<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:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ 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)
or Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
HARCOR ENERGY, INC.
4400 POST OAK PARKWAY, SUITE 2220
HOUSTON, TEXAS 77027
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 21, 1996
TO THE STOCKHOLDERS:
The 1996 Annual Meeting of Stockholders (the "Annual Meeting") of HARCOR
ENERGY, INC., a Delaware corporation (the "Company"), will be held on Tuesday,
June 21, 1996, 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 II of the Board of Directors
to hold office until the 1999 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 April 23, 1996, 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
May 15, 1996
<PAGE> 3
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, 1995, 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.
<PAGE> 4
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 1996 Annual
Meeting of Stockholders (the "Annual Meeting") to be held June 21, 1996, 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, 1995, 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 May 23, 1996.
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 April 23, 1996 are entitled to notice of and to vote
at the Annual Meeting and any adjournments or postponements thereof. At that
date, there were outstanding 8,696,207 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 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
<PAGE> 5
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
Two directors are to be elected at the Annual Meeting. Messrs. Robert J.
Cresci and Ambrose K. Monell have been nominated to fill the two expiring Class
II positions on the Board of Directors, to hold office until the 1999 Annual
Meeting of Stockholders and until their respective successors have been duly
elected and qualified or until their earlier resignation or removal. Messrs.
Monell and Cresci currently serve as directors of the Company.
In April 1996, the Board of Directors reduced the total number of
directors from ten to eight, consisting of three Class I positions, two Class
II positions and three Class III positions. Concurrent with such action, the
Board appointed Mark G. Harrington to fill the Class I position vacancy (at
which time he resigned his position as a Class III director). The Class I
directors (Messrs. Harrington, Oakes and Roth) presently 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.
The Class III directors (Messrs. Dar, Frischkorn 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 either of the above
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 two 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.
-2-
<PAGE> 6
<TABLE>
<CAPTION>
Present Position Director
Name Age With the Company Since
- ---- ---- ---------------- -----
<S> <C> <C> <C>
Mark G. Harrington ........... 43 Chairman of the Board of Directors and 1987
Chief Executive Officer
Francis H. Roth .............. 58 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* ............ 52 Director 1994
Vinod K. Dar ................. 45 Director 1992
David E. K. Frischkorn, Jr. .. 45 Director 1992
Ambrose K. Monell* ........... 41 Director 1987
Herbert L. Oakes, Jr. ........ 49 Director 1992
Robert A. Shore .............. 49 Director 1994
</TABLE>
- ----------------
* 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 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.
-3-
<PAGE> 7
Mr. Cresci has been as a Managing Director of Pecks Management Partners
Ltd., an investment management firm, since September 1990. Mr. Cresci
currently serves on the boards of Bridgeport Machines, Inc., 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 was Chairman of Jefferson Gas Systems, Inc. (a natural gas and
electric power co-investment concern) between May 1991 and Fall 1995, and the
Managing Director of Dar & Company (a consulting firm to energy companies and
financial institutions) since August 1990. Currently he is Director, in charge
of worldwide corporate strategy services at Hagler Bailly Consulting, 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 is a financial consultant to the oil and gas industry.
From January 1993 through March 1996, he was Senior Vice President and Managing
Director of the Energy Corporate Finance Department of Rauscher Pierce Refsnes,
Inc., an investment banking firm. 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.
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 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 Kiwanis Club of East Bakersfield, 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.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established an Audit Committee and a Stock
Option and Compensation Committee. An Executive Committee was terminated
subsequent to the 1995 Annual Meeting. The Company does not have a nominating
committee.
The current members of the Audit Committee are David E. K. Frischkorn, Jr.
and Herbert L. Oakes, 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
-4-
<PAGE> 8
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 1995.
The current members of the Stock Option and Compensation Committee are
Vinod K. Dar 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 one meeting during 1995.
During the year ended December 31, 1995, the Board of Directors held five
meetings. In 1995, 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 1995, 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 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 third full year of service after the effective
date of the Directors' Option Plan (October 14, 1995), Messrs. Dar, Frischkorn
and Monell were each automatically granted an option to purchase 5,000 shares
of Common Stock at an exercise price equal to $3.1625 per share, 110% of the
fair market value of the Common Stock on such date. Upon the third anniversary
of his initial election to the Board of Directors (November 17, 1995), Mr.
Oakes was automatically granted an option to purchase 5,000 shares of Common
Stock at an exercise price equal to $2.6125 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 TWO (2) NOMINEES FOR DIRECTOR NAMED HEREIN.
-5-
<PAGE> 9
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 April 30, 1996 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.
