<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HARKEN ENERGY CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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 (Set forth the amount on which the filing is
calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
<PAGE> 2
HARKEN ENERGY CORPORATION
16285 PARK TEN PLACE, SUITE 600
HOUSTON, TEXAS 77084
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 7, 2000
Notice is hereby given that a Special Meeting of Stockholders (the
"Special Meeting") of Harken Energy Corporation, a Delaware corporation
("Harken"), will be held at the Houston Marriott North, 255 North Sam Houston
Parkway East, Houston, Texas 77060, on Tuesday, November 7, 2000, at 8:00 a.m.,
local time, for the following purposes:
(1) To consider and act upon a proposal to amend Harken's
Certificate of Incorporation to effect a one-for-ten reverse
stock split; and
(2) To transact such other business as may properly be brought
before the Special Meeting or any adjournment or postponement
thereof.
The Board of Directors has fixed the close of business on September 26,
2000, as the date of record for determining the stockholders entitled to notice
of and to vote, either in person or by proxy, at the Special Meeting and any
adjournment or postponement thereof.
A Proxy Statement containing information relating to the matters to be
acted upon at the Special Meeting and a form of Proxy accompany this Notice.
You are cordially invited to attend the Special Meeting. WHETHER OR NOT
YOU PLAN TO ATTEND, YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY
SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER
THAT THE PRESENCE OF A QUORUM MAY BE ASSURED. The giving of such proxy does not
affect your right to revoke it later or vote your shares in person if you should
attend the Special Meeting.
By Order of the Board of Directors
/s/ KAREN KERR-JOHNSON
Karen Kerr-Johnson
Assistant Secretary
Houston, Texas
October 6, 2000
<PAGE> 3
HARKEN ENERGY CORPORATION
16285 PARK TEN PLACE, SUITE 600
HOUSTON, TEXAS 77084
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 7, 2000
SOLICITATION OF PROXIES
The accompanying proxy is solicited on behalf of the Board of Directors
of Harken Energy Corporation, a Delaware corporation ("Harken"), in connection
with a Special Meeting of Stockholders (the "Special Meeting"), which will be
held at the Houston Marriott North, 255 North Sam Houston Parkway East, Houston,
Texas 77060, on Tuesday, November 7, 2000, at 8:00 a.m., local time, and at any
adjournments or postponements thereof, for the purposes described in the
accompanying notice. This Proxy Statement and the accompanying Proxy will first
be mailed to stockholders of record on or about October 6, 2000.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on September 26,
2000, as the Record Date (herein so called) for determining the holders of
common stock, $0.01 par value per share, of Harken ("Common Stock") entitled to
notice of and to vote, either in person or by proxy, at the Special Meeting. The
shares of Common Stock are the only shares of capital stock entitled to vote at
the Special Meeting. On September 26, 2000, Harken had 176,782,809 shares of
Common Stock outstanding.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Special Meeting
is necessary to constitute a quorum at the Special Meeting. Abstentions and
broker non-votes are counted for purposes of determining whether a quorum is
present. If a quorum is not present or represented by proxy, the stockholders
entitled to vote at the meeting, present in person or represented by proxy, have
the power to adjourn the meeting from time to time, without notice other than an
announcement at the meeting until a quorum is present or represented. At any
such adjourned meeting at which a quorum is presented or represented, any
business may be transacted that might have been transacted at the meeting as
originally called.
On all matters submitted to a vote of the stockholders at the Special
Meeting or any adjournment thereof, each stockholder will be entitled to one
vote for each share of Common Stock owned of record by such stockholder at the
close of business on September 26, 2000.
Abstentions and broker non-votes will be treated as a vote against the
proposed amendment to Harken's Certificate of Incorporation to effect the
Reverse Split (as defined below).
<PAGE> 4
ACTIONS TO BE TAKEN UNDER THE PROXY
Proxies which are properly executed and returned will be voted at the
meeting and any adjournment thereof in accordance with the instructions thereon.
Any proxy upon which no instructions have been indicated will be voted FOR
approval of the proposed amendment to Harken's Certificate of Incorporation that
would effect the Reverse Split.
