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 Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Section 240.14a-11(c) or
Section 240.14a-12
TGC INDUSTRIES, 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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5) Total fee paid.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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TGC INDUSTRIES, INC.
1304 Summit Avenue, Suite 2
Plano, Texas 75074
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 6, 1996
To the Shareholders of
TGC INDUSTRIES, INC.
The annual meeting of the shareholders of TGC Industries, Inc.
(Company) will be held at Janney Montgomery Scott Inc., 8th Floor Conference
Room, 26 Broadway, New York, New York 10004 on June 6, 1996 at 10:00 A.M.,
New York time, for the following purposes:
1. To elect five (5) directors to serve until the next annual
meeting of shareholders and until their respective successors shall be
elected and qualified;
2. To ratify the selection of Grant Thornton LLP as independent
auditors; and
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Information regarding matters to be acted upon at this meeting
is contained in the accompanying Proxy Statement. Only shareholders of
record at the close of business on April 22, 1996 are entitled to notice
of and to vote at the meeting and any adjournment thereof.
All shareholders are cordially invited to attend the meeting.
Whether or not you plan to attend, please complete, sign, and return
promptly the enclosed proxy in the accompanying addressed envelope
for which postage is prepaid. You may revoke the proxy at any time
before the commencement of the meeting.
By Order of the Board of Directors:
William J. Barrett
Secretary
Plano, Texas
April 25, 1996
IMPORTANT
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE, SIGN,
AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE,
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING.
TGC INDUSTRIES, INC.
1304 Summit Avenue, Suite 2
Plano, Texas 75074
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- June 6, 1996
This Proxy Statement is furnished to shareholders in connection with
the solicitation of proxies by the management of TGC Industries, Inc.
(the "Company") for use at the annual meeting of shareholders to be held
at Janney Montgomery Scott Inc., 8th Floor Conference Room, 26 Broadway,
New York, New York on June 6, 1996 and at any adjournment thereof. The
Notice of Meeting, the form of Proxy, and this Proxy Statement are being
mailed to the Company's shareholders on or about April 25, 1996.
COSTS OF PROXY SOLICITATION
Although solicitation (the total expense of which will be borne
by the Company) is to be made primarily through the mail, the
Company's officers and/or employees and those of its transfer agent
may solicit proxies by telephone, telegram, or personal contact,
but in such event no additional compensation will be paid by the
Company for such solicitation. Further, brokerage firms, fiduciaries, and
others may be requested to forward solicitation material regarding
the meeting to beneficial owners of the Company's Common Stock, and
in such event the Company will reimburse them for all accountable
costs so incurred.
ACTION TO BE TAKEN
Action will be taken at the meeting to (1) elect a Board of
Directors, (2) ratify the selection of Grant Thornton LLP as
independent auditors, and (3) transact such other business as may
properly come before the meeting and any adjournment thereof. The
proxy will be voted in accordance with the directions specified
thereon, and otherwise in accordance with the judgment of the
persons designated as proxies. Any person executing the enclosed
proxy may nevertheless revoke it at any time prior to the actual
voting thereof by filing with the Secretary of the Company either
a written instrument expressly revoking it or a duly executed proxy
bearing a later date. Furthermore, such person may nevertheless
elect to attend the meeting and vote in person, in which event the
proxy will be suspended.
OUTSTANDING STOCK
The Company's Restated Articles of Incorporation authorize
25,000,000 shares of Common Stock with a par value of $.10 per
share and 4,000,000 shares of Preferred Stock with a par value of $1.00
per share. As of April 22, 1996 (the "Record Date"), which is the
date as of which the record of shareholders entitled to vote at the
meeting was determined, there were 6,166,018 shares of the
Company's Common Stock outstanding and no shares of the Company's Preferred
Stock outstanding.
