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
/X/ Definitive Proxy Statement the Commission only (as
/ / Definitive Additional Materials permitted by Rule
/ / Soliciting Material Pursuant to 14a-6 (e)(2)
Rule 14a-11 (c) or Rule 14a-12
TGC INDUSTRIES, INC.
- -----------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
/X/ No fee required.
// Fee computed on table below per Exchange Act Rules 14a-6 (i) (4) and 0-11
(1) Title of each class of securities to which transaction applies.
(2) Aggregate number of securities to which transaction applies.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined).
(4) Proposed maximum aggregate value of transaction.
(5) Total fee paid.
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a) (2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
<PAGE>
TGC INDUSTRIES, INC.
1304 Summit Avenue, Suite 2
Plano, Texas 75074
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 5, 1997
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 5, 1997 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 18, 1997 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:
/s/ William J. Barrett
William J. Barrett
Secretary
Plano, Texas
April 21, 1997
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.
<PAGE>
TGC INDUSTRIES, INC.
1304 Summit Avenue, Suite 2
Plano, Texas 75074
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- June 5, 1997
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 5, 1997 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 21, 1997.
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 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.
<PAGE>
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
18, 1997 (the "Record Date"), which is the date as of which the record of
shareholders entitled to vote at the meeting was determined, there were
6,315,738 shares of the Company's Common Stock outstanding and 1,148,850
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 of Common Stock and Preferred Stock 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
The following tabulation sets forth the names of those persons who are known
to Management to be the beneficial owner(s) as of March 20, 1997 of more than
five percent (5%) of the Company's Common Stock or Preferred Stock. Such
tabulation also sets forth the number of shares of the Company's Common Stock
or Preferred Stock beneficially owned as of March 20, 1997 by all of the
Company's directors and nominees (naming them), executive officers, 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 or
Preferred Stock possess the sole voting and dispositive power in regard to
such stock. The Preferred Stock is freely convertible into shares of Common
Stock at the conversion price per share of Common Stock of $0.75 if converted
prior to close of business on July 1, 1998, at the conversion price per share
of Common Stock of $1.25 if converted after July 1, 1998 but prior to close
of business on July 1, 1999, and at the conversion price per share of Common
Stock of $2.00 thereafter. Ownership of Preferred Stock is deemed to be
beneficial ownership of Common Stock at the conversion price per share of
$0.75 under Rule 13d-3(d) (1) promulgated under the Securities Exchange Act
of 1934. As of March 20, 1997, there were 6,315,738 shares of Common Stock
and 1,148,850 shares of Preferred Stock outstanding.
<PAGE>
<TABLE>
<S> <C> <S> <C> <C> <C>
Name and Address Title of Class Amount & Nature Approximate
of Beneficial Owner of Beneficial % of Class (1)
Ownership
Allen T. McInnes Common Stock 1,632,284 (2)(3) 23.64%
Tetra Technologies Preferred Stock 63,162 5.50%
25025 Interstate 45 N.
The Woodlands, TX 77380
Robert J. Campbell Common Stock 229,888 (2)(3)(4) 3.58%
TGC Industries, Inc. Preferred Stock 3,000 (4) *
1304 Summit Ave.,
Ste 2
Plano, Texas 75074
Wayne A. Whitener Common Stock 93,451 (2)(3) 1.47%
TGC Industries, Inc. Preferred Stock 3,000 *
1304 Summit Ave.,
Ste 2
Plano, Texas 75074
William J. Barrett Common Stock 1,072,912(2)(3)(6) 15.87%
26 Broadway, Preferred Stock 50,000 (6) 4.35%
Suite 829
New York, NY 10004
Herbert M. Gardner Common Stock 801,290 (2)(3)(5) 11.97%
26 Broadway, Preferred Stock 40,000 (5) 3.48%
Suite 829
New York, NY 10004
Ken Uselton Common Stock 18,673 (3) *
TGC Industries, Inc.
1304 Summit Ave.,
Ste 2
Plano, Texas 75074
Gerlach & Co. Common Stock 933,333 (2) 13.67%
111 Wall Street, Preferred Stock 80,000 6.96%
8th Floor
New York, NY
Special Situations Common Stock 333,333 (2) 5.01%
Cayman Fund L.P. Preferred Stock 50,000 4.35%
Special Situation Common Stock 1,000,000 (2) 13.51%
Fund III L.P. Preferred Stock 150,000 13.06%
All directors and Common Stock 3,848,501 48.90%
officers as Preferred Stock 159,162 13.85%
a group (6 persons)
_________________________
</TABLE>
*Denotes less than 1% beneficial ownership.
