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
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
HERC PRODUCTS INCORPORATED
- -------------------------------------------------------------------------------
(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| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| 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:
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(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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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
H.E.R.C. PRODUCTS INCORPORATED
2215 West Melinda Lane, Suite A
Phoenix, Arizona 85027
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held June 8, 2000
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of H.E.R.C.
PRODUCTS INCORPORATED ("Company") will be held at the Embassy Suites Hotel, 2577
W. Greenway Road, Phoenix, Arizona, on June 8, 2000, at 10:00 a.m. local time,
for the following purposes:
1. To elect three directors of the Company to hold office until the Annual
Meeting of Stockholders in 2001 and until their respective successors have been
duly elected and qualified;
2. To transact such other business as may properly come before the meeting,
or any or all adjournments thereof.
Only stockholders of record at the close of business on April 10, 2000,
will be entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
You are urged to read the attached proxy statement, which contains
information relevant to the action to be taken at the meeting. In order to
assure the presence of a quorum, whether or not you expect to attend the meeting
in person, please sign and date the accompanying proxy card and mail it promptly
in the enclosed addressed, postage prepaid envelope. You may revoke your proxy
if you so desire at any time before it is voted.
By Order of the Board of Directors
S. Steven Carl
President
Phoenix, Arizona
May 1, 2000
<PAGE>
H.E.R.C. PRODUCTS INCORPORATED
--------------------
PROXY STATEMENT
--------------------
GENERAL INFORMATION
This Proxy Statement and the enclosed form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors ("Board")
of H.E.R.C. Products Incorporated ("Company") to be used at the Annual Meeting
of Stockholders of the Company to be held on June 8, 2000, and at any
adjournment or adjournments thereof ("Annual Meeting"). The matters to be
considered at the Annual Meeting are set forth in the attached Notice of
Meeting.
The Company's executive offices are located at 2215 West Melinda Lane,
Suite A, Phoenix, Arizona 85027. This Proxy Statement and the enclosed form of
proxy are first being sent to stockholders on or about May 1, 2000.
Record Date and Outstanding Shares
The Board has fixed the close of business on April 10, 2000, as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Annual Meeting. Only stockholders of record at the close of business on
that date will be entitled to vote at the Annual Meeting or at any and all
adjournments thereof. As of April 10, 2000, the Company has issued and
outstanding 11,666,187 shares of Common Stock, par value $.01 ("Common Stock")
comprising all of the Company's issued and outstanding voting stock. Each
stockholder of the Company will be entitled to one vote for each share of Common
Stock.
Solicitation and Revocation
Proxies in the form enclosed are solicited by and on behalf of the Board.
The persons named in the proxy have been designated as proxies by the Board. Any
proxy given pursuant to such solicitation and received in time for the Annual
Meeting will be voted as specified in such proxy. If no instructions are given,
proxies will be voted "FOR" the election of the nominees listed below under the
caption "Proposal I: Election of Directors" and in the discretion of the proxies
named on the proxy card with respect to any other matters properly brought
before the meeting and any adjournments thereof. In such unanticipated event
that any other matters are properly presented at the Annual Meeting for action,
the persons named in the proxy will vote the proxies in accordance with their
best judgment. Any proxy given pursuant to this solicitation may be revoked by
the stockholder at any time before it is exercised by written notification
delivered to the Secretary of the Company, by voting in person at the Annual
Meeting, or by delivering another proxy bearing a later date. Attendance by a
stockholder at the Annual Meeting does not alone serve to revoke his or her
proxy.
Quorum
The presence, in person or by proxy, of a majority of the shares of Common
Stock entitled to vote at the Annual Meeting will constitute a quorum at the
Annual Meeting. A proxy submitted by a stockholder may indicate that all or a
portion of the shares represented by such proxy are not being voted
("stockholder withholding") with respect to a particular matter. Similarly, a
broker may not be permitted to vote stock ("broker non-vote") held in street
name on a particular matter in the absence of instructions from the beneficial
owner of such stock. The shares subject to a proxy which are not being voted on
a particular matter (because of either stockholder withholding or broker
non-vote) will not be considered shares entitled to vote on such matter. These
shares, however, may be considered present and entitled to vote on other matters
and will count for purposes of determining the presence of a quorum, unless the
proxy indicates that such shares are not being voted on any matter at the Annual
Meeting, in which case such shares will not be counted for purposes of
determining the presence of a quorum.
