SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TENERA, Inc.
------------------------------------------------
(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)(4) and
0-11.
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions 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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<PAGE>
[ ] 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.
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<PAGE>
[TENERA, INC. LOGO]
TENERA, Inc.
One Market, Spear Tower, Suite 1850
San Francisco, CA 94105-1018
----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 29, 1999
----------------------------
TO OUR SHAREHOLDERS
You are cordially invited to the Annual Meeting of Shareholders of TENERA,
Inc. (the "Company") which will be held at 1:00 p.m. (local time) on Tuesday,
June 29, 1999, at the One Market building, Spear Tower, Eighteenth Floor, at One
Market Street, San Francisco, California 94105-1018, for the following purposes
as described in the accompanying Proxy Statement:
1. To elect two (2) directors to the Board of Directors
2. To ratify the appointment of Ernst & Young LLP as independent
auditors for the Company for the year ending December 31, 1999
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Shareholders of record at the close of business on May 24, 1999, are
entitled to notice of, and to vote at the meeting or any adjournments thereof.
Your vote is important to the Company. Please complete, sign, date, and
return the enclosed proxy card in the enclosed, postage-paid envelope. If you
attend the meeting and wish to vote in person, you may withdraw your proxy and
vote your shares personally.
Sincerely,
/s/ ROBERT C. MCKAY
-------------------------------------
Robert C. McKay
President and Chief Executive Officer
May 28, 1999
<PAGE>
This page intentionally left blank.
<PAGE>
Mailed to shareholders on
or about June 4, 1999
TENERA, INC.
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of TENERA, Inc. ("TENERA" or the "Company"), a
Delaware corporation, for use at the 1999 Annual Meeting of Shareholders
("Annual Meeting") to be held at 1:00 p.m. (local time) on Tuesday, June 29,
1999, at the One Market building, Spear Tower, Eighteenth Floor, at One Market
Street, San Francisco, California 94105-1018. The Company's principal executive
offices are located at One Market, Spear Tower, Suite 1850, San Francisco,
California 94105-1018.
Each shareholder of record of Common Stock of the Company ("Common Stock")
on May 24, 1999 ("Record Date"), is entitled to vote at the Annual Meeting and
will have one vote for each share of Common Stock held at the close of business
on the Record Date. A majority of the shares entitled to vote will constitute a
quorum. On May 24, 1999, there were 10,129,403 shares of Common Stock
outstanding.
If you are unable to attend the Annual Meeting, you may vote by proxy. The
proxies will vote your shares according to your instructions. If you return a
properly signed and dated proxy card, but do not mark a choice on one or more
items, your shares will be voted in accordance with the recommendations of the
Board of Directors as set forth in this proxy statement. The proxy card gives
authority to the proxies to vote your shares at their discretion on any other
matter presented at the Annual Meeting.
You may revoke your proxy at any time prior to voting at the Annual
Meeting by delivering written notice to the Secretary of the Company, by
submitting a subsequently dated proxy, or by attending the meeting and voting in
person at the meeting. Under applicable state law and the bylaws of the Company,
a quorum is required for the matters to be acted upon at the Annual Meeting. A
quorum is defined as a majority of the shares entitled to vote, represented in
person or by proxy, at the meeting. To pass, each matter submitted to a vote,
except the election of directors, must be approved by a majority of the shares
represented and voting in person or by proxy at the meeting. Shares represented
by proxies which are marked abstain or to deny discretionary authority on any
matter will be counted as shares present for purposes of determining the
presence of a quorum; such shares will also be counted as shares present and
entitled to vote, which will have the same effect as a vote against any matter
other than election of directors. Proxies relating to "street name" shares which
are not voted by brokers on one or more matters, will not be treated as shares
present for purposes of determining the presence of a quorum, unless they are
voted by the broker on at least one matter. Such non-voted shares will not be
treated as shares represented at this meeting as to any matter for which
non-vote is indicated on the brokers' proxy. Director nominees must receive a
plurality of the votes cast at the meeting, which means that a vote withheld
will not affect the outcome of the election.
The Company will bear the cost of preparing, handling, printing, and
mailing this Proxy Statement, the accompanying proxy card, and any additional
material which may be furnished to shareholders, and the actual expense incurred
by brokerage houses, fiduciaries, and custodians in forwarding such materials to
beneficial owners of Common Stock held in their names. The solicitation of
proxies will be made by the use of the mails and may also be made through direct
communication with certain shareholders or their representatives by officers,
directors, or employees of the Company who will receive no additional
compensation therefor.
