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
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
TETRA TECHNOLOGIES, INC.
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(Name of Registrant as Specified in its Charter)
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(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)(l) 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:
- - --------------------------------------------------------------------------------
(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):
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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.
[ ] 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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TETRA TECHNOLOGIES, INC.
25025 IH-45 NORTH, 6TH FLOOR
THE WOODLANDS, TEXAS 77380
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 199817, 1999
To the Stockholders of TETRA Technologies, Inc.:
Notice is hereby given that the Annual Meeting of the Stockholders of
TETRA Technologies, Inc., a Delaware corporation (the "Company"), will be held
at The Woodlands Executive Conference Center and Resort, 2301 North Millbend
Drive, The Woodlands,the Omni Houston Hotel, Four Riverway, Houston, Texas 7738077056 on the 15th17th day
of May 19981999 beginning at 11:00 a.m., Central Daylight Time, for the following
purposes:
1. To elect threetwo directors to the Company's board to serve until the annual
meeting of stockholders to be held in 20012002 or until their successors
have been elected and qualified;
2. To approve the appointment of Ernst & Young LLP as the Company's
independent auditors for the year 1998;1999; and
3. To act upon such other business as may properly come before the annual
meeting or any adjournments thereof.
Only stockholders of record at the close of business on March 20,
199822, 1999 are
entitled to notice of and to vote at the annual meeting.
The Board of Directors and Management of the Company request that you
mark, sign, date and return the enclosed proxy promptly, regardless of whether
you expect to attend the annual meeting, in order to ensure a quorum. If you are
present at the annual meeting and wish to do so, you may revoke the proxy and
vote in person.
I hope ityou will be possible for youable to personally attend the annual meeting.
/s/ BASS C. WALLACE, JR.
BASS C. WALLACE, JR.
Corporate Secretary
March 23, 199829, 1999
The Woodlands, Texas
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TETRA TECHNOLOGIES, INC.
25025 IH-45 NORTH, 6TH FLOOR
THE WOODLANDS, TEXAS 77380
PROXY STATEMENT
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GENERAL INFORMATION
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The accompanying proxy is solicited by the Board of Directors of TETRA
Technologies, Inc. (the "Company") for use at the Annual Meeting of Stockholders
to be held on May 15, 199817, 1999 and at any adjournments thereof. The annual meeting
will begin at 11:00 a.m., Central Daylight Time, at The Woodlands Executive
Conference Center and Resort, 2301 North Millbend Drive, The Woodlands,the Omni Houston Hotel, Four
Riverway, Houston, Texas 77380.77056. When such proxy is properly executed and
returned, the shares it represents will be voted at the annual meeting in
accordance with the directions noted thereon; or if no direction is indicated,
it will be voted in favor of the proposals set forth in the notice attached
hereto. In addition, the proxy confers discretionary authority to the persons
named in the proxy to vote, in their discretion, on any other matters properly
presented at the annual meeting. The Board of Directors is not currently aware
of any such other matters.
Each stockholder of the Company has the unconditional right to revoke his
proxy at any time prior to its exercise, either in person at the annual meeting
or by written notice to the Company addressed to Corporate Secretary, TETRA
Technologies, Inc., 25025 IH-45 North, The Woodlands, Texas 77380. No revocation
by written notice will be effective unless such notice has been received by the
Corporate Secretary of the Company prior to the day of the annual meeting or by
the inspectors of elections at the annual meeting.
The cost of solicitation of these proxies will be borne by the Company.
Officers and employees of the Company may solicit proxies from the stockholders
by telephone, telegram or otherwise. Such persons will receive no compensation
in excess of their regular salaries for their services.
The approximate date on which this Proxy Statement will first be sent to
stockholders is March 31, 1998.
===============================================================================1999.
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VOTING SECURITIES
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At the close of business on March 20,22, 1998, the record date for the
determination of stockholders of the Company entitled to receive notice of and
to vote at the annual meeting or any adjournments thereof (the "Record Date"),
the Company had outstanding 13,520,74113,512,242 shares of common stock, $0.01 par value
(the "Common Stock"), held of record by approximately 137130 persons and owned
beneficially by approximately 2,9003,000 persons. Each share of Common Stock is
entitled to one vote upon each of the matters to be voted on at the annual
meeting. Shares of Common Stock may not be voted cumulatively. All proxies that
are properly completed, signed and returned prior to the annual meeting will be
voted. The presence, either in person or by proxy, of holders of a majority of
the outstanding shares of Common Stock is necessary to constitute a quorum at
the annual meeting. A plurality vote is required for the election of directors
in Proposal 1. Accordingly, if a quorum is present at the annual meeting, the
threetwo persons nominated for election as directors receiving the greatest numbers
will be elected to serve as directors. Withholding authority to vote for a
director nominee and broker non-votes in the election of directors will not
affect the outcome of the election of directors. All other matters to be voted
on will be decided by the vote of the holders of a majority of the shares
present or represented at the annual meeting and entitled to vote on such
matter. 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 such vote. Votes will be counted by Harris Trust
and Savings Bank, the Company's transfer agent and registrar.
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The following table sets forth, as of December 31, 1997,1998, certain
information with respect to the beneficial ownership of the Common Stock with
respect to each person known by the Company to own beneficially five percent
(5%) or more of the Common Stock:
AMOUNT AND NATURE
OF
NAME AND BUSINESS ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
--------------------------- ------------------- --------- -----
Montgomery Asset Management, L.P................... 1,311,500 (1) 9.7%
101 California Street
San Francisco, CA 94111
SAFECO Corporation................................. 855,300 (2) 6.4%
4333 Brooklyn Ave NE
Seattle, WA 98185------------
Morgan Stanley Dean Witter Discover & Co......... 853,000 (3) 6.3%Co........... 1,513,000(1) 11.2%
1585 Broadway
New York, NYNew York 10036
Wellington Management Company, LLP........ 1,325,200(2) 9.8%
75 State Street
Boston, Massachusetts 02109
Becker Capital Management Inc............. 988,100(3) 7.3%
1211 SW 5th Avenue, Suite 2185
Portland, Oregon 97204
Dimensional Fund Advisors Inc............. 954,700(4) 7.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Vanguard Explorer Fund.................... 938,600(5) 6.9%
P.O. Box 2600
Valley Forge, Pennsylvania 19482-2600
SAFECO Corporation........................ 855,300(6) 6.3%
SAFECO Plaza
Seattle, Washington 98185-0001
J. P. Morgan & Co Incorporated..................... 802,400 (4) 5.9%Incorporated............ 853,300(7) 6.3%
60 Wall Street
New York, NYNew York 10260
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(1) Pursuant to a Schedule 13G filed indated February 10, 1999, Morgan Stanley Dean
Witter & Co. has shared voting and dispositive power with respect to
1,513,000 shares of Common Stock, including 1,160,000 shares
beneficially owned by its Morgan Stanley Dean Witter Advisors Inc
subsidiary.
(2) Pursuant to a Schedule 13G dated December 31, 1998 with respect to
beneficial ownership as of December 31, 1997, Montgomery Asset1998, Wellington Management
L.P.Company LLP has soleshared voting power with respect to 915,500 shares
of Common Stock and sole dispositive power with respect to
1,311,5001,325,200 shares of Common Stock.
(2)Stock, including 938,600 shares beneficially
owned by Vanguard Explorer Fund, which has filed a separate Schedule
13G with respect to those shares; see footnote (4) below.
(3) Pursuant to a Schedule 13G filed indated February 199811, 1999, Becker Capital
Management has beneficial ownership and sole voting and dispositive
power with respect to 988,100 shares of Common Stock.
(4) Pursuant to a Schedule 13G dated February 11, 1999 with respect to
beneficial ownership as of December 31, 1997,1998, Dimensional Fund Advisors
Inc. has shared voting and dispositive power with respect to 954,700
shares of Common Stock.
(5) Pursuant to a Schedule 13G filed February 11, 1999, Vanguard Explorer
Fund has sole voting power and shared dispositive power with respect to
938,600 shares of Common Stock. These shares are also covered by a
Schedule 13G filed by Wellington Management Company LLP; see footnote
(1) above.
(6) Pursuant to a Schedule 13G dated February 11, 1999 with respect to
beneficial ownership as of December 31, 1998, (i) SAFECO Common Stock
Trust has shared voting and dispositive power with respect to 709,800
shares of Common Stock; and (ii) SAFECO Corporation and its subsidiary
SAFECO Asset Management Company have shared voting and dispositive
power with respect to 855,300 shares of Common Stock (including the
709,800 shares beneficially owned by SAFECO Common Stock Trust); and
(iii) SAFECO Corporation and its subsidiary SAFECO Asset Management
Company disclaim beneficial ownership of such shares, as they are owned
beneficially by registered investment companies for which SAFECO Asset
Management Company serves as an advisor.