(1) The percentage calculations have been made in accordance with Rule
13d-3(d)(1) promulgated under the Securities Exchange Act of 1934. In making
these calculations, shares of Common Stock beneficially owned by a person as
a result of the ownership of Preferred Stock and certain options and warrants
were deemed to be currently outstanding solely with respect to the holders of
such Preferred Stock, options, and warrants.
(2) Includes the number of shares of Common Stock which are deemed to
be beneficially owned as a result of ownership of shares of Preferred Stock,
which Preferred Shares ($5.00 per share) are freely convertible into shares
of Common Stock at the conversion price per shares of Common Stock of $.75
through July 1, 1998.
<PAGE>
(3) Includes the number of Shares of Common Stock set forth opposite
the person's name in the following table, which shares are beneficially owned
as a result of the ownership of Stock Options and Stock Purchase Warrants.
<TABLE>
<S> <C> <C>
Stock Warrants
Options
Allen T. McInnes -0- 168,674
Robert J. Campbell 67,500 12,500
Wayne A. Whitener 18,000 -0-
Herbert M. Gardner -0- 111,850
William J. Barrett -0- 111,850*
Ken Uselton 3,000 -0-
All directors and officers
as a group (6 persons) 88,500 404,874
</TABLE>
- ---------------------------
*Excludes 7,500 Warrants owned Mr. Barrett's wife. Mr. Barrett disclaims
beneficial ownership of such Warrants.
(4) Excludes 28,625 shares of Common Stock owned by Robert J.
Campbell's wife and also excludes 13,333 shares purchasable upon the
conversion of Preferred Stock owned by Mr. Campbell's wife. Mr. Campbell has
disclaimed beneficial ownership of these shares.
(5) Excludes 83,848 shares of Common Stock owned by Herbert M.
Gardner's wife and also excludes 13,333 shares purchasable upon the
conversion of Preferred Stock owned by Mr. Gardner's wife. Mr. Gardner has
disclaimed beneficial ownership of these shares.
(6) Excludes 71,775 shares of Common Stock owned by William J.
Barrett's wife and also excludes 66,666 shares purchasable upon the
conversion of Preferred Stock owned by Mr. Barrett's wife. Mr. Barrett has
disclaimed beneficial ownership of these shares.
Depositories such as The Depository Trust Company (Cede & Company) as of
March 20, 1997 held, in the aggregate, more than five percent (5%) of the
Company's then outstanding Common Stock 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.
<PAGE>
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
Ken Uselton (age 54) who has served as Division Controller since 1995 and
Treasurer since August 1, 1996.
<TABLE>
<S> <C> <C> <C> <C> <S>
Name, Age, and Served as
Business Experience Executive Positions
Officer Since with Company
Allen T. McInnes, 59 July 1993 Chairman
Chairman of the Board and of the Board
Chief Executive Officer of
the Company from August 1993
to March, 1996; 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, 65 1986 Vice-Chairman
Chief Executive Officer of the Board
of the Company since and CEO
March, 1996 and Vice-Chairman
of the Board since August 1993;
Chairman of the Board and
CEO of the Company from
July 1986 to July 1993; from
1979-1986 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, 45 1986 President of
President, Director, and Chief the Company
Operating Officer of the Company; and COO
President of the Geophysical
Division since 1984; served as
Vice President of TGC from 1983
to 1984; Area Manager for Grant
Geophysical Co. from December 1978
until July 1983.
William J. Barrett, 57 1986 Secretary of
Director of the Company; the Company
Senior Vice President of
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; Director of
Frederick's of Hollywood, Inc., an
apparel marketing company;
Director of Shelter Components
Corporation, a supplier to the
manufactured housing industry;
Secretary and a Director of The
Western Systems Corporation, a
company seeking to redeploy its
cash assets through suitable
investments and business
combinations.
Herbert M. Gardner, 57 1986 None.
Director of the Company;
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;
a Director of Shelter Components
Corporation, a supplier to the
manufactured housing industry;
Director of Nu Horizons
Electronics Corp., an electronic
component distributor; Director
of Transmedia Network, Inc.,
a company that markets a charge
card offering savings to the
Company's card members at
participating restaurants and
also provides savings on the
purchase of certain other
products and services; Director
<PAGE>
of Hirsch International Corp., an
importer of computerized
embroidery machines and supplies,
and developer of embroidery machine
application software; Director of The
Western Systems Corporation, a
company seeking to redeploy its
cash assets through suitable
investments and business combinations.
</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, 1996, 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, 1996, the Board of Directors
held ten (10) special meetings in addition to its regular meeting.
<PAGE>
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, 1996 to the Chief Executive Officer and any other executives whose salary
and bonus exceeded $100,000, if any.