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, two (2) Class I directors of the Company are to be
elected to serve until the annual meeting in 2002 and until their respective
successors are elected or appointed. The authorized number of directors of the
Company has been fixed at six (6) by the Board of Directors. The Board of
Directors is divided into three classes: Class I, Class II, and Class III. The
number of directors in each class shall be the whole number contained in the
quotient obtained by dividing the authorized number of directors by three.
Directors of each class serve for three years, which terms do not coincide.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them FOR the two (2) nominees of the Board of Directors named below.
The Board of Directors has nominated William A. Hasler, and Robert C. McKay to
serve for three-year terms ending in 2002. Messrs. Hasler and McKay currently
serve as Class I directors of the Company. In the event that any nominee of the
Company is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by
the current Board of Directors to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a director. In the event that
additional persons are nominated for election as directors, the proxy holders
intend to vote all proxies received by them FOR the remaining nominees and such
proxies may be voted for the election of a substitute nominee recommended by the
Board of Directors.
MANAGEMENT RECOMMENDS THAT SHAREHOLDERS VOTE TO ELECT MESSRS. HASLER AND
MCKAY AS DIRECTORS OF THE COMPANY.
The continuing directors of the Company are:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Director Term
Name Age Title Since Class Expires
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William A. Hasler ....... 57 Chairman of the Board of Directors 1992 I 1999
Robert C. McKay ......... 47 Director, President and Chief Executive Officer 1997 I 1999
Thomas S. Loo ........... 55 Director 1997 II 2000
Andrea W. O'Riordan...... 28 Director 1998 II 2000
Jeffrey R. Hazarian ..... 43 Director, Executive Vice President, 1996 III 2001
Chief Financial Officer, and Corporate Secretary
George L. Turin ......... 69 Director 1995 III 2001
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Except as set forth below, each of the continuing directors has been
engaged in the principal occupation described below. There are no family
relationships among any of the executive officers or directors of the Company.
William A. Hasler,57, has served as a Director of the Company since
his election in March 1992 and Chairman of the Board of the Company since
July 1998. Mr. Hasler is Co-Chief Executive Officer of Aphton Corporation,
a bio-technology firm. Previously, Mr. Hasler was dean of the Walter A.
Haas School of Business at the University of California, Berkeley. Prior to
his appointment as dean in 1991, Mr. Hasler was Vice Chairman of Management
Consulting for KPMG Peat Marwick from 1986 to 1991. Mr. Hasler is also a
director of Asia Pacific Wire and Cable Corporation, Ltd., Aphton
Corporation, Walker Systems, and TCSI Corporation.
Jeffrey R. Hazarian, 43, has served as a Director of the Company
since his election in October 1996, and was named its Executive Vice
President in November 1997. He has also served as its Chief Financial
Officer and Corporate Secretary since 1992. Previously, Mr. Hazarian held
the position of Vice President of Finance from 1992 to 1997.
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<PAGE>
Thomas S. Loo, Esq., 55, was elected as a Director of the Company in
February 1997. He previously served as a Director of the Company from
August 1987 to September 1993. Mr. Loo has been a partner, since 1986, of
Bryan Cave LLP, general counsel to the Company. Mr. Loo has also served as
a director of Teknekron Corporation since March 1989.
Robert C. McKay, 47, has served as a Director of the Company since
his election in June 1997, and was appointed its Chief Executive Officer
and President in November 1997. Previously, Mr. McKay was Chief Operating
Officer of the Company since April 1997. He was elected Senior Vice
President of the Company in December 1992.
Andrea W. O'Riordan, 28, has served as Director of the Company since
her election in June 1998. Ms. O'Riordan is an Applications Marketing
Coordinator for Oracle Corporation. Prior to her joining Oracle Corporation
in 1996, Ms. O'Riordan was Marketing Coordinator, Latin America, for a
Reuters Company, from 1993 to 1995.
George L. Turin, Sc.D., 69, has served as a Director of the Company
since his election in March 1995. Previously, Mr. Turin served as a
Professor of Electrical Engineering and Computer Science at the University
of California at Berkeley from 1960 to 1990. Mr. Turin also served as Vice
President, Technology for Teknekron Corporation from 1988 to 1994.