<TABLE>
<CAPTION>
Shares Owned
Beneficially Percent
As of of
Beneficial Owner(1) April 30, 1996(2) Class
- ------------------- ----------------- -------
<S> <C> <C>
Harrington and Company International Incorporated(3). . . . . . . . 690,768 7.9
Robert J. Cresci(4)(5). . . . . . . . . . . . . . . . . . . . . . . 1,110,000 12.7
Vinod K. Dar(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 32,500 *
David E.K. Frischkorn, Jr.(4) . . . . . . . . . . . . . . . . . . . 27,500 *
Mark G. Harrington(4)(6). . . . . . . . . . . . . . . . . . . . . . 919,018 10.2
Ambrose K. Monell(4). . . . . . . . . . . . . . . . . . . . . . . . 31,421 *
Herbert L. Oakes, Jr.(4). . . . . . . . . . . . . . . . . . . . . . 32,500 *
Gary S. Peck(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 131,500 1.5
Francis H. Roth(4). . . . . . . . . . . . . . . . . . . . . . . . . 160,625 1.8
Robert A. Shore(4)(7) . . . . . . . . . . . . . . . . . . . . . . . 1,108,084 11.6
FMR Corp.(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . 550,000 5.9
Bakersfield Energy Resources, Inc.(9) 1,098,084 11.5
Granite Capital L.P.(10). . . . . . . . . . . . . . . . . . . . . . 612,092 6.8
Pecks Management Partners Ltd.(11) 1,100,000 12.6
Trust Company of the West(12) . . . . . . . . . . . . . . . . . . . 1,730,710 19.3
Wellington Management Company(13) 666,700 7.7
All Directors and Officers as a group
(10 persons)(5)(6)(7)(14). . . . . . . . . . . . . . . . . . . . . 3,584,148 35.2
</TABLE>
- ---------------
* 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.
-6-
<PAGE> 10
(4) Includes, 10,000, 27,500, 27,500, 204,500, 27,500, 27,500, 101,500,
102,500 and 10,000 shares for Messrs. Cresci, Dar, Frischkorn, Harrington,
Monell, Oakes, Peck, 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 12). 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) Mr. Harrington is the Chief Executive Officer and Chairman of the Board
of Directors of the Company. The number of shares indicated includes
690,768 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.
(7) 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 10). 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.
(8) The principal business address for FMR Corp. is 82 Devonshire Street,
Boston, Massachusetts 02109. Consists of 550,000 shares issuable upon
exercise of a warrant granted to Fidelity Management & Research Company
("Fidelity"), a wholly-owned subsidiary of FMR Corp., as a result of
Fidelity's acting as investment advisor to various investment companies
registered under the Investment Company Act of 1940. FMR Corp. disclaims
sole power to vote or direct the voting of the shares owned directly by
the Fidelity Funds, which power resides with the Funds' Boards of
Trustees. Fidelity carries out the voting of the shares under written
guidelines established by the Funds' Boards of Trustees. FMR Corp.,
through its control of Fidelity, and the Funds each has sole power to
dispose of the 550,000 shares owned by the Funds.
(9) 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.
(10) 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.
(11) 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.
(12) The business address of Trust Company of the West ("TCW") is 865 South
Figueroa, Suite 1800, Los Angeles, CA 90017. Includes 256,351 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.
-7-
<PAGE> 11
(13) 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.
(14) Includes 1,514,572 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.
-8-
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
earned during the last three years 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 those years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Awards
------------------- ----------
Securities
and
Other Annual Securities All Other
Name and Compen- Underlying Compen-
Principal Position Year Salary Bonus sation(1) Options(2) sation(3)
- ---------------------------- ---- -------- ------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Mark G. Harrington 1995 $190,000 $70,417 $-0- 50,000 $3,699
Chairman of the Board 1994 190,000 62,500 -0- 148,750 3,699
and Chief Executive Officer 1993 190,000 7,917 -0- 40,000 3,455
Francis H. Roth 1995 125,000 70,208 -0- 18,000 5,113
President and Chief 1994 125,000 32,500 -0- 75,625 5,113
Operating Officer 1993 125,000 5,208 -0- 25,000 4,779
Gary S. Peck 1995 100,000 39,167 -0- 16,000 2,306
Vice President-Finance, 1994 100,000 17,500 -0- 42,500 2,306
Chief Financial Officer 1993 100,000 4,167 -0- 17,500 2,156
and Secretary
Albert J. McMullin 1995 73,770 8,026 -0- 10,000 -0-
Vice President-Land, 1994 67,000 5,025 -0- 33,500 -0-
Contracts and Acquisitions
</TABLE>
- ---------------------
(1) Does not include perquisites and other personal benefits because the
value of these items did not exceed the lesser of $50,000 or 10% of
reported salary and bonus of any of the Named Executive Officers.
(2) No stock appreciation rights ("SARs") were granted to any of the Named
Executive Officers during any of the years presented.
(3) Such amounts were premiums paid by the Company for annual disability
insurance for each such officer.
-9-
<PAGE> 13
STOCK OPTION GRANTS DURING 1995
The following table provides details regarding stock options granted to
the Named Executive Officers in 1995. The Company does not have any
outstanding SARs.
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to
Options Granted Employees Exercise or Base
Name (#)(1) in 1995 Price ($/Sh)(2) Expiration Date
- --------------- ----------------- --------- ----------------- -------------
<S> <C> <C> <C> <C>
Mark G. Harrington .. 50,000 41.7% $2.89 September 26, 2000
Francis H. Roth ..... 18,000 15.0% $2.63 September 26, 2000
Gary S. Peck ........ 16,000 13.3% $2.63 September 26, 2000
Albert J. McMullin .. 10,000 8.3% $2.63 September 26, 2000
</TABLE>
- --------------------
(1) Fifty percent of the options become exercisable on September 26, 1996
(the first anniversary of the date of grant), and the remaining fifty
percent become exercisable on September 26, 1997. 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 1995 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 1995 was 110% of
the closing bid price of the Common Stock on the date of grant thereof, as
quoted by NASDAQ.
