1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Section 240.14a-11(c) or Section
240.14a-12
HARCOR ENERGY, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
______________________________________________
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(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:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
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:
________________________________________________________________________________
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
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:
________________________________________________________________________________
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HARCOR ENERGY, INC.
4400 POST OAK PARKWAY, SUITE 2220
HOUSTON, TEXAS 77027
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 26, 1995
TO THE STOCKHOLDERS:
The 1995 Annual Meeting of Stockholders (the "Annual Meeting") of
HARCOR ENERGY, INC., a Delaware corporation (the "Company"), will be held on
Tuesday, September 26, 1995, at 10:00 a.m., local time, at the Coronado Club
located at 910 Travis, Fifth Floor, Houston, Texas, for the following purposes:
1. To elect two Directors of Class I and one Director of
Class II of the Board of Directors to hold office until the 1998
Annual Meeting of Stockholders and until their respective successors
have been elected and qualified, or until their earlier resignation or
removal; and
2. To transact such other business as may properly come
before the Annual Meeting or any adjournments or postponements
thereof.
The Board of Directors intends to present for election as Directors
the nominees named in the accompanying Proxy Statement.
In accordance with the Bylaws of the Company, the Board of Directors
has fixed the close of business on August 25, 1995, as the record date for the
determination of stockholders entitled to vote at the Annual Meeting and to
receive notice thereof. In compliance with Section 219 of the General
Corporation Law of the State of Delaware, a list of the stockholders entitled
to vote at the Annual Meeting will be open for examination by any stockholder
for any purpose germane to the Annual Meeting during ordinary business hours
for a period of ten (10) days prior to the Annual Meeting at the offices of the
Company. The list of stockholders will be available for examination at the
Coronado Club on the day of the Annual Meeting from 10:00 a.m., local time,
until adjournment of the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors,
Gary S. Peck
Secretary
September 1, 1995
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***************************************************************************
* *
* ALL STOCKHOLDERS ARE URGED TO ATTEND THE ANNUAL MEETING IN PERSON OR *
* BY PROXY. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS *
* OF THE NUMBER OF SHARES YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO BE *
* PRESENT AT THE MEETING IN PERSON, PLEASE COMPLETE, SIGN, DATE AND *
* MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN ENVELOPE. IF YOU *
* RECEIVE MORE THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN *
* DIFFERENT NAMES OR ADDRESSES, EACH SUCH PROXY SHOULD BE SIGNED AND *
* RETURNED TO ASSURE THAT ALL YOUR SHARES WILL BE VOTED. THE PROXY *
* SHOULD BE SIGNED BY ALL REGISTERED HOLDERS EXACTLY AS THE STOCK IS *
* REGISTERED. *
* *
***************************************************************************
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE YOUR PROXY CARD AND
RETURN IT IN THE POSTAGE-PAID ENVELOPE
ENCLOSED FOR YOUR CONVENIENCE
FORM 10-K
---------
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, as filed with the Securities and Exchange Commission, will
be furnished without charge (excluding exhibits) to any stockholder upon
written request to the Secretary, HarCor Energy, Inc., 4400 Post Oak Parkway,
Suite 2220, Houston, Texas 77027.
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HARCOR ENERGY, INC.
4400 POST OAK PARKWAY, SUITE 2220
HOUSTON, TEXAS 77027
(713) 961-1804
PROXY STATEMENT
This proxy statement is furnished to the stockholders of HarCor
Energy, Inc., a Delaware corporation (the "Company"), for solicitation of
proxies on behalf of the Board of Directors of the Company for use at the 1995
Annual Meeting of Stockholders (the "Annual Meeting") to be held September 26,
1995, and at any and all adjournments and postponements thereof. The purpose
of the meeting and the matters to be acted upon are set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders.
Shares represented at the Annual Meeting by an executed and unrevoked
proxy in the form enclosed, will be voted in accordance with the instructions
contained therein. If no instructions are given on an executed and returned
form of proxy, the proxies intend to vote the shares represented thereby in
favor of each of the proposals to be presented to and voted upon by the
stockholders as set forth herein, and in accordance with their best judgment on
any other matter which may properly come before the Annual Meeting.
Any proxy given by a stockholder may be revoked by such stockholder at
any time before it is exercised by submitting to the Secretary of the Company a
duly executed proxy bearing a later date, delivering to the Secretary of the
Company a written notice of revocation, or attending the Annual Meeting and
voting in person.
The cost of this solicitation of proxies is being borne by the
Company. Solicitations will be made only by the use of the mail, except that,
if deemed desirable, officers and regular employees of the Company may solicit
proxies by telephone, telegraph or personal calls, without being paid
additional compensation for such services. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
material to the beneficial owners of (i) the Common Stock, par value $.10 per
share, of the Company (the "Common Stock"), (ii) the Series B Convertible
Preferred Stock, par value $.01 per share, of the Company (the "Series B
Preferred Stock"), (iii) the Series C Convertible Preferred Stock, par value
$.01 per share, of the Company (the "Series C Preferred Stock"), and (iv) the
Series E Junior Convertible Preferred Stock, par value $.01 per share, of the
Company (the "Series E Preferred Stock") held of record by such persons, and
the Company will reimburse them for their reasonable expenses incurred in this
connection.
The Company's Annual Report to Stockholders, including financial
statements, for the year ended December 31, 1994, accompanies but does not
constitute part of this proxy statement.
The mailing to stockholders of this proxy statement and the enclosed
proxy will commence on or about September 1, 1995.
VOTING SHARES AND VOTING RIGHTS
Only holders of record of Common Stock and Series B, C and E Preferred
Stock at the close of business on August 25, 1995 are entitled to notice of and
to vote at the Annual Meeting and any adjournments or postponements thereof.