(3).
(7) Pursuant to a Schedule 13G13G/A filed in February 199823, 1999 with respect to
beneficial ownership as of December 31, 1997, Morgan Stanley, Dean
Witter, Discover & Co has shared voting and dispositive power with
respect to 853,000 shares of Common Stock.
(4) Pursuant to a Schedule 13G filed February 1998, with respect to
beneficial ownership as of December 31, 1997, J. P. Morgan & Co
Incorporated has sole voting power with respect to 665,900740,300 shares and
sole dispositive power with respect to 802,400853,300 shares of Common Stock.
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PROPOSAL 1. ELECTION OF DIRECTORS
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The Board of Directors has nominated and urges you to vote FOR the
election of the threetwo directors who have been nominated to serve a three-year term
of office in the 19981999 class of directors. Each proxy solicited hereby will be so
voted unless the stockholder specifies otherwise in the proxy. A plurality vote
is required for the election of directors in Proposal 1. Accordingly, if a
quorum is present at the annual meeting, the threetwo persons nominated for election
as directors receiving the greatest numbers of votes will be elected to serve as
directors.
The Company's Bylawsbylaws divide the Board of Directors into three classes,
designated as Class I, Class II and Class III, with respect to terms of office.
Each class is elected to serve a three-year term and consists of, as nearly as
possible, one-third of the members of the entire Board. By resolutions of the
Board of Directors adopted in accordance with the Company's bylaws, the Board of
Directors is currently comprised of nine members. The proxies solicited hereby
cannot be voted for more than threetwo nominees.
The term of office of each of the current Class IIIII Directors, Tom H.
Delimitros, Stephen T. HarcrowOscar S.
Andras, Kenneth P. Mitchell and Geoffrey M. Hertel,Hoyt Ammidon, Jr., expires at the time of the
19981999 Annual Meeting of Stockholders, or as soon thereafter as their successors
are elected or qualified. Messrs. Delimitros, HarcrowMitchell and HertelAmmidon have been nominated by
the Board to serve additional three-year terms as Class IIIII Directors. Mr.
Andras declined to be nominated as a director, due to other demands on his time.
Each of the nominees has consented to be named in this Proxy Statement and to
serve as a director, if elected.
It is intended that the proxies solicited hereby will be voted FOR the
election of such nominees, unless authority to do so has been withheld. If, at
the time of the 19981999 Annual Meeting of Stockholders, any of the nominees should
be unable or decline to serve, the discretionary authority provided in the proxy
will enable the proxy holder to vote for a substitute nominee of the Board of
Directors. The Board of Directors has no reason to believe that any substitute
nominee will be required.
DIRECTORS AND NOMINEES FOR DIRECTOR
The CLASS IIIII DIRECTORS whose terms of office as directors will expire in
20012002 if such persons are elected, and certain additional information with
respect to each of them, are as follows:
HOYT AMMIDON, JR. has served as a director of the Company since
1998. Mr. Ammidon has served as a managing director of Berkshire Capital
Corporation, a private company that provides merger and acquisition
related services to the investment management and securities industries
since November 1994. Prior thereto, Mr. Ammidon held various executive
positions at Cazenove Incorporated, a brokerage firm, The Chase Manhattan
Investment Bank and E.F. Hutton & Co., Inc. Mr. Ammidon received a B.A.
degree in History from Yale University.
KENNETH P. MITCHELL has served as a director of the Company since
1997. Mr. Mitchell is presently a director and chairman of the
compensation committee of Balchem Corporation, a manufacturer of
microencapsulated products and a distributor of specialty chemicals. Mr.
Mitchell served as President and Chief Executive Officer of Oakite
Products, Inc., a specialty chemicals company, from 1986 to 1993. From
1964 to 1986, Mr. Mitchell held a number of executive positions with
Diamond Shamrock Corporation, a public company, all of which were related
to various commodity and specialty chemical business. Mr. Mitchell
received a B.S. degree in Marketing and Finance from Ohio State University
in 1964, and in 1979, completed the Senior Executive Program at M.I.T.
-3-
The CLASS I DIRECTORS, whose terms of office as directors will expire in
2000, and certain additional information with respect to each of them, are as
follows:
PAUL D. COOMBS has served as Executive Vice President - Oil & Gas
Services of the Company since January 1994 and as a director since June
28, 1994. Mr. Coombs served as Senior Vice President Oil and Gas of the
Company from 1987 to 1994. From 1985 to 1987, Mr. Coombs served as General
Manager - Oil and Gas for the Company. Mr. Coombs has served in numerous
other positions for the Company since 1982.
ALLEN T. MCINNES has served as a director of the Company since 1993.
Mr. McInnes was appointed President and Chief Executive Officer of the
Company effective April 1, 1996. Mr. McInnes has served as Chairman of the
Board of TGC Industries, a public company involved in the geophysical
business, since July 1993. Mr. McInnes also served as Chief Executive
Officer of TGC Industries from July 1993 through April 1996. Mr. McInnes
served as Chairman of the Board of Chase Packaging Corporation, a public
company involved in the agricultural products packaging business until
December 1997. Mr. McInnes is a former Executive Vice President and
director of Tenneco, Inc., where at various times he had overall
corporate-level responsibility for chemicals, minerals, packaging,
international development and real estate operations. He also serves as a
trustee director of the American Graduate School for International
Management and several other educational and charitable institutions. Mr.
McInnes holds B.B.A., M.B.A. and Ph.D. degrees from the University of
Texas.
J. TAFT SYMONDS has served as a director of the Company since 1981
and as Chairman of the Board since October 1993. Mr. Symonds has served as
Chairman and a director of Maurice Pincoffs Company, Inc., a private
international marketing company, and as President and a director of
Symonds Trust Co., Ltd., a private investment firm, since 1978. Mr.
Symonds also serves as a director of Plains Resources, Inc., a public
energy company, and Denali Incorporated, a public company involved in the
manufacture of fiberglass and steel storage tanks, pipe and manholes for
the chemical, petroleum and waste water industries. Mr. Symonds received
his B.A. degree from Stanford University and his M.B.A. from Harvard
Business School.
The CLASS II DIRECTORS, whose terms of office as directors will expire in
2001, and certain additional information with respect to each of them, are as
follows:
RALPH S. CUNNINGHAM has served as a director of the Company since
1999. Dr. Cunningham retired in 1997 from Citgo Petroleum Corporation,
where he had served as President and Chief Executive Officer since 1995.
Dr. Cunningham served as Vice Chairman of Huntsman Corporation from April
1994 to April 1995, and from August 1990 to April 1994, he served as
President of Texaco Chemical Company. Prior to joining Texaco Chemical
Company, Dr. Cunningham held various executive positions with Clark Oil &
Refining and Tenneco. He started his career in Exxon's refinery
operations. Dr. Cunningham is presently a director of Agrium,
Incorporated, a Canadian public company involved in the agricultural
chemicals business, Huntsman Corporation, a privately held petrochemical
company headquartered in Salt Lake City, Utah, and Enterprise Products
Partners L.P., a natural gas liquids and transportation company
headquartered in Houston, Texas. He holds Ph.D. and M.S. degrees in
Chemical Engineering from Ohio State University and a B.S. degree in
Chemical Engineering from Auburn University.
TOM H. DELIMITROS has served as a director of the Company since
1994. Mr. Delimitros is a founding General Partner of AMT Venture Partners
Ltd., a private limited partnership formed in 1989 that provides equity
and debt capital to emerging growth companies involved in specialty
chemicals and advanced material technologies. He is also a director and is
chairman of the compensation committee of the board of directors of Plains
Resources, Inc., a public energy company. Mr. Delimitros received B.S. and
M.S. degrees from the University of Washington in Seattle and his M.B.A.
from Harvard Business School.
STEPHEN T. HARCROW has served as a director of the Company
since 1993. Mr. Harcrow currently serves as Chairman of the Board and
Chief Executive Officer of Denali Incorporated, a public company
involved in the manufacture of fiberglass and steel storage tanks, pipe
and manholes for the chemical, petroleum and waste water industries.
Mr. Harcrow was employed by Baker Hughes Incorporated, a public
company, from 1974 until 1993, last serving as Senior Vice President
from 1991 through 1993. He also served as President of EnviroTech, one
of the operating groups of Baker Hughes, Inc., from 1988 to 1993. Mr.
Harcrow received his B.S. degree in business from the University of
Houston.