Board Meetings, Committees, and Director Compensation
The Board of Directors held seven (7) meetings during 1998. No Board
member attended fewer than 75% of the meetings of the Board of Directors and of
the Committees of the Board on which such director served.
Among the standing committees of the Board of Directors of the Company are
the Compensation Committee, the Audit Committee, and the Nominating Committee.
The Board of Directors has a Compensation Committee, currently composed of
four members, William A. Hasler, Thomas S. Loo, Andrea W. O'Riordan, and George
L. Turin. The Compensation Committee of the Board of Directors, composed
entirely of non-employee directors, is responsible for establishing and
reviewing annually, the compensation levels of executive officers of the Company
and reviewing recommendations made by Company management concerning salaries and
incentive compensation for employees of the Company. The Compensation Committee
also serves as the administrative committee of the Company's 1992 Option Plan.
The Compensation Committee met one time during 1998.
The Board of Directors has an Audit Committee, currently composed of three
members, Thomas S. Loo, William A. Hasler, and Jeffrey R. Hazarian. The Audit
Committee reviews the results and scope of the audit and other services provided
by the Company's independent auditors and recommends the appointment of
independent auditors to the Board of Directors. (See Proposal 2.) The Audit
Committee met four (4) times during 1998.
The Board of Directors has a Nominating Committee, currently composed of
two members, George L. Turin and Andrea W. O'Riordan. The Nominating Committee
is responsible for support of the Board's director nomination process. Although
there were no formal meetings, the Nominating Committee met informally during
1998.
Except as described below, the directors of the Company are paid no
compensation by the Company for their services as directors. William A. Hasler,
Thomas S. Loo, Andrea W. O'Riordan, and George L. Turin, as non-employee
directors, are paid a retainer of $1,000 per month. These non-employee directors
are also paid a fee of $1,000 for each meeting of the Board and any Board
Committee, not held on same day as a Board meeting, which they attend. The 1993
Outside Directors Compensation and Option Plan was approved by the Board
effective March 1, 1994, as amended by the Board in 1998, and reserves up to
300,000 options for issuance to non-employee directors. In March 1998, 12,500
stock options were granted to each of Messrs. Hasler, Loo, and Turin. In July
1998, 12,500 stock options were granted to each of Ms. O'Riordan, and Mr.
Delbert F. Bunch (term ending at the Annual Meeting and not standing for
re-election). The options expire ten (10) years after the date of grant, vest
one (1) year after the date of grant, and have an exercise price equal to the
fair market value of the shares of Common Stock on the date of grant. Upon
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<PAGE>
exercise of the options, a director may not sell or otherwise transfer more than
50% of the shares until six (6) months after the date on which the director
ceases to be a director of the Company.
Security Ownership of Directors, Officers, and Principal Shareholders
The following table sets forth information as of May 20, 1999, concerning
ownership of Common Stock by (i) each director, (ii) each executive officer
named in the Summary Compensation Table, (iii) all directors and named executive
officers as a group, and (iv) each person known by the Company to own
beneficially 5% or more of the outstanding shares of its Common Stock. Unless
otherwise noted, the listed persons have sole voting and dispositive powers with
respect to the shares of Common Stock shown as beneficially owned by them,
subject to community property laws if applicable.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Shares
Beneficially Acquirable Percentage
Name Owned(1) Within 60 Ownership(2)
Days(3)(4)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Delbert F. Bunch .............................................. -- 12,500(3) *
William A. Hasler ............................................. 20,000 58,000(3) *
Jeffrey R. Hazarian ........................................... 7,186 120,750(4) 1.2%
Thomas S. Loo.................................................. -- 20,500(3) *
Robert C. McKay, Jr............................................ 1,789 186,000(4) 1.8%
Andrea W. O'Riordan (5)........................................ -- 12,500(3) *
George L. Turin................................................ 45,504 48,000(3) *
------------ ------------- ------------
All Directors and Executive Officers as a Group (7 persons) ... 74,479 458,250 5.3%
PRINCIPAL SHAREHOLDERS OTHER THAN DIRECTORS
AND EXECUTIVE OFFICERS
Harvey E. Wagner (6)........................................... 3,708,658 -- 36.6%
P.O. Box 7463
Incline Village, NV 89450
Dr. Michael John Keaton Trust (7).............................. 1,106,887 -- 10.9%
P.O. Box 400
Orinda, CA 94563-0400
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<FN>
(1) The persons named above have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by
them, subject to community property laws where applicable.