<TABLE>
Summary Compensation Table
Annual Compensation
<S><C> <C> <C> <S> <C> <S> <C> <C>
Name and All
Principal Options/ Other
Position Year Salary Bonus Stock SAR's Compensation
R.J. Campbell 1996 $95,580 -0- -0- -0- $8,721 (1)
Vice Chairman 1995 $93,600 $18,500 (4) -0- -0- $7,482 (2)
& CEO 1994 $92,892 $15,000 (5) -0- -0- $7,930 (3)
Allen T. 1995 $99,539 -0- -0- -0- $9,644 (6)
McInnes 1994 $99,339 -0- -0- -0- $5,494 (7)
Chief
Executive
Officer
</TABLE>
(1) Represents personal use of Company vehicle ($2,593), and Company's
payment for personal income tax preparation ($900), Company's
contribution to 401-K program ($3,149), and life insurance
premiums ($2,079) in 1996.
(2) Represents personal use of Company vehicle ($1,254), Company's
payment for personal income tax preparation ($900), Company's
contribution to 401-K program ($3,924), and life insurance
premiums ($1,404) in 1995.
(3) Represents personal use of Company vehicle ($1,864), and Company's
payment for personal income tax preparation ($900), Company's
contribution to 401-K program ($3,762), and life insurance
premiums ($1,404) in 1994.
(4) A 1994 bonus of $18,500 paid in 1995.
(5) A 1993 bonus of $15,000 paid in 1994.
(6) Mr. McInnes resigned as Chief Executive Officer of the Company
in March, 1996. Prior to that time, Mr. McInnes was President
and Chief Executive Officer of TGC Industries, Inc. Represents
personal use of Company vehicle ($5,260), life insurance
premiums ($900), and Company's contribution to 401-K program
($3,484).
(7) Represents personal use of Company vehicle ($575), life
insurance premiums ($900) and Company's contribution to 401-K
program ($4,019).
The Company maintains Club memberships for certain of its executive
officers. Although these memberships may be utilized from time-to-time for
non-business purposes, the costs attributable to non-business purposes were
not material. The Company believes that the aggregate amounts of such
personal benefits do not exceed 10% of cash compensation paid to any
individual in the table or, with respect to the group of all executive
officers, ten percent (10%) of the aggregate cash compensation paid to the
members of such group.
<PAGE>
(401(k) PLAN
In 1987, the Company implemented a 401(k) salary deferral plan (the
Plan) which covers all employees who have reached the age of 20-1/2 years and
have been employed by the Company for at least one year. The covered
employees may elect to have an amount deducted from their wages for
investment in a retirement plan. The Company has the option, at its
discretion, to make contributions to the Plan. Effective January 1, 1990,
the Company determined in its discretion to make a matching contribution to
the Plan equal to 10% of the employees' contributions up to 6% of those
employees' compensation. On July 24, 1991, to be effective August 5, 1991,
the Board of Directors increased the Company's matching contribution to the
Plan to fifty cents ($.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
(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 1996 for the two (2) executive officers
of the Company participating in the 401(k) Plan was as follows: Robert J.
Campbell - $3,148.65 and Wayne A. Whitener - $2,945.78.
STOCK OPTION PLANS
1986 Incentive and Nonqualified Stock Option Plan
In 1986 the Company adopted the 1986 Incentive and Non-Qualified Stock
Option Plan (the "1986 Plan"). The term of the 1986 Plan was for a period of
ten years with the result that the 1986 Plan terminated on July 24, 1996.
The provisions which were contained in the 1986 Plan were comparable to
the provisions contained in the 1993 Plan (hereafter described) which
succeeded the 1986 Plan.
Options granted under the 1986 Plan cover 44,668 shares which are
currently outstanding. During 1996, 25,000 stock options were granted under
the 1986 Plan. Any stock option outstanding as of the date of termination of
the 1986 Plan will remain outstanding until it is exercised, terminated, or
expires.
<PAGE>
1993 Stock Option Plan
On June 3, 1993, the Company's Board of Directors approved and adopted
the Company's 1993 Stock Option Plan (the "1993 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 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 that time, there are approximately 350
employees of the Company, including four officers of the Company (three of
whom are also directors), who, in management's opinion, would be considered
eligible to receive grants under the 1993 Plan, although fewer employees may
actually receive grants.
Authority to administer the 1993 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 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.
<PAGE>
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.
<PAGE>
The 1993 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 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 1996 stock options of 590,000 were granted under the Company's
1993 Stock Option Plan to officers and employees of the Company, and certain
officers and employees of the Company's former subsidiary, Chase Packaging
Corporation. Granted options covering 535,500 shares are outstanding at
December 31, 1996 under the 1993 Stock Option Plan.
Effective July 31, 1996, the Company's wholly-owned subsidiary, Chase
Packaging Corporation ("Chase"), was spun off to the Company's shareholders.
In view of this situation, and in order to provide the employees of both
Chase and the Company with the maximum period available under the tax laws
for exercising their options after a termination of employment, the 1993 Plan
was amended to extend from thirty days to three months, the period of time
following termination of employment, during which the terminating employee
can exercise his or her option.
