SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)or Section 240.14a-12
NDE ENVIRONMENTAL CORPORATION
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(Name of registrant as specified in its Charter)
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(Name of Person(s) Filing Proxy Statement; if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[PRELIMINARY FILING]
NDE Environmental Corporation
8900 Shoal Creek Boulevard, Building 200
Austin, Texas 78758
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 14, 1997
To the Stockholders of NDE Environmental Corporation:
Notice is hereby given that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of NDE Corporation, a Delaware corporation (the "Company"),
will be held at the Company's corporate headquarters located at 8900 Shoal Creek
Boulevard, Building 200, Austin, Texas, at 9:00 a.m. local time, for the
following purposes:
1. To consider and vote on the proposed amendment to the Certificate
of Incorporation of the Company to change the Company's name to
Tanknology-NDE International, Inc.;
2. To consider and vote on the nominees for director of the Company;
3. To consider and vote on a proposal to adopt an amendment and
restatement to the Company's 1989 Stock Option Plan, which would, among
other things, re-name the 1989 Stock Option Plan as the Tanknology-NDE
International, Inc. 1989 Long-Term Incentive Plan;
4. To ratify the appointment of independent public accountants for the
1997 fiscal year; and
5. Such other business as may properly come before the Annual Meeting
or any adjournment or postponement thereof.
Only stockholders of record at the close of business on July 11, 1997 are
entitled to notice of and to vote at the Annual Meeting and any adjournment or
postponement thereof.
Stockholders are cordially invited to attend the Annual Meeting in person.
Those who do not plan to attend and who wish their shares voted are requested to
sign, date and mail promptly the enclosed proxy, for which a return envelope is
provided.
FOR THE BOARD OF DIRECTORS,
/S/ Jay Allen Chaffee
_________________________________________
Jay Allen Chaffee
Chairman of the Board
Austin, Texas
July 24, 1997
<PAGE>
[PRELIMINARY FILING]
NDE Environmental Corporation
8900 Shoal Creek Boulevard, Building 200
Austin, Texas 78758
PROXY STATEMENT
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July 24, 1997
General
The accompanying proxy is solicited on behalf of the Board of Directors of
NDE Environmental Corporation, a Delaware corporation (the "Company"), for use
at the Annual Meeting of Stockholders of the Company (the "Meeting") to be held
at 9:00 a.m. on Thursday, August 14, 1997, at the Company's corporate
headquarters located at 8900 Shoal Creek Boulevard, Building 200, Austin, Texas,
78758.
Only holders of record at the close of business on July 11, 1997 (the
"Record Date") of shares of common stock of the Company, par value $0.0001 per
share (the "Common Stock"), will be entitled to vote at the Meeting on all
matters referred to below. At the close of business on the Record Date
[15,978,610] shares of Common Stock were outstanding and entitled to vote. A
majority of the shares of Common Stock outstanding on the Record Date will
constitute a quorum of the holders of Common Stock.
This Proxy Statement and accompanying proxy will be mailed to stockholders
on or about July 24, 1997.
Vote Required; Abstentions and Non-Votes
Six directors to serve as members of the Board of Directors will be elected
by a plurality of the votes cast by the holders of Common Stock. There will be
no cumulative voting for directors. Approval of the proposal to change the
Company's name to Tanknology-NDE International, Inc. requires the affirmative
vote of a majority of the outstanding shares of Common Stock. For all matters
except the election of directors and the proposal to change the Company's name,
the affirmative vote of holders of a majority of the shares of Common Stock
present in person or by proxy and entitled to vote on the matter is required.
Abstentions are treated as present and entitled to vote and, thus, will be
counted in determining whether a quorum is present. Abstentions will have the
same effect as a vote against a matter, except as to the election of directors,
as to which they will have no effect. A "broker non-vote" is a vote withheld by
a broker on a particular matter in accordance with stock exchange rules because
the broker has not received instructions from the customer for whose account the
shares are held. A broker non-vote is counted for purposes of determining the
existence of a quorum, but will have no effect on the outcome of the vote on any
of the proposals.
Solicitation of Proxies; Expenses
Solicitation of proxies by mail is expected to commence on or about July
24, 1997, and the cost thereof will be borne by the Company. In addition to such
solicitation by mail, certain of the directors, officers and regular employees
of the Company may, without extra compensation, solicit proxies by telephone,
telecopy or personal interview. Arrangements will be made with certain brokerage
houses, custodians, nominees and other fiduciaries for the forwarding of
solicitation materials to the beneficial owners of Common Stock held of record
by such persons, and such brokers, custodians, nominees and fiduciaries will be
reimbursed by the Company for reasonable out-of-pocket expenses incurred by them
in connection therewith.
Revocability of Proxies
Any person signing a proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to the Meeting or at the Meeting prior to the
vote pursuant to the proxy. A proxy may be revoked by a writing delivered to the
Company, signed by the person who signed the proxy and stating that the proxy is
revoked, by a subsequent proxy that is signed by the person who signed the
earlier proxy and is presented at the Meeting or by attending at the Meeting and
voting in person. Please note, however, that if a stockholder's shares are held
of record by a broker, bank or other nominee and that stockholder wishes to vote
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at the Meeting, the stockholder must bring to the Meeting a letter from the
broker, bank or other nominee confirming that stockholder's beneficial ownership
of the shares.
PROPOSAL NO. 1 -- AMENDMENT TO CERTIFICATE OF INCORPORATION TO CHANGE THE
COMPANY'S NAME TO TANKNOLOGY-NDE INTERNATIONAL, INC.
The holders of Common Stock will be asked to approve an amendment to the
Company's Certificate of Incorporation to change the name of the Company to
"Tanknology-NDE International, Inc." If approved by the holders of a majority of
the outstanding shares of Common Stock on the Record Date, the proposal will be
adopted.
On October 25, 1996, the Company completed the acquisition (the
"Acquisition") of substantially all of the operating assets and liabilities of
the Tanknology UST Group of Tanknology Environmental, Inc. ("TEI"). The
Tanknology UST Group's operations were principally conducted through three
subsidiaries of TEI: Tanknology Corporation International ("TCI"), Tanknology
Canada (1988), Inc. and USTMAN Industries, Inc. The acquisition was accomplished
by means of the Company's purchase of all of the issued and outstanding capital
stock of the subsidiaries. Tanknology Environmental, Inc. subsequently changes
its name to TEI, Inc.
TCI was engaged in substantially the same business as the Company in the
same markets and was the Company's largest direct domestic competitor. TCI's
revenues were significantly larger than those of NDE Testing & Equipment, Inc.
("NDE Testing"), the Company's primary operating subsidiary prior to the
acquisition of the Tanknology UST Group. Immediately following the Acquisition,
the Company caused NDE Testing to merge with and into TCI, and the surviving
corporation changed its name to Tanknology/NDE Corporation.
Given the scale of operations of former TCI as compared to NDE Testing, the
Company believes the Tanknology name is more descriptive of the Company's
continuing operations and is more familiar to the Company's current customers
and the underground storage tank testing and monitoring industry. The Company
also believes the costs of the name change, including the possibility that
potential investors may erroneously use TEI's ticker symbol (TANK) instead of
the Company's symbol (NDEC) to obtain stock quotes and other market information
about the Company, are outweighed by the value of changing the Company's name.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL
OF THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY TO TANKNOLOGY-NDE INTERNATIONAL, INC.
PROPOSAL NO. 2 -- ELECTION OF DIRECTORS
At the meeting, the holders of the Company's Common Stock will elect six
directors to hold office until the next annual meeting of stockholders and until
their respective successors have been elected and qualified or until such
director's earlier resignation or removal.
Shares represented by the accompanying proxy will be voted for the election
of those nominees recommended by the Board unless the proxy is marked in such a
manner as to withhold authority to vote or so as to vote for one or more
alternative candidates. If any nominee for any reason is unable to serve or will
not serve, the proxies may be voted for such substitute nominee as the proxy
holder may determine. The Company is not aware of any nominee who would be
unable or unwilling to serve as a director.
Nominees
Unless contrary indications are set forth in the proxy, it is intended that
the person named in the proxy will vote all shares of Common Stock represented
by the proxy for the election of Messrs. Jay Allen Chaffee, Charles C.
McGettigan, A. Daniel Sharplin, Michael S. Taylor, Myron A. Wick, III and Mark
B. Bober as directors. Messrs. Chaffee, McGettigan, Sharplin, Taylor, Wick and
Bober are all presently members of the Board of Directors of the Company.
Directors of the Company are elected annually and hold office until their
successors have been elected and qualified or their earlier resignation or
removal. Management is not aware of any circumstances likely to render any
nominee unavailable for election. However, should any nominee become unavailable
for election, the Board of Directors of the Company may designate another
nominee, in which case the person acting under duly executed proxies will vote
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for the election of the replacement nominee. A stockholder may, in the manner
set forth in the enclosed proxy card, instruct the proxy holder not to vote that
stockholder's shares for one or more of the named nominees.