At that date, there were outstanding 8,631,207 shares of Common Stock, 20,000
shares of Series B Preferred Stock (convertible into 512,800 shares of Common
Stock), and 10,000 shares of Series C Preferred Stock (convertible into 256,400
shares of Common Stock), and 30,000 shares of Series E Preferred Stock
(convertible into 857,143 shares of Common Stock). The presence at the Annual
Meeting of a majority of the voting power of outstanding shares of Common Stock
and Series B, C and E Preferred Stock, represented in person or by proxy, will
constitute a quorum. Each holder of Common Stock shall have one vote for each
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share of Common Stock registered, on the record date, in such holder's name on
the books of the Company. Each holder of Series B, C and E Preferred Stock
shall have such number of votes per share of Series B, C and E Preferred Stock
as shall equal the whole number of shares of Common Stock into which each share
of Series B, C and E Preferred Stock registered, on the record date, in such
holder's name on the books of the Company, is then convertible.
A plurality of the votes cast in person or by proxy by the holders of
Common Stock and Series B, C and E Preferred Stock, voting together as a single
class, is required to elect a director. Accordingly, abstentions and broker
non-votes will not affect the outcome of the election. All other matters to be
voted on will be decided by the affirmative vote of a majority of the voting
power of the shares represented in person or by proxy at the Annual Meeting and
entitled to vote. On any such matter, an abstention will have the same effect
as a negative vote but, because shares held by brokers will not be considered
entitled to vote on matters as to which the brokers withhold authority, a
broker non-vote will have no effect on the vote.
ELECTION OF DIRECTORS
Three directors are to be elected at the Annual Meeting. Messrs.
Herbert L. Oakes, Jr. and Francis H. Roth have been nominated to fill two of
the three expiring Class I positions on the Board of Directors, to hold office
until the 1998 Annual Meeting of Stockholders and until their respective
successors have been duly elected and qualified or until their earlier
resignation or removal. Ambrose K. Monell has been nominated to fill a Class
II position to hold office until the 1996 Annual Meeting of Stockholders and
until his respective successor has been duly elected and qualified or until his
earlier resignation or removal. Messrs. Monell, Oakes and Roth currently serve
as directors of the Company. The Class II directors (Messrs. Connolly, Cresci
and Rawls) presently hold office until the 1996 Annual Meeting of Stockholders
and until their respective successors have been duly elected and qualified or
until their earlier resignation or removal. Messrs. Connolly and Rawls have
advised the Company that they will resign from the Board of Directors effective
as of the date of the Annual Meeting. As a result of such resignations and in
accordance with the Company's Bylaws, Ambrose K. Monell has been nominated to
Class II of the Board of Directors instead of to Class I of the Board of
Directors. The Class III directors (Messrs. Dar, Frischkorn, Harrington and
Shore) presently hold office until the 1997 Annual Meeting of Stockholders and
until their respective successors have been duly elected and qualified or until
their earlier resignation or removal.
Although the Board of Directors knows of no reason why any of these
nominees might be unable or refuse to accept nomination or election, if such
situation arises, the persons named in the proxy have the right to use their
discretion to vote for a substitute nominee or nominees designated by the Board
of Directors. All of the nominees have consented to being named herein and to
serve if elected.
The names and ages of the Company's executive officers and directors,
including the three nominees for election to the Board of Directors, the
principal occupation or employment of each of them during the past five years
and at present, the name and principal business of the corporation or other
organization, if any, in which such occupation or employment is or was carried
on, directorships of other public companies or investment companies held by
them, and the period during which the directors have served in that capacity
with the Company are set forth below.
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Present Position Director
Name Age With the Company Since
---- --- ---------------- -----
Mark G. Harrington 42 Chairman of the Board of Directors and 1987
Chief Executive Officer
Francis H. Roth* 57 President, Chief Operating Officer and 1989
Director
Gary S. Peck 43 Vice President - Finance, Chief N/A
Financial Officer and Secretary
Albert J. McMullin 39 Vice President - Land, Contracts and N/A
Acquisitions
Robert J. Cresci 51 Director 1994
Vinod K. Dar 44 Director 1992
David E. K. Frischkorn, Jr. 44 Director 1992
Ambrose K. Monell* 41 Director 1987
Herbert L. Oakes, Jr.* 49 Director 1992
Robert A. Shore 48 Director 1994
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* Nominee for election at Annual Meeting
Mr. Harrington has been Chairman of the Board of Directors and Chief
Executive Officer of the Company since May 1987. He also is President of
Harrington and Company International Incorporated ("Harrington and Company"),
an investment company which he founded in 1986. Harrington and Company is the
general or managing partner of several limited partnerships which in the
aggregate own approximately 20% of the outstanding Common Stock. In 1977, he
joined Carl H. Pforzheimer and Co., an investment banking firm, where he became
a partner in 1980 and remained as a partner until December 1985. During his
eight years with Carl H. Pforzheimer and Co., he worked in the firm's research
and corporate finance departments. In 1984, Mr. Harrington helped organize
Chipco Energy Corporation, the holding company for the firm's oil and gas
assets. He is a director of HCO Energy Ltd. and Jefferson Gas Systems, Inc.
Mr. Harrington holds a Bachelor of Business Administration degree and a Master
of Business Administration degree, both in finance, from the University of
Texas.