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GEOFFREY M. HERTEL has served as a director of the Company since
1984. From 1981 to 1984 he was associated with the Company as a non-voting
director and special consultant to the Board. Mr. Hertel joined the
Company in March 1993 as Senior Vice President-Finance and Administration.
On January 25, 1994 he was appointed Executive Vice President-Finance and
Administration. Mr. Hertel has served as President and a director of
Fairway Petroleum, Inc., a private oil and gas company, and LAGGS, Inc., a
private natural gas pipeline company, since 1980. From 1972 to 1985, Mr.
Hertel held various positions with Rotan Mosle, Inc., an investment
banking firm, most recently as Senior Vice President-Corporate Finance.
Mr. Hertel received both his B.A. and M.B.A. degrees from Michigan State
University.
The CLASS III DIRECTORS, whose terms of office as directors will expire
in 1999, and certain additional information with respect to each of them, are as
follows:
OSCAR S. ANDRAS has served as a director of the Company since
1997. Mr. Andras presently serves as a director, a member of the
compensation committee of the board of directors and as President and
Chief Executive Officer of Enterprise Products Company, a private
natural gas liquids and transportation company. Mr. Andras joined
Enterprise Products Company in February 1981 as Executive Vice
President, became President and Chief Operating officer in May 1982,
and was named Chief Executive officer in January 1996. Mr. Andras
worked for Dow Chemical Company in numerous capacities from 1959 to
1981, last serving as Director of Hydrocarbons. Mr. Andras received a
B.S. degree in Chemical Engineering from Louisiana State University.
KENNETH P. MITCHELL has served as a director of the Company
since 1997. Mr. Mitchell is presently a director and chairman of the
compensation committee of Balchem Corporation, a private company that
manufactures certain specialty chemicals. Mr. Mitchell served as
President and Chief Executive Officer of Oakite Products, Inc., a
private specialty chemicals company, from 1986 to 1993. From 1964 to
1986, Mr. Mitchell held a number of executive positions with Diamond
Shamrock Corporation, a public company, all of which were related to
various commodity and specialty chemical business. Mr. Mitchell
received a B.S. degree in Marketing and Finance from Ohio State
University in 1964, and in 1979, completed the Senior Executive Program
at M.I.T.
The CLASS I DIRECTORS, whose terms of office as directors will expire
in 2000, and certain additional information with respect to each of them, are as
follows:
PAUL D. COOMBS was appointed Executive Vice President-Oil and
Gas of the Company in January 1994 and a director on June 28, 1994.
Mr. Coombs served as Senior Vice President-Oil and Gas of the Company
from 1987 to 1994. From 1985 to 1987, Mr. Coombs served as General
Manager-Oil and Gas for the Company. Mr. Coombs has served in numerous
other positions for the Company since 1982.
ALLEN T. MCINNES has served as a director of the Company since
1993. Mr. McInnes was appointed President and Chief Executive Officer
of the Company effective April 1, 1996. Mr. McInnes is also Chairman
of the Board and a member of the compensation committee of TGC
Industries, a public company involved in the geophysical business. Mr.
McInnes served as Chairman of the Board and a member of the
compensation committee of Chase Packaging Corporation, a public
company involved in the agricultural products packaging business until
December 1997. Mr. McInnes served as Chief Executive Officer of TGC
Industries from July 1993 through April 1996. Mr. McInnes is a former
Executive Vice President and director of Tenneco, Inc., where at
various times he had overall corporate-level responsibility for
chemicals, minerals, packaging, international development and real
estate operations. He also serves as a trustee director of the
American Graduate School for International Management and several
other educational and charitable institutions. Mr. McInnes holds
B.B.A., M.B.A. and Ph.D. degrees from the University of Texas.
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J. TAFT SYMONDS has served as a director of the Company since
1981 and as Chairman of the Board since October 1993. Mr. Symonds has
served as Chairman and a director of Maurice Pincoffs Company, Inc., a
private international marketing company, and as President and a
director of Symonds Trust Co., Ltd., a private investment firm, since
1978. Mr. Symonds also serves as a director of Plains Resources, Inc.,
a public energy company, and Denali Incorporated, a public company
involved in the manufacture of fiberglass and steel storage tanks, pipe
and manholes for the chemical, petroleum and waste water industries.
Mr. Symonds received his B.A. degree from Stanford University and his
M.B.A. from Harvard Business School.
The following table reflects the beneficial ownership of the Common Stock
and certain additional information as of March 1, 19981999 with respect to (i) the
directors and nominees for director of the Company, set forth above, (ii) the four highest paid
executive officers of the Company and its Chief Executive Officer
and its former Executive Vice President -- Specialty Chemicals (collectively,
the "Named Executive Officers"), and (iii) the Company's directors and executive
officers as a group.
NUMBER OF
SHARES OF
COMMON STOCK PERCENT
NAME AGE BENEFICIALLY OWNED OF CLASS
---- --- ------------------ --------
Oscar S. Andras (1) 62 12,604(4) *
Paul D. Coombs (1) 42 159,386(5) 1.18%
Tom H. Delimitros(2) 57 20,550(6) *
Stephen T. Harcrow (1)(2) 51 26,000(7) *
Geoffrey M. Hertel 53 119,870(8) *
Allen T. McInnes 60 313,226(9) 2.32%
Kenneth Mitchell(2) 58 11,965(10) *
Raymond D. Symens 47 22,488(11) *
J. Taft Symonds (1) 58 231,775(12) 1.72%
Fred K. Vogt 53 39 *
Thomas H. Wentzler(3) 51 24,548(13) *
Directors and executive officers as a group (13 persons) 938,729(14) 6.95%
NUMBER OF
SHARES OF
COMMON STOCK PERCENT
NAME AGE BENEFICIALLY OWNED OF CLASS
-------- ----- ------------------ -----------
Hoyt Ammidon, Jr.(1)(2) 61 6,230(4) *
Oscar S. Andras (3) 63 13,302(5) *
Paul D. Coombs (1) 43 167,065(6) 1.22%
Ralph S. Cunningham(1) 58 6,000(7) *
Tom H. Delimitros(2)(3) 58 19,550(8) *
Geoffrey M. Hertel 54 128,232(9) *
Allen T. McInnes (3) 61 224,326(10) 1.65%
Kenneth P. Mitchell(2)(3) 59 16,983(11) *
Raymond D. Symens 48 23,652(12) *
J. Taft Symonds(3) 59 192,926(13) 1.43%
Fred K. Vogt 54 9,703(14) *
Directors and executive
officers as a group (14 persons) 850,177(15) 6.29%
* Less than 1%
- - --------------------------
(1-------------------
(1) Member of Audit Committee.
(2) Member of Management and Compensation Committee.
(3) Resigned as an officerMember of Nominating and a director effective July 28, 1997.Corporate Governance Committee.
(4) Includes 10,6046,230 shares subject to options exercisable within 60 days of
the Record Date.
(5) Includes 104,74811,302 shares subject to options exercisable within 60 days
of the Record Date.
(6) Includes 20,050112,374 shares subject to options exercisable within 60 days
of the Record Date.
(7) Includes 18,0006,000 shares subject to options exercisable within 60 days of
the Record Date.
(8) Includes 93,74817,050 shares subject to options exercisable within 60 days
of the Record Date.
(9) Includes (i) 305,000101,374 shares subject to options exercisable within 60 days
of the Record Date and (ii) 200 shares owned by Mr. McInnes' minor
children, as to which shares Mr. McInnes disclaims beneficial ownership.Date.
(10) Includes 10,965209,267 shares subject to options exercisable within 60 days
of the Record Date.
(11) Includes 18,56611,483 shares subject to options exercisable within 60 days
of the Record Date.
(12) Includes 84,88218,482 shares subject to options exercisable within 60 days
of the Record Date.
(13) Includes 21,74844,731 shares subject to options exercisable within 60 days
of the Record Date.
(14) Includes 692,0067,916 shares subject to options exercisable within 60 days of
the Record Date.
-5-
8
Committees.(15) Includes 577,179 shares subject to options exercisable within 60 days
of the Record Date.
COMMITTEES. The Board of Directors has a standing Audit Committee. The
Audit Committee is currently comprised of Messrs. Andras, Coombs, HarcrowAmmidon, Cunningham and
Symonds.Coombs. The Audit Committee's functions include making recommendations
concerning the engagement of independent auditors; reviewing with the
independent auditors the plan and results of the auditing engagement; reviewing
professional services provided by the independent auditors; reviewing the
independence of the independent auditors; considering the range of audit and
non-audit fees; and reviewing the adequacy of the Company's internal accounting
controls.