The Company's bylaws currently provide for a Board of Directors of seven
persons. Six persons currently serve on the Board and are expected to continue
to serve until the annual meeting. The proxies solicited hereby cannot be voted
for a number of persons greater than the number of nominees named below. The
Certificate of Incorporation of the Company, as amended to date, does not permit
cumulative voting. A plurality of the votes of the holders of the outstanding
shares of Common Stock of the Company represented at a meeting at which a quorum
is present may elect directors.
The following sets forth information concerning the six nominees for
election as directors at the meeting, including their position with the Company
and the business experience during at least the past five years, and the age of
each nominee as of April 30, 1997.
<TABLE>
<CAPTION>
Name Age Principal Occupation Director Since
- ------------------------- --- ------------------------------------ --------------
<S> <C> <C> <C>
Jay Allen Chaffee(1)(2) 45 Chairman of the Board 1991
A. Daniel Sharplin 35 President and Chief Executive Officer 1996
Mark B. Bober(1)(2)(3) 36 Certified Public Accountant 1996
Charles C. McGettigan(3) 52 Investment Banking
Michael S. Taylor(3) 55 Investment Banking 1992
Myron A. Wick, III(1)(2) 53 Investment Banking 1991
<FN>
- ------------------
(1) Member of Executive Committee
(2) Member of Compensation Committee
(3) Member of Audit Committee
</FN>
</TABLE>
Each of the directors named herein was elected to be a director at the
Company's Annual Meeting of Stockholders held on June 5, 1996, with the
exception of Mark B. Bober who was elected to the Board of Directors by the
Board of Directors as of December 12, 1996.
Jay Allen Chaffee was elected to the Company's Board of Directors in April
1991 and has been the Chairman of the Board since December 1994. He served as
the Company's President, Chief Executive Officer and Chief Financial Officer
form May 1991 until June 1995. Mr. Chaffee has served as President and a
director of Bunker Hill Associates, Inc. ("Bunker Hill") since 1985, and he
continues to serve in these capacities. Mr. Chaffee received a Bachelor of Arts
from Franklin & Marshall College in 1974 and a Juris Doctor from the University
of Tulsa, College of Law in 1978.
A. Daniel Sharplin has been the Company's President and Chief Executive
Officer since June 1995. He became the Company's Vice President, Western Region,
in December 1991, was appointed the Company's Chief Operating Officer and
Secretary in July 1992 and was appointed President in December 1994. Prior to
joining the Company, Mr. Sharplin functioned as an environmental service
industry consultant from April 1991 to December 1991. Mr. Sharplin received a
Masters of Business Administration from the University of Texas in 1987.
Mark B. Bober is a partner in Bober, Markey & Company, Certified Public
Accountants, a position he has held since August 1992. From 1983 until 1992 he
held positions of progressive responsibility with Price Waterhouse, Cleveland.
Mr. Markey holds a Bachelor of Science degree from Miami University and is
Certified Public Accountant, State of Ohio.
Charles C. McGettigan was a founding partner in 1991 and is a general
partner of Proactive Investment Managers, L.P., which is the general partner of
Proactive Partners, L.P. ("Proactive"), a merchant banking fund investing in and
providing financial services to small public companies. Mr. McGettigan was a
co-founder of Corporate Finance, of Hambrecht & Quist, Incorporated. Prior to
that, Mr. McGettigan was a Senior Vice President of Dillon, Read & Co. Inc. He
currently serves on the Boards of Directors of Modtech, Inc., Onsite Energy,
Inc., PMR Corporation and Sonex Research, Inc. Mr. McGettigan is a graduate of
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of Georgetown University, and he received a Masters of Business Administration
in Finance from the Wharton School at the University of Pennsylvania.
Michael S. Taylor has been a director of the Company since July 1992. He
has been Associate Director of Investment Banking of Josephthal since June 1989.
From early 1980 until joining Josephthal, he was President of Mostel & Taylor
Securities, Inc., an NASD-member investment banking and brokerage firm. He has
been involved in the securities industry since 1966, when he joined Lehman
Brothers Inc. as an analyst. He became a director of Simtek Corporation this
year. He attended Amherst College and Columbia University.
Myron A. Wick, III has been a director of the Company since November 1991.
Since November 1988, he has been Managing Director of McGettigan, Wick & Co.,
Inc., an investment banking firm in San Francisco which he co- founded. Since
May 1991, Mr. Wick has been a general partner of Proactive Investment Managers,
L.P., which is the general partner of Proactive. From September 1985 to May
1988, Mr. Wick was Chief Operating Officer of California Biotechnology, Inc., a
publicly traded biotechnology firm. Mr. Wick is a director of Phoenix Network,
Inc., Sonex Research, Inc. and Stat-Tech International Corporation. Mr. Wick
received a Bachelor of Arts from Yale University in 1965 and a Masters of
Business Administration from Harvard University in 1968.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE FOREGOING NOMINEES AS DIRECTORS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, officers and beneficial
owners of more than 10% of the Common Stock to file with the Securities and
Exchange Commission (the "SEC"), initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and 10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. The
Company believes that, during the 1996 fiscal year, the filings required of its
officers, directors or greater than 10% beneficial owners were not timely filed.
Meetings of the Board of Director and Certain Committees
During all of 1996, Jay Allen Chaffee, A. Daniel Sharplin, Charles C.
McGettigan, Michael S. Taylor and Myron A. Wick, III were members of the Board
of Directors. Effective December 12, 1996, Mark B. Bober was unanimously elected
to the Board by the foregoing directors.
The Board of Directors met five times in 1996. The standing committees of
the Board include an Executive Committee, an Audit Committee and a Compensation
Committee. The Board does not have a nominating committee. The functions of the
nominating committee are performed by the Board. During 1995, the Executive
Committee met three (3) times, the Compensation Committee met one (1) time and
the Audit Committee met one (1) time. All directors attended at least 75% of the
meetings held in 1996 of the Board of Directors and any committees on which they
served during their term of service as directors.
During 1996, the members of the Executive Committee were Jay Allen Chaffee
and Myron A. Wick, III. Mark B. Bober was elected as an additional member of the
Executive Committee effective December 12, 1996. Messrs. Bober, Chaffee and Wick
continue to be the members of the Executive Committee. The Executive Committee
has, in general, the authority to take substantially all actions that can be
taken by the Board of Directors as a whole.
During 1996, the members of the Compensation Committee were Michael S.
Taylor and Myron A. Wick, III. Mark B. Bober was elected as an additional member
of the Compensation Committee effective December 12, 1996. Messrs. Bober, Taylor
and Wick continue to be the members of the Compensation Committee. The
Compensation Committee has the authority to determine the compensation and other
benefits received by the Company's Chief Executive Officer and members of the
Company's senior management group.
During 1996, the members of the Audit Committee were Charles C. McGettigan
and Michael S. Taylor. Mark B. Bober was elected as an additional member of the
Audit Committee effective December 12, 1996. Messrs. Bober, McGettigan and
Taylor continue to be the members of the Audit Committee. The Audit Committee
reviews with the Company's outside auditors the Company's financial reporting
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systems and controls and meets with the outside auditors concerning the scope
and terms of their engagement and the results of their audits.
Executive Officers
Jay Allen Chaffee. See "Proposal No. 2 -- Election of Directors --
Nominees."
A. Daniel Sharplin. See "Proposal No. 2 -- Election of Directors --
Nominees."
H. Baxter Nairon, age 37, was named President, Field Services, in April
1996 and is the President of the Company's subsidiary, Tanknology/NDE
Corporation. Prior to joining the Company, from 1989 to 1996, Mr. Nairon was
employed by Booz-Allen & Hamilton, a global management consulting firm, where he
achieved the position of Principal, specializing in engagements for large oil
companies. He has received a Professional Engineering registration and is 37
years old. He holds a Bachelor of Science in Mechanical Engineering from the
University of Tennessee at Knoxville and a Masters of Business Administration
from the University of Texas.
David G. Osowski, age 45, was named Vice President, Secretary and Chief
Financial Officer in December 1996. Prior to joining NDE, from May 1991 until
July 1996, Mr. Osowski served as Senior Vice President, Controller and Treasurer
for Summagraphics Corporation. Mr. Osowski received a Bachelor of Science from
the University of Bridgeport.
Certain Transactions
During the last fiscal year, the following transactions in excess of
$60,000 were entered into with related parties: Banc One Capital Partners L.P.,
a lender to and warrant holder of the Company ("BOCP"), purchased $8 million in
senior subordinated debt, earned $170,000 in fees related to the debt purchase
and was reimbursed $21,930 for due diligence and travel costs. Proactive
Partners, L.P., a major shareholder of the Company, converted $825,000 of debt
and $28,103 of accrued interest into 6,600,000 shares of Common Stock. Lagunitas
Partners, L.P., a major shareholder of the Company, converted $175,000 of debt
and $7,779 of accrued interest into 1,400,000 shares of Common Stock. Jay Allen
Chaffee, Chairman of the Board, is the president of Bunker Hill Associates, Inc.