Mr. Roth has been President and Chief Operating Officer of the Company
since March 1989. Prior to that time, he served as Vice President - Production
of the Company since July 1988. He has been employed in various engineering
positions with both Amoco and Chevron in several geographic locations. Prior
to joining the Company, he had been employed for 16 years by MCO Resources,
Inc., an oil and gas company, in various positions, including General Manager
of Operations and Engineering. He also served as Vice President of Drilling
and Production and Engineering for MCOR Oil and Gas Corporation, a subsidiary
of MCO Resources, Inc. Mr. Roth holds a Bachelor of Science degree in
petroleum engineering from the University of Kansas, a Master of Science degree
in petroleum engineering from the University of Oklahoma and a Master of
Business Administration degree from the University of California.
Mr. Peck joined the Company as Vice President - Finance and Chief
Financial Officer in October 1989 and became Secretary in November 1989. Prior
to joining the Company, Mr. Peck acted as a financial consultant to the
Company. Mr. Peck was Director of Finance for Herbert L. Farkas Company (a
multi-location furniture and business equipment concern) from 1987 to 1989 and
was Vice President - Finance and Chief Financial Officer of RAWA, Inc. (a
franchising and car rental company) from 1985 to 1987. Prior to that, Mr. Peck
had approximately seven years' experience in oil and gas accounting management
with Minoco Southern Corporation and MCO Resources, Inc. He graduated from
California State University at Long Beach in 1977 with a Bachelor of Science
degree in accounting and finance.
Mr. McMullin joined the Company as Vice President - Land, Contracts
and Acquisitions in August 1992. Prior to joining the Company, Mr. McMullin
was a gas supply manager for Mitchel Marketing Company since
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1991 and for Delhi Gas Pipeline Corporation during 1990. Mr. McMullin also
worked as an Accounts Manager for United Gas Pipeline from 1987 to 1989. From
1980 to 1985, Mr. McMullin worked for Atlantic Richfield Company as a landman.
He holds a Bachelor of Arts degree in petroleum land management from the
University of Texas and earned a Masters in Business Administration from the
University of St. Thomas.
Mr. Cresci has served as a Managing Director of Pecks Management
Partners Ltd., an investment management firm, since September 1990. From 1985
to 1990 Mr. Cresci was Vice President of Alliance Capital Management L.P. Mr.
Cresci currently serves on the boards of directors of Serv-Tech, Inc., EIS
International, Inc., Sepracor, Inc., Vestro Natural Foods, Inc., Olympic
Financial, Ltd., GeoWaste, Inc., Hitox, Inc., Natures Elements, Inc, Garnet
Resources Corporation, Meris Laboratories, Inc. and several private companies.
Mr. Dar has been Chairman of Jefferson Gas Systems, Inc. (a natural
gas and electric power co-investment concern) since May 1991, and the Managing
Director of Dar & Company (a consulting firm to energy companies and financial
institutions) since August 1990. Currently he is Senior Advisor, RCG/Hagler,
Bailly & Company, an international management consulting firm he helped found
in 1980. He was also Chairman of Sunrise Energy Services between 1992 and
1994. Since 1980 Mr. Dar has held a variety of executive positions in the
natural gas industry and with management consulting firms. He has been the
Senior Vice President of American Exploration Company, an oil and gas firm, and
Executive Vice President and Director of Hadson Corporation, a diversified
public company. He was the founder and Chief Executive Officer of four major
Hadson subsidiaries, Hadson Gas Systems, Hadson New Mexico, Hadson Liquid Fuels
and Hadson Electric. He has a Bachelor of Science degree in engineering and a
Master's degree in management and finance from MIT, where he also received his
doctoral training in economics.
Mr. Frischkorn has been Senior Vice President and Managing Director of
the Energy Corporate Finance Department of Rauscher Pierce Refsnes, Inc., an
investment banking firm, since January 1993. From 1988 to 1992, he was
President of Frischkorn & Co., a Houston, Texas-based merchant banking firm
specializing in oil and gas corporate finance services. Prior to that he served
as Vice President, Energy Group of Kidder, Peabody & Co. in Houston, Texas and
Senior Vice President, Corporate Finance of Rotan Mosle, Inc. in Houston. He
holds a Bachelor of Arts degree in economics and german from Tufts University
and a Masters of Business Administration from Columbia.
Mr. Monell has been Vice President and a director of Harrington and
Company since 1986. He has been active in the oil and gas industry since 1976.
In 1976, he co-founded Alexander & Ambrose Oil Corporation, a privately-held
Denver-based exploration company. He graduated from the University of Virginia
in 1976 with a Bachelor of Science degree in foreign affairs.
Mr. Oakes is Managing Director and a principal of Oakes, Fitzwilliams
& Co. Limited, a member of the London Stock Exchange, and which he founded in
1987. In 1973, he joined Dillon, Read & Co. Inc., an investment banking firm,
in London. In 1982, he formed H. L. Oakes & Co. Limited specializing in
arranging venture and development capital for U.S. and U.K. corporations. He
is a director of California Energy Company, Inc., Shared Technologies, Inc.,
The New World Power Corporation and a number of private corporations in the
U.S. and the U.K.
Mr. Shore was founder and has been Chief Executive Officer of
Bakersfield Energy Resources, Inc. since 1990. He is responsible for
evaluating and negotiating acquisitions, and planning the development of oil
and gas properties for Bakersfield Energy Resources, Inc. For 20 years prior
to founding Bakersfield Energy Resources, Inc., Mr. Shore held various
engineering, supervisory and management positions with Mission Resources,
Texaco Inc. and Getty Oil Company in California. Mr. Shore holds a Bachelor of
Science degree in petroleum engineering from Stanford University. He is a
member of the American Petroleum Institute, the Society of Petroleum Engineers
and the California Independent Petroleum Association. Mr. Shore also serves as
a Director of the Stanford University Petroleum Investment Fund.