(2) Based on the number of shares outstanding at, or acquirable within 60
days of May 20, 1999. Asterisks represent less than 1% ownership.
(3) Represents options under the Company's 1993 Outside Directors
Compensation and Option Plan which are exercisable on May 20, 1999, or
within 60 days thereafter. Mr. Bunch's term expires at the Annual Meeting
and he will not stand for re-election.
(4) Represents options under the Company's 1992 Option Plan which are
exercisable on May 20, 1999, or within 60 days thereafter.
(5) Ms. O'Riordan is the daughter of Harvey E. Wagner, the Company's largest
stockholder by virtue of his interest in a limited partnership
(see Footnote 6 below).
(6) Such shares are held of record by Incline Village Investment Group
Limited Partnership, a Georgia limited partnership, and were contributed
to such partnership by Mr. Wagner in exchange for a 99% limited
partnership interest. An additional 37,462 shares, as to which Mr. Wagner
disclaims beneficial ownership, were contributed to such partnership by
Mr. Wagner's spouse, Leslie Wagner, in exchange for a 1% general partner
interest. Such partnership has sole voting and investment power with
respect to all such shares. Mr. Wagner subsequently transferred a 14.7%
limited partnership interest in the partnership to Ms. O'Riordan, a
director of the Company, who disclaims beneficial ownership of all the
shares held by such partnership.
(7) Mr. Keaton has sole voting and investment power with respect to all
shares shown as beneficially owned by him, subject to community property
laws where applicable.
</FN>
</TABLE>
4
<PAGE>
Beneficial ownership as shown in the table above has been determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934. Under this
Rule, certain securities may be deemed to be beneficially owned by more than one
person (such as where persons share voting power or investment power). In
addition, securities are deemed to be beneficially owned by a person if the
person has the right to acquire the securities (for example, upon exercise of an
option or the conversion of a debenture) within 60 days of the date as of which
the information is provided; in computing the percentage of ownership of any
person, the amount of securities outstanding is deemed to include the amount of
securities beneficially owned by such person (and only such person) by reason of
these acquisition rights. As a result, the percentage of outstanding shares of
any person as shown in the preceding tables does not necessarily reflect the
person's actual voting power at any particular date.
Executive Officers
The names and ages of the current executive officers of the Company are as
follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Name Age Position
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert C. McKay* ............... 47 President and Chief Executive Officer
Jeffrey R. Hazarian* ........... 43 Executive Vice President, Chief Financial Officer, and Corporate Secretary
- -----------------------------------------------------------------------------------------------------------------------
* Director of the Company.
</TABLE>
Executive Compensation
The following tables set forth certain information covering compensation
paid by TENERA to the Chief Executive Officer ("CEO") and each of the Company's
other executive officers, other than the CEO, whose total annual salary and
bonus exceeded $100,000 (the "named executives") for services to TENERA in all
their capacities during the fiscal years ended December 31, 1998, 1997, and
1996.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Annual Compensation Awards
------------------------------ -------------
Securities All Other
Name and Underlying Compensa-
Principal Position Year Salary Bonus(1) Options(2) tion(3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert C. McKay, Jr. 1998 $ 200,000 $ 152,500 -- $ 3,200
Chief Executive Officer 1997 179,375 2,179 90,000 --
President 1996 145,390 -- 28,000 8,777
Jeffrey R. Hazarian 1998 159,000 50,400 75,000 3,180
Executive 1997 145,875 25,000 -- --
Vice President and 1996 142,500 -- 27,000 8,586
Chief Financial Officer
- ---------------------------------------------------------------------------------------------------------------
<FN>
(1) Includes $100,000 retention bonus paid to Mr. McKay in 1998 (see "Other Compensation Arrangements" below) and 1998 accrued
bonus of $3,000 for Mr. Hazarian paid in February 1999.
(2) Reflects the number of options granted under the 1992 Option Plan. The options expire at the earlier of the end of the option
period or three months after employment termination.
(3) These amounts represent the amounts accrued for the benefit of the named executives under the Company's 401(k) Plan.