During 1996, the Company paid $168,775 to Bunker Hill for services of Mr.
Chaffee and related expenses as described below.
In connection with the Acquisition, the Company placed $8 million of senior
subordinated debt with a 5-year maturity and interest at 13% per annum with
BOCP. BOCP also purchased from the Company warrants to purchase 13,022,920
shares of Common Stock at an initial exercise price of $0.325 per share subject
to downward adjustment (but not less than $0.125 per share) based on the
Company's financial performance during the 12-month period prior to the exercise
of the warrants. In connection with the Acquisition and related financings,
Proactive Partners, L.P. provided a $1 million standby commitment in the event
of a payment default by the Company under both the BOPC subordinated debt and,
together with its affiliate Lagunitas Partners L.P., agreed to convert $1
million of prior indebtedness and $35,882 of associated accrued interest, into
8,000,000 shares of the Company's Common Stock.
Employment Agreements
In 1991, the Company entered into a service contract with Bunker Hill
Associates, Inc. to retain the services of Mr. Chaffee. Mr. Chaffee is a
principal of Bunker Hill, a management consulting firm based in Houston, Texas.
Pursuant to the contract, Mr. Chaffee has agreed to serve the Company in various
capacities as an officer and director. Effective July 1995, the Company agreed
to pay for such services at the rate of $7,500 per month with additional stock
and cash bonus consideration. The contract can be terminated by either party
with one month's notice. In 1996, Bunker Hill, on behalf of Mr. Chaffee,
received $90,000 in consideration of Mr. Chaffee's management services as an
officer of the Company. In addition, $78,775 was remitted to Bunker Hill for
secretarial support and reimbursement of travel and out-of-pocket expenses
related to Mr. Chaffee's services.
Compensation of Directors
The Company has agreed to pay or reimburse the travel expenses of its
directors resulting from attendance at Board meetings. No other cash
compensation was paid to, or on behalf of, board members, in consideration of
their services provided as directors in 1996. However, certain directors were
provided compensation for other services provided to the Company as described
above. Beginning in 1997, the Board of Directors has agreed to pay Mr. Taylor
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and Mr. Bober a per meeting fee of $2,250 and to reimburse travel expenses of
all directors resulting from attendance at Board meetings.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as to the beneficial
ownership of the Company's capital stock, as of May 30, 1997 by: (a) each
stockholder known by the Company to be the beneficial owner of more than 5% of a
class of voting stock, (b) each director, (c) each of the executive officers of
the Company named in the Summary Compensation Table below and (d) all executive
officers and directors as a group.
Beneficial Ownership of Common Stock(1)
Number of Percentage of
Beneficial Owner Shares Class
- ------------------------------------- ---------- -------------
Proactive Partners, L.P.(2)(3)(5)(6) 14,349,233 47.80%
50 Osgood Place, Penthouse
San Francisco, CA 94153
Lagunitas Partners, L.P.(2)(3)(5)(6) 14,319,556 47.71
50 Osgood Place, Penthouse
San Francisco, CA 94153
Banc One Capital Partners(4) 13,022,920 43.39
150 East Gay Street
Columbus, OH 43215
Myron A. Wick, III(5)(6) 10,614,595 35.36
c/o Proactive Partners
50 Osgood Place, Penthouse
San Francisco, CA 94133
Charles C. McGettigan(5)(6) 10,614,595 35.36
c/o Proactive Partners
50 Osgood Place, Penthouse
San Francisco, CA 94133
A. Daniel Sharplin(7) 1,016,959 3.39
Jay Allen Chaffee(8) 410,483 1.37
H. Baxter Nairon(9) 128,000 *
Mark B. Bober(10) -- *
Michael S. Taylor(11) 17,333 *
All executive officers and directors 15,922,008 53.04
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* Less than 1% of the outstanding Common Stock
(1) For the purposes of the above table and the following notes, the shares of
Common Stock shown as "beneficially owned" include all shares of Common
Stock that the "beneficial owner" has the right to acquire within 60 days
upon the conversion of other securities, upon the exercise of warrants or
otherwise. In calculating the total number of shares of Common Stock deemed
to be outstanding for the purpose of reflecting the beneficial owner's
percentage of the class, the shares that other owners did not then own but
had the right to acquire within 60 days or more are not included.
(2) Includes 10,267,378 outstanding shares of Common Stock. Also includes (i)
175,000, 105,874 and 50,000 shares reserved for issuance upon the exercise
of warrants at prices of $0.375, $0.15, and $0.125, respectively; (ii)
3,721,304 shares beneficially owned by Lagunitas Partners, L.P. and
referred to in note (3) below; (iii) 13,333 shares beneficially owned by
Mr. McGettigan and referred to in note (5) below and (v) 3,010 shares
issuable upon the exercise of warrants at a price of $0.15 per share issued
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to McGettigan, Wick & Co., Inc. and to Proactive Partners, L.P.'s general
partner, Proactive Investment Managers, L.P. See also note (7) below.
(3) Includes 3,694,390 outstanding shares of Common Stock. Also includes (i)
26,914 shares of Common Stock issuable upon the exercise of warrants at a
price of $0.15 per share and (ii) 10,598,252 shares beneficially owned by
Proactive Partners, L.P. and referred to in note (2) above.
(4) Consists of warrants to purchase 13,022,920 shares of Common Stock.
(5) Includes (i) 13,333 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. Wick under the Company's 1989 Stock Option
Plan and (ii) the shares beneficially owned by Proactive Partners, L.P. and
referred to in note (2) above (10,398,252). Mr. Wick is a general partner
of Proactive Investment Managers, L.P., the general partner of Proactive
Partners, L.P. Also includes 3,010 shares beneficially owned by McGettigan,
Wick & Co. (Mr. Wick is a general partner of McGettigan, Wick & Co.) but
does not include an additional 26,667 shares subject to options that are
not yet exercisable. Also does not include 184,410 shares owned by the NDE
Environmental Corporation 401(K) plan of which Mr. Wick is a trustee.
(6) Includes (i) 13,333 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. McGettigan under the Company's 1989 Stock
Option Plan and (ii) the shares beneficially owned by Proactive Partners,
L.P. and referred to in note (2) above (10,598,252). Mr. McGettigan is a
general partner of Proactive Investment Managers, L.P., the general partner
of Proactive Partners, L.P. Also includes 3,010 shares beneficially owned
by McGettigan, Wick & Co. (Mr. McGettigan is a general partner of
McGettigan, Wick & Co.) but does not include an additional 26,667 shares
subject to options that are not yet exercisable.
(7) Includes 513,932 outstanding shares of Common Stock. Also includes 26,360
shares reserved for issuance upon the exercise of warrants at prices of
$7.50. Also includes 476,667 shares reserved for issuance to Mr. Sharplin
under the Company's 1989 Stock Option Plan but does not include an
additional 213,333 shares subject to options that are not yet exercisable.
Also does not include 184,410 shares owned by the NDE Environmental
Corporation 401(K) plan of which Mr. Sharplin is a trustee.
(8) Includes 67,150 outstanding shares of Common Stock. These shares are held
in the name of Bunker Hill Associates, Inc., an affiliate of Mr. Chaffee.
Also includes 343,333 shares subject to exercisable options granted to
Bunker Hill under the Company's 1989 Stock Option Plan but does not include
146,667 shares subject to options that are not yet exercisable. Also does
not include 184,410 shares owned by the NDE Environmental Corporation
401(K) plan of which Mr. Chaffee is a trustee.
(9) Consists of 128,000 shares issuable upon the exercise of options granted to
Mr. Nairon under the Company's 1989 Stock Option Plan but does not include
256,000 shares subject to options that are not yet unexercisable.
(10) Does not include 40,000 shares subject to options granted to Mr. Bober
under the Company's 1989 Stock Option Plan that are not yet unexercisable.
(11) Includes 13,333 shares issuable upon the exercise of options granted to Mr.
Taylor under the Company's 1989 Stock Option Plan but does not include
26,667 shares subject to options that are not yet unexercisable. Also
includes 4,000 shares outstanding held by Mr. Taylor's wife. Mr. Taylor
disclaims beneficial ownership of his wife's shares.
The following table sets forth all compensation awarded to, earned by or
paid to the most highly compensated executive officers of the Company (the
"Named Executive Officers"), for all services rendered in all capacities to the
Company and its subsidiaries during 1994, 1995 and 1996. No other person who was
an executive officer of the Company at the end of 1996 was awarded, earned or
received annual salary and bonus in excess of $100,000.