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COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established an Audit Committee, a Stock
Option and Compensation Committee and an Executive Committee. The Company does
not have a nominating committee.
The current member of the Audit Committee is David E. K. Frischkorn,
Jr. The responsibilities of the Audit Committee include reviewing the scope
and results of audits by the Company's independent auditors, the Company's
compliance with all accounting and financial reporting requirements, the
Company's internal accounting controls, the scope of other services performed
by independent auditors, and the cost of all accounting and financial services,
and to make recommendations to the Board of Directors as to the appointment of
the Company's independent auditors. The Audit Committee held one meeting
during 1994.
The current members of the Stock Option and Compensation Committee are
Vinod K. Dar, Daryl H. Connolly and Herbert L. Oakes, Jr. The functions of the
Stock Option and Compensation Committee are to monitor the Company's executive
compensation plans, practices and policies, including all salaries, bonus and
stock option awards and fringe benefits, and to make recommendations to the
Board of Directors as to changes in existing executive compensation plans and
the formulation and adoption of new executive compensation plans. The Stock
Option and Compensation Committee held two meetings during 1994.
The Board of Directors established the Executive Committee on June 22,
1993. Its current members are James H. Rawls and Daryl H. Connolly. The
functions of the Executive Committee are to approve certain executive actions
of the Company's officers and to keep the Board of Directors informed of any
such actions. The Executive Committee did not hold any meetings during 1994,
and the Board of Directors intends to terminate the Executive Committee at its
first meeting held after the Annual Meeting.
During the year ended December 31, 1994, the Board of Directors held 6
meetings. In 1994, each incumbent director attended at least 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings held by all committees on which he served (in each
case held during the periods that he served).
COMPENSATION OF DIRECTORS
During 1994, nonemployee members of the Board of Directors received
annual compensation of $10,000 plus $1,000 for each meeting of the Board of
Directors attended in person ($250 per telephonic meeting) and reimbursement
for their reasonable expenses incurred in connection with their duties and
functions as directors. Directors of the Company who are also employees do not
receive any compensation for their services as directors.
On October 14, 1992, the Board of Directors adopted the Company's 1992
Nonemployee Directors' Stock Option Plan (the "Directors' Option Plan"). Under
the Directors' Option Plan, upon the later of the effective date of the
Directors' Option Plan or the date of their initial election or appointment to
the Board of Directors, directors who are not employees of the Company were
granted options to purchase 20,000 shares of Common Stock at an exercise price
equal to the fair market value of the Common Stock on the date of grant.
Thereafter, and so long as the Directors' Option Plan is in effect, upon the
completion of each full year of service on the Board of Directors, each
nonemployee director continuing to serve as a director will automatically be
granted an additional option to purchase 5,000 shares of Common Stock at an
exercise price equal to 110% of the fair market value of the Common Stock on
the date of grant. All options granted under the Directors' Option Plan vest
in equal parts over two years.
Upon their initial appointment to the Board of Directors effective
July 6, 1994, Messrs. Cresci and Shore were each granted options to purchase
20,000 shares of common stock at an exercise price of $3.375 per share which
was equal to 100% of the fair market value of the common stock on such date.
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Upon the first anniversary of their election to the Board of Directors
(July 6, 1995), Messrs. Cresci and Shore were each automatically granted
options to purchase 5,000 shares of Common Stock at an exercise price equal to
3.7125 per share, 110% of the fair market value of the Common Stock on such
date. Upon completion of their second full year of service after the effective
date of the Directors' Option Plan (October 14, 1994), Messrs. Connolly, Dar,
Frischkorn, Monell and Rawls were each automatically granted an option to
purchase 5,000 shares of Common Stock at an exercise price equal to $4.33125
per share, 110% of the fair market value of the Common Stock on such date.
Upon the second anniversary of his initial election to the Board of Directors
(November 17, 1994), Mr. Oakes was automatically granted an option to purchase
5,000 shares of Common Stock at an exercise price equal to $3.85 per share,
110% of the fair market value of the Common Stock on such date.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE THREE (3) NOMINEES FOR DIRECTOR NAMED HEREIN.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as to the number and
percentage of shares of Common Stock owned beneficially as of August 1, 1995 by
(i) each person known to the Company to be the beneficial owner of more than 5%
of the Common Stock, (ii) each director and each nominee for election as a
director, (iii) each Named Executive Officer and (iv) all directors and
officers of the Company as a group. Unless otherwise indicated in the
footnotes following the table, each named beneficial owner had sole voting and
investment power over the shares of Common Stock shown as beneficially owned by
them.