Harken knows of no other matters, other than the amendment to Harken's
Certificate of Incorporation to effect the Reverse Split, to be presented for
consideration at the meeting. If, however, other matters properly come before
the meeting or any adjournments thereof, it is the intention of the persons
named in the accompanying proxy to vote such proxy in accordance with their
judgement on any such matters. The persons named in the accompanying proxy may
also, if it is deemed advisable, vote such proxy to adjourn the meeting from
time to time.
PROXY SOLICITATION
The expense of the solicitation of proxies will be borne by Harken.
Solicitation of proxies may be made in person or by mail, telephone or telegraph
by directors, executive officers and other employees of Harken. Harken will
request banking institutions, brokerage firms, custodians, nominees and
fiduciaries to forward solicitation material to the beneficial owners of Common
Stock held of record by such persons, and Harken will reimburse such entities
for their reasonable out-of-pocket expenses. Harken has retained the services of
ChaseMellon Shareholder Services to solicit proxies by mail, telephone,
telegraph or personal contact. The estimated cost of the professional
solicitation will be approximately $7,500.00 plus out-of-pocket expenses.
REVOCATION OF PROXY
Any stockholder returning the accompanying proxy may revoke such proxy
at any time prior to its exercise (a) by giving written notice to the Secretary
or Assistant Secretary of Harken of such revocation; (b) by voting in person at
the meeting; or (c) by executing and delivering to the Secretary or Assistant
Secretary of Harken a later dated proxy.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO EFFECT THE REVERSE SPLIT
The Board of Directors has adopted, and proposes that the stockholders
of Harken approve, an amendment to the Certificate of Incorporation that would
effect a one-for-ten reverse stock split of the outstanding shares of Common
Stock, but would maintain the authorized number of shares of Common Stock at
225,000,000 shares and maintain the par value of the Common Stock at $0.01 per
share (collectively, the "Reverse Split"). The authorized number of shares
(10,000,000) and par value ($1.00) of Harken's Preferred Stock would remain
unchanged.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO EFFECT THE REVERSE SPLIT.
REASONS FOR THE REVERSE SPLIT
Possible Increase in Stock Price. The Board of Directors believes that
the completion of the Reverse Split will cause the trading price of the Common
Stock to increase proportionately. There can be no assurance, however, that the
Reverse Split will result in any change in the price of the Company's Common
Stock or that, if the price of the Company's Common Stock does increase as a
result of the Reverse Split,
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<PAGE> 5
such increase will be proportionate to the decrease in the amount of outstanding
shares of Common Stock resulting from the Reverse Split.
Marketability. If the per share price of the Common Stock were to
increase as a result of the Reverse Split, the Board of Directors believes that
the Reverse Split may result in a broader market for the Common Stock than
currently exists due to such increase of the per share price. The Board of
Directors believes that the present level of the per share market price of the
Common Stock impairs the acceptability of the stock by portions of the financial
community and the investing public. Theoretically, the price per share of stock
should not, of itself, affect the marketability of the stock, the type of
investor who acquires the stock, or a company's reputation in the financial
community. However, in practice, the price per share does affect the stock
because many investors look upon low priced stock as unduly speculative in
nature, and, as a matter of policy, avoid investment in such stocks. The
increased price per share may encourage interest and trading in the Common Stock
and possibly promote greater liquidity for Harken's stockholders, although such
liquidity could be adversely affected by the reduced number of shares
outstanding after the Reverse Split. Nonetheless, there is no assurance that
these effects will occur or that the per share price level of the Common Stock
immediately after the proposed Reverse Split will be maintained for any period
of time.
Commissions. In addition, the Board of Directors believes that the
Reverse Split may improve the liquidity of Harken's Common Stock in another
manner. Frequently, brokers charge trading commissions based upon the number of
shares purchased. As a result, this trading commission per share is relatively
higher as a percentage of the value of the shares of Harken's Common Stock
purchased. The Board of Directors and management believe that the relatively
high trading cost of Harken's Common Stock may adversely impact the liquidity of
Harken's Common Stock by making it a less attractive investment than the stock
of other companies in Harken's industry. If the Reverse Split is effected and
the price of Harken's Common Stock rises correspondingly, the trading costs for
Harken's Common Stock would decrease.