-5-
The Board of Directors also has a standing Management and Compensation
Committee, which is currently comprised of Messrs. Ammidon, Delimitros Harcrow and
Mitchell. Until his resignation in December for health reasons, Mr. Harcrow also
served as a member of this committee in 1998. The functions performed by the
Management and Compensation Committee include reviewing and establishing overall
management compensation; administering the Company's employee stock option
plans; and approving salary and bonus awards to the Company's executive
officers.
The Board of Directors does not haveestablished a Nominating Committee.and Corporate Governance
Committee in 1998, which is currently comprised of Messrs. Ammidon, Andras,
Cunningham, Delimitros, McInnes, Mitchell and Symonds. The Nominating and
Corporate Governance Committee investigates and makes recommendations to the
Board with respect to qualified candidates to be nominated for election to the
Board and investigates and makes recommendations to the Board with regard to all
matters of corporate governance, including the structure, operation and
evaluation of the Board and its committees.
During 1997,1998, the Board of Directors had sevennine meetings, the Audit Committee
had three meetings and the Management and Compensation Committee had six meetings.two
meetings and the Nominating and Corporate Governance Committee had one meeting.
During 1997,1998, each member of the Board of Directors attended 75% or more of the
meetings of the Board of Directors held while he was a member of the Board and
75% or more of the meetings of all committees of the Board of Directors of which
he was a member that were held while he was a member, except that (i) Mr. AndrasHarcrow,
who was a director until he resigned in December 1998 for health reasons,
attended only six of the nine meetings of the Board of Directors, only two of
the three meetings of the Audit Committee, and (ii) Mr. Mitchell attended only twonone of the four meetings of the
Management and Compensation Committee that were held while he was a member of
that committee.
Director Compensation. Beginning April 1997, directorsor the Nominating and Corporate Governance
Committee.
DIRECTOR COMPENSATION. Directors who are not employees of the Company or
any subsidiary or affiliate of the Company (the "Outside Directors") receive
compensation of $1,500 per month plus $500 for each Board or committee meeting
attended, and are reimbursed for out-of-pocket expenses incurred in attending
meetings of the Board of Directors or committee meetings. Mr. Symonds receives
total annual compensation of $40,000 for serving as Chairman of the Board of
Directors.
Under the Company's Director Stock Option Plan, as amended (the "Director
Plan"), each Outside Director generally receives an automatic grant of an option
to purchase 6,000 shares of Common Stock on January 1 of each year while they
are a director. The options have an exercise price equal to the closing price as
of the grant date.last trading day of the previous year. The Board of Directors granted Mr.
Symonds an option under the TETRA Technologies, Inc. 1990 Stock Option Plan to
purchase 6,000 shares of Common Stock at a price of $26.375$11 per share, which was the
closing price as of December 31, 1996.1998.
In December 1998 the Management and Compensation Committee of the Board of
Directors reviewed the outstanding options under the Company's stock option
plans and determined that many optionees held options at exercise prices that
limited their effectiveness as a tool for employee retention and as a long-term
incentive. To address this problem, the Committee consulted with an independent
benefits consultant and, after considering various alternative methods of
dealing with this problem, adopted a stock option exchange program (the
"Exchange Program"). Under the Exchange Program, eligible employees were
permitted to surrender existing options granted in 1996, 1997 and 1998 in
exchange for a new option to purchase a lesser number of shares of Common Stock
at a lower exercise price, $10.1875, which was the fair market value on the date
of the Committee's action. Performance options granted in 1997 and 1998 were not
eligible for the Exchange Program. New options maintained the same vesting
schedule as the exchanged options. Thereafter the full Board adopted a similar
plan (the "Director Exchange Program") for the non-employee directors of the
Company with respect to options granted in 1996, 1997 and 1998. Under this plan,
the new options to non-employee directors were made under the TETRA
Technologies, Inc. 1998 Director Stock Option Plan (the "1998 Director Stock
Option Plan") and were options to purchase only 50% as many shares of Common
Stock as the exchanged options. The purpose of the 1998 Director Stock Option
Plan, which was adopted in December 1998, is to permit the Company to attract
and retain qualified individuals to serve as directors of the Company and to
align the interests of such individuals more closely with the interests of the
Company's stockholders. A maximum of 75,000 shares of treasury stock may be
issued under the 1998 Director Stock Option Plan. All non-employee directors
elected to participate in the Director Exchange Program.
-6-
9
EXECUTIVE OFFICERS
The current executive officers of the Company and their ages and positions
are listed below.
NAME AGE POSITION
- - ---- --- --------
Allen T. McInnes ............. 60 President, Chief Executive Officer and Director
Geoffrey M. Hertel............ 53 Executive Vice President, Chief Financial Officer
and Director
Paul D. Coombs................ 42 Executive Vice President and Director
Fred K. Vogt.................. 53 Senior Vice President
Raymond D. Symens............. 47 Senior Vice President
Bass C. Wallace, Jr........... 39NAME AGE POSITION
Allen T. McInnes .......... 61 President, Chief Executive Officer
and Director
Geoffrey M. Hertel......... 54 Executive Vice President, Chief
Financial Officer and Director
Paul D. Coombs............. 43 Executive Vice President and
Director
Raymond D. Symens.......... 48 Senior Vice President
Fred K. Vogt............... 54 Senior Vice President
Bruce A. Cobb.............. 49 Controller and Chief Accounting
Officer
James R. Hale.............. 49 Treasurer and Assistant Secretary
Bass C. Wallace, Jr........ 40 General Counsel and Corporate
Secretary
James R. Hale................. 48 Treasurer and Assistant Secretary
Bruce A. Cobb................. 48 Controller and Chief Accounting Officer
(Information regarding the business experience of Messrs. McInnes, , Hertel
and Coombs is set forth above under "Directors and Nominees for Director".)
RAYMOND D. SYMENS was elected Senior Vice President -- Bromine and
Strategic Affairs in 1997. He served as Senior Vice President -- Planning and
Strategic Affairs for the Company from 1994 to 1997, and as Vice President --
Manufacturing from 1988 to 1994. From 1976 to 1988, Mr. Symens held various
executive positions with Earth Sciences Incorporated and its wholly owned
Canadian subsidiary, ESI Resources, Ltd., finally as Vice President and General
Manager for the chemical recovery operations located in western Canada. Mr.
Symens received his B.S. degree in Metallurgical Engineering from the South
Dakota School of Mines and Technology.
FRED K. VOGT was elected as Senior Vice President -- Specialty Chemicals
upon his employment by the Company in 1997. Beginning in 1970, Mr. Vogt was
employed by Mallinckrodt Group, Inc., a pharmaceutical and laboratory chemicals
company, in various positions, last serving as President of the Mallinckrodt
Baker Division from 1995 to 1996. From 1991 to 1995, Mr. Vogt served as Vice
President, Performance and Laboratory Chemicals, from 1987 to 1991 as Vice
President, Science Product Division and from 1984 to 1987, Mr. Vogt served as
Assistant General Manager for Mallinckrodt's Specialty Chemicals Division. Mr.
Vogt received his B.S. in Chemical Engineering, M.S. in Engineering
Administration and an Honorary Professional Chemical Engineering Degree from
University of Missouri at Rolla.
RAYMOND D. SYMENS was elected Senior Vice President -- Bromine and
Strategic Affairs in 1997. HeBRUCE A. COBB has served as Senior Vice President - PlanningController of the Company since 1991. From
1987 to 1991, Mr. Cobb was the chief financial officer of Speeflo Manufacturing
Company. From 1979 to 1987, he served as division controller for Hughes
Production Tools, a division of Hughes Tool Company. From 1973 to 1979, Mr. Cobb
practiced accounting with Ernst & Young. Mr. Cobb received a B.B.A. degree in
accounting from the University of Texas, and Strategic Affairs forhe is a certified public
accountant.
JAMES R. HALE has served as Treasurer of the Company since 1986. Mr. Hale
served as Chief Financial Officer of the Company from 1994 to 1997, and as Vice President -
Manufacturing from 1988 to 1994.1986 until 1993. From 1976
to 1988,1985, Mr. SymensHale held various executive positions with Earth Sciences Incorporated and its wholly owned
Canadian subsidiary, ESI Resources, Ltd.First City Bancorporation of
Texas, Inc., finallymost recently as Vice President and General
Manager for the chemical recovery operations located in western Canada.of Profit Planning. Mr.
SymensHale received hisa B.S. degree in Metallurgical Engineeringeconomics and history from the University of the
South Dakota School of Mines and Technology.an M.B.A. from Vanderbilt University. Mr. Hale is a certified public
accountant.