-7-
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION
Summary Compensation Table
Long-Term
Compensation
-------------
Annual Compensation Awards
------------------------------------- -------------
Name and Underlying All Other
Principal Position Year Salary Bonus Options Compensation
- ----------------------- -------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Jay Allen Chaffee 1996 $90,000 (1) $150,000 (1)
Chairman of the Board 1995 $113,671 $19,969 (1) 440,000 (4)
of Directors 1994 $114,000
A. Daniel Sharplin 1996 $154,526 (2) $75,000 (2) $4,526 (7)
President and Chief 1995 $136,779 $39,969 (2) 640,000 (5)
Executive Officer 1994 $117,885
A. Baxter Nairon 1996 $95,537 $45,000 (3) 384,000 (6)
President, Tanknology/ n/a
NDE and Field Services n/a
Division
<FN>
(1) In 1993, the Company awarded a bonus of $19,969 to Mr. Chaffee; this amount
was paid in installments in 1995 with the last installment being paid in
January 1996. In July 1995 the Company amended the Senior Executive
Compensation Plan and revised the annual sum paid to Bunker Hill for Mr.
Chaffee's management services as an Officer of the Company to $90,000 from
$125,000 (see "Certain Transactions"). In 1996 the Compensation Committee
awarded Mr. Chaffee a bonus for 1996 of $150,000 which is to be paid in
1997.
(2) In 1993, the Company accrued a $19,969 bonus for Mr. Sharplin; this amount
was paid in 1995. Also in 1995, the Compensation Committee awarded him a
$20,000 bonus which was paid in 1997. Mr. Sharplin's 1996 bonus award of
$75,000 was paid in 1997.
(3) Mr. Nairon joined the Company in 1996 and received a $10,000 bonus as an
inducement to join the Company. He was also granted a salary advance of
$10,000 as of his hire date. In 1996 the Compensation Committee awarded Mr.
Nairon a 1996 bonus of $35,000 which was paid in 1997. Mr. Nairon repaid
the salary advance out of proceeds from the bonus payment.
(4) On June 22, 1995, Mr. Chaffee was awarded an option to purchase 440,000
shares of Common Stock at $0.125 per share which will expire in June 2005.
The option vests one-third each year from date of grant starting June 22,
1995. The option was granted in 1995, subject to approval by shareholders
of an increase in the number of shares available for grant to management
under options. Shareholders approved an increase in the number of shares
available for grant in 1996 to 2,500,000. In addition, in 1996 certain
previously granted options were repriced (see "Report on Repricing of
Options" below).
(5) On June 22, 1995 Mr. Sharplin was awarded an option to purchase 640,000
shares of Common Stock at $0.125 per share which will expire in June 2005.
The option vests one-third each year from date of grant starting June 22,
1995. The option was granted in 1995, subject to approval by shareholders
of an increase in the number of shares available for grant to management
under options. Shareholders approved an increased in the number of shares
available for grant in 1996 to 2,500,000. In addition, in 1996 certain
previously granted options were repriced (see "Report on Repricing of
Options" below).
(6) In March 1996, the Board granted an option to purchase 384,000 shares of
Common Stock to Mr. Nairon at $0.1875, the market price of NDE Common Stock
on Mr. Nairon's hire date. The option vests ratably one-third each year
starting at his date of hire.
-8-
<PAGE>
(7) Consists of matching funds for the Company 401(k) Plan relating to Company
contributions for 1992, 1993 and 1994 which were made in 1996.
</FN>
</TABLE>
The following table sets forth further information regarding the stock
options referred to above.
Option Grants in Last Fiscal Year
The following table sets forth options granted to the named executive
officers during the year ended December 31, 1996.
Number of Percent of
Shares Total Options
Underlying Granted to Exercise
Options Employees in Price Per Expiration
Name Granted Fiscal Year Share Date
- ------------------- ----------- ------------ ----------- -------------
Jay Allen Chaffee 50,000(1) 10% $ 0.1250 June 2004
A. Daniel Sharplin 50,000(1) 10% $ 0.1250 June 2004
H. Baxter Nairon 384,000 76% $ 0.1875 (1) April 2006 (2)
- ----------------------
(1) Issued pursuant to a repricing of existing option grants. See "Report on
Repricing of Options" below. (2) See Note (6) to the immediately preceding
table.
Fiscal Year End Options Values
The following table sets forth the option holdings and the value of
unexercised options held by each Named Executive Officer as of December 31,
1996. None of the Named Executive Officers exercised options during 1996.
Numbers of Shares Underlying Value of Unexercised
Unexercised-Options in-the-Money-Options
at December 31, 1996 at December 31, 1996
---------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ----------- ------------- ----------- -------------
Jay Allen Chaffee 196,666 293,334 $ 55,312 $ 82,500 (1)
A. Daniel Sharplin 263,334 426,666 $ 74,063 $ 120,000 (1)
H. Baxter Nairon 0 384,000 $ 0 $ 84,000 (2)
(1) Represents (i) the difference ($0.28125) between the exercise price of the
options ($0.125) and the per share fair market value on December 31, 1996
($0.40625) times (ii) the number of shares subject to the options.
(2) None of Mr. Nairon's options vest until April 15, 1997, one year after his
date of hire. Represents (i) the difference ($0.21875) between the exercise
price of the options ($0.1875) and the per share fair market value on
December 31, 1996 ($0.40625) times (ii) the number of shares subject to the
options.
Compensation of Directors
The Company has agreed to pay or reimburse the travel expenses of its
directors resulting from attendance at Board meetings.
Report on Repricing of Options
In 1996 the Compensation Committee of the Board of Directors determined
that in connection with the granting of executive options in 1995, that it would
be in the best interests of shareholders and the Company to reprice certain
management options that had been granted in 1993 to a current market price
rather than issue additional new options. The Committee believed that at the
existing exercise prices, the options were not providing the proper performance
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<PAGE>
incentive to management. Accordingly, the Committee repriced 50,000 options that
had been previously granted to each Messrs. Chaffee and Sharplin as well as
20,000 for Mr. Eric Hopkins, the former Vice President and Chief Financial
Officer of the Company, to $0.125, then market price of the Common Stock. All of
the aforementioned options previously had exercise prices of $3.75. All of these
options remain fully vested following the repricing.
PROPOSAL NO. 3 -- APPROVAL OF THE AMENDED AND RESTATED NDE ENVIRONMENTAL
CORPORATION 1989 STOCK OPTION PLAN, WHICH WOULD BE RENAMED
AS THE TANKNOLOGY-NDE INTERNATIONAL, INC. 1989 LONG-TERM
INCENTIVE PLAN
The Board of Directors of the Company has adopted, subject to approval by
the shareholders of the Company, an amendment and restatement to the Company's
1989 Stock Option Plan, which would, among other things, re-name the 1989 Stock
Option Plan as the Tanknology-NDE International, Inc. 1989 Long-Term Incentive
Plan (the "Incentive Plan"). A copy of the Incentive Plan is attached hereto as
Appendix A. The following description of the Incentive Plan is qualified by
reference to the full text of the Incentive Plan.
The purpose of the Incentive Plan as so amended and restated is to retain
key executives and other selected employees, reward them for making major
contributions to the success of the Company and provide them with a proprietary
interest in the growth and performance of the Company and its subsidiaries. In
general, the Incentive Plan as so amended permits the award of stock-based
compensation in addition to options, extends the term of the Incentive Plan,
increases the number of shares of stock with respect to which awards may be made
under the Plan and accommodates changes in response to the enactment of section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
revisions to Rule 16b-3 promulgated by the U.S. Securities and Exchange
Commission.
Administration
The Incentive Plan will be administered by the a committee designated by
the Board of Directors of the Company to administer the Incentive Plan (in this
caption, the "Committee"). The Compensation Committee of the Board has been
designated as this Committee. Subject to the terms of the Incentive Plan, the
Committee will have authority (i) to select employees to receive awards, (ii) to
determine the timing, form, amount or value and term of awards, and the
conditions and limitations, if any, subject to which awards will be made and
become payable and (iii) to interpret the Incentive Plan and adopt rules,
regulations and guidelines for carrying out the Incentive Plan. The Committee
may delegate certain of its duties under the Incentive Plan to the Chairman of
the Board, the President and other senior officers of the Company. The Committee
may not, however, delegate to any person the authority to grant awards to, or
take other action with respect to, participants who are subject to Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
Types of Incentive Awards
The Incentive Plan provides for the grant of any or all of the following
types of awards: stock options, stock appreciation rights, stock awards and cash
awards. Awards of different types may be made singly, in combination or in
tandem. Stock options may be incentive stock options ("ISOs") that comply with
Section 422 of the Code. No participant may be granted awards consisting of
stock options or stock appreciation rights exercisable for more than fifty
percent of the shares of Common Stock of the Company reserved for issuance under
the Incentive Plan. Awards issued under the Plan as it was constituted prior to
this amendment and restatement are not being cancelled or reissued, but shall
remain in effect in accordance with their terms.
