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FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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ANNUAL REPORT
PURSUANT TO SECTION 15(d)
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
TETRA Technologies, Inc.
401(k) Retirement Plan
(Full title of the plan)
--------------------
TETRA Technologies, Inc.
(Name and issuer of the securities held pursuant to the plan)
25025 I-45 North
The Woodlands, Texas 77380
(Address of principal executive offices)
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FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
TETRA TECHNOLOGIES, INC. 401(k) RETIREMENT PLAN
YEAR ENDED DECEMBER 31, 1998
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TETRA Technologies, Inc. 401(k) Retirement Plan
Financial Statements and Supplemental Schedules
Year ended December 31, 1998
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors...............................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits..............................3
Statement of Changes in Net Assets Available for Benefits....................4
Notes to Financial Statements................................................5
Supplemental Schedules
Item 27(a) - Schedule of Assets Held for Investment Purposes................10
Item 27(d) - Schedule of Reportable Transactions............................11
</TABLE>
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Report of Independent Auditors
Participants and Administrator of the TETRA
Technologies, Inc. 401(k) Retirement Plan
We have audited the accompanying statements of net assets available for benefits
of the TETRA Technologies, Inc. 401(k) Retirement Plan as of December 31, 1998
and 1997, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1998. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year ended December 31, 1998, are presented for purpose of
additional analysis and are not a required part of the financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The Fund Information in the statement of
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changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the changes in net assets available
for benefits of each fund. The supplemental schedules and Fund Information have
been subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
May 28, 1999
Houston, Texas
2
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TETRA Technologies, Inc. 401(k) Retirement Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
Cash $ 48,304 $ 70,446
Receivables:
Employer contributions 70,022 56,381
Participant contributions 186,471 158,090
Accrued income 4,459 5,824
Other receivables 17,940 --
----------- -----------
Total receivables 278,892 220,295
Investments at fair value:
American Funds Growth Fund of America 636,591 408,181
American Funds Washington Mutual Investors Fund 2,644,827 1,974,317
Wells Fargo Bank Short-Term Income Fund 905,863 806,000
TETRA Technologies, Inc. common stock 2,701,934 2,964,301
AIM Equity Fund Inc. Constellation Fund 2,298,700 1,968,812
American Funds Bond Fund of America 278,441 194,608
Fidelity Advisor Growth Opportunities Fund 2,602,656 1,966,468
Invesco Mutual Fund GIC 295,722 152,414
Euro-Pacific International Fund 307,041 225,682
Participant loans 534,921 439,503
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Total investments at fair value 13,206,696 11,100,286
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Total assets 13,533,892 11,391,027
LIABILITIES
Excess contribution refunds 106,423 116,138
Other liabilities -- 18,496
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Total liabilities 106,423 134,634
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Net assets available for benefits $13,427,469 $11,256,393
=========== ===========
</TABLE>
See accompanying notes.
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TETRA Technologies, Inc. 401(k) Retirement Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
--------------------------------------------------------------------------------------------
AMERICAN WELLS
FUNDS FARGO
AMERICAN WASHINGTON BANK TETRA AIM EQUITY AMERICAN
FUNDS MUTUAL SHORT-TERM TECHNOLOGIES, FUND INC. FUNDS BOND
GROWTH FUND INVESTORS INCOME INC. COMMON CONSTELLATION FUND OF
OF AMERICA FUND FUND STOCK FUND AMERICA
------------ ------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Participant contributions $ 111,113 $ 459,843 $ 129,083 $ 496,631 $ 472,959 $ 76,610
Employer contributions -- -- -- -- -- --
Rollover contributions 10,741 32,984 27,408 74,370 23,382 12,577
Interest and dividends 59,533 238,030 48,678 20,384 52,363 18,299
Net appreciation (depreciation) in
fair value of investments
84,863 169,005 -- (789,169) 306,200 (5,770)
------------ ------------ ------------ ------------ ------------ ------------
Total additions 266,250 899,862 205,169 (197,784) 854,904 101,716
Deductions:
Benefits paid to participants 45,789 153,740 133,652 81,867 209,332 15,171