Shares Owned
Beneficially Percent
As of of
Beneficial Owner(1) 8/1/95 (2) Class
- ------------------- --------------- -------
Harrington and Company International Incorporated(3) . . . . . . . . . 729,968 8.4
Daryl H. Connolly(4) . . . . . . . . . . . . . . . . . . . . . . . . . 22,850 *
Robert J. Cresci(4)(5) . . . . . . . . . . . . . . . . . . . . . . . . 1,110,000 12.8
Vinod K. Dar(4)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . 172,500 2.0
David E.K. Frischkorn, Jr.(4)(7) . . . . . . . . . . . . . . . . . . . 47,500 *
Mark G. Harrington(4)(8) . . . . . . . . . . . . . . . . . . . . . . . 938,218 10.6
Ambrose K. Monell(4) . . . . . . . . . . . . . . . . . . . . . . . . . 41,421 *
Herbert L. Oakes, Jr.(4) . . . . . . . . . . . . . . . . . . . . . . . 22,500 *
Gary S. Peck(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,750 1.4
James H. Rawls(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,100 *
Francis H. Roth(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 148,125 1.7
Robert A. Shore(4)(9) . . . . . . . . . . . . . . . . . . . . . . . . . 1,108,084 11.7
AGF Management Ltd.(10) . . . . . . . . . . . . . . . . . . . . . . . . 692,500 8.0
Bakersfield Energy Resources, Inc.(11) . . . . . . . . . . . . . . . . 1,098,084 11.6
Granite Capital L.P.(12) . . . . . . . . . . . . . . . . . . . . . . . 612,092 6.9
Pecks Management Partners Ltd.(13) . . . . . . . . . . . . . . . . . . 1,100,000 12.7
Trust Company of the West(14) . . . . . . . . . . . . . . . . . . . . . 1,728,009 19.4
Wellington Management Company(15) . . . . . . . . . . . . . . . . . . . 507,900 5.9
All Directors and Officers as a group
(20 persons)(5)(6)(7)(8)(9)(16) . . . . . . . . . . . . . . . . . . . 3,785,548 36.8
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* Less than 1%
(1) Information with respect to beneficial ownership is based on
information publicly available or furnished to the Company by each
person included in this table.
(2) Includes, in each case, shares deemed beneficially owned by such
persons or entities pursuant to Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended, because such persons or
entities have the right to acquire such shares within 60 days upon the
exercise of stock options or similar rights or because such persons or
entities have or share investment or voting power with respect to such
shares.
(3) The business address of Harrington and Company International
Incorporated is 4400 Post Oak Parkway, Suite 2220, Houston, Texas
77027. Such amount includes (i) 372,305 shares held by Harrington and
Company EV Fund I, Ltd., and (ii) 309,868 shares held by Harrington
and Company EV Fund II, Ltd. (71,429 shares of which are issuable
within 60 days upon conversion of Series A Preferred Stock held by
Harrington and Company EV Fund II, Ltd.), of which limited
partnerships Harrington and Company International Incorporated is the
general or managing partner. The shares held by each such limited
partnership are also deemed to be beneficially owned by such limited
partnership. Harrington and Company International Incorporated
disclaims beneficial ownership of such shares.
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(4) Includes 22,500, 10,000, 22,500, 22,500, 184,500, 22,500, 22,500,
92,750, 22,500, 90,000 and 10,000 shares for Messrs. Connolly, Cresci,
Dar, Frischkorn, Harrington, Monell, Oakes, Peck, Rawls, Roth and
Shore, respectively, purchasable within 60 days upon the exercise of
stock options.
(5) Includes 1,100,000 shares and votes deemed to be beneficially owned by
Pecks Management Partners Ltd., of which Mr. Cresci is a managing
director (See Footnote 13). As a result, Mr. Cresci may be deemed to
share voting and investment power with respect to such shares. Mr.
Cresci disclaims beneficial ownership of such shares.
(6) Includes 150,000 shares purchasable within 60 days upon the exercise
of options held by Jefferson Gas Systems, Inc. of which Mr. Dar is the
Chief Executive Officer and a Director. Such option is exercisable
only upon the Company's exercise of its option to purchase 150,000
Common Shares of Jefferson Gas Systems, Inc.
(7) Includes 25,000 shares issuable within 60 days upon the exercise of
options held by Rauscher Pierce Refsnes, Inc., of which Mr. Frischkorn
is a Senior Vice President and Managing Director. As a result, Mr.
Frischkorn may be deemed to share voting and investment power with
respect to such shares. Mr. Frischkorn disclaims beneficial ownership
of such shares.
(8) Mr. Harrington is the Chief Executive Officer and Chairman of the
Board of Directors of the Company. The number of shares indicated
includes 729,968 shares deemed to be beneficially owned by Harrington
and Company International Incorporated (see footnote 3 above) of which
Mr. Harrington is the majority stockholder, the President and a
director. As a result, voting and investment power over such shares
may be deemed to be shared between Mr. Harrington and Harrington and
Company International Incorporated. Mr. Harrington disclaims
beneficial ownership of such shares.
(9) Includes 1,098,084 shares deemed to be beneficially owned by
Bakersfield Energy Resources, Inc., of which Mr. Shore is the Chief
Executive Officer and a director (see Footnote 11). As a result, Mr.
Shore may be deemed to share voting and investment power with respect
to such shares. Mr. Shore disclaims beneficial ownership of such
shares.
(10) The principal business address for AGF Management Ltd. is P.O. Box 50,
Toronto Dominion Bank Tower, 31st Floor, Toronto, Ontario M5K 1E9.
Includes 550,000 shares beneficially owned by AGF Growth Equity Fund
and 142,500 shares beneficially owned by AGF Canadian Resources Fund.
AGF Management Ltd. is the investment manager of AGF Growth Equity
Fund and AGF Canadian Resources Fund and as such has shared voting and
investment power over all of such shares. AGF Management Ltd.
disclaims beneficial ownership of all of such shares.
(11) The principal business address for Bakersfield Energy Resources, Inc.
is 2131 Mars Court, Bakersfield, California 93308. Includes 857,143
shares of common stock issuable to Bakersfield Gas, L.P. upon its
conversion of 30,000 shares of Series E Preferred Stock, of which
limited partnerships Bakersfield Energy Resources, Inc. is the general
or managing partner. The shares held by each such limited partnership
are also deemed to be beneficially owned by such limited partnership.