In voting on all matters expected to come before the meeting,
a shareholder will be entitled to one vote, in person or by proxy,
for each share held in his name on the Record Date. The Company's
Restated Articles of Incorporation prohibit cumulative voting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Common Stock
The following tabulation sets forth the names of those persons
who are known to Management to be the beneficial owner(s) as of
March 12, 1996 of more than five percent (5%) of the Company's $.10
par value Common Stock. Such tabulation also sets forth the number
of shares of the Company's Common Stock beneficially owned as of
March 12, 1996 by all of the Company's directors and nominees
(naming them) and all directors and officers of the Company as a
group (without naming them). Persons having direct beneficial
ownership of the Company's Common Stock possess the sole voting and
dispositive power in regard to such stock. Unless otherwise
indicated, the following persons have direct beneficial ownership
of such shares of Common Stock. As of March 12, 1996, there were
6,166,018 shares of the Company's Common Stock issued and
outstanding.
<TABLE>
<S> <C> <C>
Name and Address Number of Shares Approximate
of Beneficial Owner of Common Stock Percent*
Allen T. McInnes 1,500,848 (1) 22.8%
650 Shartle Circle
Houston, TX 77024
Robert J. Campbell 185,347 (2) 3.0%
1304 Summit Ave., Suite 2
Plano, Texas 75074
Wayne A. Whitener 25,842 (3) 0.4%
1304 Summit Ave., Suite 2
Plano, Texas 75074
William J. Barrett 821,854 (4) 13.1%
26 Broadway, Suite 829
New York, New York 10004
Herbert M. Gardner 621,472 (5) 9.9%
26 Broadway, Suite 829
New York, New York 10004
Gerlach & Co. 400,000 6.4%
New York, NY
All directors and 3,180,906 46.4%
officers as a group (6 persons)
</TABLE>
*The percentage calculations have been made in accordance with
Rule 13d-3(d)(1) of the Securities Exchange Act of 1934. In making
these calculations, shares beneficially owned by a person as a
result of the ownership of options were deemed to be currently
outstanding solely with respect to the holders of such options.
(1) Includes 250,000 shares purchasable upon exercise of
options granted under the 1993 Stock Option Plan described below,
and 168,674 shares purchasable upon exercise of Warrants.
(2) Includes 7,668 shares purchasable upon exercise of options
granted under the 1986 Incentive and Non-Qualified Stock Option
Plan described below; and includes 6,666 shares purchasable upon
exercise of options granted under the Company's 1993 Stock Option Plan
described below, and 12,500 shares purchasable upon the exercise of
Warrants; and includes 28,625 shares owned by Mr. Campbell's wife.
Mr. Campbell disclaims beneficial ownership of these shares.
(3) Includes 2,334 shares purchasable upon exercise of options
granted under the Company's 1986 Incentive and Non-Qualified Stock
Option Plan and includes 5,000 shares purchasable upon exercise of
options granted under the Company's 1993 Stock Option Plan
described below.
(4) Includes 3,000 shares purchasable upon exercise of options
granted under the Company's 1986 Incentive and Non-Qualified Stock
Option Plan described below; includes 111,850 shares purchasable
upon the exercise of Warrants; includes 71,775 shares and 7,500
shares purchasable upon the exercise of Warrants owned by Mr.
Barrett's wife individually. Mr. Barrett has disclaimed beneficial
ownership of these shares.
(5) Includes 3,000 shares purchasable upon exercise of options
granted under the Company's 1986 Incentive and Non-Qualified Stock
Option Plan described below; includes 111,850 shares purchasable
upon the exercise of Warrants; and includes 83,848 shares owned by
Mr. Gardner's wife. Mr. Gardner has disclaimed beneficial
ownership of these shares.
Depositories such as The Depository Trust Company (Cede &
Company) as of March 12, 1996 held, in the aggregate, more than
five percent (5%) of the Company's then outstanding voting shares. The
Company understands that such depositories hold such shares for the
benefit of various participating brokers, banks, and other
institutions which are entitled to vote such shares according to
the instructions of the beneficial owners thereof. The Company has no
reason to believe that any of such beneficial owners hold more than
five percent (5%) of the Company's outstanding voting securities.
MANAGEMENT AND NOMINEES FOR DIRECTOR
Five (5) directors, comprising the entire membership of the
Company's Board of Directors, are to be elected at the annual
meeting of shareholders. Unless otherwise instructed, the proxy
holders will vote the proxies received by them for the nominees
shown below for a term of one year and until their successors are
duly elected and have qualified.