Other changes in net assets:
Net interfund transfers 20,340 (33,315) (69,558) 385,680 (281,880) 4,133
------------ ------------ ------------ ------------ ------------ ------------
Net increase 240,801 712,807 1,959 106,029 363,692 90,678
Net assets available for benefits:
Beginning of year 408,181 1,974,317 872,274 1,268,877 1,968,812 194,608
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 648,982 $ 2,687,124 $ 874,233 $ 1,374,906 $ 2,332,504 $ 285,286
============ ============ ============ ============ ============ ============
<CAPTION>
PARTICIPANT-DIRECTED NON-PARTICIPANT-DIRECTED
----------------------------------------------------------- ----------------------------
FIDELITY
ADVISOR TETRA
GROWTH INVESCO EURO-PACIFIC TECHNOLOGIES,
OPPORTUNITIES MUTUAL INTERNATIONAL PARTICIPANT INC. COMMON
FUND FUND GIC FUND LOANS STOCK OTHER
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Participant contributions $ 464,894 $ 58,201 $ 88,211 $ -- $ -- $ --
Employer contributions -- -- -- -- 848,659 --
Rollover contributions 12,211 5,244 -- -- -- --
Interest and dividends 102,193 13,766 14,113 29,478 27,999 (15,541)
Net appreciation (depreciation) in
fair value of investments
395,573 -- 21,715 -- (1,084,007) --
------------ ------------ ------------ ------------ ------------ ------------
Total additions 974,871 77,211 124,039 29,478 (207,349) (15,541)
Deductions:
Benefits paid to participants 175,855 18,788 19,199 46,277 91,087 (49,007)
Other changes in net assets:
Net interfund transfers (123,348) 90,545 (15,697) 112,217 1,765 (90,882)
------------ ------------ ------------ ------------ ------------ ------------
Net increase 675,668 148,968 89,143 95,418 (296,671) (57,416)
Net assets available for benefits:
Beginning of year 1,966,468 152,414 225,682 439,503 1,785,257 --
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 2,642,136 $ 301,382 $ 314,825 $ 534,921 $ 1,488,586 $ (57,416)
============ ============ ============ ============ ============ ============
<CAPTION>
TOTAL
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<S> <C>
Additions:
Participant contributions $ 2,357,545
Employer contributions 848,659
Rollover contributions 198,917
Interest and dividends 609,295
Net appreciation (depreciation) in
fair value of investments
(901,590)
------------
Total additions 3,112,826
Deductions:
Benefits paid to participants 941,750
Other changes in net assets:
Net interfund transfers --
------------
Net increase 2,171,076
Net assets available for benefits:
Beginning of year 11,256,393
------------
End of year $ 13,427,469
============
</TABLE>
See accompanying notes.
4
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TETRA Technologies, Inc. 401(k) Retirement Plan
Notes to Financial Statements
December 31, 1998
1. DESCRIPTION OF THE PLAN
The following description of the TETRA Technologies, Inc. 401(k) Retirement Plan
(the "Plan") is provided for general information only. Participants should refer
to the summary plan description for a more complete description of the Plan's
provisions, a copy of which is available from TETRA Technologies, Inc. (the
"Company" or "Plan Administrator").
GENERAL
The Plan, which became effective January 1, 1990, is a profit sharing plan as
defined by Section 401 of the Internal Revenue Code ("IRC") and contains a
provision for salary reduction contributions under Section 401(k) of the IRC.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
ELIGIBILITY
All employees of the Company and its subsidiaries who have reached the age of 18
are eligible to join the Plan on the first January 1 or July 1 following their
date of hire.
CONTRIBUTIONS
Participants may elect to contribute from 1% to 15% of their gross compensation
to the Plan. Contributions for each participant are limited in any calendar year
to an amount as determined by IRC regulations. For calendar year 1998, the
maximum contribution allowed for each participant was $10,000. The Company
matches, monthly, 50% of each participant's contributions which does not exceed
6% of compensation. The Company may also, at the discretion of the Board of
Directors, make a profit sharing contribution to the Plan at the end of each
fiscal year. Such Company contribution will be allocated to Plan participants in
the same ratio that each participant's compensation, as defined in the Plan
agreement, bears to the total compensation of all participants. All Company
contributions are directed to the Company common stock fund.
EXCESS CONTRIBUTION REFUNDS
The IRC provides that the Plan cannot discriminate in favor of highly
compensated individuals. To comply with these laws, contributions in excess of
the IRC Section 401(k) and 401(m) limits and all earnings attributable to such
contributions were required to be refunded to certain highly compensated
participants. These amounts are designated on the statement of net assets
available for benefits as "Excess contribution refunds" at December 31, 1998 and
1997.