(12) The principal business address for Granite Capital L.P. is 375 Park
Avenue, 18th Floor, New York, New York 10152. Includes 256,400 shares
of common stock issuable within 60 days upon conversion of 10,000
shares of the Series C Preferred Stock. Also includes 45,000 shares
beneficially owned by an affiliate of Granite Capital L.P. and 3,000
shares beneficially owned by certain managed accounts for which
Granite Capital is the investment manager and shares voting and
investment power. Granite Capital L.P. disclaims beneficial ownership
of such 3,000 shares.
(13) The principal business address for Pecks Management Partners Ltd. is
One Rockefeller Plaza, New York, New York 10020. As investment
manager for such clients, Pecks Management Partners Ltd. may be deemed
to share voting and investment power with respect to such shares.
(14) The business address of Trust Company of the West ("TCW") is 865 South
Figueroa, Suite 1800, Los Angeles, CA 90017. Includes 253,650 shares
purchasable within 60 days upon the exercise of a warrant held by TCW.
Includes 1,474,359 shares beneficially owned by a General Mills
pension fund, which shares TCW controls voting and investment power as
Investment Manager and Custodian. TCW disclaims beneficial ownership
of the 1,474,359 shares.
-8-
12
(15) The principal business address for Wellington Management Company is 75
State Street, Boston, Massachusetts 02109. Such shares are also
deemed beneficially owned by Wellington Trust Co., N.A., a subsidiary
of Wellington Management Company.
(16) Includes 1,645,822 shares purchasable within 60 days upon the exercise
of stock options and warrants and the conversion of convertible
preferred stock held or deemed to be owned by all officers and
directors.
Holders of the Company's Series B, C and E Preferred Stock have
certain voting rights, including the right to vote together with the holders of
the common stock on all matters voted upon by the holders of the common stock.
In all such matters, holders of the Series B, C and E Preferred Stock have the
number of votes per share of such preferred stock equal to the whole number of
shares of common stock into which each share of such preferred stock is
convertible. The outstanding shares of Series B Preferred Stock are held by
(i) Citibank, N.A., as Trustee for the United Technologies Corporation Master
Retirement Trust, United Technologies Building, Hartford, Connecticut 06101
(25%), (ii) Bankers Trust Company, as Trustee of the Hughes Aircraft Company
Retirement Plan, 7200 Hughes Terrace, Los Angeles, California 90045-0066 (25%),
and (iii) Bankers Trust Company, as Trustee of the GTE Service Corporation Plan
for Employees' Pensions, One Stamford Place, Stamford, Connecticut 06904 (50%).
All of the outstanding shares of the Series C Preferred Stock are held by
Granite Capital Partners, L.P., 666 Fifth Avenue, 33rd Floor, New York, New
York 10103. All outstanding shares of the Series E Preferred Stock are held by
Bakersfield Gas, L.P., 2131 Mars Court, Bakersfield, California 93308.
-9-
13
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation earned during 1994 by the Company's Chief Executive Officer and
each of the Company's two other most highly compensated executive officers
(collectively, the "Named Executive Officers") based on salary and bonus earned
in 1994:
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Awards
----------------------------------- ---------------------
All
Other Annual Securities Other
Name and Compen- Underlying Compen-
Principal Position Year Salary Bonus sation (1) Options (2) sation(3)
------------------ ---- ------ ----- ------------ ----------- ---------
Mark G. Harrington . . . . . . 1994 $ 190,000 $ 62,500 $ -0- 148,750 $ 3,699
Chairman of the Board 1993 190,000 7,917 -0- 40,000 3,455
and Chief Executive
Officer
Francis H. Roth . . . . . . . . 1994 125,000 32,500 -0- 75,625 5,113
President and Chief 1993 125,000 5,208 -0- 25,000 4,779
Operating Officer
Gary S. Peck . . . . . . . . . 1994 100,000 17,500 -0- 42,500 2,306
Vice President -- Finance, 1993 100,000 4,167 -0- 17,500 2,156
Chief Financial Officer
and Secretary
________________
(1) Does not include perquisites and other personal benefits because the value
of these items did not exceed the lesser of $50,000 or 10% of reported
salary and bonus of any of the Named Executive Officers.
(2) No stock appreciation rights ("SARs") were granted to any of the Named
Executive Officers during 1993 and 1994.
(3) Such amounts were premiums paid by the Company for annual disability
insurance for each such officer.
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14
STOCK OPTION GRANTS DURING 1994
The following table provides details regarding stock options granted to the
Named Executive Officers in 1994. The Company does not have any outstanding
SARs.
OPTION GRANTS IN 1994
Number of % of Total
Securities Options Granted
Underlying Options to Employees Exercise or Base
Name Granted (#)(1) in 1994 Price ($/Sh)(2) Expiration Date
------------------ ------------------ --------------- --------------- ---------------
Mark G. Harrington 125,000 48.1% $3.71 July 6, 1999
Francis H. Roth 60,000 23.1% $3.38 July 6, 1999
Gary S. Peck 30,000 11.5% $3.38 July 6, 1999
- --------------
(1) Fifty percent of the options were vested immediately upon grant and the
remaining 50% become exercisable upon a successful completion of the sale
of a secondary public sale of the Company's equity securities. If the
Company recapitalizes or otherwise changes its capital structure,
thereafter upon any exercise of an option the optionee will be entitled to
purchase, in lieu of the number and class of shares of Common Stock then
covered by such option, the number and class of shares of stock and
securities to which the optionee would have been entitled pursuant to the
terms of the recapitalization if, immediately prior to such
recapitalization, the optionee had been the holder of record of the number
of shares of Common Stock then covered by such option. If there is a
Corporate Change, as defined in the 1994 Stock Option Plan, then the Stock
Option and Compensation Committee, acting in its sole discretion, has the
following alternatives, which may vary among individual optionees: (1)
accelerate the time at which options then outstanding may be exercised, (2)
require the surrender to the Company by selected optionees of some or all
of the outstanding options held by such optionees, in which event the
Committee will thereupon cancel such options and pay to each optionee a
certain amount of cash or (3) make such adjustments to the options then
outstanding as the Committee deems appropriate to reflect such Corporate
Change. Any adjustment provided for pursuant to this paragraph will be
subject to any required stockholder action.