Although it is not contemplated that any nominee will be unable
to serve as a director, in such event the proxies will be voted by
the holders thereof for such other person as may be designated by
the current Board of Directors. The Management of the Company has
no reason to believe that any of the nominees will be unable or
unwilling to serve if elected to office, and to the knowledge of
Management, the nominees intend to serve the entire term for which
election is sought. There are no family relationships by blood,
marriage, or adoption between any director or executive officer, or
person nominated or chosen to become a director or executive
officer. Only five (5) nominees for director are named, even
though the Company's bylaws allow a maximum of nine, since the proposed
size of the board is deemed adequate to meet the requirements of
the Board of Directors. Up to two vacancies may be filled by the Board
of Directors under Texas law during the time between any two
successive annual shareholder meetings if suitable persons are
designated. The information set forth below with respect to each
of the nominees has been furnished by each respective nominee. Each
executive officer of the Company is a nominee as set forth below
with the exception of Doug Kirkpatrick (age 43) who has served as
Chief Financial Officer of the Company since 1986.
<TABLE>
<S> <C> <C>
Served as
Name, Age, and Executive Positions
Business Experience Officer Since with Company
Allen T. McInnes, 58 July 1993 Chairman of the
Chairman of the Board and Board, President
Chief Executive Officer of and CEO
the Company; Executive Vice
President and Director of
Tenneco, Inc. 1960-1992;
Director of Tetra Technologies,
President and CEO since
April 1, 1996; Director of
NationsBank Texas 1990-1993.
Robert J. Campbell, 64 1986 Vice-Chairman
Vice-Chairman of the Board of the Board
of the Company since August
1993; Chairman of the Board
and CEO of the Company from
July 1986 to July 1993; from
1979 to 1986 served as President
and Chief Executive Officer
of Supreme Industries, Inc.,
a manufacturer of specialized
truck bodies and shuttle buses;
Director of Supreme Industries,
Inc.
Wayne A. Whitener, 44 1986 Vice-President
President of the Company from of the Company,
1984 to July 1993; served as President of the
Vice President of the Company Geophysical
from 1983 to 1984; Area Manager Division
for Grant Geophysical Co. from
December 1978 until July 1983.
William J. Barrett, 56 1986 Secretary of
Senior Vice President of the Company
Janney Montgomery Scott
Inc., investment bankers,
since 1966; Secretary of
the Company since 1986;
Secretary, Assistant
Treasurer, and a Director
of Supreme Industries, Inc.,
a manufacturer of specialized
truck bodies and shuttle
buses, since 1979; Secretary,
Assistant Treasurer, and
a Director of Contempri
Homes, Inc., a modular
housing manufacturer, since
1987; Director of Esmor
Correctional Services, Inc.,
private management and
operation of secure and
non-secure corrections and
detention facilities for
federal, state and local
corrections agencies;
Director of Frederick's
of Hollywood, Inc., an
apparel marketing company;
Chairman of the Board of
Shelter Components Corporation,
a supplier to the manufactured
housing and recreational vehicle
industries; Secretary and a
Director of The Western
Transmedia Company, Inc., a
franchisee of Transmedia
Network, Inc., principally for
the State of California, a
specialized finance charge card company.
Herbert M. Gardner, 56 1986 None
Senior Vice President of
Janney Montgomery Scott Inc.,
investment bankers, since
1978; Chairman of the Board
and a Director of Supreme
Industries, Inc., a manufacturer
of specialized truck bodies
and shuttle buses, since 1979,
and President since 1992;
Chairman of the Board and
a Director of Contempri Homes,
Inc., a modular housing
manufacturing company,
since 1987; a Director of
Shelter Components Corporation,
a supplier to the manufactured
housing and recreational
vehicle industries; Director
of Nu Horizons Electronics
Corp., an electronic component
distributor; Director of
Transmedia Network, Inc.,
a specialized restaurant
savings charge card company;
Director of Hirsch
International Corp., an
importer of computerized
embroidery machines and
supplies, and developer of
embroidery machine application
software; Director of The
Western Transmedia Company,
Inc., a franchisee of Transmedia
Network, Inc. principally
for the State of California.