-10-
<PAGE> 14
1995 OPTION EXERCISES AND OUTSTANDING STOCK OPTION VALUES AS OF DECEMBER 31,
1995
The following table shows the number of shares acquired by the Named
Executive Officers upon their exercise of stock options during 1995, 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, 1995 and their values at such date.
AGGREGATED OPTION EXERCISES IN 1995
AND OPTION VALUES AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
December 31, 1995(#) December 31, 1995($)(1)
Shares Acquired ---------------------------- ---------------------------
Name on Exercise(#) Value Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------ --------------- ----------------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark G. Harrington -0- N/A 204,500 112,500 12,750 -0-
Francis H. Roth -0- N/A 102,500 48,000 12,750 -0-
Gary S. Peck -0- N/A 101,500 31,000 23,375 -0-
Albert J. McMullin -0- N/A 40,000 22,500 -0- -0-
</TABLE>
- -------------------
(1) On December 31, 1995, the closing bid price of the Common Stock as quoted
by NASDAQ was $2.625 per share. Value is calculated on the basis of the
difference between the option price and $2.625, 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 equal to or higher than $2.625 and therefore
no value is ascribed to such options in the above table.
-11-
<PAGE> 15
RESTRICTED SHARE VALUES AS OF DECEMBER 31, 1995
The following table shows the number of restricted shares of Common Stock
held by the Named Executive Officers and their values at December 31, 1995:
RESTRICTED STOCK SHARES AND
RESTRICTED STOCK VALUES AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
Restricted Restricted
Shares Share Value
Name (#) ($)
------------------ ---------- -----------
<S> <C> <C>
Mark G. Harrington..... 23,750 62,344
Francis H. Roth........ 15,625 41,016
Gary S. Peck........... 12,500 32,813
Albert J. McMullin..... 8,500 22,312
</TABLE>
- ------------------
(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 value of Restricted Shares at December 31, 1995 is calculated by
multiplying the number of Restricted Shares by the December 31, 1995
closing bid price of the Common Stock as quoted by NASDAQ, which was
$2.625 per share.
-12-
<PAGE> 16
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. This warrant had an exercise
price of $5.00 per share and would have expired on June 30, 2001. 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 holders of the Company's
Series D Preferred Stock (the "Series D Holders") in July 1995 for the
redemption of the Series D Preferred Stock at its stated redemption price and
the exchange of warrants to purchase 3,424,666 shares of Common Stock for
1,100,000 shares of Common Stock of the Company. These warrants had an
exercise price of $3.67 per share and would have expired two years following
the date of redemption of the Series D Preferred Stock. 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.
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. On November 15, 1994, Sunrise Marketing
filed a voluntary petition for protection under Chapter 11, Title 11 of the
United States Bankruptcy Code. As of December 31, 1995, Sunrise Marketing owed
the Company approximately $92,000 for gas delivered by the Company during the
term of such contract. 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, 1995 to December 31, 1995 all filing
requirements applicable to its officers, directors and greater than 10%
stockholders were complied with except that Robert A. Shore, a director, failed
to file on a timely basis on Form 4 a report required by Section 16(a) during
the said period. One report relating to two transactions was not reported on a
timely basis, but these transactions were subsequently reported on Form 5 at
the end of the Company's fiscal year.
-13-
<PAGE> 17
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company at its principal
executive office by December 31, 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 1996. 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.
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
May 15, 1996
-14-
<PAGE> 18
HARCOR ENERGY, INC.
PROXY FOR 1996 ANNUAL MEETING
P THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
R The undersigned hereby appoints Mark G. Harrington, Gary S. Peck,
Francis H. Roth and each of them, with or without the others, proxies, with
O full power of substitution, to vote all shares of stock that the undersigned
is entitled to vote at the 1996 Annual Meeting of Stockholders of HarCor
X Energy, Inc. (the "Company"), to be held in Houston, Texas on June 21, 1996,
at 10:00 a.m. (local time) and all adjournments and postponements thereof as
Y follows:
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 19
Please mark [X]
your votes as
indicated in
this example
This Proxy will be voted as you specify on this card. If no specification is
made, this Proxy will be voted with respect to item (1) FOR the nominees
listed and FOR proposal (2). Receipt of the Notice of the 1996 Annual Meeting
and the related Proxy Statement is hereby acknowledged or waived by your
signature hereon.
1. Election of Directors
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below). nominees listed below
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.)
Robert J. Cresci (Class II) Ambrose K. Monell (Class II)
2. In their discretion, upon any other business which may properly come before
said meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I plan to attend the meeting. [ ]
Signature(s)___________________________________ Dated_____________________, 1996
NOTE: Please sign your name exactly as it appears hereon. Joint owners must
each sign. When signing as attorney, executor, 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.