Shares of Common Stock Subject to the Incentive Plan
The total number of shares of Common Stock of the Company that may be
awarded pursuant to the Incentive Plan since its original 1989 enactment will
not exceed 6,000,000 (six million). The number of shares of Common Stock of the
Company that may be awarded pursuant to the Incentive Plan is subject to
adjustment upon the occurrence of certain events, as described below.
-10-
<PAGE>
Eligibility
Participants in the Incentive Plan will be selected by the Committee from
among those employees who hold positions of responsibility and whose
performance, in the judgment of the Committee, have a significant effect on the
success of the Company. All directors, officers, management employees and key
consultants of the Company and its subsidiaries are eligible for awards under
the Incentive Plan. Awards are discretionary, however, and nothing in the
Incentive Plan guarantees an employee of the Company or its Subsidiaries any
right to participate in the Incentive Plan or to be granted an award. The table
set forth below shows the awards allocated under the amended and restated Plan,
including awards subject to shareholder approval.
<TABLE>
<CAPTION>
1989 Stock Option Plan - Summary of Grants
As of April 30, 1997
Options Granted Contingent on
Approval of Amendment and
Restatement (1) Total Options Granted
----------------------------- --------------------------
Number of Average Number of Average
Name of Individual Shares Exercise Price Shares Exercise Price
<S> <C> <C> <C> <C>
- ----------------------------------------- ---------- -------------- --------- --------------
Jay Allen Chaffee, Chairman 690,000 $ 0.12500
A. Daniel Sharplin, CEO and President 490,000 $ 0.12500
H. Baxter Nairon, President, 384,000 $ 0.18750
Tanknology/NDE
Mark B. Bober, Director 40,000 $ 0.40625 40,000 $ 0.40625
Charles C. McGettigan, Director 40,000 $ 0.12500
Michael S. Taylor, Director 40,000 $ 0.12500
Myron A. Wick III, Director 40,000 $ 0.12500
All current executive officers as a group 250,000 $ 0.40625 1,989,556 $ 0.17240
(4 persons)
All current directors other than executive 160,000 $ 0.19531
officers as a group (4 persons)
All current employees other than 620,000 $ 0.21512
executive officers as a group (10 persons)
- ------------------
<FN>
(1) Includes director and officer compensation option awards made in December
1996 which vest ratably over three years and will expire in December 2006.
The market value of the shares underlying the options was below the
exercise price as of June 30, 1997. For a discussion of the federal income
tax consequences of such issuance, see "Federal Income Tax Consequences"
below.
</FN>
</TABLE>
Terms and Conditions of Stock Options
Stock options will have exercise prices not less than 50% of the fair
market value of the Common Stock of the Company on the date of grant and may be
ISOs that comply with Section 422 of the Code. The exercise price of any stock
option may, at the discretion of the Committee, be paid in cash or by
surrendering shares of Common Stock of the Company or another award under the
Incentive Plan, valued at fair market value on the date of exercise, or any
combination thereof. The Committee shall determine acceptable methods for
tendering Common Stock or other awards to exercise a stock option as it deems
appropriate. If permitted by the Committee, payment may be made by successive
exercises by the participant. The Committee may provide for loans from the
Company to permit the exercise or purchase of awards and may provide for
procedures to permit the exercise or purchase of awards by use of the proceeds
to be received from the sale of Common Stock issuable pursuant to an award.
Unless otherwise provided in the applicable Award Agreement, in the event shares
of Common Stock that are restricted or subject to forfeiture provisions
("Restricted Stock") are tendered as consideration for the exercise of a stock
option, a number of the shares issued upon the exercise of the stock option,
equal to the number of shares of Restricted Stock used as consideration
therefor, shall be subject to the same restrictions as the Restricted Stock so
submitted as well as any additional restrictions that may be imposed by the
Committee.
-11-
<PAGE>
Terms and Conditions of Stock Appreciation Rights
Stock appreciation rights are rights to receive, without payment to the
Company, cash or shares of Common Stock of the Company with a value determined
by reference to the difference between the exercise or "strike" price of the
stock appreciation right and the fair market value or other specified valuation
of the Common Stock of the Company at the time of exercise, as set forth in the
Award Agreement.
Terms and Conditions of Stock Awards
Stock awards may consist of Common Stock of the Company or be denominated
in units of Common Stock of the Company. Stock awards may be subject to
conditions established by the Committee, including, but not limited to,
continuous service with the Company and its subsidiaries, achievement of
specific business objectives, increases in specified indices, attaining
specified growth rates and other comparable measurements of performance. Stock
awards may be based on fair market value or other specified valuations. A stock
award may provide for voting rights and dividend or dividend equivalent rights.
Terms and Conditions of Cash Awards
Cash awards may be denominated in cash with the amount of payment subject
to conditions specified by the Committee, including, but not limited to,
continuous service with the Company and its subsidiaries, achievement of
specific business objectives, increases in specified indices, attaining
specified growth rates and other comparable measurements of performance.
Payment of Awards
Payment of awards may be made in cash or Common Stock of the Company or
combinations thereof, as determined by the Committee. An award may provide for
the granting or issuance of additional, replacement or alternative awards upon
the occurrence of specified events, including the exercise of the original
award. With the approval of the Committee, payments may be deferred, either in
the form of installments or a future lump-sum payment.
Adjustment Provisions
The existence of outstanding awards shall not affect in any manner the
right or power of the Company or its shareholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
capital stock of the Company or its business or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock (whether or not such issue is prior to, on a parity with or junior to the
Common Stock) or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding of any kind, whether or not of a character similar to that of
the acts or proceedings enumerated above.
In the event of any subdivision or consolidation of outstanding shares of
Common Stock or declaration of a dividend payable in shares of Common Stock or
capital reorganization or reclassification or other transaction involving an
increase or reduction in the number of outstanding shares of Common Stock, the
Committee may adjust proportionally (i) the number of shares of Common Stock
reserved under the Incentive Plan and covered by outstanding awards denominated
in Common Stock or units of Common Stock; (ii) the exercise or other price in
respect of such awards; and (iii) the appropriate fair market value and other
price determinations for such awards. In the event of any consolidation or
merger of the Company with another corporation or entity or the adoption by the
Company of a plan of exchange affecting the Common Stock or any distribution to
holders of Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Committee shall make such
adjustments or other provisions as it may deem equitable, including adjustments
to avoid fractional shares, to give proper effect to such event.
In the event of a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization or liquidation, the Committee shall be
authorized, in its discretion, (i) to issue or assume stock options, regardless
of whether in a transaction to which section 424(a) of the Code applies, by
means of substitution of new options for previously issued options or an
assumption of previously issued options, (ii) to make provision, prior to the
transaction, for the acceleration of the vesting and exercisability of, or lapse
of restrictions with respect to, awards and the termination of options that
remain unexercised at the time of such transaction or (iii) to provide for the
acceleration of the vesting and exercisability of the options and the cancella-
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<PAGE>
tion thereof in exchange for such payment as shall be mutually agreeable to the
participant and the Committee.
Termination of Employment
Upon the termination of employment by a participant, any unexercised,
deferred or unpaid awards shall be treated as provided in the specific Award
Agreement evidencing the award. In the event of such a termination, the
Committee may, in its discretion, provide for the extension of the
exercisability of an award, accelerate the vesting or exercisability of an
award, eliminate or make less restrictive any restrictions contained in an
award, waive any restriction or other provision of the Incentive Plan or an
award or otherwise amend or modify the award in any manner that is either (i)
not adverse to such participant or (ii) consented to by such participant.
Amendment and Termination of the Incentive Plan
The Board of Directors of the Company may amend, modify, suspend or
terminate the Incentive Plan for the purpose of meeting or addressing any
changes in legal requirements or for any other purpose permitted by law except
that (i) no amendment or alteration that would impair the rights under any award
previously granted will be made without the award holder's consent and (ii) no
amendment or alteration will be effective prior to approval by the shareholders
of the Company to the extent such approval is then required pursuant to Rule
16b-3 promulgated under the Exchange Act in order to preserve the applicability
of any exemption provided by such rule to any award then outstanding (unless the
holder of such award consents) or to the extent shareholder approval is
otherwise required by applicable legal requirements. No amendment or
modification shall be made to the Incentive Plan, without the approval of the
shareholders of the Company, which would increase the total number of shares
reserved for the purposes of the Incentive Plan, except as provided with respect
to adjustments to the capital stock of the Company. Shareholder approval is also
necessary to materially modify the requirements for eligibility to participate
in the Incentive Plan.