</FN>
</TABLE>
5
<PAGE>
Compensation Committee Report
The Compensation Committee of the Board of Directors ("Committee") is made
up of only outside directors and oversees the Company's executive compensation
programs. The Committee oversees all elements of executive compensation,
including base compensation, annual incentive bonuses, and long-term incentives
such as the Company's 1992 Option Plan. The Committee consults periodically with
outside compensation and benefit consultants and the Company's executive
management regarding overall plan design and competitively-based, as well as
performance-based, individual targets and awards. Annually, the Committee makes
recommendations to the Board of Directors for approval, but has the discretion
to make mid-year recommendations. In 1994, the Committee enlisted the assistance
of compensation and benefit consultants to review and make recommendations on
overall compensation philosophy and policy, as well as to make recommendations
on specific programs. Based on the consultant's recommendations, the Committee
recommended, and the Board of Directors adopted a competitively-based and
performance-oriented Executive Compensation Program, the base elements of which
are set forth below. The Committee continued this program during 1998.
Executive Compensation Philosophy. TENERA's overall executive compensation
philosophy is as follows:
o Attract, motivate, and retain executives of exceptional ability and
potential, who are critical to both the short-term and long-term success
of the Company
o Reinforce strategic performance objectives through the use of annual and
long-term incentive compensation programs
o Create a mutuality of interest between executives and shareholders
through compensation structures that share the rewards and risks of
strategic decision-making
o Provide executives with the opportunity to hold substantial stock
options in TENERA, to more closely align executives' interests with
those of the shareholders.
Base Compensation. The Committee's approach to base compensation is to
offer competitive salaries in comparison with market practices. Salary
determination is based on a combination of factors including evaluation of
compensation for executive positions within similar size and like companies and
the individual's past performance against established annual goal attainment.
Annual Incentive Bonus Plans. The annual bonus program for executives and
top performing nonexecutives was established to promote teamwork and
cooperation, and the attainment of defined performance objectives. The target
bonus (generally ranging from 25% to 40% of salary for executives) is generally
linked to job grade, corporate plan, and/or individual performance. Incentives
are designed to reward the achievement of significant, agreed-upon expectations
that contribute to the achievement of key, Company- and/or subsidiary-wide
business goals such as increased profitability, improvement in contracted
backlog, and improved margins. The primary measure of bonus eligibility for each
employee will be their level of performance as measured against the mutually
agreed upon performance expectations for each year after Company- and/or
subsidiary-wide performance has exceeded plan.
Long-Term Incentive Compensation. Executives and top performing
nonexecutives are eligible for stock option awards under the Company's 1992
Stock Option Plan. It is the Committee's philosophy that executive ownership of
substantial levels of stock options further aligns the executive's interests
with those of the shareholders.
The Committee sets the target range of options to be granted to each
individual executive based primarily on the level of responsibilities. The
actual number of options granted are based on performance against established
annual corporate, subsidiary, and individual goals. In evaluating the
performance of executives other than the Chief Executive Officer, the Committee
consults with the Chief Executive Officer and others in management, as
applicable. In evaluating the performance of the Chief Executive Officer, the
Committee consults with the Board of Directors. Executive performance for each
fiscal year is reviewed and evaluated by the Committee following the end of such
fiscal year. In an effort to attract and retain highly qualified executives and
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<PAGE>
other employees, stock options may also be granted by the Committee to
newly-hired executives and other employees as an inducement to accept employment
with the Company.
1998 Compensation for the Chief Executive Officer. Mr. McKay was paid a
salary of $200,000, based upon competitive compensation market information for
chief executives of similar companies, and his rapid creation of effective
management teams to lead the two continuing subsidiaries. The 1998 annual bonus
plan provided for the payment of bonuses to executives only after business plan
objectives were exceeded. In addition to the $100,000 retention bonus paid to
Mr. McKay pursuant to his employment arrangement, and in light of the return to
consolidated profitability, increased contracted sales activity accompanied by
higher contracted backlog, and attainment of business plan objectives, Mr. McKay
was paid an annual bonus of $50,000 in 1998.
1998 Compensation for Other Executives. The salary and annual and
long-term incentives for the other executive, Mr. Hazarian, were based upon
competitive compensation information and the establishment and attainment of
annual Company- and/or subsidiary-wide goals, as well as level of job
resonsibilities, contributions made by this individual in helping the Company
and/or subsidiaries, achievement of his annual and long-term goals, continued
cost control attainment, and meeting planned operating results for 1998.
As business plan objectives were met in 1998, Mr. Hazarian was paid an
annual bonus of $39,750. Management of the Company's energy and government
services subsidiaries were also paid bonuses reflective of their achievement of
the subsidiaries' 1998 business plan objectives.