<PAGE>
Voting
Under "Proposal I: Election of Directors," the persons nominated for
election as directors will be elected by a plurality of the shares voted at the
Annual Meeting. "Plurality" means that the nominees who receive the highest
number of votes cast "FOR" will be elected as the directors of the Company for
the ensuing year. Consequently, any shares not voted "FOR" a particular nominee
(because of either stockholder withholding or broker non-vote) will not be
counted in such nominee's favor.
Security Ownership of Certain Beneficial Owners
The table and accompanying footnotes on the following pages set forth
certain information as of April 10, 2000 with respect to the stock ownership of
(i) those persons or group who beneficially own more than 5% of the Common
Stock, (ii) each director and director-nominee of the Company, (iii) the
Company's Chief Executive Officer and each of the Company's next four most
highly compensated executive officers as of the date of this proxy whose
individual compensation exceeded $100,000 in the year ended December 31, 1999,
and (iv) all directors and executive officers of the Company as a group (based
upon information furnished by such persons).
Amount and Nature of Percent of Class
Name of Beneficial Owner Beneficial Ownership(1) of Voting Securities
- ------------------------ -------------------- --------------------
S. Steven Carl(2)(3) 727,709 6.13%
R. John Armstrong(2) 72,752 *
Salvatore T. DiMascio(2)(5) 59,863 *
Lance Laifer and Laifer
Capital Management, Inc.(2) 3,410,000 29.23%
Norman H. Pessin(2) 1,025,000 8.79%
Shelby A. Carl(2)(4) 597,470 5.10%
All directors and executive
officers as a group
(4 persons)(6) 946,524 7.94%
____________________
* Less than 1%.
(1) Beneficial ownership is determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934. A person is deemed to be the beneficial
owner of securities that can be acquired by such person within 60 days from
January 31, 2000 upon the exercise of options and warrants or conversion of
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants and convertible securities
that are held by such person (but not held by any other person) and that
are exercisable or convertible within 60 days from January 31, 2000 have
been exercised or converted. The information concerning the beneficial
owners is based upon information furnished to the Company by such
beneficial owners. Except as otherwise indicated, and subject to applicable
community property and similar laws, each of the persons named has sole
voting and investment power with respect to the shares shown as
beneficially owned.
(2) The address for Messrs. S. Steven Carl, Shelby A. Carl, Armstrong and
DiMascio is c/o H.E.R.C. Products Incorporated, 2215 West Melinda Lane,
Suite A, Phoenix, Arizona 85027. The address for Norman H. Pessin is c/o
Neuberger & Berman, LLC, 605 Third Avenue, New York, NY 10158. The address
for Lance Laifer is c/o Laifer Capital Management, Inc., 45 West 43rd
Street, 9th Floor, New York, NY 10036.
(3) Includes 210,000 shares issuable pursuant to immediately exercisable
options. Excludes 40,000 shares issuable on options that become exercisable
in the future.
(4) Includes 50,000 shares issuable pursuant to immediately exercisable
options.
(5) Includes 20,000 shares issuable pursuant to immediately exercisable
options.
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(6) Includes shares referred to as being included in note (3), (4) and (5),
68,200 additional shares and 18,000 shares issuable pursuant to immediately
exercisable options. Excludes shares referred to as being excluded in note
(3) and 32,000 shares issuable on options which become exercisable in the
future.
PROPOSAL I: ELECTION OF DIRECTORS
The persons listed below have been designated by the Board as candidates
for election as directors to serve until the next annual meeting of stockholders
or until their respective successors have been elected and qualified. Unless
authority is withheld, the proxies solicited by management will be voted "FOR"
the election of these candidates. In case any of these nominees becomes
unavailable for election to the Board, an event which is not anticipated, the
persons named as proxies, or their substitutes, shall have full discretion and
authority to vote or refrain from voting for any other candidate in accordance
with their judgment.