BASS C. WALLACE, JR. has served as General Counsel of the Company since
his initial employment by the Company in 1994. Prior to that time, he was a
partner with the law firm of Norton & Blair, P.C., where he practiced corporate
and securities law from 1990 to 1994. Mr. Wallace has served as Corporate
Secretary of the Company since 1996. Mr. Wallace received his B.A. degree in
economics from the University of Virginia and his J.D. degree from the
University of Texas School of Law.
JAMES R. HALE has served as Treasurer of the Company since 1986. Mr.
Hale served as Chief Financial Officer of the Company from 1986 until 1993. From
1976 to 1985, Mr. Hale held various positions with First City Bancorporation of
Texas, Inc., most recently as Vice President and Manager of Profit Planning. Mr.
Hale received a B.S. degree in economics and history from the University of the
South and an M.B.A. from Vanderbilt University. Mr. Hale is a certified public
accountant.
BRUCE A. COBB has served as Controller of the Company since 1991. From
1987 to 1991, Mr. Cobb was the chief financial officer of Speeflo Manufacturing
Company. From 1979 to 1987, he served as division controller for Hughes
Production Tools, a division of Hughes Tool Company. From 1973 to 1979, Mr. Cobb
practiced accounting with Ernst & Young. Mr. Cobb received a B.B.A. degree in
accounting from the University of Texas, and he is a certified public
accountant.
-7-
10
COMPENSATION OF EXECUTIVE OFFICERS
The following information is given for the years 19951996 through 19971998 with
respect to the Named Executive
Officers:
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION(1) LONG-TERMCOMPENSATION
-------------------------- COMPENSATION
AWARDS--------------
SECURITIES ALL
FISCAL UNDERLYING OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) COMPENSATION(2)(2) COMPENSATION(3)
- - --------------------------- ---- ------ ----- ----------- -------------------- --------- -------------- ------------------
Allen T. McInnes............... 1997McInnes..................... 1998 $285,000 $ 82,000 300,000 $3,0250 210,000 $ 3,075
President and Chief 1997 285,000 82,000 300,000 3,025
Executive Officer 1996 213,750(3)213,750(4) 100,000 300,000300,000(6) 2,138
Paul D. Coombs................. 1997 $197,004 $120,000 100,000 $4,750Coombs....................... 1998 $221,004 $ 0 52,500 $ 3,750
Executive Vice President ......1997 197,004 120,000 100,000 4,750
1996 187,000 112,326 75,000 2,250
1995 184,828 108,116 075,000(6) 2,250
Geoffrey M. Hertel.............Hertel................... 1998 $210,000 $ 0 52,500 $ 4,800
Executive Vice President; 1997 $191,004 $191,004 70,670 100,000 $2,954
Executive Vice President.......2,954
Chief Financial Officer 1996 182,000 71,526 75,000 0
Chief Financial Officer........ 1995 181,083 101,228 075,000(6) 0
Raymond D. Symens.............. 1997 $159,167Symens.................... 1998 $175,000 $ 44,800 0 $4,67873,000 $ 4,800
Senior Vice President .........1997 159,167 44,800 0 4,678
Fred K. Vogt (4) .............. 1997Vogt......................... 1998 $190,000 $ 31,667 $ 20,000 100,000 0 25,000 $12,554(8)
Senior Vice President Thomas H. Wentzler (5)......... 1997 $202,000 $31,667(5) 20,0000 100,000(7) 0 0 $4,750
Executive Vice President ...... 1996 202,000 58,014 75,000 2,250
1995 199,824 80,000 0 2,250
- - ------------------------------
(1) During the years ended December 31, 1995, 1996, 1997 and 19971998, none of the
Named Executive Officers received perquisites or other personal
benefits that exceeded the lesser of $50,000 or 10% of the total annual
salary and bonus for such individual.
(2) The Management and Compensation Committee of the Board of Directors
approved an option exchange program effective December 11, 1998 (the
"Option Exchange Program"). Under the program, which was optional to
significantly all holders of outstanding options, each of the Named
Executive Officers elected to participate and was granted replacement
options with an exercise price of $10.1875, in exchange for the
surrender of their options previously granted in 1996, 1997 and 1998 at
higher exercise prices, except that performance options were not
eligible to be exchanged under the program. The replacement options
were for 70% as many shares as the 1996 options and 50% as many shares
as the 1997 and 1998 options. The surrendered options were canceled.
The 1998 options shown are all replacement options except 50,000 new
performance stock options granted to Mr. Symens in 1998.
(3) Represents employer matching contributions under the Company's 401(k)
Retirement Plan.
(3)(4) Mr. McInnes was initially employed as President and Chief Executive
Officer on April 1, 1996.
(4) On September 23, 1997,(5) Mr. Vogt was hiredinitially employed as Senior Vice President at an annual salaryon September
23, 1997.
(6) Surrendered and canceled under the Option Exchange Program; see
footnote (2) above.
(7) 50,000 of $190,000.
(5)these were surrendered and canceled under the Option Exchange
Program; see footnote (2) above.
(8) Includes $7,754 in taxable moving expenses and related employer taxes
reimbursed to Mr. Wentzler resigned as an officer and director effective July 28,
1997.
Employment Agreements.Vogt.
EMPLOYMENT AGREEMENTS. Mr. McInnes and the Company entered into an employment
agreement, effective April 1, 1996, with a term of four years that provides for
a base salary of $285,000. Under the agreement, Mr. McInnes is entitled to
participate in the Company's Incentive Compensation Program and the Company's
other employee benefit plans, and he is entitled to certain other benefits. In
the event of a change of control of the Company (as defined in the agreement),
Mr. McInnes may be entitled to the then remaining benefits under the agreement.
Under the agreement, Mr. McInnes may not compete with the Company in any
business in a specified geographic area, and he agreed to certain other
covenants designed to protect the Company against any such competition.
401(k) Plan.401(K) PLAN. Under the TETRA Technologies, Inc. 401(k) Retirement Plan (the
"401(k) Plan"), eligible employees may contribute on a pre-tax basis up to 15%
of their compensation, subject to an annual maximum established under the
Internal Revenue Code. The Company makes a matching contribution under the
401(k) Plan equal to 50% of the first 6% of a participant's annual compensation
that is contributed to the 401(k) Plan. As of December 31, 1997,1998, approximately
66%81% of all eligible employees had elected to participate in the 401(k) Plan.
-8-
11
STOCK OPTIONS
The following information concerns individual grants of stock options made
during the last fiscal year to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
PERCENT
NUMBER OF OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES PRICE EXPIRATION GRANT DATE
NAME GRANTED(#) IN FISCAL YEAR ($/SHARE) DATE THEORETICAL VALUE(2)VALUE (3)
- - ---- ----------- --------------- --------- ---------- -------------- --------- ---- ------------------------------------------
Allen T. McInnes........... 300,000 (1) 42.34% $25.00 09/26/05 $3,606,000McInnes............ 210,000(1) 15.54% $10.1875 12/11/08 $1,034.768
Paul D. Coombs............. 100,000 (1) 14.11% $25.00 09/26/05 $1,202,000Coombs.............. 52,500(1) 3.89% $10.1875 12/11/08 $ 236,250
Geoffrey M. Hertel......... 100,000 (1) 14.11% $25.00 09/26/05 $1,202,000Hertel.......... 52,500(1) 3.89% $10.1875 12/11/08 $ 236,250
Raymond D. Symens.......... - - - - -Symens........... 50,000(2) 3.70% $25.00 07/26/03 $ 558,500
23,000(1) 1.70% $10.1875 12/11/08 $ 103,500
Fred K. Vogt............... 50,000 7.06% $22.00 09/26/07 $481,000
50,000 (1) 7.06% $25.00 09/26/05 $601,000
Thomas H. Wentzler......... - - - - -Vogt................ 25,000(1) 1.85% $10.1875 12/11/08 $ 112,500
- - ----------------------------------------------------------------------
(1) The Management and Compensation Committee of the Board of Directors
approved an option exchange program effective December 11, 1998. Under
the program, which was optional to significantly all holders of
outstanding options, each of the Named Executive Officers elected to
participate and was granted replacement options with an exercise price
of $10.1875, in exchange for the surrender of their options previously
granted in 1996, 1997 and 1998 at higher exercise prices, except that
performance options were not eligible to be exchanged. The replacement
options were for 70% as many shares as the 1996 options and 50% as many
shares as the 1997 and 1998 options. The surrendered options were
canceled.