Compensation Committee
William A. Hasler, Chairman
Thomas S. Loo
Andrea W. O'Riordan
George L. Turin
7
<PAGE>
The following table sets forth certain information concerning options
granted during 1998 to the named executive officers:
<TABLE>
OPTIONS GRANTS IN 1998
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Individual Grants Price Appreciation
for Option Term
---------------------------------------------------- -----------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted Fiscal Year ($/Share) Date 5% 10%
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. McKay, Jr. ..... -- -- $ -- -- $ -- $ --
Jeffrey R. Hazarian....... 75,000 20.27 0.725 2/19/04 18,493 41,954
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Other Compensation Arrangements
The 1992 Option Plan provides that options may become exercisable over
such periods as provided in the agreement evidencing the option award. Options
granted to date, including options granted to executive officers and set forth
in the above tables, generally call for vesting over a four-year period. The
1992 Option Plan provides that a change in control of the Company will result in
immediate vesting of all options granted and not previously vested.
Other than as set forth below for Mr. McKay, the Company has no employment
contracts or arrangements for its executive officers.
Mr. McKay, upon appointment to Chief Operating Officer in 1997, was
granted a retention bonus arrangement, amounting to $100,000, dependent upon his
continued employment through June 30, 1998. The bonus was paid to Mr. McKay in
1998 in accordance with the arrangement.
8
<PAGE>
Performance Graph
The Comparison Stock Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed under such Acts.
The following graph compares the cumulative, five-year total return on the
Company's Common Stock with the Standard & Poor's Small Cap 600 Index and an
index of peer companies. The peer group consists of six other professional
services and information systems companies which provide services and products
similar to that of TENERA. The companies included in the peer group are COMARCO,
Inc.; Metzler Group, Inc.; TRC COS, Inc.; URS Corp.; VSE Corp.; and Roy F.
Weston, Inc. Information concerning the peer group and the Standard & Poor's
Small Cap 600 Index was supplied to the Company by Standard & Poor's Compustat,
a division of the McGraw-Hill Companies.
[PERFORMANCE GRAPH]
<TABLE>
[TABULAR DATA IN PLACE OF PERFORMANCE GRAPH]
<CAPTION>
__________________________________________________________________________________________________
Indexed Returns
-----------------------------------------------------
Year Ending December 31,
------------------------------------------------------------------
Base
Period
Company Name/Index 1993 1994 1995 1996 1997 1998
__________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
TENERA, Inc. ............. 100 $ 49.96 $ 68.15 $ 49.96 $ 59.05 $ 118.18
S&P Small Cap 600 Index .. 100 95.23 123.76 150.14 188.56 186.10
Peer Group ............... 100 93.77 110.30 112.88 143.43 229.50
__________________________________________________________________________________________________
<FN>
(1) Assumes $100 invested on December 31, 1993, in TENERA, S&P Small Cap 600 Index, and the Peer Group, and any dividends that
were reinvested.
</FN>
</TABLE>
Compensation Committee Interlocks and Insider Participation
During 1998, the Compensation Committee was composed of William A. Hasler,
Thomas S. Loo, Andrea W. O'Riordan, and George Turin. Thomas S. Loo is a partner
in the law firm of Bryan Cave LLP, general counsel to the Company and Teknekron
Corporation, and is a director of Teknekron Corporation. Andrea W. O'Riordan, a
director of the Company since June 29, 1998, is the daughter of Harvey E.
Wagner, the Company's largest stockholder by virtue of a limited partnership
interest in Incline Village Investment Group Limited Partnership (see "Security
Ownership of Directors, Officers, and Principal Shareholders"). Mr. Wagner is
also the sole stockholder and a director of Teknekron Corporation.
Certain Relationships and Related Transactions
See "Compensation Committee Interlocks and Insider Participation."
9
<PAGE>
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as independent
auditors of the Company for the year ending December 31, 1999. Ernst & Young LLP
or its predecessor has audited the Company's financial statements since 1985.