Name Age Position
- ---- --- ------------
S. Steven Carl 42 Chairman of the Board of Directors,
Chief Executive Officer and
President
R. John Armstrong 56 Director
Salvatore T. DiMascio 60 Director
S. Steven Carl has been the Chief Executive Officer and a Director of the
Company since August 1995 and President of the Company from August 1995 to
February 28, 1996. Effective February 28, 1996, Mr. Carl became Chairman of the
Board and resigned as President of the Company. Mr. Carl was re-appointed the
President in May 1997. From May 1992 to August 1995, Mr. Carl was the President
and Chief Executive Officer of CCT Corporation, a wholly owned subsidiary of the
Company acquired in May 1995.
R. John Armstrong has been a Director of the Company since January 1, 1999.
Mr. Armstrong served eleven years in the U.S. Navy, with experience in ship
design, construction and maintenance, with a four year tour at a SupShip
(supervisor of shipbuilding office), serving in quality assurance, contracts and
planning departments in addition to serving two years on the engineering faculty
at the Naval Academy. Following his resignation from the Navy, Mr. Armstrong
served as a Project Manager and, ultimately, Executive Vice President of a
professional services company in Washington DC, providing engineering and
computer services to a broad spectrum of clients. In 1986 he became the
President of Seaward Marine Services, Inc., engaged in international diving
services.
Salvatore T. DiMascio has been a Director of the Company since September 3,
1996. Since 1986, Mr. DiMascio has been President of DiMascio Venture
Management, a management and investment consulting firm. From June 1994 to June
1997, Mr. DiMascio was Executive Vice President and Chief Financial Officer of
Anchor Gaming, a public company. Among other executive level positions held
during his 30-year career, Mr. DiMascio was Senior Vice President and Chief
Financial Officer of Conair Corporation. In addition, he has experience in
industrial products manufacturing, distribution and other service industries.
Mr. DiMascio is currently a director of Fotoball USA, a public company. Mr.
DiMascio is a Certified Public Accountant.
Directors are elected to serve until the next annual meeting of
stockholders of the Company or until their successors are elected and qualified.
Officers serve at the discretion of the Board subject to any employment
contracts.
Outside Directors elected at duly convened annual shareholder's meetings or
other properly convened Board elections are compensated by an annual Outside
Director's Retainer in the amount of $15,000 per annum, payable as follows: (a)
$1,500 semi-annually on the first day of the second and fourth quarters
following such election; (b) $1,000 for personal attendance at duly convened
quarterly meetings of the Board; and (c) the issuance of HERC restricted Common
Stock payable quarterly on the first day of each quarter in an amount equivalent
to $2,000 of market value measured on the close of trading of the last trading
day of the prior quarter, plus out-of-pocket expenses.
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<PAGE>
The Board met five times in the fiscal year ended December 31, 1999, and
all directors attended all the meetings.
The Board has established an Audit Committee and a Compensation Committee.
The Audit Committee, currently comprised of Salvatore T. DiMascio and R.
John Armstrong, has been formed to: (i) recommend annually to the Board of
Directors the appointment of the independent auditors of the Company; (ii)
review with the independent auditors the scope of the annual audit and review
their final report relating thereto; (iii) review with the independent auditors
the accounting practices, policies and accounting and financial controls of the
Company; (iv) be available to the independent auditors during the year for
consultation; and (v) review related party transactions by the Company on an
ongoing basis and review potential conflicts of interest situations where
appropriate. The Audit Committee held two meetings in the fiscal year ended
December 31, 1999.
The Compensation Committee, currently comprised of Salvatore T. DiMascio,
R. John Armstrong and S. Steven Carl, has been formed to review overall
executive compensation and review the Company's employee benefit plans. The
Compensation Committee held one meeting in the fiscal year ended December 31,
1999.
The Company is obligated through April 2001, if so requested by GKN
Securities Corporation ("GKN"), the placement agent of its April 1996 private
placement, to nominate and use its best efforts to elect GKN's designee as a
director of the Company or, at GKN's option, as a non-voting advisor to the
Board. GKN has not exercised its right to designate such a person.