Increase of Surplus. As a part of the Reverse Split, Harken's surplus
would be increased as a result of maintaining the par value of the Common Stock
at $0.01 per share but decreasing the number of issued shares of Harken. Under
the Delaware General Corporation Law (the "DGCL"), a corporation is permitted to
purchase its own shares of capital stock or to declare dividends only to the
extent that the corporation has an amount of surplus equal to or greater than
the amount of the stock redemption or dividend. Under the DGCL, the "surplus" of
a corporation is defined as the excess of the net assets of a corporation less
the stated capital of a corporation. The "stated capital" of a corporation is
equal to the number of issued shares of the corporation multiplied by the par
value of the shares. The "net assets" of a corporation are the assets minus the
liabilities of a corporation. Because the number of issued shares of Harken will
decrease as a result of the Reverse Split but the par value will remain the
same, the stated capital of Harken will necessarily decrease. The amount by
which the stated capital decreases will be considered additional surplus of
Harken. Despite the increase in the amount of surplus that would be caused by
the surplus, Harken at this time has no plans, other than in connection with the
Common Stock repurchase program announced on September 25, 2000 and the
redemption of fractional shares created by the Reverse Split as described below,
to redeem its shares of Common Stock or to declare a dividend on its shares of
Common Stock.
Effect on Earnings Per Share. The Board of Directors believes that the
total number of shares currently outstanding is disproportionately large
relative to Harken's present market capitalization. Moreover, when such a large
number of shares is outstanding, earnings per share is only affected by a
significant change in net earnings. If a smaller number of shares were
outstanding, management would be more likely to see its revenue efforts and cost
savings reflected in Harken's earnings per share.
Effective Increase of Authorized Shares of Common Stock. As a part of
the Reverse Split, Harken proposes to effectively increase the number of
authorized shares of Common Stock by maintaining the
3
<PAGE> 6
authorized number at 225,000,000 shares. Harken believes that the Reverse Split
will provide greater flexibility to issue additional equity securities, for
example to raise additional capital or to pursue opportunities for expansion
through acquisitions. The amount of the Preferred Stock outstanding would not be
affected by the Reverse Split. The Board of Directors believes the proposed
amounts of Common Stock and Preferred Stock authorized for issuance are adequate
to meet Harken's needs in the foreseeable future. If the Reverse Split is
approved, no stockholder approval will be solicited for the issuance of all or
any portion of the additional shares of Common Stock and Preferred Stock unless,
required by law or any rules or regulations to which Harken is subject.
EFFECT OF REVERSE SPLIT ON STOCKHOLDERS
The proposed Reverse Split will not affect any stockholder's
proportionate equity interest in Harken, except for those stockholders who would
receive cash in lieu of fractional shares. Holders of Common Stock will continue
to be entitled to receive such dividends as may be declared by the Board of
Directors. Outstanding warrants, stock options under Harken's stock option plan
and other securities convertible into Common Stock will be adjusted to reflect
the ratio of the Reverse Split if such transaction is effected. Harken's
reporting obligations under the Securities Exchange Act of 1934, as amended,
will not be affected by the Reverse Split.
EFFECT OF REVERSE SPLIT ON CAPITAL STOCK
Harken's Certificate of Incorporation currently authorizes the issuance
of 225,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock.
At the Record Date, Harken had outstanding 176,782,809 shares of Common Stock,
leaving a total of 48,217,191 authorized and unissued shares of Common Stock
available for future issuances. Following the Reverse Split, Harken will have
approximately 17,678,281 shares of Common Stock outstanding, leaving
approximately 207,321,719 authorized but unissued shares of Common Stock
available for issuance. The par value of the Common Stock would remain at $0.01
per share. Because the number of issued shares of Harken would decrease but the
par value would remain the same after the Reverse Split, Harken's stated capital
would decrease by approximately $1,591,200, and Harken's surplus account would
increase by a corresponding amount. This change in Harken's capital accounts
would be reflected in Harken's financial statements, along with a notation of
the change in outstanding shares of Common Stock, as a result of the Reverse
Split.