</TABLE>
The Company's Board of Directors recommends that you vote
FOR the nominees named above for election to the Board of
Directors.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee comprised
of Messrs. McInnes, Gardner, Barrett and Campbell. The Executive
Committee, which met two times during the fiscal year ended
December 31, 1995, is charged by the Company's bylaws with the
responsibility of exercising such authority of the Board of Directors as is
specifically delegated to it by the Board, subject to the
limitations contained in the bylaws. The Executive Committee is
also responsible for reviewing the compensation of the independent
auditors; conferring with the outside auditors to assure that
personnel in the treasurer's and controller's departments are
adequately trained and supervised; meeting periodically with the
independent auditors, Board of Directors, and certain officers of
the Company to insure the adequacy of internal controls and
reporting; reviewing the financial statements and conducting
pre-audit and post-audit review to assure the adequacy of all
phases of the audit; and performing any other duties or functions deemed
appropriate by the Board.
No compensation is paid to members of the Board of Directors,
other than the reimbursement of out-of-pocket expenses for travel
to meetings of the Board of Directors.
The Board of Directors does not have audit, nominating, or
compensation committees. The functions of a compensation committee
are performed by the entire Board of Directors.
During the fiscal year ended December 31, 1995, the Board of
Directors held four (4) special meetings in addition to its regular
meeting.
EXECUTIVE COMPENSATION
The table below sets forth on an accrual basis all cash and
cash equivalent remuneration paid by the Company during the year
ended December 31, 1995 to the Chief Executive Officer and any
other executives whose salary and bonus exceeded $100,000, if any.
Summary Compensation Table
<TABLE>
Annual Compensation Long-Term Compensation
Name and Other Restricted All
Principal Annual Stock Options/ Other
Position Year Salary Compensation Awards SAR's Compensation
<S> <C> <C> <C> <S> <C> <C>
Allen T. McInnes 1995 $99,539 $ 5,260(1) -0- -0- $4,384(2)
Chairman and CEO
R. J. Campbell 1995 $93,600 $20,654(3) -0- -0- $5,328(4)
Vice Chairman
(1) Represents personal use of company vehicle.
(2) Life insurance premiums ($900) and Company's contribution
to 401(k) program ($3,484).
(3) Represents personal use of company vehicle, Company's
payment for personal income tax preparation in 1995,
and 1994 Bonus of $18,500 paid in 1995.
(4) Represents Company's contribution to 401(k) program
($3,924) and life insurance premiums ($1,404) in 1995.
</TABLE>
The Company maintains Club memberships for certain of its
executive officers. Although these memberships may be utilized from
time-to-time for non-business purposes, the costs attributable to
non-business purposes were not material. The Company believes that the
aggregate amounts of such personal benefits do not exceed 10% of cash
compensation paid to any individual in the table or, with respect to the
group of all executive officers, ten percent(10%) of the aggregate cash
compensation paid to the members of such group.
401(k) PLAN
In 1987, the Company implemented a 401(k) salary deferral
plan (the Plan) which covers all employees who have reached the age of 20-1/2
years and have been employed by the Company for at least one year. The
covered employees may elect to have an amount deducted from their wages for
investment in a retirement plan. The Company has the option, at its
discretion, to make contributions to the Plan. Effective January 1, 1990,
the Company determinedin its discretion to make a matching contribution to
the Plan equal to 10% of the employees' contributions up to 6% of those
employees' compensation. On July 24, 1991, to be effective August 5, 1991,
the Board of Directors increased the Company's matching contribution to the
Plan to fifty cents ($.50) for every one dollar ($1.00) of compensation a
participant defers under the Plan up to 6% of those employees' compensation.