Executive Compensation
Set forth in the following table is information as to the compensation paid
or accrued to each officer and director receiving compensation of at least
$100,000 and the Chief Executive Officer, (collectively, the "Named Executive
Officers") for the three years ended December 31, 1999.
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation (1) Compensation
------------ -----------
Restricted
Stock
Name and Principal Position Year Salary Bonus Award
- --------------------------- ---- ------ ----- --------
S. Steven Carl 1999 $109,875 $24,038 $16,500
Chairman of the Board, 1998 $ 82,100 --
Chief Executive Officer 1997 $100,100 --
and Director
(1) On June 15, 1999, the Company entered into an employment agreement with Mr.
S. Steven Carl.
Other than the compensation set forth in the table, the Named Executive
Officers did not receive non-cash benefits having a value exceeding 10% of their
stated compensation.
On June 15, 1999, the Company entered into a two year employment agreement
with Mr. S. Steven Carl. Under the agreement, Mr. Carl currently is paid an
annual base salary of $115,500. The annual base salary will increase by 15% on
June 15, 2000. Mr. Carl will also be paid a bonus equal to 7.5% of EBITDA
(excluding extraordinary accounting events or any accounting impact from
discontinued operations) based on the financial results of fiscal year 1999 and
2000. This bonus may be paid in cash or by the issuance of Common Stock equal to
the bonus amount. Mr. Carl also participtes in the bonus pool established for
all employees of the Company. In addition, if the Company achieves its projected
EBITDA for the fiscal year as established by the board of directors, Mr. Carl
will be issued 25,000 shares of Common Stock. Mr. Carl is entitled to receive
benefits no less favorable than other senior executives and a car allowance of
$500 per month. The Company also awarded Mr. Carl 50,000 shares of common stock
as restricted shares of which 25,000 vested on June 15, 1999 and 25,000 will
vest on June 15, 2000. The agreement provides that Mr. Carl is subject to
non-competition and confidentiality restrictions.
4
<PAGE>
Report of the Compensation Committee of the Board of Directors on Executive
Compensation
The Compensation Committee of the Board of Directors sets the compensation
of the executive officers and key employees, subject to ratification by the
Board of Directors.
General Compensation Policy. The Compensation Committee believes that the
compensation program for executive officers of the Company should be designed to
attract, motivate and retain talented executives responsible for the success of
the Company. The Compensation Committee believes the compensation program should
be determined within a competitive framework and should be based on achievement
of overall financial results and individual contribution.
Compensation Components. The three major components that make up the
compensation of the Company's executive officers are (i) base salary, (ii)
annual cash incentive awards in the form of a cash bonus and stock bonus awards
and (iii) long-term equity-based incentive awards in the form of stock option
and restricted stock grants. The Compensation Committee's determination of the
compensation components for executive officers is highly subjective and not
subject to specific criteria. The Compensation Committee has, however, compared
its executives' compensation levels to independent compensation surveys and
compensation packages for executives in similarly sized technology companies and
has found its compensation packages to be comparable.
The base salary for each executive officer is determined at levels
considered appropriate for comparable positions at other companies and the
Company's ability to pay. Annual cash bonuses are subjective and are based on
the Company's achievement of financial performance targets as well as individual
contribution. Long-term equity- based incentive awards, in the form of stock
option grants, are determined subjectively based on the executive's position
within the Company, individual performance, potential for future responsibility
and promotion and the number of unvested options held at the time of the new
grant. The relative weight given to each of these factors varies among
individuals at the Compensation Committee's discretion.
CEO Compensation. During 1999, the Compensation Committee evaluated Mr. S.
Steven Carl's compensation and recommended and approved a written employment
agreement. The agreement terms are described above under "Executive
Compensation." The base salary was set based on an evaluation of Mr. Carl's
performance and the performance of the Company during the last two years. It was
also based on a comparison of executive salaries in similar industries and the
Phoenix market, subject to the Company's ability to pay. Because of the
restrictions on the Company's ability to pay compensation, the Compensation
Committee instituted bonuses based on the EBITDA of the Company based on the
annual fiscal year results of 1999 and 2000 and the achievement of the annual
budget by the Company. The Compensation Committee further tied compensation to
Mr. Carl serving the Company by awarding a grant of restricted stock of 50,000
shares of which 25,000 vested on June 15, 1999 and 25,000 will vest on June 15,
2000.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934, that might incorporate future filings made by the Company under those
statutes, the preceding Compensation Committee Report on Executive Compensation
will not be incorporated by reference into any of those prior filings, nor will
such report be incorporated by reference into any future filings made by the
Company under those statutes.