Federal Income Tax Consequences
The holder of a nonqualified stock option will recognize no taxable income
as a result of the grant of the stock option. Upon the exercise of the stock
option, however, the holder of a nonqualified stock option will recognize
taxable ordinary income in an amount equal to the difference between the fair
market value of the shares on the date of exercise and the exercise or purchase
price (or, in the case of relinquishment, in an amount equal to the sum of the
cash received and the fair market value of the shares or award received
determined on the date of exercise) and, correspondingly, the Company will be
entitled to an income tax deduction for such amount.
Upon the exercise of an incentive stock option, the stock option holder
generally will not recognize taxable income by reason of the exercise, and the
Company normally will not be entitled to any income tax deduction. If the stock
option holder disposes of the shares acquired upon the exercise of an incentive
stock option after satisfaction of certain minimum holding periods, any gain
realized will be capital gain. Gain attributable to post-exercise appreciation
of stock acquired upon the exercise of a nonqualified or incentive stock option
will be long-term capital gain if the stock option holder has held the shares as
a capital asset for more than one year. If a stock option holder disposes of the
shares acquired upon the exercise of an incentive stock option prior to the
expiration of the minimum holding periods, the stock option holder would
recognize ordinary income, and the Company would be entitled to a commensurate
income tax deduction (except with respect to post-exercise appreciation).
The grant of a stock appreciation right will produce no U.S. federal tax
consequences for the participant or the Company. The exercise of a stock
appreciation right results in taxable income to the participant equal to the
difference between the exercise price of the shares and the market price of the
shares on the date of exercise, and a corresponding tax deduction to the
Company.
A participant under the Incentive Plan who has been granted an award of
Restricted Stock will not realize taxable income at the time of the grant, and
the Company will not be entitled to a tax deduction at the time of the grant,
unless the participant makes an election to be taxed at the time of the award.
When the restrictions lapse, the participant will recognize taxable income in an
amount equal to the excess of the fair market value of the shares at such time
over the amount, if any, paid for such shares. The Company will be entitled to a
corresponding tax deduction. Dividends paid to the participant during the
restriction period will also be compensation income to the participant and
deductible as such by the Company. The holder of a Restricted Stock award may
elect to be taxed at the time of grant of the Restricted Stock on the market
value of the shares, in which case (i) the Company will be entitled to a
deduction at the same time and in the same amount, (ii) dividends paid to the
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<PAGE>
participant during the restriction period will be taxable as dividends to him or
her and will not be deductible by the Company and (iii) there will be no further
federal income tax consequences when the restrictions lapse.
Vote Required
Approval of the Incentive Plan as amended and restated will require the
affirmative vote of the holders of a majority of the shares of Common Stock of
the Company represented and entitled to vote at the meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR
APPROVAL OF THE INCENTIVE PLAN.
PROPOSAL NO. 4 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS
At the Meeting, the stockholders will be asked to ratify the appointment by
the Board of Ernst & Young L.L.P. as the Company's independent public
accountants to perform the audit of the Company's financial statements for the
fiscal year ended December 31, 1997. Ernst & Young L.L.P. has been the Company's
auditors since the resignation of Touche Ross, L.L.P. in November 1989. The
Board of Directors currently does not expect the representatives of Ernst &
Young L.L.P. to be present at the Meeting and, accordingly, no representatives
are expected to be available to respond to questions. However representatives of
Ernst & Young L.L.P. are invited to attend the Meeting and, should they attend,
they will be given an opportunity to make a statement at the Meeting if they
desire to do so and will be available to respond to appropriate questions. The
affirmative vote of a majority of the Company's outstanding shares of Common
Stock represented and voting at the Meeting is required for approval of this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
FOR APPOINTMENT OF ERNST & YOUNG L.L.P. AS THE COMPANY'S AUDITORS
STOCKHOLDERS PROPOSALS FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS
The Company intends to hold its 1998 annual meeting of stockholders in June
1998. Stockholders proposals for inclusion in the Company's Proxy Statement and
form of proxy for the 1998 annual meeting of stockholders must be received by
the Company no later than March 13, 1998.
OTHER BUSINESS
The Board of Directors does not presently intend to bring any other
business before the Meeting, and, so far as is known to the Board of Directors,
no matters are to be brought before the Meeting except as specified in the
notice of the Meeting. As to any business that may properly come before the
Meeting, however, it is intended that proxies, in the form enclosed, will be
voted in respect thereof in accordance with the judgment of the persons voting
such proxies.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
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<PAGE>
PROXY
NDE ENVIRONMENTAL THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CORPORATION The undersigned hereby appoints _________________,
8900 SHOAL CREEK __________________, and each of them, attorneys and agents
BOULEVARD with full power of substitution, to vote as proxy all the
BUILDING 200 shares of Common Stock of NDE Environmental Corporation held
AUSTIN, TX 78758 of record by the undersigned on July 11, 1997 at the Annual
Meeting of Stockholders of NDE Environmental Corporation to
be held on August 14, 1997 and at any adjournment or
postponement thereof, in the manner indicated on the reverse
hereof and in their discretion on such other matters as may
properly come before said meeting or any adjournments
thereof.
If you wish to vote in accordance with the recommendations of the Board of
Directors, you may just sign and date below and mail in the postage paid
envelope provided. Specific choices may be made on the reverse side.
Dated ___________________________, 1997
-----------------------------------------
Signature
-----------------------------------------
Signature if held jointly
When signing as Executor, Administrator,
Trustee or the like, please give full title.
PROXY (CONTINUED)
This Proxy will be voted as directed, or if no direction is indicated, will be
voted FOR Proposal 1, FOR all nominees listed below for election as directors,
FOR Proposal 3 and FOR Proposal 4. The Board of Directors recommends a vote FOR
Proposals 1, 2, 3 and 4.
(1) Approval of the Amendment to the FOR [ ] AGAINST [ ] ABSTAIN [ ]
Certificate of Incorporation to
change the Company's name to
Tanknology-NDE International, Inc.
(2) Election of Directors FOR ALL [ ] WITHHOLD AUTHORITY [ ]
(except as specified below) TO VOTE FOR
Jay Allen Chaffee
Charles C. McGettigan
A. Daniel Sharplin
Michael S. Taylor
Myron A. Wick
Mark A. Bober
Instructions: To withhold vote for individual(s), write name(s) below.
_____________________________________________________________________________
(3) Approval of the adoption of the FOR [ ] AGAINST [ ] ABSTAIN [ ]
amendment and restatement of the
Company's 1989 Stock Option Plan
(4) Ratification of the appointment of FOR [ ] AGAINST [ ] ABSTAIN [ ]
Ernst & Young L.L.P. as Independent
Public Accountants
(Sign and date on reverse side)
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<PAGE>
Appendix A
TANKNOLOGY-NDE INTERNATIONAL, INC.
AMENDED AND RESTATED
1989 STOCK OPTION PLAN
As previously Adopted August 28, 1989
and
As Amended July 10, 1990, March 28, 1991, December 6, 1991 and June 26, 1996
1. Purpose and Objective. The 1989 Stock Option Plan was established by
Tanknology- NDE International, Inc. (the "Company"), formerly NDE Environmental
Corporation, to attract, retain and provide equity incentives to selected
persons to promote the financial success of the Company. This amended and
restated 1989 Stock Option Plan, which will henceforth be designated as the
Tanknology-NDE International, Inc. 1989 Long-Term Incentive Plan (the "Plan"),
is amended and restated in order to facilitate compliance with recently-adopted
section 162(m) of the Internal Revenue Code of 1986, and changed provisions of
Rule 16b-3 promulgated under the Exchange Act (as defined below), as well as to
permit issuance of stock-based compensation Awards (as defined below) in
addition to stock options. The Plan is also being amended to increase the number
of shares with respect to which Awards may be offered under the Plan and to
extend the term of the Plan. As so amended, the Plan is designed to retain
selected employees of the Company and its Subsidiaries (as hereinafter defined)
and reward them for making significant contributions to the success of the
Company and its Subsidiaries. These objectives are to be accomplished by making
Awards under the Plan and thereby providing Participants (as hereinafter
defined) with a proprietary interest in the growth and performance of the
Company and its Subsidiaries. The Plan is hereby amended and restated as it
shall appear in the text of this document.
2. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:
"Award" means the grant of any form of stock option, stock appreciation
right, stock award or cash award, whether granted singly, in combination or in
tandem, to a Participant pursuant to any applicable terms, conditions and
limitations as the Committee may establish in order to fulfill the objectives of
the Plan.
"Award Agreement" means a written agreement between the Company and a
Participant that sets forth the terms, conditions and limitations applicable to
an Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means such committee of the Board as is designated by the Board
to administer the Plan.
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<PAGE>
"Common Stock" means the Common Stock, par value $ .0001 per share, of the
Company.