Beginning January 4, 1993, the Board of Directors discontinued the matching
contribution to the Plan. Concurrently with the acquisition of Chase
Packaging, the Board of Directors reinstated contributions to the 401(k)
salary deferral plan. The Company makes a matching contribution to the Plan
equal to the sum of seventy-five percent (75%) of each Participant's salary
reduction contributions to the Plan for such Plan year which are not in
excess of three percent (3%) of the Participant's compensation for such Plan
year, and fifty percent (50%) of each Participant's salary reduction
contributions to the Plan for such Plan Year which are in excess of
three percent (3%) of the Participant's compensation but not in
excess of eight percent (8%) of the Participant's compensation for such Plan
Year. The total amount of the Company's contribution during 1995 for the
four (4) executive officers of the Company participating in the 401(k) Plan
was asfollows: Allen T. McInnes - $3,483.85; Robert J. Campbell -$3,923.50;
Wayne A. Whitener -$2,877.40; and Doug Kirkpatrick - $2,548.58.
STOCK OPTION PLANS
1986 Incentive and Nonqualified Stock Option Plan
TGC's 1986 Incentive and Nonqualified Stock Option Plan is administered
by a Stock Option Committee consisting of three members of the Board of
Directors. The Stock Option Committee recommends, and the Board grants,
options covering TGC's Common Stock to TGC's officers and/or employees
based upon the value or potential value of services rendered by such persons.
The exercise price for options granted under the Nonqualified Plan will be
determined by the Stock Option committee on the date of grant; the exercise
price for options granted under the Incentive Plan will not be less than the
market value of the Common Stock on the date of grant. All options must be
exercised within five years from the date of grant. No options may be
exercised during the first 12 months following grant. During the second year
following the date of grant, options covering up to one-third of the shares
covered thereby may be exercised, and during the third year options covering
up to two-thirds of such shares may be exercised. Thereafter, and until the
options expire, the optionee may exercise options covering all of the shares.
Persons over sixty-five on the date of grant may exercise options covering
up to one-half of the shares during the first year and thereafter may
exercise all optioned shares. Subject to the limitations just described,
options may be exercisedas to all or any part of the shares covered thereby
on one or more occasions, but, as a general rule, options cannot be exercised
as to less than one-hundred shares at one time. The right to exercise is
contingent upon continued employment with the Company; provided, however,
that if any optionee becomes permanently disabled, then such optionee may
exercise his option at any time within ninety (90) days after the termination of
such employment due to disability. Notwithstanding the provisions discussed
above, upon a Change of Control (as defined in the Incentive and Nonqualified
Stock Option Plan) all optionsoutstanding at such time will become
immediately exercisable in full. Granted options covering 46,668 shares are
outstanding under the Plan. The Plan will terminate on July 24, 1996.
Any stock option outstanding at the termination date will remain outstanding
until it has been exercised, terminated, or has expired.
On June 3, 1993, the Company's Board of Directors approved and
adopted the Company's 1993 Stock Option Plan (the "1993 Stock Option
Plan"). At the 1994 Annual Meeting, shareholders approved the 1993 Stock
Option Plan. The following paragraphs summarize certain provisions of the
1993 Stock Option Plan and are qualified in their entirety by reference
thereto.
The 1993 Stock Option Plan provides for the granting of
options (collectively, the "Options") to purchase shares of the Company's
Common Stock to certain key employees of the Company (and/or any of its
affiliates), and certain individuals who are not employees of the Company but
who from time-to-time provide substantial advice or other assistance or
services to the Company (and/or any of its affiliates). The 1993 Stock Option
Plan authorizes the granting of options (both statutory and non-statutory) to
acquire up to 750,000 shares of Common Stock, subject to certain adjustments
described below, to be outstanding at any time. Subject to the foregoing,
there is no limit on the absolute number of awards that may be granted during
the life of the 1993 Stock Option Plan. At the present time, there are
approximately 350 employees of the Company, including four officers of the
Company (three of whom are alsodirectors), who, in management's opinion, would
be considered eligible to receive grants under the 1993 Stock Option Plan,
although fewer employees may actually receive grants.