Representatives of Ernst & Young LLP, expected to be at the Annual Meeting, will
have an opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
SHAREHOLDER PROPOSALS FOR 1999
Proposals of shareholders that are intended to be presented at the
Company's 2000 Annual Meeting of Shareholders must be received by the Company no
later than December 31, 1999. Such proposals may be included in next year's
Proxy Statement if they comply with certain rules and regulations promulgated by
the Securities and Exchange Commission. Proposals must comply with the proxy
rules of the Securities and Exchange Commission relating to stockholder
proposals in order to be included in the proxy materials. Additionally,
management proxy holders for the Company's 2000 Annual Meeting of Shareholders
will have discretionary authority to vote on any shareholder proposal that is
presented at such Annual Meeting but that is not included in the Company's Proxy
materials, unless notice of such proposal is received by the Secretary of the
Company on or before April 21, 2000.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10 percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors, and more than ten percent shareholders are required by
Securities and Exchange Commission regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during 1998, its officers, directors, and more than ten percent beneficial
owners complied with all filing requirements applicable to them.
ANNUAL REPORT TO SHAREHOLDERS
The Company's 1998 Annual Report was previously distributed to
shareholders.
10
<PAGE>
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at the
Annual Meeting, but if any other matters should properly come before the
meeting, it is intended that the persons named in the accompanying proxy will
vote the same in accordance with their best judgment.
By Order of the Board of Directors
/s/ Jeffrey R. Hazarian
-------------------------------------
Jeffrey R. Hazarian
Director, Executive Vice President,
Chief Financial Officer, and
Corporate Secretary
San Francisco, California
May 28, 1999
11
<PAGE>
ANNEX A
FORM OF PROXY CARD
FRONT OF PROXY CARD
PROXY
TENERA, INC.
PROXY for 1999 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TENERA, INC.
The undersigned shareholder of TENERA, Inc., a Delaware corporation (the
"Company"), hereby appoints Jeffrey R. Hazarian and Robert C. McKay as the
undersigned's proxies, each with full power of substitution to attend and act
for the undersigned at the Annual Meeting of Shareholders of the Company to be
held on Tuesday, June 29, 1999 at 1:00 p.m., local time, at the One Market
building, Spear Tower, Eighteenth Floor, One Market Street, San Francisco,
California, and any adjournments thereof, and to represent and vote as
designated on the other side, all of the shares of Common Stock of the Company
that the undersigned would be entitled to vote.
The proxies, and each of them, shall have all the powers that the
undersigned would have if acting in person. The undersigned hereby revokes any
other proxy to vote at the Annual Meeting and hereby ratifies and confirms all
that the proxies, and each of them, may lawfully do by virtue hereof. With
respect to matters not known at the time of the solicitation of this proxy,
the proxies are authorized to vote in accordance with their best judgment.
The proxies present at the Annual Meeting, either in person or by
substitute (or if only one shall be present and act, then that one), shall
vote the shares represented by this proxy in the manner indicated on the other
side by the undersigned. IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED ON
THIS PROXY, IT WILL BE VOTED FOR ITEMS 1 AND 2 SHOWN ON THE OTHER SIDE.
<PAGE>
BACK OF PROXY CARD
<TABLE>
<CAPTION>
Please mark -------
your votes as | |
indicated in | X |
this example. -------
Management recommends a vote FOR ALL of the nominees in Item 1.
<S> <C> <C> <C>
WITHHOLD WITHHOLD
FOR all AUTHORITY AUTHORITY
of the to vote for all of to vote for
nominees the nominees as one nominee as
listed below indicated below indicated below
Item 1. Election of Directors: ---------- ---------- ----------
(INSTRUCTION: TO WITHHOLD AUTHORITY | | | | | |
TO VOTE FOR ANY NOMINEE, DRAW A LINE | | | | | |
THROUGH THAT NOMINEE'S NAME BELOW) ---------- ---------- ----------
William A. Hasler -- Class I
Robert C. McKay -- Class I
</TABLE>
<TABLE>
<CAPTION>
Management recommends a vote FOR Item 2.
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
Item 2. Ratification of the appointment of Ernst & Young LLP as ------- ------- -------
independent auditors for the Company for the year end- | | | | | |
ing December 31, 1999 ------- ------- -------
</TABLE>
Signature of Shareholder(s) __________________________ Date: ________ , 1999
IMPORTANT: In signing this proxy, please sign your name or names on the
signature line in the same way as stenciled on this proxy. When signing as an
attorney, executor, administrator, trustee or guardian, please give your full
title as such. EACH JOINT OWNER MUST SIGN.
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE POSTAGE-PAID
ENVELOPE PROVIDED