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TETRA Technologies, Inc. 401(k) Retirement Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
All participant contributions vest immediately. All Company contributions vest
according to the following schedule:
<TABLE>
<CAPTION>
YEARS OF SERVICE: PERCENTAGE
----------------- ----------
<S> <C>
Less than two 0%
Two but less than three 25%
Three but less than four 50%
Four but less than five 75%
Five or more 100%
</TABLE>
BENEFIT PAYMENTS
Upon a participant's death, his/her entire account balance is payable to the
named beneficiary. When eligible, benefits are payable in any of several forms.
Under the Plan, amounts which are forfeited due to termination of employment
reduce the employer's contribution.
PLAN TERMINATION
Upon full termination of the Plan, the employer shall direct the distribution of
the assets to participants in accordance with the normal procedures for benefit
distributions. All participant accounts will become 100% vested in the event of
a Plan termination.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000, up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balances.
Loan transactions are treated as a transfer to (from) the investment fund from
(to) the participant loan fund. Loan terms range from 1 to 5 years, or up to 15
years for the purchase of a primary residence. The loans are secured by the
balances in the participants' accounts and bear interest at rates commensurate
with local prevailing rates as determined quarterly. Principal and interest are
paid ratably through payroll deductions.
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TETRA Technologies, Inc. 401(k) Retirement Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared using the accrual method
of accounting. Benefit payments to participants are recorded upon distribution.
Prior year balances have been reclassified to conform to the current year
presentation.
ADMINISTRATIVE EXPENSES
All administrative expenses are paid by the Company.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements and accompanying notes
and schedules. Actual results could differ from those estimates.
3. INVESTMENTS
Effective January 2, 1997, Wells Fargo Bank of Texas, N.A., was named trustee of
the Plan.
The fair value of the fund accounts and the common stock is based on quoted
market prices on the last business day of the Plan year.
Participant loans are stated at cost, which approximates fair value.
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated June 8, 1995, stating that the Plan is qualified under Section 401(a) of
the IRC and, therefore, the related trust is exempt from taxation. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan's Administrator believes the Plan is being
operated in compliance with the applicable requirements of the IRC and,
therefore, believes that the Plan is qualified and the related trust is tax
exempt.
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TETRA Technologies, Inc. 401(k) Retirement Plan
Notes to Financial Statements (continued)
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1998
------------
<S> <C>
Net assets available for benefits per financial statements $ 13,427,469
Amounts allocated to withdrawing participants (49,007)
------------
Net assets available for benefits per Form 5500 $ 13,378,462
============
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
1998
-----------
<S> <C>
Benefits paid to participants per the financial statements $941,750
Add amounts allocated to withdrawing participants at end of year 49,007
--------
Benefits paid to participants per Form 5500 $990,757
========
</TABLE>
Amounts allocated to withdrawing participants are recorded on Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, but which have not yet been paid as of that date.
6. YEAR 2000 ISSUE (UNAUDITED)
The Company has determined that it will be necessary to take certain steps in
order to ensure that the Plan's information systems are prepared to handle year
2000 dates. The Company is taking a two-phase approach. The first phase
addresses internal systems that must be modified or replaced to function
properly. Both internal and external resources are being utilized to replace or
modify existing software applications, and test the software and equipment for
the year 2000 modifications. The Company anticipates substantially completing
this phase of the project by June 1999. Costs associated with modifying software
and equipment are not estimated to be significant and will be paid by the
Company.
6. YEAR 2000 ISSUE (UNAUDITED) (CONTINUED)
For the second phase of the project, Plan management established formal
communications with third-party service providers to determine that they have
developed plans to address their own year 2000 problems as they relate to the
Plan's operations. All third-party service providers have indicated that they
will be year 2000 compliant by mid 1999. If modifications of data processing
systems of either the Plan, the Company, or its service providers are not
completed timely, the year 2000 problem could have a material impact on the
operations of the Plan. However, the Plan's management is developing a
contingency plan in case the systems are inoperable for an extended period.
8
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Supplemental Schedules
9
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TETRA Technologies, Inc. 401(k) Retirement Plan
Item 27(a) - Schedule of Assets Held for Investment Purposes
EIN: 74-2148293 PN: 001
December 31, 1998
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, CURRENT
LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
- -------------------------------- --------------------------------------- ------------- -------------
<S> <C> <C> <C>
*Wells Fargo Bank of Texas, N.A. AIM Equity Fund Inc.