If the amendment is approved by the stockholders, Harken will file a
Certificate of Amendment (the "Certificate of Amendment") to its Certificate of
Incorporation with the Secretary of State of the State of Delaware promptly
following the conclusion of the meeting. The proposed amendment would become
effective on the date provided in the Certificate of Amendment (the "Effective
Date"). On the Effective Date, without further action of Harken or its
stockholders, (i) every ten shares of Common Stock outstanding will
automatically be reverse of Amendment split into one share outstanding, (ii) the
number of shares of authorized Common Stock will remain fixed at 225,000,000 and
(iii) the par value of the Common Stock will remain at $0.01 per share. Based on
information as of the Record Date, Harken anticipates that the number of
outstanding shares of Common Stock, after giving effect to the Reverse Split,
will be approximately 17,678,281 shares. Upon filing the Certificate of
Amendment, Harken will notify the stockholders that the Reverse Split has been
effected.
4
<PAGE> 7
EXCHANGE OF CERTIFICATES; NO FRACTIONAL SHARES
To effect the Reverse Split, Harken will issue certificates
representing one share of Common Stock in exchange for each ten shares of Common
Stock presently outstanding upon surrender of an existing certificate evidencing
outstanding shares of Common Stock.
NO FRACTIONAL SHARES OF COMMON STOCK WILL BE ISSUED IN CONNECTION WITH
THE PROPOSED REVERSE SPLIT. ASSUMING THE APPROVAL OF THE REVERSE SPLIT, A
STOCKHOLDER WHO WOULD OTHERWISE BE ENTITLED TO RECEIVE A FRACTIONAL SHARE OF
COMMON STOCK WILL RECEIVE, IN LIEU THEREOF, CASH IN A PROPORTIONAL AMOUNT EQUAL
TO THE CLOSING PRICE OF THE COMMON STOCK ON AMERICAN STOCK EXCHANGE ON THE
RECORD DATE.
Harken will appoint ChaseMellon Shareholder Services as exchange agent
("Exchange Agent") in connection with the Reverse Split. As soon as practicable
after the Effective Date, the holders of the Common Stock will be notified and
requested to surrender to the Exchange Agent any certificate(s) representing
outstanding shares of Common Stock in exchange for certificate(s) representing
the reduced number of shares of Common Stock that will result from the Reverse
Split, together with cash in lieu of any fractional share. On the Effective
Date, each certificate representing shares of Common Stock will be deemed for
all purposes to represent the reduced number of shares of Common Stock that will
result from the Reverse Split, whether or not the certificates representing the
outstanding Common Stock are surrendered for exchange.
Harken will deposit with the Exchange Agent, as soon as practicable
after the Effective Date, cash in an amount equal to the value of the estimated
aggregate number of fractional shares that will result from the Reverse Split.
Any portion of the cash deposited with the Exchange Agent to pay for fractional
shares that is held by the Exchange Agent six months after the Effective Date
will be returned to Harken, on demand. Thereafter, holders of post-split shares
eligible for this cash settlement would be paid directly by Harken. Based on the
aggregate number of shares owned by record holders as of the Record Date, Harken
estimates that payments for fractional shares resulting from the Reverse Split
will aggregate approximately $50,000. Harken intends to use existing cash for
such purpose. Harken currently has approximately 4,000 stockholders of record,
and following the Reverse Split, Harken does not anticipate that this number
will change materially.
NO DISSENTER'S RIGHTS
The DGCL does not give stockholders of a Delaware corporation
dissenter's rights with respect to the Reverse Split.
RESALES OF RESTRICTED SECURITIES
The proposed amendment will not affect the transferability of shares of
Common Stock or any present restriction on the sale thereof. Therefore, for
purposes of determining the relevant holding period as prescribed by Rule 144
under the Securities Act of 1933, as amended, the shares of Common Stock to be
issued to each stockholder after the Effective Date will be deemed to have been
acquired on the date on which the stockholder acquired the shares of Common
Stock held immediately prior to the Effective Date.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of the federal income tax
consequences of the Reverse Split. The discussion is based on the present
federal income tax law. The discussion is not, and should not be relied on as, a
comprehensive analysis of the tax issues arising from or relating to the
proposed amendment. Accordingly, stockholders are urged to consult their
personal tax advisors for an analysis of the effect of the Reverse Split on
their respective tax situations, including consequences under applicable state
tax laws.