THE COMPENSATION COMMITTEE
S. Steven Carl
R. John Armstrong
Salvatore T. DiMascio
Stock Option Plans
In 1993, the Company's Board adopted the 1993 Stock Option Plan ("1993
Plan") pursuant to which 350,000 shares of Common Stock were reserved for
issuance to key employees, including officers. Key employees are persons in
those positions within the Company whose efforts, knowledge and expertise are
integral to the operations and success of the Company. The 1993 Plan is
administered by the Board, who may appoint a committee to act on its behalf. To
date, the Board has not appointed a committee. Options may be granted under the
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<PAGE>
1993 Plan as incentive stock options within the meaning of the Internal Revenue
Code of 1986, as amended, or options not qualifying as incentive stock options.
The exercise price of any incentive stock option cannot be less than 100% of the
fair market value per share of Common Stock on the date of grant (110% of such
fair market value if the grantee owns stock possessing more than 10% of the
combined voting power of all classes of the Company's stock). No options may be
granted after the year 2003. As of December 31, 1999, the Company had issued
under the 1993 Plan 88,000 options exercisable at prices ranging from $0.3125 to
$0.32 per share.
In 1996, the Company's Board adopted the 1996 Equity Performance Plan
("1996 Plan") pursuant to which 1,000,000 shares of Common Stock were reserved
for issuance to key employees, officers, directors and consultants of the
Company and its subsidiaries, as both incentive stock options and non-incentive
stock options and other equity based awards. Holders of these awards are persons
in those positions with the Company whose efforts, knowledge and expertise are
integral to the operations and success of the Company. The 1996 Plan is
administered by the Board, who may a appoint a committee to act on its behalf.
To date, the Board has not appointed a committee. The exercise price of any
incentive stock option cannot be less than 100% of the fair market value per
share of Common Stock on the last trading day before the date of grant (110% of
such fair market value if the grantee owns stock possessing more than 10% of the
total combined voting power of all classes of the Company's stock). The exercise
price of a non- incentive stock option may not be less than 100% of the fair
market value on the last trading day before the date of grant. No options may be
granted after the year 2006. As of December 31, 1999, the Company had issued
options under the 1996 Plan to acquire 586,500 shares of Common Stock,
exercisable at prices ranging from $0.31 to $1.75 per share.
Other Options and Warrants
In addition to the options under the 1993 Plan and the 1996 Plan, the
Company has outstanding the following options and warrants as of December 31,
1999: (i) warrants to purchase 85,000 shares of Common Stock at $3.00 per share
issued to Perrin, Holden & Davenport Capital Corporation in connection with its
private placement in December 1996, (ii) an option to purchase 171,490 units,
each unit consisting of one share of Common Stock and one warrant to purchase
one share of Common Stock at $2.00 per share, issued to GKN and its designees in
connection with a private placement in April 1996, (iii) warrants issued to
consultants to purchase 392,500 shares of Common Stock at prices ranging from
$0.21875 to $2.75 per share, (iv) other options issued to employees to purchase
390,000 shares of Common Stock at prices ranging from $0.3125 to $1.75 per
share, (v) warrants to purchase 300,000 shares of Common Stock at prices ranging
from $1.31 to $2.00 per share, issued to GKN and its designees in connection
with the exercise of 150,000 units in June 1997 and (vi) warrants to purchase
125,000 shares of Common Stock at prices ranging from $1.18 to $1.47 issued to
InterEquity in connection with the term loan in September 1997. All of the
foregoing securities are exercisable into an aggregate of 2,309,980 shares of
Common Stock.
No options were granted to the Named Executive Officers during the fiscal
year ended December 31, 1999.