Authority to administer the 1993 Stock Option Plan has been delegated to
a committee (the "Committee") of the Board of Directors. Except as expressly
provided by the 1993 Stock Option Plan, the Committee has the authority, in its
discretion, to award Options and to determine the terms and conditions (which
need not be identical) of such Options, including the person to whom, and the
time or times at which, Options will be awarded, the number of Options to be
awarded to each such person, the exercise price of any such Options, and the
form, terms, and provisions of any agreement pursuant to which such Options are
awarded. The 1993 Stock Option Plan also provides that the Committee may be
authorized by the Board of Directors to make cash awards as specified by the
Board of Directors to the holder of an Option in connection with the exercise
thereof.
Subject to the limitations set forth below, the exercise price of the
shares of stock covered by each 1993 Option will be determined by the Committee
on the date of award.
Unless a holder's option agreement provides otherwise, the following
provisions will apply to exercise by the holder of his or her option: No
options may be exercised during the first twelve months following grant.
During the second year following the date of grant, options covering up to one-
third of the shares covered thereby may be exercised, and during the third year
following the date of grant, options covering up to two-thirds of such shares
may be exercised. Thereafter, and until the options expire, the optionee may
exercise options covering all of the shares. Persons over sixty-five on the
date of grant may exercise options covering up to one-half of the shares during
the first year and thereafter may exercise all optioned shares. Subject to the
limitations just described, options may be exercised as to all or any part of
the shares covered thereby on one or more occasions, but, as a general rule,
options cannot be exercised as to less than one-hundred shares at any one time.
The exercise price of the shares of stock covered by each incentive stock
option ("ISO"), within the meaning of Sec. 422 of the Internal Revenue Code of
1986, as amended (the "Code"), will not be less than the fair market value of
stock on the date of award of such ISO except that an ISO may not be awarded
to any person who owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company unless the
exercise price is at least one hundred ten percent (110%) of the fair market
value of the stock at the time the ISO is awarded and the ISO is not
exercisable after the expiration of five years from the date it is awarded.
The exercise price of the shares of Common Stock covered by each Option that
is not an ISO will not be less than fifty percent (50%) of the fair market
value of the stock on the date of award.
Payment for Common Stock issued upon the exercise of an Option may be
made in cash or with the consent of the Committee, in whole shares of Common
Stock owned by the holder of the Option for at least six months prior to the
date of exercise or, with the consent of the Committee, partly in cash and
partly in such shares of Common Stock. If payment is made, in whole or in
part, with previously-owned shares of Common Stock, the Committee may issue to
such holder a new Option for a number of shares equal to the number of shares
delivered by such holder to pay the exercise price of the previous Option
having an exercise price equal to at least one-hundred percent (100%) of the
fair market value per share of the Common Stock on the date of the exercise of
the previous Option.
The duration of each Option will be for such period as the Committee
determines at the time of award, but not for more than ten years from the date
of award in the case of an ISO.
In the event of any change in the number of shares of Common Stock
effected without receipt of consideration therefor by the Company by reason of
a stock dividend, or split, combination, exchange of shares or other
recapitalization, merger, or otherwise, in which the Company is the surviving
Corporation, the aggregate number and class of reserved shares, the number and
class of shares subject to each outstanding Option, and the exercise price of
each outstanding Option will be automatically adjusted to reflect the effect
thereon of such change. Unless a holder's option agreement provides otherwise,
a dissolution or liquidation of the Company, certain sales of all or
substantially all of the assets of the Company, certain mergers or
consolidations in which the Company is not the surviving corporation, or
certain transactions in which another corporation becomes the owner of
fifty percent (50%) or more of the total combined voting power of all classes
of stock of the Company, will cause such holder's Options then outstanding to
terminate, but such holder may, immediately prior to such transaction, exercise
such options without regard to the period and installments of exerciseability
applicable pursuant to such holder's option agreement.
The 1993 Stock Option Plan will terminate on June 3, 2003, or such
earlier date as the Board of Directors may determine. Any stock option
outstanding at the termination date will remain outstanding until it has been
exercised, terminated, or has expired.