(2) The exercise price per share with respect to the stock options granted to
Messrs. Roth and Peck in 1994 is equal to the closing bid price of the
Common Stock on the date of grant thereof, as quoted by the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"). Pursuant to the terms of the 1994 Stock Option Plan, because
Mr. Harrington is deemed to own more than 10% of the Common Stock, the
exercise price per share of all options granted to him in 1994 was 110% of
the closing bid price of the Common Stock on the date of grant thereof, as
quoted by NASDAQ.
-11-
15
1994 OPTION EXERCISES AND OUTSTANDING STOCK OPTION VALUES AS OF
DECEMBER 31, 1994
The following table shows the number of shares acquired by the Named
Executive Officers upon their exercise of stock options during 1994, the value
realized by such Named Executive Officers upon such exercises, the number of
shares of Common Stock covered by both exercisable and non-exercisable stock
options as of December 31, 1994 and their values at such date.
AGGREGATED OPTION EXERCISES IN 1994
AND OPTION VALUES AT DECEMBER 31, 1994
Number of Securities
Shares Underlying Unexercise Value of Unexercised
Acquired on Value Realized Options at In-the-Money Options at
Name Exercise (#) ($) (1) December 31, 1994 (#) December 31, 1994 ($)(2)
-------------------------- ------------ -------------- ----------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Mark G. Harrington -0- N/A 184,500 82,500 24,000 -0-
Francis H. Roth -0- N/A 90,000 42,500 24,000 -0-
Gary S. Peck 15,000 21,563 92,750 23,750 44,000 -0-
- ----------------------
(1) The closing bid price of the Common Stock as quoted by NASDAQ on September
30, 1994, the date of exercise of such options, was $3.625. The value
realized is calculated on the basis of the difference between the exercise
price of such options and $3.625, multiplied by the number of shares of
Common Stock issued upon exercise. The exercise price of the options
exercised by Mr. Peck was $2.1875 per share.
(2) On December 31, 1994, the closing bid price of the Common Stock as quoted
by NASDAQ was $3.00 per share. Value is calculated on the basis of the
difference between the option price and $3.00, multiplied by the number of
shares of Common Stock granted at that option price. The option price for
exercisable options granted to Mr. Harrington, Mr. Roth and Mr. Peck
covering 30,000, 30,000 and 55,000 shares, respectively, is $2.20 per
share. The option prices for the remaining exercisable options and all of
the unexercisable options are higher than $3.00 and therefore no value is
ascribed to such options in the above table.
-12-
16
1994 RESTRICTED SHARE GRANTS AND RESTRICTED SHARE VALUES AS OF
DECEMBER 31, 1994
The following table shows the number of restricted shares of common stock
granted to the Named Executive Officers during 1994 and their values at
December 31, 1994:
RESTRICTED STOCK GRANTS IN 1994 AND
RESTRICTED STOCK VALUES AT DECEMBER 31, 1994
Number and Value of
Restricted Shares at
Restricted Restricted December 31, 1994
Shares Share Value -----------------------
Name Granted (#) ($) Shares (#) Value ($)
------------------------------------------- ----------- ----------- ---------- ---------
Mark G. Harrington . . . . . . . . . . . . 23,750 95,000 23,750 71,250
Francis H. Roth . . . . . . . . . . . . . . 15,625 62,500 15,625 46,875
Gary S. Peck . . . . . . . . . . . . . . . 12,500 50,000 12,500 37,500
- ---------------------
(1) The Restricted Shares may not be sold, tendered, assigned, transferred,
pledged or otherwise encumbered prior to the earliest of April 28, 1997
(lapse date), the date of a grantee's death or disability, or the date of a
"Change of Control" of the Company, as defined in the Restricted Stock
Agreement. In the event that a grantee terminates employment with the
Company prior to the lapse date, the Restricted Shares shall revert back to
the Company; provided, however, in the event a grantee is involuntarily
terminated for any reason other than cause, the Compensation Committee of
the Board of Directors of the Company administering this Agreement may, at
its sole discretion, determine to release a prorated number of Restricted
Shares, based on the number of months of active employment service during
the restriction period, as a percentage of the total months of the
restriction period.
(2) The Restricted Share value is calculated by multiplying the number of
Restricted Shares granted by the "Current Stock Price" per share, as
defined and set out in a specified formula, equal to the high bid price of
the common stock as quoted by NASDAQ on April 28, 1994, which was $4.00 per
share.
(3) The value of Restricted Shares at December 31, 1994 is calculated by
multiplying the number of Restricted Shares by the December 31, 1994
closing bid price of the common stock as quoted by NASDAQ, which was $3.00
per share.
-13-
17
TRANSACTIONS WITH RELATED PARTIES
The Company completed an agreement with Bakersfield Gas, L.P. in June 1995
for the exchange of a warrant to purchase 1,000,000 shares of Common Stock for
182,500 shares of Common Stock of the Company. Robert A. Shore, one of the
Company's directors, is the Chief Executive Officer of Bakersfield Energy
Resources, Inc., the general partner of Bakersfield Gas, L.P.
The Company completed an agreement with the Series D Holders, on July 24,
1995, for the exchange of warrants to purchase 3,424,666 shares of Common Stock
for 1,100,000 shares of Common Stock of the Company. Robert J. Cresci, one of
the Company's directors, is a managing director of Pecks Management Partners
Ltd., the investment advisor to the Series D Holders.