(2) Performance option that vests in full in five years from grant date,
subject to earlier vesting as follows: (i) in the event the market
value per share of Common Stock is greater than or equal to 150% of the
exercise price for a period of at least 20 consecutive trading days,
50% of the shares underlying such option vest immediately and (ii) in
the event the market value per share of Common Stock is greater than or
equal to 200% of the exercise price for a period of at least 20
consecutive trading days, the remaining 50% of the shares underlying
such option vestvests immediately. Vested options must be exercised within
three years of vesting, and, in general, no more than 100,000 vested
options may be exercised in any 90 day period.
(2)(3) The theoretical values on the grant date arewere calculated underusing the
Black-Scholes Model. The Black-ScholesBlack- Scholes Model is a mathematical formula
used to value options traded on stock exchanges. This formula considers
a number of factors to estimate the options'san option's theoretical value,
including the stock's historical volatility and dividend rate, the
exercise period of the option, and interest rates. The grant date
theoretical value above assumes a volatility of 39%39.9%, a dividend yield
of 0.0%, a 6.00% risk free rate of return, and an exercise five to six
years after the grant date.
-9-
12TEN YEAR OPTION REPRICING TABLE
Effective December 11, 1998, the Company's Board of Directors approved an
option exchange program (the "Option Exchange Program") whereby options were
granted with an exercise price of $10.1875 to significantly all current employee
optionholders (including executive officers) who elected to participate in
exchange for options granted to them in 1996, 1997 and 1998. The replacement
options were for 70% as many shares as the 1996 options and 50% as many shares
as the 1997 and 1998 options. The surrendered options were canceled. The Option
Exchange Program was an acknowledgment of the importance of the Company's key
employees and executive officers. Stock option exercise prices that are
substantially above the current price of the Common Stock do not provide
retention value to key employees, including executive officers, who may be
recruited by competitors. The Company included executive officers in the Option
Exchange Program because of the importance of their leadership to the success of
the Company, although performance options previously granted to the executive
officers were not eligible to participate in the program. Approximately 516,000
shares were returned to the Company's stock option plans for future grants (net
of the new options granted under the Option Exchange Program).
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE OPTION
UNDERLYING OF STOCK AT EXERCISE NEW REMAINING
OPTIONS TIME OF PRICE AT TIME EXERCISE AT DATE OF
NAME DATE EXCHANGED EXCHANGE OF EXCHANGE PRICE EXCHANGE
- - ---- -------- ------------- --------------- ----------------- ------------ -------------
Allen T. McInnes..................... 12/11/98 284,977 $10.1875 $16.875 $10.1875 88 months
President and 12/11/98 15,023 $10.1875 $16.75 $10.1875 85 months
Chief Executive Officer
Paul D. Coombs....................... 12/11/98 75,000 $10.1875 $16.75 $10.1875 85 months
Executive Vice President
Geoffrey M. Hertel................... 12/11/98 75,000 $10.1875 $16.75 $10.1875 85 months
Executive Vice President
Raymond D. Symens.................... 12/11/98 15,000 $10.1875 $16.75 $10.1875 85 months
Senior Vice President 12/11/98 25,000 $10.1875 $23.00 $10.1875 111 months
Fred K. Vogt......................... 12/11/98 50,000 $10.1875 $22.00 $10.1875 105 months
Senior Vice President
The following table shows all exercises of stock options during the last
fiscal year by the Named Executive Officers of the Company and the fiscal
year-end value of unexercised options:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS HELD OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END ($)(1)
---------------------------- ------------------------------ ----------------------------
SHARES
ACQUIRED ON VALUE
EXERCISE REALIZED NOT NOT
NAME (#) ($) EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- - ---- ------------ --------------------- ----------- ----------- ----------- ------------------------ -------------
Allen T. McInnes............ 0 0 274,464 334,536 $1,248,889McInnes........ 4,000 $50,125 209,391 305,609 $169,943 $ 149,3024,557
Paul D. Coombs.............. 0 0 96,998 164,002 $1,031,316 $ 364,872
Geoffrey M. Hertel.......... 0 0 90,665 163,335 $1,099,050 $ 355,325
Raymond D. Symens........... 5,016 $90,284 16,466 14,852 $ 161,702 $ 98,256
Fred K. Vogt................ 0 0 0 100,000 $Coombs.......... 0 $ 0 Thomas H. Wentzler.......... 87,720 $1,622,100 13,998 64,002105,916 132,584 $203,238 $31,918
Geoffrey M. Hertel...... 4,000 $50,125 94,916 132,584 $316,988 $31,918
Raymond D. Symens....... 5,318 $75,808 14,066 119,134 $ 127,12920,313 $18,374
Fred K. Vogt............ 0 $ 364,8720 5,833 69,167 $ 4,739 $15,573
- - --------------------------------------------
(1) Computed based on the difference between aggregate fair market value
and aggregate exercise price. The fair market value of the Company's
Stock on December 31, 19971998 was $21.1875$11.00, based on the average of the high
and low sales prices on the New York Stock Exchange on that date.date as
reported by the Wall Street Journal.
-10-
MANAGEMENT COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no transactions or relationships required to be disclosed under
this section.
MANAGEMENT AND COMPENSATION COMMITTEE REPORT
The Management and Compensation Committee, which is composed of outsidethe
Outside Directors of the Company, establishes overall management compensation
for the Company and is responsible for investigating, determining and awarding
compensation to be paid to the Company's senior executive officers, including
grants under the Company's stock option plans. In order to make such
determinations, each year the Committee evaluates (i) the Company's performance
relative to its annual objectives, (ii) the Company's performance relative to
changes in the industry (i.e.(I.E., performance relative to the opportunities
available), and (iii) each senior executive officer's contribution to the
Company's achievements during the year.
The basic objectives of the senior executive compensation program are to:
o Enable the Company to attract, retain, motivate and reward high caliberhigh-caliber
senior executive officers to manage the Company's diverse,
interconnected businesses;
o Inspire the senior executive officers to work as a team to innovatively
and aggressively pursue Company goals, including its multifaceted
growth plan;
o Encourage the senior executive officers to analyze and make
improvements to the Company's business systems in order to carry
operations to higher levels of achievement and efficiency;
o Emphasize "pay for performance" by having a significant portion of the
senior executive officers' total compensation "at risk" in the form of
incentive compensation; and
o Align the long-term interests of the senior executive officers with
those of the Company's stockholders through the use of stock options as
a portion of compensation and thereby encourage the achievement of
performance objectives that enhance stockholder value on a continuing
basis.
-10-
13
The Committee monitors general industry conditions, changes in regulations
and tax laws, and other developments that may require modifications of the
senior executive compensation program in order to ensure the program is properly
structured to achieve its objectives. The Company's senior executive
compensation program currently is comprised of three major components: base
salary, annual incentive bonuses, and longer termlonger-term incentive stock options.
Base Salaries.BASE SALARIES. Base salaries for each of the Company's senior executive
officers are determined on an individual basis, taking into consideration the
performance of the individual and his contributions to the Company's
performance, the length of service of the individual with the Company,
compensation by industry competitors for comparable positions, internal equities
among positions, and general economic conditions. Although no specific weight is
assigned to these factors, the Committee generally targets the mid-point range
of salary levels paid within the industry as a primary consideration in setting
base salaries. In order to determine salary levels paid within the industry, the
Committee reviews various industry surveys and proxy information of its
competitors and, from time to time, consults with independent compensation
consulting firms. The Committee gives serious consideration to the
recommendations of the Chief Executive Officer with regard to the salaries to be
paid to the senior executive officers. The Committee believes that maintaining a
competitive base salary structure is vital to attract and retain talented
executives and that optimal performance is encouraged through the use of
incentive programs, such as annual incentive compensation and stock option
plans, thereby furthering the goal of having "at risk" compensation as an
important component of the executive compensation program.
Annual Incentive Compensation.-11-
ANNUAL INCENTIVE COMPENSATION. In addition to their base salaries, each of
the Company's senior executive officers (in addition to other key employees) is
eligible to earn an annual incentive payment under the Company's Incentive
Compensation Program, depending on (i) the extent to which the Company (and the
applicable Division, if any) achieves its earnings per share goal for the
applicable year and (ii) such individual achieving his or her individual goals,
which typically include various operating, financial and strategic goals (such
as achievement of divisional earnings or other financial targets and successful
completion of major projects) that are considered to be important to the
Company's long- or short-term success. Individual goals are not specifically
weighted in the determination of whether to award annual incentive payments to
the senior executive officers. The Incentive Compensation Program has six levels
of participation, each of which represents maximum amounts of incentive
compensation that may be awarded (expressed as a percentage of base pay), based
on the extent to which the Company achieves it earnings goal. Senior executive
officers participate in the top two levels. After a year-end review of corporate
and divisional achievements and the personal achievement of the applicable
individual goals, the Chief Executive Officer determines the amount of the
annual incentive payment, if any, that he recommends be awarded to each senior
executive officer. Such review includes the Chief Executive Officer's subjective
evaluation of factors that include the extent to which the goals were achieved
by the senior executive officers. The Committee reviews, makes changes if
desired, and approves such payments to the senior executive officers. Two
hundred and forty-sevenNo
employees of the Company received payments under the Incentive Compensation
Program with regard to the Company's financial performance in 1997, including each of the senior executive
officers (other than Mr. Wentzler). (See above under "Compensation of Executive
Officers", "Summary Compensation Table".)