"Director" means an individual serving as a member of the Board.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Fair Market Value" means, as of a particular date, (i) if the shares of
Common Stock are listed on a national securities exchange, the mean between the
highest and lowest sales price per share of Common Stock on the consolidated
transaction reporting system for the principal such national securities exchange
on that date, or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was so reported, (ii) if
the shares of Common Stock are not so listed but are quoted in the NASDAQ
National Market System the mean between the highest and lowest sales price per
share of Common Stock on the NASDAQ National Market System on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (iii) if the Common Stock
is not so listed or quoted, the mean between the closing bid and asked price on
that date, or, if there are no quotations available for such date, on the last
preceding date on which such quotations shall be available, as reported by
NASDAQ, or, if not reported by NASDAQ, by the National Quotation Bureau, Inc.,
or (iv) if none of the above is applicable, such amount as may be determined by
the Board, in good faith, to be the fair market value per share of Common Stock.
"ISO" means an incentive stock option within the meaning of section 422 of
the Code.
"Participant" means an employee of the Company or any of its Subsidiaries
to whom an Award has been made under this Plan.
"Restricted Stock" means Common Stock that is restricted or subject to
forfeiture provisions.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, or any
successor rule.
"Subsidiary" means any corporation of which the Company directly or
indirectly owns shares representing more than 50% of the voting power of all
classes or series of capital stock of such corporation which have the right to
vote generally on matters submitted to a vote of the shareholders of such
corporation.
3. Eligibility. All Awards issued under this Plan prior to the effective
date of this amendment and restatement of the Plan shall remain effective in
accordance with their terms and provisions. All Directors, officers, management
employees and key consultants of the Company and its Subsidiaries are eligible
for Awards under this Plan as amended and restated. The Committee shall
determine eligibility for Awards under the Plan in its sole discretion, and
shall select the Participants in the Plan from time to time by the grant of
Awards under the Plan. The granting of Awards under this Plan shall be entirely
discretionary and nothing in this Plan shall be deemed to give any employee of
the Company or its Subsidiaries any right to participate in this Plan or to be
granted an Award.
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4. Common Stock Available for Awards. There shall be available for Awards
granted wholly or partly in Common Stock (including rights or options which may
be exercised for or settled in Common Stock) during the term of this Plan, which
commenced pursuant to the Plan as it was adopted on August 28, 1989, an
aggregate of 6,000,000 (six million) shares of Common Stock, subject to
adjustment as provided in Paragraph 14. The Board of Directors and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to file required documents with governmental authorities
and stock exchanges and transaction reporting systems to make shares of Common
Stock available for issuance pursuant to Awards. Common Stock related to Awards
that are forfeited or terminated, expire unexercised, are settled in cash in
lieu of Common Stock or in a manner such that all or some of the shares covered
by an Award are not issued to a Participant, or are exchanged for Awards that do
not involve Common Stock, shall immediately become available for Awards
hereunder.
5. Administration. This Plan shall be administered by the Committee, which
shall have full and exclusive power to interpret this Plan and to adopt such
rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan. Unless
otherwise provided in an Award Agreement with respect to a particular award, the
Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions contained in an
Award, waive any restriction or other provision of this Plan or an Award or
otherwise amend or modify an Award in any manner that is either (i) not adverse
to the Participant holding such Award or (ii) consented to by such Participant,
including (in either case) an amendment or modification that may result in an
ISO Award losing its status as an ISO. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in this Plan or in any Award
in the manner and to the extent the Committee deems necessary or desirable to
carry it into effect. Any decision of the Committee in the interpretation and
administration of this Plan shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned. No member
of the Committee or officer of the Company to whom it has delegated authority in
accordance with the provisions of Paragraph 6 of this Plan shall be liable for
anything done or omitted to be done by him or her, by any member of the
Committee or by any officer of the Company in connection with the performance of
any duties under this Plan, except for his or her own willful misconduct or as
expressly provided by statute.
6. Delegation of Authority. The Committee may delegate to the Chairman of
the Board of Directors, the President and to other senior officers of the
Company its duties under this Plan pursuant to such conditions or limitations as
the Committee may establish, except that the Committee may not delegate to any
person the authority to grant Awards to, or take other action with respect to,
Participants who are subject to Section 16 of the Exchange Act or section 162(m)
of the Code.
7. Awards. The Committee shall determine the type or types of Awards to be
made to each Participant under this Plan. Each Award made hereunder shall be
embodied in an Award Agreement, which shall contain such terms, conditions and
limitations as shall be determined by the
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Committee in its sole discretion and shall be signed by the Participant and
by the President or any Vice President of the Company for and on behalf of the
Company. An Award Agreement may include provisions for the repurchase by the
Company of Common Stock acquired pursuant to the Plan and the repurchase of a
Participant's option rights under the Plan. Awards may consist of those listed
in this Paragraph 7 and may be granted singly, in combination or in tandem.
Awards may also be made in combination or in tandem with, in replacement of, or
as alternatives to, grants or rights (i) under this Plan or any other employee
plan of the Company or any of its Subsidiaries, including the plan of any
acquired entity or (ii) made to any Company or Subsidiary employee by the
Company or any Subsidiary. An Award may provide for the granting or issuance of
additional, replacement or alternative Awards upon the occurrence of specified
events, including the exercise of the original Award.
Notwithstanding anything herein to the contrary, no Participant may be
granted Awards consisting of stock options or stock appreciation rights
exercisable for more than 50% of the shares of Common Stock originally
authorized for Awards under the Plan, subject to adjustment as provided in
Paragraph 14. In the event of an increase in the number of shares authorized
under the Plan, the 50% limitation will apply to the number of shares
authorized.
(a) Stock Option. An Award may consist of a right to purchase a specified
number of shares of Common Stock at a price specified by the Committee that is
not less than 50% of the Fair Market Value of the Common Stock on the date of
grant. A stock option may be in the form of an ISO which, in addition to being
subject to applicable terms, conditions, and limitations established by the
Committee, complies with section 422 of the Code. Pursuant to the ISO
requirements of section 422 of the Code, notwithstanding anything herein to the
contrary, (i) no ISO can be granted under the Plan on or after the tenth
anniversary of the Effective Date of the amended and restated Plan (as
hereinafter defined), (ii) no Participant may be granted an ISO if, upon the
grant of the ISO, the aggregate Fair Market Value (determined as of the date the
Award is granted) of the Common Stock with respect to which ISOs (including
Awards hereunder) are exercisable for the first time by the Participant during
any calendar year (under all plans of the Participant's employer corporation and
its parent and subsidiary corporations) would exceed $100,000 and (iii) no
Participant may be granted an ISO if the Participant is not an employee of the
Company or a Subsidiary. No person shall be eligible for the grant of an ISO who
owns (within the meaning of sections 422 and 424 of the Code), or would own
immediately after the grant of such ISO, directly or indirectly stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company. This restriction shall not apply if, at the time such ISO is granted,
the ISO price is at least 110% of Fair Market Value on the date of grant and the
ISO is not, by its terms exercisable after the expiration of five years from the
date of grant.
(b) Stock Appreciation Right. An Award may consist of a right to receive a
payment, in cash or Common Stock, equal to the excess of the Fair Market Value
or other specified valuation of a specified number of shares of Common Stock on
the date the stock appreciation right ("SAR") is exercised over a specified
strike price as set forth in the applicable Award Agreement.
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<PAGE>
(c) Stock Award. An Award may consist of Common Stock or may be denominated
in units of Common Stock. All or part of any stock award may be subject to
conditions established by the Committee, and set forth in the Award Agreement,
which may include, but are not limited to, continuous service with the Company
and its Subsidiaries, achievement of specific business objectives, increases in
specified indices, attaining specified growth rates and other comparable
measurements of performance. Such Awards may be based on Fair Market Value or
other specified valuations. The certificates evidencing shares of Common Stock
issued in connection with a stock award shall contain appropriate legends and
restrictions describing the terms and conditions of the restrictions applicable
thereto.
(d) Cash Award. An Award may be denominated in cash with the amount of the
eventual payment subject to future service and such other restrictions and
conditions as may be established by the Committee, and set forth in the Award
Agreement, including, but not limited to, continuous service with the Company
and its Subsidiaries, achievement of specific business objectives, increases in
specified indices, attaining specified growth rates and other comparable
measurements of performance.
8. Payment of Awards.
(a) General. Payment of Awards may be made in the form of cash or Common
Stock or combinations thereof and may include such restrictions as the Committee
shall determine, including in the case of Common Stock, restrictions on transfer
and forfeiture provisions.
(b) Deferral. With the approval of the Committee, payments may be deferred,
either in the form of installments or a future lump sum payment. The Committee
may, in its discretion, (i) permit selected Participants to elect to defer
payments of some or all types of Awards in accordance with procedures
established by the Committee or (ii) provide for the deferral of an Award in an
Award Agreement or otherwise. Any deferred payment, whether elected by the
Participant or specified by the Award Agreement or by the Committee, may be
forfeited if and to the extent that the Award Agreement so provides.