5
<PAGE> 8
The Reverse Split will be deemed to be a tax-free recapitalization to
Harken and its stockholders to the extent that outstanding shares of Common
Stock are exchanged for a reduced number of shares of Common Stock. Therefore,
neither Harken nor its stockholders will recognize any gain or loss for federal
income tax purposes as a result thereof. However, if a stockholder receives cash
in lieu of any fractional share interest in the Common Stock, such stockholder
will be treated as having received the cash in redemption of his or her
fractional share interest. Depending on the stockholder's retained stock
interest, such cash redemption will be treated as either (i) a dividend to the
extent of Harken's current and accumulated earnings and profit with any excess
first applied against the stockholder's adjusted tax basis allocable to the
fractional share interest ("Basis") and the remainder treated as gain from the
sale or exchange of the fractional shares or (ii) gain or loss from the sale or
exchange of the fractional shares in an amount equal to the difference, if any,
between the cash received and the stockholder's Basis.
The shares of Common Stock to be issued to each stockholder will have
an aggregate basis, for computing gain or loss, equal to the aggregate basis of
the shares of Common Stock held by such stockholder immediately prior to the
Effective Date, less any basis allocable to the fractional shares redeemed (if
any) to the extent such redemption is treated as a sale or exchange under the
preceding paragraph. A stockholder's holding period for the shares of Common
Stock to be issued will include the holding period for shares of Common Stock
exchanged therefor, provided, that such outstanding shares of Common Stock were
held by the stockholder as capital assets on the Effective Date.
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
If the Reverse Split is approved, the Certificate of Incorporation will
be amended by deleting the first paragraph of Article Four in its entirety and
inserting in its place the following five paragraphs:
The aggregate number of shares which the Corporation shall
have the authority to issue is two hundred thirty-five million
(235,000,000), of which two hundred twenty-five million (225,000,000)
shall be designated as Common Stock of the par value of One Cent ($.01)
per share and ten million (10,000,000) shall be designated as Preferred
Stock of the par value of One Dollar ($1.00) per share.
The Corporation does, by this Amendment to the Certificate of
Incorporation (such Amendment to the Certificate of Incorporation being
effective upon its filing with the Secretary of State of the State of
Delaware, with the time of such effectiveness being hereinafter
referred to as the "Effective Time"), reclassify its shares of Common
Stock, par value $.01 per share (the "Old Common Stock") issued and
outstanding immediately before the Effective Time and cancel its
unissued shares of Old Common Stock unissued before the Effective Time,
as set forth herein.
All of the shares of Old Common Stock that were authorized but
unissued immediately before the Effective Time, shall, at the Effective
Time, be canceled. The Old Common Stock shall be superseded by the
authorized but unissued shares of Common Stock, $0.01 par value of the
Corporation.
Each ten shares of Old Common Stock outstanding immediately
before the Effective Time, and each ten shares of Old Common Stock
issuable pursuant to an instrument exercisable for shares of Old Common
Stock (including, but not limited to, all outstanding options and
warrants to acquire Old Common Stock and the Corporation's 5% Senior
Convertible Notes Due 2003), shall, at the Effective Time, be
reclassified as and converted into, and become a right to receive, and
the holders of the outstanding Old Common Stock or instruments
exercisable for such Old Common Stock shall be entitled to receive
therefor upon surrender of the certificates representing such shares of
Old Common Stock to the Corporation, or upon exercise of such
instrument, one share of Common Stock, $0.01 par value of the
Corporation, subject to the treatment of fractional shares set forth
herein.
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<PAGE> 9
No scrip or fractional certificates will be issued. In lieu of
fractional shares, the Corporation will pay a cash adjustment in
respect of such fraction of a share in an amount equal to the same
fraction of the closing sale price of the Common Stock as quoted on the
American Stock Exchange, or such other representative price as
determined by the officers of the Corporation, as of the closing of
business on September 26, 2000.
APPROVAL OF REVERSE SPLIT
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock outstanding and entitled to vote on the Record Date is
required to approve the Reverse Split.