ISO's Exercised in 1996 by Officers of Company
No Stock options were exercised by Officers of the Company in 1996.
ISO's Granted in 1996 to Officers of the Company
Information with respect to options granted in 1996 to the Company's
Vice-Chairman and CEO and the President and COO is set forth in the table
below:
<PAGE>
<TABLE>
Options Granted in Last Fiscal Year
<S> <C> <C> <C> <C> <C> <C>
% of Total
Options
No. of Granted to Exercise
Options Employees in Price Expiration
Name Granted Fiscal Year ($/Share) (a) Date
Robert J. Campbell 50,500 (b) 8.0% $ .52 06-03-01
Wayne A. Whitener 120,500 (c) 19.0% $ .75 06-03-01
</TABLE>
(a) The exercise price and tax withholding obligations related to
exercise may be paid by delivery of already-owned shares, subject to certain
conditions.
(b) These options were granted for a term of five (5) years and 3,000
shares were granted under the Company's 1986 Incentive and Nonqualified Stock
Option Plan and 47,500 shares were granted under the Company's 1993 Stock
Option Plan, subject to earlier termination in certain events related to
termination of employment.
(c) These options were granted for a term of five (5) years and 3,000
shares were granted under the Company's 1986 Incentive and Nonqualified Stock
Option Plan and 117,500 shares were granted under the Company's 1993 Stock
Option Plan, subject to earlier termination in certain events related to
termination of employment.
The following table shows certain information with respect to options to
acquire TGC's Common Stock held by the Company's Vice-Chairman and CEO and
the Company's President and COO.
<TABLE>
Aggregated Options Exercised
and FY-End Options Values
<S> <C> <S> <C> <C> <C>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares
Name and Acquired on Value Exercisable/ Exercisable/
Principal Position Exercise (#) Realized ($) Unexercisable Unexercisable
Robert J. Campbell -0- -0- 67,500/ $ 42,525.00
Vice Chairman -0- -0- 10,000 $ 3,750.00
& CEO
Wayne A. Whitener -0- -0- 70,168/ $ 51,223.00
President & COO -0- -0- 70,000 $ 26,250.00
</TABLE>
<PAGE>
TRANSACTIONS WITH MANAGEMENT
In 1996, the Company had outstanding Subordinated Notes payable in the
amount of $365,812 to certain executive officers and directors. Interest
expense of $18,579 was paid on this debt during 1996. In July 1996, the
Company exchanged this debt for 73,162 shares of Series C 8% Convertible
Exchangeable Preferred Stock in connection with the Private Placement.
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, 1997.
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 1998 must be received by the Company at its
principal executive offices in Plano, Texas on or before December 1, 1997 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, 1996 enclosed
herewith.
By Order of the Board of Directors
/s/ William J. Barrett
William J. Barrett,
Secretary
Plano, Texas
April 21, 1997
TGC INDUSTRIES, INC.
Proxy Solicited on Behalf of the Board of Directors for the
Annual Meeting of Shareholders, June 5, 1997
The undersigned hereby appoint(s) Allen T. McInnes, Robert J. Campbell,
and William J. Barrett, or any of them, each with full power of substitution,
as proxies, to vote all Common Stock in TGC Industries, Inc. which the
undersigned would be entitled to vote on all matters which may come before
the 1997 Annual Meeting of the Shareholders of the Company and any
adjournments thereof.
THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
/X/ Please mark your
votes as in this
example
The Board of Directors recommends a vote FOR each of items 1 and 2:
1. ELECTION OF DIRECTORS:
______ FOR all nominees ______ Withhold authority Nominees:
listed at right to vote for the Allen T. McInnes
(except as marked nominees listed Robert J. Campbell
to the contrary at right Wayne A. Whitener
below). William J. Barrett
Herbert M. Gardner
INSTRUCTIONS: To withhold authority to vote for any
individual nominee, vote for all
nominees and strike a line through
the individual nominees's name listed
at right.
2. RATIFICATION OF SELECTION OF
GRANT THORNTON LLP AS _____ FOR _____ AGAINST _____ ABSTAIN
INDEPENDENT AUDITORS:
Returned proxy forms when properly executed will be voted: (1) as specified
on the mailer(s) listed above; (2) in accordance with the Directors'
recommendations where a choice is not specified; and (3) in accordance with
the judgment of the proxies on any other matters that may properly come before
the meeting.
PLEASE COMPLETE, SIGN, DATE AND RETURN THE CARD PROMPTLY.
Signature(s) _____________________________________ Date:______________
Note: Executors, trustees and others signing in a representative capacity
should include their names and capacity in which they sign. PLEASE DATE
AND SIGN AS SHOWN HERE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
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