654 (5) 1.2
Patrick J. Lynch 46,863 (6) 0.7
Joseph J. Morrow 1,787,602 (7) 26.1
John H. Sununu 259,368 (8) 3.8
Mark E. Walker 434,530 (9) 6.5
Robert G. and Pauline B. Walker
Revocable Trust 345,724 (10) 5.2
Edmund A. Schwesinger, Jr. 376,866 (11) 5.6
All Kinark Directors and
Officers as Group (8 persons) 3,093,615 (12) 41.5
Each person named above has sole voting and dispositive power with respect to
all the shares listed opposite such person's name, unless indicated otherwise.
(1) Based on 6,680,825 shares of the Company's Common Stock outstanding as of
April 1, 2002 plus any currently exercisable warrants and stock options or stock
options which become exercisable within 60 days. The address for each Director
of the Company is: c/o Kinark Corporation, 2250 East 73rd Street, Suite 300,
Tulsa, Oklahoma 74136-6832.
(2) Includes 77,291 shares subject to options and warrants exercisable at
April 1, 2002.
(3) Includes 6,000 shares subject to options and warrants exercisable at April
1, 2002.
(4) Includes 283,333 shares subject to options and warrants exercisable at
April 1, 2002.
(5) Includes 76,249 shares subject to options and warrants exercisable at
April 1, 2002.
(6) Includes 41,458 shares subject to options and warrants exercisable at
April 1, 2002.
(7) Includes 163,332 shares subject to options and warrants exercisable at
April 1, 2002. The shares listed for Mr. Morrow include 55,536 shares owned by
his wife. Mr. Morrow disclaims beneficial ownership of these shares.
(8) Includes 96,666 shares subject to options and warrants exercisable at
April 1, 2002.
(9) Includes 30,000 shares subject to options and warrants exercisable at
April 1, 2002. The shares listed for Mr. Walker include 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.
(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.
(11) Information based on Schedule 13G of Mr. Edmund A. Schwesinger, Jr., 94
Cutler Road, Greenwich, Connecticut 06831, filed with the SEC.
(12) All directors and officers as a group held in the aggregate presently
exercisable stock options and warrants to acquire 774,329 shares. On the Record
Date, directors and officers as a group owned 2,319,286 shares, or 34.7% of the
6,680,825 shares outstanding and entitled to vote, not including presently
exercisable stock options and warrants.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------------------------------------
SECURITIES
OTHER UNDER- ALL OTHER
ANNUAL RESTRICTED LYING COMPEN-
NAME AND COMPEN- STOCK OPTIONS/ LTIP SATION
PRINCIPAL POSITION YEAR SALARY BONUS SATION AWARD(S) SARS(#) PAYOUTS (A)
----------------------------------------------------------------------------------------------------------
Paul R. Chastain, 2001 $141,600 ---- ---- ---- ---- ---- $8,921
Vice President and 2000 141,600 ---- ---- ---- ---- ---- 8,921
CFO and Secretary 1999 141,600 ---- ---- ---- ---- ---- 8,921
Ronald J. Evans 2001 $100,000 ---- ---- ---- ---- ---- $6,300
President and CEO 2000 100,000 ---- ---- ---- ---- ---- 6,300
1999 100,000 ---- ---- ---- ---- ---- 6,300
(A) All compensation shown in this column represents the Company's matching
contributions to its 401(k) defined contribution retirement plan.
OPTION GRANTS IN LAST FISCAL YEAR
There were no option grants to Kinark's executive officers in 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE (SHARES) FISCAL YEAR-END ($)
ON EXERCISE REALIZED --------------------------------------------------------------
NAME (#) ($) (A) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------------------------------------------------------------------------------------------
Paul R. Chastain (B) 0 0 6,000 0 0 0
Ronald J. Evans (C) 0 0 233,000 0 0 0
Ronald J. Evans (D) 0 0 17,000 0 0 0
(A) Market value of underlying securities at December 31, 2001 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 per share was not "in-the-money" at
December 31, 2001.
(C) Option granted April 3, 1996 pursuant to the Company's 1988 Stock Option
Plan at an exercise price of $2.50 per share was not "in-the-money" at December
31, 2001.
(D) Option granted July 18, 1996 pursuant to the Company's 1996 Stock Option
Plan at an exercise price of $3.50 per share was not "in-the-money" at December
31, 2001.
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. 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 2001.
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:
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 key
officer and senior managers and corporate officer is reviewed annually by the
president and chief executive officer who may recommend an increase for approval
by the Compensation Committee. The president and chief executive officer's
salary is determined by the Board based on a review and recommendation by the
Compensation Committee.
ANNUAL INCENTIVE COMPENSATION. The Company's officers and key subsidiary
personnel are eligible to participate in an annual incentive compensation plan
with awards based primarily on achievement of profit performance targets. Awards
are subject to decrease or increase on the basis of the Company's performance
and at the discretion of the Compensation Committee. The Compensation Committee
approved incentive awards to the president and key managers of the galvanizing
subsidiary for achieving increased operating earnings in 2001 over the prior
year. There were no incentive awards to the Company's executive officers for
2001.