Stock Options.1998.
STOCK OPTIONS. For many years the Company has used stock options as its
long-term incentive program for senior executive officers and other key
employees. Stock options are used in order to relate the benefits received by
the senior executive officers and key employees to the amount of appreciation
realized by the stockholders over comparable periods. The Committee administers
the Company's stock option plans, taking into consideration the recommendations
of the Chief Executive Officer with regard to specific option grants. Stock
options are generally granted every 12 to 18 months. Stock options other than
"Performance Options" (discussed below) are usually granted at exercise prices
not less than the market value of the stock on the date of the grant. In
general, 20% of options vest one year after the date of grant and the remainder
of the options vests ratably over the next four years (assuming continued
employment). As a result, no options have any realizable value unless the
optionee remains employed by the Company and the Company's stock appreciates in
value over the exercise price. Termination of employment triggers a requirement
that the options be exercised or forfeited. All stock options are
non-transferable. Stock options provide the senior executive officers and other
key employees the opportunity to acquire and build a meaningful ownership
interest in the Company and, therefore, closely align the their interests with
those of the stockholders.
-11-
14
Performance Based Stock Options.PERFORMANCE BASED STOCK OPTIONS. The Plan also permits the issuance
of options (the "Performance Options") that are subject to early vesting only if
the price of the Common Stock increases significantly. Performance Options
include the following special terms and conditions:
Oo The Exercise Price is the greater of (i) $25.00 per share or (ii) the
Market Value Per Share on the Grant Date
Oo These options vest in full no less than five years from the Grant Date
(assuming that the option holder is still employed by the Company),
subject to earlier vesting as follows:
Oo Fifty percent of each such option vests immediately if the Market
Value Per Share is equal to or greater than 150% of the Exercise
Price for a period of at least 20 consecutive trading days; and
Oo The remaining fifty percent vests immediately if the Market Value
Per Share is equal to or greater than 200% of the Exercise Price for
a period of at least 20 consecutive trading days
Oo These options are immediately exercisable upon vesting; provided,
however, that no more than 100,000 shares of Common Stock may be
exercised by any individual after vesting in any 90 day period, except
in the event of the death, incapacity or termination of employment of
the holder or the occurrence of a Corporate Change.
Oo Such options must be exercised within three years of vesting or else
they expire.
-12-
For example, if the closing price per share of the Common Stock is at or
below $25.00 on the date of grant of any of such options, the exercise price
will be $25.00 per share. Therefore, early vesting of 50% of such options would
not occur until the closing price per share is at least $37.50 per share for 20
consecutive trading days, and the remaining 50% of such options would not vest
early unless the closing price per share is at least $50.00 per share for 20
consecutive trading days.
The Committee believes that such options will be powerful incentives to
such senior executive officers to bring their full talents and energies to bear
to accomplish the significant increases in stockholder values that vesting
requires, within the option period. In 1997,1998, the Committee approved grantsa grant of
Performance Options to Messrs. McInnes, Coombs, Hertel and Vogt.Mr. Symens. (See above under "Summary Compensation Table"
and "Stock Options" for details of these option grants.)
CompensationSTOCK OPTION EXCHANGE PROGRAM. In the Fall of 1998 the Committee
reviewed the outstanding options under the Company's stock option plans and
determined that many optionees held options at exercise prices that limited
their effectiveness as a tool for employee retention and as a long-term
incentive. To address this problem, the Committee consulted with an independent
benefits consultant and, after considering various alternative methods of
dealing with this problem, adopted a stock option exchange program (the "Option
Exchange Program"). Under the Option Exchange Program, eligible employees were
permitted to surrender existing options granted in 1996, 1997 and 1998 in
exchange for a new option to purchase a lesser number of shares of Common Stock
at a lower exercise price, $10.1875, which was the fair market value on the date
of the Chief Executive Officer.Committee's action. Options granted in 1996 were exchanged for new
options to purchase only 70% as many shares of Common Stock and options granted
in 1997 or 1998 were exchanged for new options to purchase only 50% as many
shares of Common Stock. New options maintained the same vesting schedule as the
exchanged options. All executive officers elected to participate in the Option
Exchange Program, although performance options were not eligible for the
program. As a result of the Option Exchange Program, approximately 516,000
shares were returned to the Company's stock option plans for future grants (net
of the new options granted under the Option Exchange Program). (See above under
"Ten Year Option Repricing Table" for details of certain of these new options.)
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Mr. McInnes is employed
pursuant to the terms of a four year employment agreement entered into in 1996
in connection with his initial hiring. Under his employment agreement, Mr.
McInnes is paid a base salary of $285,000 per year, subject to review by the
Committee from year to year and increase if merited. UnderMr. McInnes did not receive
a bonus under the Incentive Compensation Program since the Company achieved in excess of 80% but less than
90% of its earnings per share goal for 1997, the Committee consideredwith regard to the Company's
record revenues and earnings and Mr. McInnes' achievement of his
individual goals, including his development of new operational systems for the
Company and his recruitment of additional senior management personnel,performance in awarding him a bonus of $82,000 on an exception basis. If the Company had
achieved 100% of its earnings per share goal for 1997, Mr. McInnes would have
been entitled to a maximum bonus of $122,550.1998.
Submitted by the Management and Compensation Committee
of the Board of Directors in March 1998,1999,
Tom H. Delimitros, Chairman
Stephen T. HarcrowHoyt Ammidon, Jr.
Kenneth P. Mitchell
-12-
15
This report and the Performance Graph set forth below have been prepared
for inclusion in the proxy materials to be provided to the stockholders of the
Company in anticipation of the Annual Meeting of Stockholders to be held May 15, 199817,
1999 and not for inclusion in any other filing required under the Securities Act
of 1933 or the Securities Exchange Act of 1934 (the "Exchange Act"), except to
the extent the Company specifically incorporates such information by reference
into a filing under either of such Acts. This Report is not to be considered
"soliciting materials" as that term is used in the proxy rules of the Securities
and Exchange Commission.
INSIDER STOCK SALES
The Company acknowledges that sales of Common Stock by the Company's
insiders will occur periodically. In particular, the Company believes that its
insiders who have a significant portion of their net worth in Common Stock may
desire to diversify their investment portfolio over time. The Company has
established an insider trading policy for insider transactions. This policy is
designed to help ensure compliance with the federal securities laws and allow
the anticipated periodic sales to occur in an orderly fashion, typically within
a window period following the
-13-
release of quarterly financial data. The insider trading policy also prohibits
directors, officers and employees of the Company from purchasing securities of
the Company on margin or in short sales and from buying or selling puts, calls
or options involving securities of the Company (other than employee stock
options). All directors, executive officers and any employees owning more than
5% of any class of securities of the Company are generally required to limit
transactions in Company securities to certain specified "window" periods and
they are generally prohibited from selling more than 25% of the amount of
Company securities individually owned in any 12 month period.
-13-
16
PERFORMANCE GRAPH
COMPARISON OF FIVE5 YEAR CUMULATIVE TOTAL RETURN*
AMONG TETRA TECHNOLOGIES, INC., THE S & P&P 500 INDEX,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND A PEER GROUP
12/92 12/93 12/94 12/95 12/96 12/97
------- ------- ------- ------- ------- -------
TETRA TECHNOLOGIES, INC. 100.00 86 144 211 306 255
Peer Group 100.00 100 98 123 153 179
S & P 500 100.00 110 112 153 189 252
NASDAQ STOCK MARKET (U.S.) 100.00 115 112 159 195 240
* Value of $100 invested on December 31, 1992 in indicated stock or index;
including reinvestment of dividends; fiscal year ending December 31.[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
Tetra Technologies Inc Del (TTI)
CUMULATIVE TOTAL RETURN
-----------------------------------------------------------
12/93 12/94 12/95 12/96 12/97 12/98
TETRA TECHNOLOGIES, INC....... 100 167 244 354 296 154
PEER GROUP.................... 100 98 125 151 175 142
S&P 500....................... 100 101 139 171 229 294
NASDAQ STOCK MARKET (U.S.).... 100 98 138 170 208 294
The Peer Group consists of the following companies:
Albemarle Corporation Minerals Technologies Inc.