Constellation Fund $ 1,875,779 $ 2,298,700
*Wells Fargo Bank of Texas, N.A. American Funds Bond Fund of America 280,866 278,441
*Wells Fargo Bank of Texas, N.A. American Funds Growth Fund of America
502,057 636,591
*Wells Fargo Bank of Texas, N.A. Euro-Pacific International Fund 301,728 307,041
*Wells Fargo Bank of Texas, N.A. American Funds Washington Mutual
Investors Fund 2,141,352 2,644,827
*Wells Fargo Bank of Texas, N.A. Wells Fargo Bank Short-Term Income Fund
905,863 905,863
*Wells Fargo Bank of Texas, N.A. Fidelity Advisor Growth
Opportunities Fund 1,926,632 2,602,656
*Wells Fargo Bank of Texas, N.A. Invesco Mutual Fund GIC 295,722 295,722
*TETRA Technologies, Inc. TETRA Technologies, Inc.
common stock 3,852,792 2,701,934
*Participant loans Loans with various maturities
and interest rates ranging
from 9% to 10% per annum -- 534,921
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$ 12,082,791 $ 13,206,696
============= =============
</TABLE>
*Party-in-interest
10
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TETRA Technologies, Inc. 401(k) Retirement Plan
Item 27(d) - Schedule of Reportable Transactions
EIN: 74-2148293 PN: 001
Year ended December 31, 1998
<TABLE>
<CAPTION>
IDENTITY OF PURCHASE SELLING
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CATEGORY (i) - SINGLE TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Wells Fargo Bank of Texas, N.A. Wells Fargo Bank Short-Term Income
Fund
Purchases $ 522,940 $ --
Sales -- 450,582
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Wells Fargo Bank of Texas, N.A. AIM Equity Funds Inc. Constellation Fund
Purchases 729,947 --
Sales -- 706,259
Wells Fargo Bank of Texas, N.A. Fidelity Advisor Growth Opportunities
Fund
Purchases 678,019 --
Sales -- 437,404
<CAPTION>
CURRENT VALUE
OF ASSET ON
IDENTITY OF COST OF TRANSACTION NET
PARTY INVOLVED DESCRIPTION OF ASSET ASSET DATE GAIN OR (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CATEGORY (i) - SINGLE TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Wells Fargo Bank of Texas, N.A. Wells Fargo Bank Short-Term Income
Fund
Purchases $ 522,940 $ 522,940 $ --
Sales 450,582 450,582 --
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Wells Fargo Bank of Texas, N.A. AIM Equity Funds Inc. Constellation Fund
Purchases 729,947 729,947 --
Sales 647,129 706,259 59,130
Wells Fargo Bank of Texas, N.A. Fidelity Advisor Growth Opportunities
Fund
Purchases 678,019 678,019 --
Sales 341,747 437,404 95,657
</TABLE>
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TETRA Technologies, Inc. 401(k) Retirement Plan
Item 27(d) - Schedule of Reportable Transactions (continued)
EIN: 74-2148293 PN: 001
Year ended December 31, 1998
<TABLE>
<CAPTION>
IDENTITY OF PURCHASE SELLING
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)
TETRA Technologies Inc. Common Stock
TETRA Technologies, Inc.
Purchases $ 2,104,812 $ --
Sales -- 494,003
Wells Fargo Bank of Texas, N.A. American Funds Washington Mutual Investor Fund
Purchases 893,643 --
Sales -- 392,138
Wells Fargo Bank of Texas, N.A. Wells Fargo Bank Short-Term Income Fund
Purchases 7,001,496 --
Sales -- 6,901,633
<CAPTION>
CURRENT VALUE
OF ASSET ON
IDENTITY OF COST OF TRANSACTION NET
PARTY INVOLVED DESCRIPTION OF ASSET ASSET DATE GAIN OR (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TETRA Technologies Inc. Common Stock
TETRA Technologies, Inc.
Purchases $ 2,104,812 $ 2,104,812 $ --
Sales 586,128 494,003 (92,125)
Wells Fargo Bank of Texas, N.A. American Funds Washington Mutual Investor Fund
Purchases 893,643 893,643 --
Sales 303,528 392,138 88,610
Wells Fargo Bank of Texas, N.A. Wells Fargo Bank Short-Term Income Fund
Purchases 7,001,496 7,001,496 --
Sales 6,901,633 6,901,633 --
</TABLE>
12
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The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the administrative committee (or other persons who administer the
employee benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
TETRA Technologies, Inc.
401(k) Retirement Plan
Date: June 29, 1999 By: /s/ JAMES R. HALE
--------------------------
James R. Hale
Committee Member