(c) Dividends and Interest. Dividends or dividend equivalent rights may be
extended to and made part of any Award denominated in Common Stock or units of
Common Stock, subject to such terms, conditions and restrictions as the
Committee may establish. The Committee may also establish rules and procedures
for the crediting of interest on deferred cash payments and dividend equivalents
for deferred payment denominated in Common Stock or units of Common Stock.
(d) Substitution of Awards. At the discretion of the Committee, a
Participant may be offered an election to substitute an Award for another Award
or Awards of the same or different type.
9. Stock Option Exercise. The price at which shares of Common Stock may be
purchased under a stock option shall be paid in full at the time of exercise in
cash or, if permitted by the Committee, by means of tendering Common Stock or
surrendering another Award, including Restricted Stock, valued at Fair Market
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Value on the date of exercise, or any combination thereof. The Committee shall
determine acceptable methods for tendering Common Stock or other Awards to
exercise a stock option as it deems appropriate. If permitted by the Committee,
payment may be made by successive exercises by the Participant. The Committee
may provide for loans from the Company to permit the exercise or purchase of
Awards and may provide for procedures to permit the exercise or purchase of
Awards by use of the proceeds to be received from the sale of Common Stock
issuable pursuant to an Award. Unless otherwise provided in the applicable Award
Agreement, in the event shares of Restricted Stock are tendered as consideration
for the exercise of a stock option, a number of the shares issued upon the
exercise of the stock option, equal to the number of shares of Restricted Stock
used as consideration therefor, shall be subject to the same restrictions as the
Restricted Stock so submitted as well as any additional restrictions that may be
imposed by the Committee.
10. Tax Withholding. The Company shall have the right to deduct applicable
taxes from any Award payment and withhold, at the time of delivery or vesting of
cash or shares of Common Stock under this Plan, an appropriate amount of cash or
number of shares of Common Stock or a combination thereof for payment of taxes
required by law or to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for withholding of such taxes. The
Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made.
11. Amendment, Modification, Suspension or Termination. The Board may
amend, modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted
by law except that (i) no amendment or alteration that would impair the rights
of any Participant under any Award previously granted to such Participant shall
be made without such Participant's consent and (ii) no amendment or alteration
shall be effective prior to approval by the Company's stockholders to the extent
such approval is then required pursuant to Rule 16b-3 in order to preserve the
applicability of any exemption provided by such rule to any Award then
outstanding (unless the holder of such Award consents) or to the extent
stockholder approval is otherwise required by applicable legal requirements.
Notwithstanding the foregoing, no amendment or modification shall be made,
without the approval of the shareholders of the Company, which would:
(a) Increase the total number of shares reserved for the purposes of
the Plan under Paragraph 4, except as provided in Paragraph 14;
or
(b) Materially modify the requirements as to eligibility for
participation in the Plan.
12. Termination of Employment. Upon the termination of employment by a
Participant, any unexercised, deferred or unpaid Awards shall be treated as
provided in the specific Award Agreement evidencing the Award. In the event of
such a termination, the Committee may, in its discretion, provide for the exten-
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sion of the exercisability of an Award, accelerate the vesting or exercisability
of an Award, eliminate or make less restrictive any restrictions contained in an
Award, waive any restriction or other provision of this Plan or an Award or
otherwise amend or modify the Award in any manner that is either (i) not adverse
to such Participant or (ii) consented to by such Participant.
13. Assignability. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
constituting a derivative security within the meaning of Rule 16a-l(c) under the
Exchange Act shall be assignable or otherwise transferable except by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order (a "QDRO") as defined by the Code or Title I of the Employee Retirement
Income Security Act, as amended ("ERISA"), or the rules thereunder. No ISO Award
under this Plan shall be assignable or otherwise transferrable, except by will
or the laws of descent and distribution or pursuant to a QDRO. The Committee may
prescribe and include in applicable Award Agreements other restrictions on
transfer. Any attempted assignment of an Award or any other benefit under this
Plan in violation of this Paragraph 13 or the terms of an Award Agreement shall
be null and void.
14. Adjustments.
(a) The existence of outstanding Awards shall not affect in any manner the
right or power of the Company or its shareholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
capital stock of the Company or its business or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock (whether or not such issue is prior to, on a parity with or junior to the
Common Stock) or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding of any kind, whether or not of a character similar to that of
the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding shares
of Common Stock or declaration of a dividend payable in shares of Common Stock
or capital reorganization or reclassification or other transaction involving an
increase or reduction in the number of outstanding shares of Common Stock, the
Committee may adjust proportionally (i) the number of shares of Common Stock
reserved under this Plan and covered by outstanding Awards denominated in Common
Stock or units of Common Stock; (ii) the exercise or other price in respect of
such Awards; and (iii) the appropriate Fair Market Value and other price
determinations for such Awards. In the event of any consolidation or merger of
the Company with another corporation or entity or the adoption by the Company of
a plan of exchange affecting the Common Stock or any distribution to holders of
Common Stock of securities or property (other than normal cash dividends or
dividends payable in Common Stock), the Committee shall make such adjustments or
other provisions as it may deem equitable, including adjustments to avoid
fractional shares, to give proper effect to such event. In the event of a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Committee shall be authorized, in its
discretion, (i) to issue or assume stock options, regardless of whether in a
transaction to which section 424(a) of the Code applies, by means of
substitution of new options for previously issued options or an assumption of
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<PAGE>
previously issued options, (ii) to make provision, prior to the transaction, for
the acceleration of the vesting and exercisability of, or lapse of restrictions
with respect to, Awards and the termination of options that remain unexercised
at the time of such transaction or (iii) to provide for the acceleration of the
vesting and exercisability of the options and the cancellation thereof in
exchange for such payment as shall be mutually agreeable to the Participant and
the Committee.
15. Restrictions. No Common Stock or other form of payment shall be issued
with respect to any Award unless the Company shall be satisfied based on the
advice of its counsel that such issuance will be in compliance with applicable
federal and state securities laws. It is the intent of the Company that this
Plan comply with Rule 16b-3 with respect to persons subject to Section 16 of the
Exchange Act unless otherwise provided herein or in an Award Agreement, that any
ambiguities or inconsistencies in the construction of this Plan be interpreted
to give effect to such intention, and that if any provision of this Plan is
found not to be in compliance with Rule 16b-3, such provision shall be null and
void to the extent required to permit this Plan to comply with Rule 16b-3.
Certificates evidencing shares of Common Stock delivered under this Plan may be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any securities exchange or transaction
reporting system upon which the Common Stock is then listed and any applicable
federal and state securities law. The Committee may cause a legend or legends to
be placed upon any such certificates to make appropriate reference to such
restrictions.
16. Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock
or rights thereto, this Plan shall be unfunded. Although bookkeeping accounts
may be established with respect to Participants who are entitled to cash, Common
Stock or rights thereto under this Plan, any such accounts shall be used merely
as a bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by cash, Common Stock or rights
thereto, nor shall this Plan be construed as providing for such segregation, nor
shall the Company nor the Board nor the Committee be deemed to be a trustee of
any cash, Common Stock or rights thereto to be granted under this Plan. Any
liability or obligation of the Company to any Participant with respect to a
grant of cash, Common Stock or rights thereto under this Plan shall be based
solely upon any contractual obligations that may be created by this Plan and any
Award Agreement, and no such liability or obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of the
Company. Neither the Company nor the Board nor the Committee shall be required
to give any security or bond for the performance of any obligation that may be
created by this Plan.
17. No Employment Guaranteed. No provision of this Plan or any Award
Agreement hereunder shall confer any right upon any employee or consultant to
continued employment with the Company or any Subsidiary.
18. Rights as a Shareholder. Unless otherwise provided under the terms of
an Award Agreement, a Participant shall have no rights as a holder of Common
Stock with respect to Awards granted hereunder, unless and until certificates
for shares of Common Stock are issued to such Participant.
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19. Governing Law. This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory provisions of
the Code or the securities laws of the United States, shall be governed by and
construed in accordance with the laws of the State of Texas.
20. Effective Date of Plan. This Plan as amended and restated shall be
effective as of the date (the "Effective Date") it is approved by the Board of
Directors of the Company, subject to approval by shareholders of the Company at
the next subsequent shareholders' meeting. Notwithstanding the foregoing, the
adoption of this Plan as so amended and restated is expressly conditioned upon
the approval by the holders of a majority of shares of Common Stock present, or
represented, and entitled to vote at a meeting of the Company's shareholders
held on or before _________________. If the shareholders of the Company should
fail so to approve this Plan prior to such date, this Plan shall terminate and
cease to be of any further force or effect and all grants of Awards hereunder
shall be null and void.
Attested to by the Secretary of Tanknology-
NDE International, Inc. as adopted by the
Board of Directors of Tanknology-NDE
International, Inc. effective as of the _____
day of ______________, 1997 (the "Effective
Date") of this amended and restated Plan.
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