The Company has made loans from time to time to Mark G. Harrington, Chief
Executive Officer, Chairman of the Board of Directors and stockholder of the
Company. Total loans made to Mr. Harrington during 1991 aggregated $35,000 and
total loans made to Mr. Harrington during 1992 were $40,000. In lieu of
payment of a cash bonus to Mr. Harrington for his performance in 1992, the
Company forgave $25,000 of such loans. No such loans were made during 1994.
Total loans outstanding to Mr. Harrington on April 30, 1995 were $15,000. All
loans to Mr. Harrington carry an interest rate of 10% simple interest per
annum.
The Company incurred expenses of approximately $150,000 in 1994 for
investment banking advice to the investment banking firm of Rauscher Pierce
Refsnes, Inc., of which David E.K. Frischkorn, Jr., a director of the Company,
is a Managing Director.
Vinod K. Dar, one of the Company's directors, was the Chairman of the Board
of Directors and Chief Executive Officer of Sunrise Energy Services, Inc.
("Sunrise Energy") from October 1992 to October 1994. As part of the Company's
acquisition of the Bakersfield Properties, the Company was assigned an interest
in a previously existing gas marketing contract with Sunrise Energy Marketing
Company ("Sunrise Marketing"), a subsidiary of Sunrise Energy, whereby Sunrise
Marketing agreed to pay $1.97 per one million British thermal units ("MMBtu")
for the delivery of 2,250 MMBtu of gas per day from the Bakersfield Properties
during June, July and August of 1994. As of December 20, 1994, Sunrise
Marketing owed the Company approximately $92,000 for gas delivered by the
Company during the term of such contract. On November 15, 1994, Sunrise
Marketing filed a voluntary petition for protection under Chapter 11, Title 11
of the United States Bankruptcy Code. The $92,000 amount owed to the Company
by Sunrise Marketing is an unsecured claim and, as such, the Company is unable
to determine whether such amount will be paid and if such amount is paid in
full or in part, when such amount will be paid.
SECTION 16 REPORTING
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership to the Securities and Exchange Commission
(the "Commission"). Officers, directors and greater than 10% stockholders are
required by the Commission regulations to furnish the Company with copies of
all Section 16(a) reports they file. Based solely on its review of copies of
such reports received by it and written representations from certain reporting
persons that no Forms 5 were required for those persons, the Company believes
that, during the period from January 1, 1994 to December 31, 1994 all filing
requirements applicable to its officers, directors and greater than 10%
stockholders were complied with.
-14-
18
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1996 Annual
Meeting of Stockholders must be received by the Company at its principal
executive office by February 1, 1996, in order for such proposals to be
included in the Company's proxy statement and form of proxy for such meeting.
Stockholders submitting such proposals are requested to address them to the
Secretary, HarCor Energy, Inc., 4400 Post Oak Parkway, Suite 2220, Houston,
Texas 77027. It is suggested that such proposals be sent by certified mail,
return receipt requested.
INDEPENDENT AUDITORS
Arthur Andersen & Co. has been selected to serve as the Company's
independent auditors for 1995. Representatives of that firm will be present at
the Annual Meeting to respond to appropriate questions and will be given an
opportunity to make a statement if they so desire.
OTHER MATTERS
The Company knows of no other matters to be presented at the Annual
Meeting, but if any other matters should properly come before the meeting, it
is intended that the persons named in the accompanying proxies will vote the
same in accordance with their best judgment.
The Company hereby incorporates by reference into this Proxy Statement the
following information from its Annual Report on Form 10-K which is included in
the HarCor Energy, Inc. 1994 Annual Report being delivered herewith:
Management's Discussion and Analysis of Financial Condition and Results of
Operations and Financial Statements and the Notes thereto.
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN THE ACCOMPANYING
PROXY CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
Gary S. Peck
Secretary
Houston, Texas
September 1, 1995
-15-
19
PROXY HARCOR ENERGY, INC.
Proxy for 1995 Annual Meeting
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Mark G. Harrington, Gary S. Peck, Francis
H. Roth, and each of them, with or without the others, with full power of
substitution, to vote all shares of stock that the undersigned is entitled to
vote at the 1995 Annual Meeting of Stockholders of HarCor Energy, Inc. (the
"Company"), to be held in Houston, Texas on September 26, 1995, at 10:00 a.m.
(local time) and all adjournments and postponements thereof as follows:
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
20
I plan to attend
the meeting.
/ /
This Proxy will be voted as you specify above. If no specification is made,
this Proxy will be voted with respect to item (1) FOR the nominees listed and
FOR proposal (2), above. Receipt of the Notice of the 1995 Annual Meeting and
the related Proxy Statement is hereby acknowledged.
1. Election of Directors
WITHHOLD
FOR AUTHORITY
all nominees listed below to vote for all
(except as marked to the nominees listed
contrary below) below
/ / / /
2. In their discretion, upon any other business which may properly come before
said meeting.
FOR AGAINST ABSTAIN
/ / / / / /
(INSTRUCTION: To withhold authority to vote for any individual nominees strike
a line through the nominee's name in the list below.)
Herbert L. Oakes, Jr. (Class I)
Francis H. Roth (Class I)
Ambrose K. Monell (Class II)
Please sign your name exactly as it appears
hereon. Joint owners must each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title
as it appears herein. If held by a
corporation, please sign in the full
corporate name by the president or other
authorized officer.
Dated: , 1995
--------------------------------
---------------------------------------------
Signature
---------------------------------------------
Signature, if jointly held