STOCK OPTION PROGRAM. The purpose of this program is to provide additional
incentives to employees to work to maximize growth of the Company and
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 works to achieve equitable compensation objectives
for key employees.
The Compensation Committee believes that its objectives of linking
executive compensation to corporate performance results in alignment of
compensation with corporate goals and shareholder interest. When performance
goals are met or exceeded, shareholders' value is increased and executives are
rewarded commensurately. The committee believes that compensation levels during
2001 adequately reflect the Company's compensation goals and policies.
The Compensation Committee:
LINWOOD J. BUNDY
GILBERT L. KLEMANN, II
MARK E. WALKER
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is presently comprised of Directors Messrs.
Bundy, Klemann and Walker, none of whom are employees of Kinark. Mr. Chastain
was a member of the Compensation Committee until March 6, 2001.
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. 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 provided a beneficial continuity and knowledge, and that no
conflicts of interest exist. Mr. Chastain did not participate in any option
grant decisions during 2001.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Kinark's Audit Committee consists of three directors, all of whom are
independent in accordance with and meet the other requirements of the American
Stock Exchange. The Audit Committee operates under a written charter adopted by
the Board of Directors and is responsible for, among other things, reviewing
with our independent auditors the scope and results of their audit engagement.
In connection with the fiscal 2001 audit, the Audit Committee has:
o reviewed and discussed with Deloitte & Touche, LLP, our
independent auditors ("Deloitte & Touche"), and with management
Kinark's audited financial statements to be included in our
annual report on Form 10-K for the year ended December 31, 2001,
o discussed with Deloitte & Touche the matters required by
Statement of Accounting Standards No. 61, and
o received from and discussed with Deloitte & Touche the written
disclosures and letter from Deloitte & Touche required by
Independence Standards Board Standard No. 1 as modified or
supplemented, regarding their independence.
Based on the review and the discussions described in the preceding bullet
points, the Audit Committee has recommended to the Board of Directors that the
audited financial statements be included in our Annual Report on Form 10-K for
the year ended December 31, 2001 for filing with the SEC.
The Audit Committee:
MARK E. WALKER
LINWOOD J. BUNDY
PATRICK J. LYNCH
THE FOREGOING REPORT SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT OR REFERENCE TO THIS PROXY STATEMENT INTO ANY FILING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, EXCEPT TO THE EXTENT THAT KINARK SPECIFICALLY INCORPORATES
THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER
SUCH ACTS.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, upon the recommendation of the
Audit Committee has appointed Deloitte & Touche LLP as independent accountants
to examine the financial statements of the Company for the year ending December
31, 2002. The Board of Directors has directed that such appointment be submitted
for ratification by the stockholders at the meeting.
Deloitte & Touche LLP has served as the independent accountant for the
Company since 1990. A representative of Deloitte & Touche LLP is expected to be
present at the Meeting and will have the opportunity to make a statement if he
or she desires to do so and will be available to respond to appropriate
questions.
AUDIT FEES
The aggregate fees billed by Deloitte & Touche LLP for professional
services rendered for the audit of the Company's annual financial statements for
the year ended December 31, 2001 and for the reviews of the financial statements
included in the Company's Quarterly Reports on Form 10-Q for that same year were
$125,128.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no professional services rendered by Deloitte & Touche in the
2001 fiscal year relating to financial information systems design and
implementation.
ALL OTHER FEES
The aggregate fees for all other services rendered by Deloitte & Touche
in the 2001 fiscal year was $101,507 and can be sub-categorized as follows:
Attestation Fees. The aggregate fees for attestation services rendered by
Deloitte & Touche for matters such as consents related to SEC and other
registration statements, audits of employee benefit plans and
consultation on accounting standards or transactions was $12,323.
Other Fees. The aggregate fees for all other services, such as
consultation related to tax planning and compliance rendered by Deloitte
& Touche in the 2001 fiscal year was approximately $89,184.
The Audit Committee of the Company's Board of Directors has considered
whether the provision of non-audit services by Deloitte & Touche LLP for the
year ended December 31, 2001 is compatible with maintaining the principal
auditor's independence.
The affirmative vote of a majority of the shares of common stock present,
in person or by proxy, and entitled to vote at the meeting, is required for
ratification of the appointment of Deloitte & Touche LLP as the independent
accountants.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP.
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, 1996 through December 31, 2001. The graph assumes
$100 was invested December 31, 1996, in the Company's Common Stock and in each
of the referenced indices and assumes the reinvestment of dividends.
STOCK PERFORMANCE
[GRAPH APPEARS HERE]
Cumulative Total Return
------------------------------------------------------------------------
12/96 12/97 12/98 12/99 12/00 12/01
KINARK CORPORATION 100.00 78.69 57.38 39.34 22.95 25.44
DOW JONES US TOTAL MARKET 100.00 131.81 164.63 202.04 183.31 161.46
DOW JONES US INDUSTRIAL, DIVERSIFIED 100.00 141.71 182.25 246.90 248.68 223.57
RELATED PARTY TRANSACTIONS
In February 2001, the Company offered a private placement of subordinated
debt and warrants (together, the "Private Securities") to certain of its
directors and to accredited shareholders holding at least 100,000 shares of
Common Stock. The exercise price of $.856 a share for the Warrant was determined
based on the average closing market price for the Common Stock on the American
Stock Exchange for the 20 business day period beginning three business days
after February 17, 2001. A special committee of the Board of Directors approved
the offering of the Private Securities and the special committee received an
opinion from The Robinson-Humphrey Company, LLC that the consideration to be
paid in the offering was fair to the Company from a financial point of view. The
following directors and nominees for reelection participated in the offering as
indicated:
Linwood J. Bundy - 10% Subordinated Note for $100,000 and Warrant to purchase
66,666 shares of Common Stock.
Ronald J. Evans (President) - 10% Subordinated Note for $50,000 and Warrant to
purchase 33,333 shares of Common Stock.
Gilbert L. Klemann, II - 10% Subordinated Note for $100,000 and Warrant to
purchase 66,666 shares of Common Stock.
Patrick J. Lynch - 10% Subordinated Note for $50,000 and Warrant to purchase
33,333 shares of Common Stock.
Joseph J. Morrow - 10% Subordinated Note for $100,000 and Warrant to purchase
66,666 shares of Common Stock.
John H. Sununu - 10% Subordinated Note for $100,000 and Warrant to purchase
66,666 shares of Common Stock.
The Morrow Foundation - 10% Subordinated Note for $100,000 and Warrant to
purchase 66,666 shares of Common Stock.
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 as
described in the section titled "Other Matters" in this Proxy Statement.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors and persons who
beneficially own more than ten percent of a registered class of the Company's
equity securities, to file reports of securities ownership and changes in such
ownership with the SEC. Officers, directors and greater than ten-percent
beneficial owners also are required by rules promulgated by the SEC to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such reports furnished to the
Company, the Company believes that, during the last fiscal year, its executive
officers, directors and greater than ten-percent beneficial owners complied with
all applicable Section 16(a) filing requirements.
STOCKHOLDER PROPOSALS
If any stockholder wishes to submit a proposal for inclusion in the Proxy
Statement for the Company's 2003 Annual Meeting, such proposal must be received
at the Company's principal executive office by January 15, 2003. Such proposal
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.
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. We expect to pay
Morrow & Co. a fee of $7,500 for its services and will reimburse Morrow for
certain out-of-pocket expenses estimated to be $6,000. Brokers, banks, nominees,
fiduciaries and other custodians will be requested to solicit beneficial owners
of shares and will be reimbursed for their expenses.
Mellon Investor Services LLC 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
Paul R. Chastain
Vice President & Secretary
Tulsa, Oklahoma
April 9, 2002
KINARK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF THE DIRECTORS
For the Annual Meeting of Stockholders on
May 15, 2002
The undersigned, a stockholder of record of Kinark Corporation (the
"Company") on April 1, 2002 (the "Record Date"), hereby appoints Linwood J.
Bundy, Ronald J. Evans and Paul R. Chastain, or any 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 15, 2002, 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 enforceability 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.
o FOLD AND DETACH HERE
Annual Meeting
of
Kinark Corporation Stockholders
Wednesday, May 15, 2002
11:00 a.m.
American Stock Exchange
Boardroom -14th Floor
86 Trinity Place
New York, NY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW.
PLEASE MARK
YOUR VOTES AS [X]
INDICATED IN
THIS EXAMPLE
1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS: 01 LINWOOD J. BUNDY, 02 PAUL
R CHASTAIN, 03 RONALD J. EVANS, 04 GILBERT L. KLEMANN, 05 PATRICK J. LYNCH,
06 JOSEPH J. MORROW, 07 JOHN H. SUNUNU, 08 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. RATIFY APPOINTMENT OF DELOITTE & TOUCHE LIP AS INDEPENDENT ACCOUNTANTS
FOR AGAINST ABSTAIN
[_] [_] [_]
3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERTY COME BEFORE THE
ANNUAL MEETING.
"THIS IS YOUR PROXY CARD"
PLEASE SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY, USING THE ENCLOSED ENVELOPE.
----------------------------- ---------------------------- -----------
SIGNATURE SIGNATURE DATE
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.
FOLD AND DETACH HERE
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 4PM EASTERN TIME
THE BUSINESS DAY PRIOR TO ANNUAL MEETING DAY.
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR
SHARES IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND
RETURNED YOUR PROXY CARD.
INTERNET
HTTP://WWW.EPROXY.COM/KIN
Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number, located
in the box below, to create and submit an electronic ballot.
OR
TELEPHONE 1-800-435-6710
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in the
box below, and then follow the directions given.
OR
MAIL
Mark, sign and date your proxy card and return it in the enclosed
postage-paid envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE, YOU DO NOT
NEED TO MAIL BACK YOUR PROXY CARD. PLEASE SIGN, DATE AND RETURN THIS PROXY
PROMPTLY, USING THE ENCLOSED ENVELOPE.