The following table sets forth certain information with respect to options
granted to the Named Executive Officers:
AGGREGATE YEAR END OPTION VALUES
Value of Unexercised
# of Unexercised Options In-the-Money Options
at Fiscal Year End at Fiscal Year End
------------------------ ------------------
Name of Executive Exercisable Unexercisable Exercisable Unexercisable
- ----------------- ----------- ------------- ----------- -------------
S. Steven Carl
Chairman of the 210,000 40,000 0(1) 0(1)
Board, Chief Executive
Officer and President
(1) The market value at December 31, 1999 of the Common Stock underlying the
options was $0.30 per share. The Options are exercisable at prices of
$0.3125 or more.
6
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities ("ten- percent
stockholders") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the Boston Stock Exchange. Officers,
directors and ten-percent stockholders also are required to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on its review of
the copies of such forms furnished to it, and written representations that no
other reports were required, the Company believes that during the Company's
fiscal year ended December 31, 1999, all its officers directors and ten-percent
stockholders complied with the Section 16(a) reporting requirements.
INDEPENDENT ACCOUNTANTS
Arthur Andersen, LLP, Phoenix, Arizona, was the independent accountant of
the Company for the year ended December 31, 1999. A representative of Arthur
Andersen, LLP is expected to be present at the meeting with an opportunity to
make a statement if the representative desires to do so and is expected to be
available to respond to appropriate questions from stockholders.
SOLICITATION OF PROXIES
The solicitation of proxies in the enclosed form is made on behalf of the
Company and the cost of this solicitation is being paid by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph using the services of directors, officers and regular
employees of the Company at nominal cost. Banks, brokerage firms and other
custodians, nominees and fiduciaries will be reimbursed by the Company for
expenses incurred in sending proxy material to beneficial owners of the
Company's Common Stock.
2001 STOCKHOLDER PROPOSALS
Any stockholder of the Company who wishes to submit a proposal for
presentation at the annual meeting of stockholders to be held in the year 2001,
must submit the proposal to the Company at its headquarters set forth in this
proxy statement no later than December 31, 2000, for inclusion, if appropriate,
in the proxy statement and proxy related to that meeting. The Company reserves
the right to exclude any proposal which does not meet all the requirements for
inclusion established by the commission in effect at that time.
Stockholders are advised that management will be permitted to exercise
discretionary voting authority under proxies it solicits for the 2001 annual
meeting of stockholders with respect to any proposal presented by a stockholder,
without any discussion of the proposal in the proxy statement for the meeting,
unless the Company receives notice of such proposal at its principal office in
Phoenix, Arizona not later than March 16, 2001.
OTHER MATTERS
The Board knows of no matter which will be presented for consideration at
the meeting other than the matters referred to in this Proxy Statement. Should
any other matter properly come before the meeting, it is the intention of the
persons named in the accompanying proxy to vote such proxy in accordance with
their best judgment.
By Order of the Board of Directors
S. Steven Carl
President
Phoenix, Arizona
May 1, 2000
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H.E.R.C. PRODUCTS INCORPORATED - PROXY
Solicited By The Board of Directors
for the Annual Meeting To Be Held on June 8, 2000
P The undersigned Stockholder(s) of H.E.R.C. Products Incorporated, a
Delaware corporation ("Company"), hereby appoints S. Steven Carl and John
Gulick, or either of them, with full power of substitution and to act
without the other, as the agents, attorneys and proxies of the undersigned,
to vote the shares standing in the name of the undersigned at the Annual
R Meeting of Stockholders of the Company to be held on June 8, 2000 and at
all adjournments thereof. This R proxy will be voted in accordance with the
instructions given below. If no instructions are given, this proxy will be
voted FOR all of the following proposals.
O 1. Election of the following Directors:
FOR all nominees listed below except WITHHOLD AUTHORITY to vote for
X as marked to the contrary below |_| all nominees listed below |_|
Y S. Steven Carl, Salvatore T. DiMascio and R. John Armstrong
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.
________________________________________________________
2. In their discretion, the proxies are authorized to vote upon such
other business as may come before the meeting or any adjournment
thereof.
|_| I plan on attending the Annual Meeting.
Date _____________________________, 2000
----------------------------------------
Signature
----------------------------------------
Signature if held jointly
Please sign exactly as name appears above.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