OWNERSHIP OF COMMON STOCK
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of September 26, 2000, there was no person known by Harken to
beneficially own five percent (5%) or more of the outstanding shares of Common
Stock.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of September 26, 2000, information
regarding the number of shares of Common Stock beneficially owned by each
Director, Harken's Chief Executive Officer and Harken's four most highly
compensated executive officers other than the Chief Executive Officer during
1999, and all of Harken's Directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Percent of
Name Owned Class
------------------------------------------------ ----------------- -----------
<S> <C> <C>
Michael M. Ameen, Jr. 126,000 (1) (2)
Larry G. Akers 10,000 (2)
Mikel D. Faulkner 2,501,242 (3) 1.35 %
Bruce N. Huff 1,042,500 (4) (2)
Hobart A. Smith 155,950 (5) (2)
William Petty 15,000
Guillermo Sanchez 571,250 (4) (2)
Gary B. Wood 477,338 (6) (2)
Stephen C. Voss 1,032,500 (4) (2)
Larry E. Cummings 379,239 (7) (2)
All Directors and Executive Officers as a 6,665,869 (8) 3.77 %
Group (15 persons)
</TABLE>
--------------------
(1) Includes 105,000 shares issuable within 60 days upon exercise of
options issued by Harken.
(2) Less than one percent (1%).
(3) Includes 2,391,242 shares issuable within 60 days upon exercise of
options issued by Harken.
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<PAGE> 10
(4) Represents shares issuable within 60 days upon exercise of options
issued by Harken.
(5) Includes 106,250 shares issuable within 60 days upon exercise of
options issued by Harken.
(6) Includes 48,588 shares owned by Concorde Financial Corporation which is
90% owned by Dr. Wood, 75,000 shares owned by Partners Trust and 10,000
shares held by Stephanie's Partners Trust, both trusts established for
the benefit of Dr. Wood's children, 85,000 shares held by J&L Partner's
Trust, of which Dr. Wood is the primary beneficiary, 15,000 shares held
by Wood Management Trust, of which Dr. Wood is a potential beneficiary,
and 108,750 shares issuable within 60 days upon exercise of options
issued by Harken.
(7) Includes 337,564 shares issuable within 60 days upon exercise of
options issued by Harken.
(8) Includes 6,064,906 shares issuable within 60 days upon exercise of
options issued by Harken.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Under the SEC's proxy rules, stockholder proposals that meet certain
conditions may be included in Harken's proxy statement and form of proxy for a
particular annual meeting. Stockholders that intend to present a proposal at
Harken's 2001 Annual Meeting of Stockholders must send the proposal to Harken so
that it is received at Harken's principal executive offices no later than
December 31, 2000 to be considered for inclusion in the proxy statement and form
of proxy related to the 2001 Annual Meeting of Stockholders. Stockholders that
intend to present a proposal that will not be included in the proxy statement
and the form of proxy, must give notice to Harken no later than March 15, 2001.
Any and all such proposals and notices should be sent to the attention of the
Secretary of Harken. Any and all such proposals should be in compliance with
other applicable Securities and Exchange Commission regulations in order to be
included in Harken's proxy materials or in its presentation at the 2001 Annual
Meeting.
By Order of the Board of Directors
/s/ KAREN KERR-JOHNSON
Karen Kerr-Johnson,
Assistant Secretary
Houston, Texas
October 6, 2000
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<PAGE> 11
HARKEN ENERGY CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 7, 2000
The undersigned hereby (1) acknowledges receipt of the Notice of
Special Meeting of Stockholders of Harken Energy Corporation ("Harken") to be
held November 7, 2000, and (2) constitutes and appoints Anna Williams, Elmer
Johnston, and Karen S. Kerr-Johnson, and each of them, attorneys and proxies of
the undersigned, with full power of substitution to each, for and in the name,
place, and stead of the undersigned, to vote, and to act in accordance with the
instructions given below with respect to, all of the shares of Common Stock of
Harken standing in the name of the undersigned or with respect to which the
undersigned is entitled to vote and act at that meeting and at any meetings to
which that meeting is adjourned. In their discretion, the proxies may vote upon
such other matters as may properly come before the meeting.
PROPOSAL: Approval of an amendment to Harken's Certificate of
Incorporation to effect a one-for-ten reverse stock split.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 12
You are encouraged to specify your choices by marking the appropriate
boxes (SEE REVERSE SIDE), but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. This Proxy will be
voted as specified. If no specification is made this Proxy will be voted FOR the
proposal. Your shares cannot be voted unless you sign and return this card.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO EFFECT THE REVERSE SPLIT.
------------------------ ---------------------- -------------------------
(Signature) (Signature) (Date)
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON, JOINT OWNERS SHOULD
EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
2