The 1993 Stock Option Plan may be terminated, modified, or amended by the
Board of Directors at any time without further shareholder approval, except that
shareholder approval is required for any amendment which: (a) changes the
number of shares of Common Stock subject to the 1993 Stock Option Plan other
than by adjustment provisions provided therein, (b) changes the designation of
the class of employees eligible to receive Options, (c) decreases the price
at which ISO's may be granted, (d) removes the administration of the 1993 Stock
Option Plan from the Committee, or (e) without the consent of the affected
holder, causes the ISO's granted under the 1993 Stock Option Plan and
outstanding at such time that satisfied the requirements of Sec. 422 of the
Code no longer to satisfy such requirements.
During 1995 no stock options were granted under the Company's 1993 Stock
Option Plan to officers and employees of the Company. Grantedoptions covering
480,000 shares are outstanding under the 1993 Stock Option Plan.
ISO's Exercised in 1995 by Officers of Company
On January 9, 1995, options for 4,000 shares and 2,332 shares of Common
Stock at an exercise price of $.875 and $1.00, respectively, per share were
exercised by Mr. Wayne Whitener, Vice President of the Company. The Company
received 1,458 shares of its Common Stock at a market value of $4.00 per share
as payment for the exercise of the options.
On February 1, 1995, Mr. Allen T. McInnes, Chairman and CEO of the
Company, exercised stock options to purchase 125,000 shares of Common Stock.
The Company received $100,000 representing payment in full of the exercise price
of the option.
The following table shows certain information with respect to options
to acquire TGC's Common Stock held by the Company's Chairman and CEO and the
Company's Vice Chairman.
<TABLE>
Aggregated Options Exercised
and FY-End Options Values
<S> <C> <C> <C> <C>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Name and Shares
Principal Acquired on Value Exercisable/ Exercisable/
Position Exercise (#) Realized ($) Unexerciable Unexercisable
Allen T. McInnes -0- -0- 250,000/(2) $ 81,250/
Chairman & CEO 125,000 (1) -0-
Robert J. Campbell -0- -0- 14,333/ $ 1,333.50/
Vice Chairman 15,667 $ 291.75
(1) Mr. McInnes transferred 125,000 options to the Company's
general pool on March 5, 1996.
(2) Mr. McInnes transferred 250,000 options to the Company's
general pool on April 12, 1996.
</TABLE>
TRANSACTIONS WITH MANAGEMENT
On July 28, 1995, 64,676 shares of Common Stock were contributed to the
Company by a Director of TGC Industries, Inc. The Company included these
shares in its treasury stock account at $2.50 per share which represents the
fair market value of the Company's Common Stock on the date of the transaction.
On July 31, 1995, certain executive officers and directors of the Company
exchanged $200,000 in short-term debt for Private Placement Units. On August 1,
1995, 4,874 Units were issued as payment of accrued interest on this debt.
In the fourth quarter of 1995, certain executive officers and directors
of the Company made loans to the Company in the amount of $240,000. Interest
expense of $3,538.35 was accrued on these loans for this period.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Grant Thornton LLP to serve as
auditors for the Company. It is expected that a representative of Grant
Thornton LLP will be present at the shareholders' meeting with the opportunity
to make a statement if he/she desires to do so and also will be available to
respond to appropriate questions at the meeting.
The Company's Board of Directors recommends that you vote FOR ratification
of the selection of Grant Thornton LLP as the Company's auditors for the fiscal
year ending December 31, 1996.
OTHER MATTERS
The Company's management knows of no other matters that may properly be,
or which are likely to be, brought before the meeting. However, if any other
matters are properly brought before the meeting, the persons named in the
enclosed proxy, or their substitutes, will vote in accordance with their best
judgment on such matters.
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at the Company's Annual
Meeting of Shareholders in 1997 must be received by the Company at its
principal executive offices in Plano, Texas on or before December 1, 1996 in
order to be included in the Company's proxy statement and form of proxy
relating to that meeting.
FINANCIAL STATEMENTS
Financial statements of the Company are contained in the Annual Report to
Shareholders for the fiscal year ended December 31, 1995, enclosed herewith.
By Order of the Board of Directors
William J. Barrett,
Secretary
Plano, Texas
April 25, 1996
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