Amcol International Corporation NewPark Resources, Inc.
Bemis Inc. Oil-Dri Corp of America
BetzDearborn, Inc. OM Group, Inc.
Calgon Carbon Corporation Omega Environmental,
Albemarle Corporation International Technology Corp. Quaker Chemical Corporation
Amcol International Corporation Lilly Industries, Inc. Raychem Corporation
Bemis Inc. Minerals Technologies Inc. Scotts Company
Calgon Carbon Corporation NewPark Resources, Inc. Stephan Company
Chemed Corporation Oil-Dri Corp of America Sybron Chemicals, Inc.
Cytec Industries, Inc. OM Group, Inc. SynAlloy Corporation
Ferro Corporation Omega Environmental, Inc. Witco Corporation
Geon Company Pall Corporation
Cytec Industries, Inc. Quaker Chemical Corporation
Dekalb Genetics Corporation Raychem Corporation
Ferro Corporation Scotts Company
Geon Company Stephan Company
The GNI Group, Inc. Sybron Chemicals, Inc.
International Technology Corp. SynAlloy Corporation
Lilly Industries, Inc. Witco Corporation
The following companies, each of which was included in the Company's Peer
Group used for the Performance Graph contained in the Company's definitive proxy
statement which involved the election of the Company's directors in 1997,1998, are no
longer part of the Peer Group, since their stocks are no longer publicly traded:
Allwaste,BetzDearborn, Inc., Mid-American Waste Systems, Inc., PetroliteDekalb Genetics Corporation, and Western Waste Industries.The GNI Group, Inc.
-14-
17
===============================================================================- - ------------------------------------------------------------------------------
PROPOSAL 2. APPROVAL OF AUDITORS
===============================================================================- - ------------------------------------------------------------------------------
Proposal 2 requests stockholder approval of the Board of Directors
appointment of the firm of Ernst & Young LLP as the Company's independent
auditors for the year ending December 31, 1998.1999. Representatives of Ernst & Young
LLP are expected to be present at the Annual Meeting of Stockholders and will
have an opportunity to make a statement if they desire and to respond to
appropriate questions from those attending such meeting. Ernst & Young LLP has
served as independent auditors for the Company since 1981.
===============================================================================
COMPLIANCE WITH- - ------------------------------------------------------------------------------
SECTION 16(A) OF THE EXCHANGE ACT
===============================================================================BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- - ------------------------------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of the Common Stock, to
file initial reports of ownership and reports of changes in ownership of Common
Stock (Forms 3, 4 and 5) with the Securities and Exchange Commission (the "SEC")
and with the New York Stock Exchange. Executive officers and directors and
greater than 10% stockholders are required by SEC regulations to furnish the
Company with copies of all such forms they file.
To the Company's knowledge, based solely on the Company's review of the
copies of such reports received by the Company and on written representations by
certain reporting persons that no reports on Form 5 were required, the Company
believes that during the fiscal year ended December 31, 1997,1998, all Section 16(a)
filing requirements applicable to its executive officers and directors and 10%
stockholders were complied with in a timely manner.
===============================================================================manner except that each of Messrs.
Mitchell and Vogt did not timely report purchases of shares of Common Stock on a
Form 4, although each filed a Form 5 with respect to those purchases.
- - ------------------------------------------------------------------------------
PROPOSALS OF STOCKHOLDERS
===============================================================================- - ------------------------------------------------------------------------------
A proposal of a stockholder intended to be presented at the Company's 19992000
Annual Meeting of Stockholders must be received at the Company's principal
executive offices no later than December 1, 1998November 30, 1999 and comply with the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") if the stockholder making the proposal desires such
proposal to be considered for inclusion in the Company's proxy statement and form of proxymaterials
relating to such meeting. The Company may exercise discretionary voting
authority with respect to any stockholder proposal, other than a nomination of a
candidate for election as a director, not included in the Company's proxy
materials unless notice of such proposal is received by the Company not later
than February 17, 2000 and is accompanied by a written statement as required by
Rule 14a-8 under the Exchange Act.
Additionally, the Bylawsbylaws of the Company provide that a stockholder may
nominate directors only if written notice complying with the provisions set
forth in the Bylawsbylaws is delivered to the Company by such stockholder 80 days in
advance of an annual meeting or within ten days after the date of notice by the
Company of a special meeting involving the election of directors. ===============================================================================If such notice
is timely given but is not accompanied by a written statement to the extent
required by Rule 14a-8 under the Exchange Act, the Company may exercise
discretionary voting authority over proxies with respect to such proposal.
-15-
- - ------------------------------------------------------------------------------
ADDITIONAL FINANCIAL INFORMATION
===============================================================================- - ------------------------------------------------------------------------------
Stockholders may obtain additional financial information of the Company
for the year ended December 31, 19971998 from the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission. A copy of the Annual
Report on Form 10-K may be obtained without charge by written or oral request to
Carole K. Bishop, Manager, Investor Relations, TETRA Technologies, Inc., 25025
IH-45 North, 6th Floor, The Woodlands, Texas 77380, telephone (281) 367-1983.
This copy will be sent via first class mail or equally prompt means within one
business day of receipt of such request.
-15-
===============================================================================- - ------------------------------------------------------------------------------
OTHER MATTERS
===============================================================================- - ------------------------------------------------------------------------------
The Board of Directors has at this time no knowledge of any matters to be
brought before the annual meeting other than those referred to above. However,
if any other matters properly come before the annual meeting, it is the
intention of the persons named in the accompanying proxy to vote said proxy in
accordance with their best judgment on such matters.
A certified copy of the list of stockholders as of the record date of
March 20, 199822, 1999 will be available for stockholder inspection at the Company's
office ten days prior to the meeting date of May 15, 1998.17, 1999.
By Order of the Board of Directors,
/s/ BASS C. WALLACE, JR.
BASS C. WALLACE, JR.
Corporate Secretary
March 23, 199829, 1999
The Woodlands, Texas
-16-
18FRONT SIDE OF PROXY
PROXY TETRA TECHNOLOGIES, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 15, 199817, 1999
The undersigned hereby constitutes and appoints BASS C. WALLACE, JR. and PAUL D. COOMBS,GEOFFREY M. HERTEL,
and each or either of them, lawful attorneys and proxies of the undersigned, each acting
alone with full power of substitution, for and in the name, place and stead of
the undersigned, to attend the annual meeting of stockholders of TETRA
Technologies, Inc., (herein the "Company") to be held at The Woodlands Executive Conference Center and Resort, 2301 North Millbend Drive,
The Woodlands,the Omni Houston
Hotel, Four Riverway, Houston, Texas 7738077056 on the 15th17th day of May 19981999 at 11:00
a.m., Central Daylight Savings Time, and any adjournments(s)adjournment(s) thereof, with all powers the
undersigned would possess if personally present and to vote thereat, as provided
on the reverse side of this card, the number of shares the undersigned would be
entitled to vote if personally present.
1. Election of Directors:ELECTION OF DIRECTORS:
[ ] FOR all nominees listed, except as indicated to the contrary below [ ] WITHHOLD AUTHORITY to vote for
except as indicated to the election of all nominees
contrary below
NOMINEES: Tom H. Delimitros, Stephen T. Harcrow, Geoffrey M. HertelHoyt Ammidon, Jr. and Kenneth P. Mitchell
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that person's name in the space provided below.
- - -------------------------------------------------------------------------------below:
_______________________________________________________________
2. To approve the appointment of ErnstTO APPROVE THE APPOINTMENT OF ERNST & YoungYOUNG LLP as the Company's independent
auditors for the year 1998.AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE YEAR 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE)
19(CONTINUED FROM OTHER SIDE)
Every properly signed proxy will be voted in accordance with the
specification made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2. All prior proxies are hereby revoked.
This Proxy will also be voted in accordance with the discretion of the
proxies or proxy on any other business. Receipt is hereby acknowledged of the
Notice of Annual Meeting and Proxy Statement of the Company dated March 24,
1998.
Dated __________________________________ , 1998
_______________________________________________29,
1999.
Dated: _________________________, 1999
______________________________________
Signature of Shareholder
_____________________________________________________________________________________
Signature of Shareholder
Note:NOTE: Please sign exactly as name
appears hereon. Joint owners
should each sign. When Signingsigning
as attorney, executor,
administrator, trustee or
guardian, please give full
title as such.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY