MAVERICK TUBE CORPORATION
400 Chesterfield Center, Second Floor
Chesterfield, Missouri 63017-4800
---------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------
To the Stockholders of:
MAVERICK TUBE CORPORATION
The Annual Meeting of Stockholders of Maverick Tube Corporation (the "Company")
will be held at the Doubletree Hotel and Conference Center, 16225 Swingley Ridge
Road, Chesterfield, Missouri 63017, on Monday, February 10, 1997 at 4:00 P.M.,
Central Standard Time, for the following purposes:
1. To elect six (6) Directors to serve until the next Annual Meeting of Stock
holders and until their successors are elected and qualified;
2. To consider and act upon a proposal to approve the Board of Directors'
adoption of the amendment to the Maverick Tube Corporation 1994 Stock
Option Plan; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on December 12, 1996,
as the date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting. A complete list of the stockholders entitled
to vote at the meeting
will be open to the examination of stockholders for any purpose germane to the
Annual Meeting during ordinary business hours for a period of ten days prior to
the meeting at the offices of the Company, 400 Chesterfield Center, Second
Floor, Chesterfield, Missouri 63017-4800.
A copy of the Company's Annual Report for its fiscal year 1996 accompanies this
Notice.
By Order of the Board of Directors,
CHARLES O. STRUCKHOFF
Secretary
December 16, 1996
Chesterfield, Missouri
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
MAVERICK TUBE CORPORATION
400 Chesterfield Center, Second Floor
Chesterfield, Missouri 63017-4800
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 10, 1997
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of
Maverick Tube Corporation (the "Company"), for use at the Annual Meeting of
Stockholders to be held on February 10, 1997, or any adjournment thereof. Shares
represented by properly executed proxies received in time for the Annual Meeting
will be voted as directed by the stockholders and, if no directions are given,
will be voted as follows: "FOR" the election of the six persons named herein as
nominees for directors of the Company as set forth in proposal 1 as indicated in
the enclosed form of proxy; and "FOR" the approval of the amendment to the
Company's 1994 Stock Option Plan which would increase the number of shares of
Common Stock available for issuance upon exercise of options granted under the
plan from 300,000 to 1,000,000 as set forth in proposal 2 as indicated in the
enclosed form of proxy.
Stockholders who executed proxies may revoke them at any time before they are
exercised by giving notice to the Secretary of the Company. Any stockholder of
record on the record date who attends the meeting may vote in person whether or
not he or she has previously filed a proxy. This proxy statement and enclosed
form of proxy are being mailed to stockholders on or about December 16, 1996.
Solicitation of proxies will be made primarily by mail. The cost of solicitation
of proxies will be paid by the Company and will also include reimbursement paid
to brokerage firms and others for their expenses of forwarding solicitation
materials to their principals.
On December 12, 1996, the record date of the determination of
stockholders entitled to vote at the Annual Meeting, there were
7,472,071 shares of Common Stock, par value $.01 per share ("Common
Stock"), of the Company outstanding. Each share is entitled to one vote
on each matter submitted to a vote of the stockholders. A majority of
the outstanding shares present or represented by proxy will constitute a
quorum at the meeting. Votes that are withheld in the election of
directors, abstentions on all other matters properly brought before this
meeting and proxies relating to "street name" shares which are not voted
by brokers on one or more, but less than all, matters (so-called "broker
non-votes") will be considered as shares present for purposes of
determining a quorum. With regard to the election of directors, votes
that are withheld will be excluded entirely from the vote and will have
no effect. With regard to any other matters, abstentions (including
proxies which deny discretionary authority on any other matters properly
brought before this meeting) will be counted as shares present and
entitled to vote and will have the same effect as a vote against any
such other matters. Broker non-votes will not be treated as shares
represented at the meeting as to such matter(s) not voted on and
therefore will have no effect.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 12, 1996 with respect
to each person known to the Company to be the beneficial owner of more than five
percent (5%) of the outstanding shares of Common Stock of the Company:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
<S> <C> <C>
First Reserve Corporation (1) 600,000 8.03%
475 Steamboat Road
Greenwich, CT 06830
John D. Weil 589,000 7.88%
200 North Broadway, Suite 825
St. Louis, MO 63102
Wellington Management Company 470,000 6.29%
75 State Street
Boston, MA 02109
<FN>
(1) First Reserve corporation ("first Reserve") affiliates American
Gas & Oil Investors, Limited Partnership and AmGO II, Limited
Partnership own 350,000 and 250,000 shares of Common Stock,
respectively. These shares are deemed to be beneficially owned
by first Reserve by reason of its position as the managing
general partner.
</FN>
</TABLE>
Management Ownership of the Company's Stock
Under regulations of the Securities and Exchange Commission, persons who have
power to vote or to dispose of shares of the Company, either alone or jointly
with others, are deemed to be beneficial owners of those shares. The following
table shows, as of December 12, 1996, the beneficial ownership of each present
director and executive officer and of all present directors and executive
officers as a group, of shares of the Company's Common Stock. The information
has been furnished to the Company by the individuals named.
<TABLE>
<CAPTION>
Number of Shares Currently
Name of Individual Beneficially Exercisable Percent of
or Number in Group Owned Options(1) Class
<S> <C> <C> <C>
Gregg M. Eisenberg 97,354 -0- 1.30%
John A. Hill 4,000(2) 2,000 *
William E. Macaulay 2,000(2)(3) 2,000 *
David H. Kennedy 2,000(2) 2,000 *
C. Robert Bunch 5,200 4,000 *
C. Adams Moore 2,000 2,000 *
Charles O. Struckhoff 60,675 -0- *
T. Scott Evans 31,143 25,000 *
Sudhakar Kanthamneni 35,504 30,000 *
-------- ------
All directors and officers as a group
(10 persons including those named) 239,876 67,000 3.21%
(of 7,472,071 shares)
- ---------
<FN>
* Represents less than 1% of the class.
(1) Number of shares of Common Stock issuable upon the exercise of options
which are presently exercisable or will first become exercisable within
60 days of December 12, 1996. Such shares are included in the number of
shares of Common Stock indicated under the column captioned "Number of
Shares Beneficially Owned" above.
(2) Excludes: (a) 350,000 shares of Common Stock owned by American Gas & Oil
Investors, Limited Partnership; and (b) 250,000 shares of Common Stock
owned by AmGo II, all of which may be deemed to be beneficially owned by
John A. Hill, William E. Macaulay and David H. Kennedy, each of whom is a
Director of the Company, and serve as Chairman of the Board, President and
Chief Executive Officer, and Managing Director, respectively, of First
Reserve. Messrs. Hill, Macaulay and Kennedy disclaim beneficial ownership
of these shares.
(3) Excludes: (a) 9,940 shares of Common Stock owned by the Anne R. Macaulay
Trust 1; (b) 1,156 shares of Common Stock owned by the Anne R. Macaulay
Trust 2; (c) 8,023 shares of Common Stock owned by the Elizabeth R.
Macaulay Trust 1; (d) 1,156 shares of Common Stock owned by the Elizabeth
R. Macaulay Trust 2; and (e) 25,329 shares of Common Stock owned by Linda
R. Macaulay, the wife of Mr. Macaulay; all of which may be deemed to be
beneficially owned by Mr. Macaulay. Mr. Macaulay disclaims beneficial
ownership of these shares.
</FN>
</TABLE>
ITEM 1- ELECTION OF DIRECTORS
The term of office of each of the seven current members of the Company's
Board of Directors expires at the 1997 Annual Meeting of Stockholders.
It is the intention of the persons named in the accompanying proxy,
unless otherwise directed, to vote such proxies for the election of the
six nominees named below as Directors of the Company to serve until the
1998 Annual Meeting of Stockholders and until their successors are
elected and qualified. If any persons named below should become
unavailable for election as a Director, the holders of the proxies
reserve the right to substitute another nominee of their choice. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE SIX NOMINEES NAMED
BELOW.
The following table sets forth information with respect to each nominee for
election as a Director, each of whom has agreed to serve if elected.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
AND BUSINESS EXPERIENCE
DURING PAST 5 YEARS AND SERVED AS A
NAME AGE OTHER DIRECTORSHIPS DIRECTOR SINCE
<S> <C> <C> <C>
Gregg M. Eisenberg 46 Chairman of the Board since 1988
February 1996, President, Chief
Executive
Officer and a
Director of
the Company
since 1988.
John A. Hill 54 Chairman of the Board of First 1987
Reserve since July 1990; Director
of Snyder Oil Company, Trans-
montaigne Oil Company and
Weatherford Enterra Inc.; Trustee
of the Putnam Funds.
William E. Macaulay 51 President and Chief Executive 1987
Officer of First Reserve since
July 1990; Director of Weatherford
Enterra, Inc., Hugoton Energy
Corporation, National-Oilwell, Inc. and
Transmontaigne Oil Company.
David H. Kennedy 47 Managing Director of First Reserve 1996
since 1986, Director of Berkley
Petroleum Corporation, Burner
Exploration Ltd. and Pursuit
Resources.
C. Robert Bunch 42 Attorney, Scott Douglass Luton & 1991
McConnico, L.L.P. since May 1996;
Executive Vice President and Chief
Operating Officer of Oyo Geospace
Corporation, (June 1995-May 1996);
President of Geo-Capital Resources,
L.C.; Senior Vice President of Siberian
American Limited-Liability Company
(June 1992-June 1993); President, Chief
Operating Officer and a Director of
Tescorp, Inc. (November 1989-March 1992).
C. Adams Moore 63 Independent consultant in the steel 1996
distribution and fabrication businesses
since February 1992; Vice President of
Sales of Bethlehem Steel Corporation
and President of Bethlehem Steel Export
Corporation (January 1982-February 1992)
Director of Fisher Tank Company and
Warren Fabricating and Machinery
Corporation.
<FN>
The Company's Bylaws currently specify that the number of Directors shall be
seven, subject to amendment by the Board. John P. Stupp, Jr., a current Director
of the Company, is not standing for reelection, thereby creating a vacancy on
the Board of Directors following the 1997 Annual Meeting. Although the Board
intends to fill this vacancy no person has as yet been selected, and it is not
anticipated that the vacancy will be filled until after the 1997 Annual Meeting.
Proxies solicited by the Company cannot be voted to elect any person a Director
who is not named herein.
</FN>
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's executive officers and directors, and persons who own more than 10% of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Such individuals are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on review of the
copies of such forms furnished to the Company, seven Form 5's, were timely
filed. The Company believes that such persons complied with all Section 16(a)
filing requirements applicable to them with respect to transactions during
fiscal 1996.
The Board of Directors of the Company has established an Audit Committee
currently consisting of Messrs. Bunch (Chairman), Moore and Kennedy and a
Compensation Committee currently consisting of Messrs. Macaulay (Chairman), Hill
and Bunch. The purpose of the Audit Committee is to review the results and scope
of the audit and services provided by the Company's independent auditors. The
purpose of the Compensation Committee is to act on behalf of the Board of
Directors with respect to the compensation of directors and executive officers.
The Compensation Committee also administers the Company's stock option and other
benefit plans.
During the fiscal year ended September 30, 1996, the Board of Directors held
three meetings, the Audit Committee held one meeting and the Compensation
Committee held two meetings. During such fiscal year each incumbent Director
attended no fewer than 75% of the aggregate of (i) the total number of meetings
of the Board of Directors held during the period and (ii) the meetings held
during the period by Committees of the Board of Directors on which he served.
The Company pays an annual retainer of $20,000 to each non-employee Director. In
addition, the Company pays to each non-employee Director for each Board of
Directors meeting attended, and for each Committee meeting attended,
compensation of $1,500 and $750, respectively. The Company also pays the
ordinary and necessary out-of-pocket expenses incurred by non-employee Directors
to attend Board of Directors and Committee meetings. Pursuant to the Director
Stock Option Plan, each "Eligibl Director" will receive an annual grant of
options to acquire 3,750 shares of Common Stock at an exercise price equal to
the Fair Market Value of such shares at the time of grant. An "Eligible
Director" is a director of the Company who is neither an employee of the Company
nor a director or employee of an entity having the power to vote or dispose of
ten percent (10%) or more of the outstanding Common Stock.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information relating to compensation paid to or
accrued for the benefit of the Company's Chief Executive Officer and each of the
three other executive officers of the Company (together, the "named executive
officers") for all services rendered in all capacities to the Company during
each of the Company's last three completed fiscal years. No compensation was
paid in the form of restricted stock awards, stock appreciation rights or
payouts pursuant to long-term incentive plans during any of the last three
fiscal years.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Securities
Fiscal Other Underlying All Other
Year Salary Bonus Annual Options/ Compen-
Name and Principal Position Ended ($)(1) ($)(2) Compensation(3) SARs(#) sation(4)
- --------------------------- ----- ------ ----- --------------------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Gregg M. Eisenberg 1996 248,000 149,310 -- 35,000 20,399
President and Chief 1995 236,250 7,561 -- 65,000 6,657
Executive Officer 1994 225,000 -- -- --
6,944
Charles O. Struckhoff 1996 138,000 83,268 -- 30,000 4,643
Vice President - 1995 131,250 4,223 -- 25,000 3,904
Finance and Admin- 1994 120,000 -- -- --
5,325
istration and Chief
Financial Officer
T. Scott Evans 1996 138,000 81,962 -- 30,000 19,693
Vice President - 1995 131,250 4,231 -- 25,000 4,087
Commercial 1994 125,000 -- -- 10,000 5,529
Operations
Sudhakar Kanthamneni 1996 145,000 88,288 -- 35,000 24,883
Vice President - 1995 131,250 4,231 -- 25,000 3,913
Manufacturing and 1994 125,000 -- -- 10,000 5,015
Technology
- -----
<FN>
(1) Includes that portion of salary deferred at the named executive officer's
election under the Maverick Tube Corporation Savings for Retirement Plan
(the "Company 401(k) Plan").
(2) Executive officers of the Company may earn bonuses under the Company's
Performance Bonus Plan (quarterly) and Profitability Bonus Plan (annually)
if certain performance criteria, which are established annually, are met.
(3) Except as otherwise noted, other annual compensation paid or distributed to
each of the named executive officers did not in any year exceed the lesser
of $50,000 or 10% of his respective annual salary and bonus.
(4) Includes amounts contributed by the Company under the Company's 401(K) Plan
and additional compensation deferred under the Deferred Compensation Plan
established in fiscal 1996 for the benefit of executive officers. The
Deferred Compensation Plan provides for annual deferred compensation awards
(together with interest thereon) all of which are payable on the fifth
anniversary of the first award, provided that the executive officer remains
employed by the Company, or upon the executive officer's death or a change
in control of the Company. During fiscal 1996, deferred compensation awards
of $15,000, $15,000 and $20,000 were made to Messrs. Eisenberg, Evans and
Kanthamneni, respectively.
</FN>
</TABLE>
Information as to Stock Options
The following table provides certain information as to options granted to the
persons named in the Summary Compensation Table during fiscal 1996:
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
<CAPTION>
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of
Securities Options Stock Price Appreciation
Underlying Granted Exercise or for Option Term (4)
Options Employees in Base Price Expiration -------------------------
Name Granted (#)(1) Fiscal Year ($/Sh) (2) Date (3) 5% ($) 10% ($)
----- -------------- ----------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Gregg M. Eisenberg 20,000 14.08% $8.00 11/14/02 54,415.30 123,449.76
15,000 10.56 13.25 09/26/01 54,910.96 121,338.90
Charles O. Struckhoff 15,000 10.56% $8.00 11/14/02 40,811.48 92,587.32
15,000 10.56 13.25 09/26/01 54,910.96 121,338.90
T. Scott Evans 15,000 10.56% $8.00 11/14/02 40,811.48 92,587.32
15,000 10.56 13.25 09/26/01 54,910.96 121,338.90
Sudhakar Kanthamneni 20,000 14.08% $8.00 11/14/02 54,415.30 123,449.76
15,000 10.56 13.25 09/26/01 54,910.96 121,338.90
<FN>
(1) Each option with respect to each optionee listed above was granted on November 14, 1995 and September 27, 1996 at which
time the fair market value of the Maverick Common Stock was $6.50 and $13.125 respectively.
(2) These options are not exercisable until November 14, 2000 and September 26, 1999, respectively, whereupon they become fully
exercisable.
(3) Subject generally to earlier termination upon cessation of employment.
(4) The potential realizable values shown illustrate the values that might be
realized upon exercise immediately prior to the expiration of their term
using 5 percent and 10 percent appreciation rates set by the Securities
and Exchange Commission, compounded annually and therefore are not
intended to forecast possible future appreciation, if any, of the
Company's stock price. Additionally, these values do not take into
consideration certain provisions of the option which could affect
value, such as
the nontransferability or the termination thereof following termination of employment.
</FN>
</TABLE>
<TABLE>
AGGREGATE OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at Fiscal Year- at Fiscal Year-
End (#) End ($)(1)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Gregg M. Eisenberg -- -- --/100,000 --/$272,080
Charles O. Struckhoff -- -- --/55,000 --/$155,415
T. Scott Evans -- -- 25,000/55,000 $150,000/$155,415
Sudhakar Kanthamneni -- -- 30,000/60,000 $187,500/$181,248
<FN>
(1) Represents the market value of the underlying Common Stock at the close of business on September 30, 1996, less the aggregate
exercise price.
</FN>
</TABLE>
Employment Arrangements with Executive Officers
The Company is not a party to any employment agreements with its officers or
employees. The Company has entered into Severance Agreements with each of the
named executive officers providing for severance pay upon the involuntary
termination of such named executive officers (other than for cause) of an amount
equal to one-half of such executive officer's then base annual salary. Such
Severance Agreements also provide for severance pay to the named executive
officer if, within two years following a "Change of Control" of the Company, the
employment of such named executive officer with the Company (or its successor)
is terminated by the Company (or its successor) other than for cause or is
terminated by the named executive officer for "good reason." In such event, the
then base salary of the named executive officer will continue for the remainder
of the period ending two years from the occurrence of the Change of Control. A
"Change of Control" is defined in the Severance Agreements to mean generally the
occurrence of certain events which result in the acquisition by an entity, or
group of entities acting in concert, of more than thirty-five percent (35%) of
the outstanding Common Stock. The term "good reason" is defined in the Severance
Agreements to mean generally a significant reduction of the duties or salaries,
a required relocation of the named executive officer, the occurrence of certain
breaches of the agreement by the Company or determination of the executive
officer that the business philosophy or policies of the Company or its successor
are not compatible with those of the executive officer. Additionally, the option
agreements with each of the named executive officers with respect to options
granted in November, 1995 and September, 1996 under the Maverick Tube
Corporation 1994 and 1990 Stock Option Agreement respectively provide that all
options granted thereunder shall become exercisable immediately upon the
occurrence of certain events which would result in a Change of Control.
Certain Relationships and Related Transactions
Certain funds managed by First Reserve have collectively acquired a substantial
minority equity interest in National-Oilwell, Inc. ("National-Oilwell), a
significant customer of the Company. William E. Macaulay, a director of the
Company is also a director of National-Oilwell. In fiscal 1996, National-Oilwell
accounted for 16 percent of the Company's net sales, and was the largest single
customer of the Company during that 12-month period.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is committed to providing a comprehensive
compensation package designed to attract and retain quality executive officers,
instill a long-term commitment to the Company and insure that the interests of
management and the Company's shareholders are aligned. With this in mind, the
Compensation Committee's principal objective is to link executive compensation
to corporate performance. However, the Committee also considers progress on
strategic and other qualitative goals when determining base salaries of the
Company's executive officers. The Committee's compensation policies include the
following:
* establishing compensation levels competitive with those of similar-size
manufacturing companies;
* balancing short-term and long-term goals and performance of the Company
and its executive officers; and
* providing executive officers with opportunities to build capital value
through stock options.
Given the Compensation Committee's policies, the executive officers'
compensation package primarily includes three elements: (1) base salary; (2)
cash bonuses; and (3) stock options.
Base Salaries
Base salaries for executive officers are initially determined by
evaluating the responsibilities of the position held and the
experience of the individual, and by referring to the relevant
competitive marketplace for executive management, which includes a
comparison to a self-selected group of other manufacturing companies
of a size similar to that of the Company. The comparative group is
not limited to companies which comprise the published industry index
shown in the Company's stock performance graph presented below.
Rather, the Compensation Committee believes that the relevant
marketplace for executive management is broader than that represented
by other companies in such industry. The base salary for each of the
executive officers is targeted generally at or below the mid-point
within the comparative group. When determining base salary, the
Compensation Committee also takes into account other aspects of the
entire compensation package afforded by the Company to the individual
officer, which include Company matching contributions under the
401(k) Profit Sharing Plan, deferred compensation and certain
perquisites.
Base salaries are reviewed annually and adjusted after considering
executive officer salaries of the comparative group (as discussed
previously), the Company's performance for the year, the individual
executive's contribution to that performance, achievement of
individual performance objectives and years of service with the
Company. The Compensation Committee exercises judgment and discretion
in the information it reviews and the analysis it considers. In
reviewing base salaries of the executive officers other than the
Chief Executive Officer, the Compensation Committee also takes into
account the views of Gregg M. Eisenberg, President and Chief
Executive Officer, whose views typically are subjective, such as his
perception of the individual's performance, the importance of his
role and functional responsibilities to the overall well-being of the
Company and any planned changes in functional responsibilities.
In determining Mr. Eisenberg's base salary for fiscal 1997, the
Compensation Committee considered several factors relating to the
Company's financial and operating performance during fiscal 1996.
Such factors, to which the Committee did not attribute specific
values or weights, included the record breaking financial results of
the Company for fiscal 1996, 58% growth in the Company's Industrial
Products segment, and the significant improvement in the Company's
Oil Country Tubular Goods market share. Based on these
considerations, the Compensation Committee set Mr. Eisenberg's base
salary for fiscal 1997 at $265,000, which reflects a 6.85% increase
over fiscal 1996, Mr. Eisenberg was also awarded deferred cash
compensation of $15,000 during fiscal 1996 under the Company's
Deferred Compensation Plan.
Bonuses
Under the terms of the Company's Performance Bonus Plan, the
Company's executive officers are eligible for quarterly cash bonuses,
not to exceed 15% of base salary, based upon attaining specified
objective criteria. The Compensation Committee establishes annual
cash bonuses under the terms of the Company's Executive Bonus Plan,
not to exceed 50% of base salary. The criteria for annual bonuses for
fiscal 1996 was the achievement by the Company of a specified
earnings per share target with respect to 50% of the bonus and the
achievement of certain other performance goals, with respect to the
remaining 50% of the bonus. The bonus paid to Mr. Eisenberg reflects
the application of the objective standards set by the Compensation
Committee in November, 1995.
Stock Options
The granting of stock options is a key part of the Company's overall
compensation program designed to provide its executive officers and
other key employees with incentives to maximize the Company's
long-term financial performance and align their interests with those
of the Company's shareholders. Through its Stock Option Plans, the
Company has encouraged its executive officers to acquire and hold the
Company's Common Stock.
In determining whether and how many options should be granted, the
Committee may consider the seniority of and the amount of Common
Stock already held by each of the executive officers and such other
factors as it deems appropriate. However, the Compensation Committee
has not established target awards governing the recipient, timing or
size of option grants under the Stock Option Plans. Thus,
determinations by the Compensation Committee with respect to the
granting of stock options is subjective in nature. The Compensation
Committee's primary consideration for determining the number of
shares to be covered by options provided during fiscal 1996 was to
encourage long term performance of the Company's executive officers.
For this reason, each of the options granted to Mr. Eisenberg and the
other executive officers named in the Summary Compensation Table was
for an option price in excess of the fair market value of the
Maverick Common Stock on the date of the grant and is not exercisable
for a period of three to five years.
Respectfully submitted,
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF MAVERICK TUBE CORPORATION
William E. Macaulay, Chairman
John A. Hill, Member
C. Robert Bunch, Member
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return since October 1, 1991 through September 30, 1996 on its Common Stock
against the cumulative total return of the Nasdaq Stock Market - U.S and the Dow
Jones Oilfield and Equipment Services-Other Index.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG MAVERICK TUBE CORPORATION,
NASDAQ STOCK MARKET -- U.S. INDEX AND THE DOW JONES OTHER OILFIELD EQUIPMENT
AND SERVICES INDEX
<CAPTION>
Measurement Period Maverick Tube Nasdaq Stock Dow Jones Oilfield
(Fiscal Year Covered) Corporation Market -- U.S. Index Equipment and Services Index
- -------------------- ------------- --------------------- ----------------------------
<S> <C> <C> <C>
FYE 9/30/91 100 100 100
FYE 9/30/92 85 112 104
FYE 9/30/93 185 147 108
FYE 9/30/94 131 148 93
FYE 9/30/95 103 204 112
FYE 9/30/96 181 243 149
</TABLE>
<PAGE>
Item 2 - AMENDMENT OF THE MAVERICK TUBE CORPORATION 1994 STOCK OPTION PLAN
It is the intention of the persons named in the accompanying proxy, unless
otherwise directed, to vote such proxies for the adoption of the amendment to
the Maverick Tube Corporation 1994 Stock Option Plan. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE IN THE FAVOR OF THE ADOPTION OF THE AMENDMENT TO THE MAVERICK
TUBE CORPORATION 1994 STOCK OPTION PLAN AS SET FORTH BELOW.
In 1994, the Board of Directors of the Company (the "Board") adopted and the
Stockholders of the Company (the "Stockholders") subsequently approved the
Maverick Tube Corporation 1994 Stock Option Plan (the "1994 Plan"). On October
22, 1996, the Board of Directors amended the 1994 Plan in order to increase the
number of shares of Common Stock available for issuance from 300,000 to
1,000,000 (the "First Amendment") and directed that the First Amendment be
submitted to the Stockholders for their approval. If the holders of at least a
majority of the issued and outstanding shares of Common Stock present at the
annual meeting in person or by proxy do not vote for the approval thereof, no
options granted thereunder will qualify as incentive stock options ("ISOs")
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")
The 1994 Plan is designed to provide additional incentives for key employees
of the Company to promote the success of the business and to enhance the
Company's ability to attract and retain the service of qualified persons. As
indicated above, a maximum of 300,000 shares of Common Stock currently may be
issued pursuant to options granted under the 1994 Plan and of that amount, only
10,000 shares remain available for future grants of options. The Board believes
that option grants under the 1994 Plan will continue to be an important
ingredient in the successful recruitment and retention of management personnel.
An option enables the optionee to purchase shares of Common Stock at an
exercise price set by the Board at the date of grant. In the case of ISOs, the
exercise price per share may not be less than the fair market value of the
Common Stock at the time the option is granted, and in the case of an optionee
who is or would be the beneficial owner of more than 10% of the total combined
voting power of all classes of the Company's stock, the exercise price may not
be less than 110% of the fair market value of the Common Stock on the date of
grant. No person may be granted ISOs under the 1994 Plan that are first
exercisable during any calendar year for shares having an aggregate fair market
value as of the date of grant of more than $100,000. In order to obtain the
option shares, a participant must pay the full exercise price to the Company at
the time of exercise of the option. The purchase price may be paid in cash or,
with the consent of the Board, stock of the Company, including stock acquired
under the same option. All ISOs granted are intended to qualify under Section
422 of the Code.
The 1994 Plan provides that stock options may be granted with terms of no
more than 10 years from the date of grant, provided that with respect to the
grant of an ISO to an optionee who is or would be the beneficial owner of more
than 10% of the total combined voting power of all classes of the Company's
stock, the term of such option may not exceed 5 years. Options will survive for
a limited period of time after the optionee's death, disability or normal
retirement from the Company. Any shares as to which an option expires, lapses
unexercised or is terminated or canceled may be subject to a new option .
Under present law, upon exercise of an option the holder recognizes ordinary
income, and the Company is entitled to a deduction, equal to the amount by which
the fair market value of the shares acquired upon exercise exceeds the exercise
price. However, an ISO generally will not result in taxable income to the
recipient or a tax deduction to the Company at the time of exercise. If certain
requirements are met, a taxable event will not be triggered with respect to an
ISO until the underlying shares are sold.
ITEM 3 - RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, the Company's independent public accountants for the fiscal
year ended September 30, 1996, has been selected as the Company's independent
public accountants for the fiscal year ending September 30, 1997.
Representatives of Ernst & Young LLP are expected to attend the annual meeting
and will have the opportunity to make statements and respond to appropriate
questions from stockholders.
STOCKHOLDER PROPOSALS
Any stockholder proposal to be presented at the 1998 Annual Meeting of
Stockholders must be received by the Company's Secretary at the Company's
principal executive offices not later than October 24, 1997, for inclusion in
the Board of Directors' Proxy Statement and form of proxy relating to that
meeting. Each proposal submitted should be accompanied by the name and address
of the stockholder submitting the proposal, the number of shares of Common Stock
owned by him of record or beneficially and the date upon which he acquired such
shares. If the proponent is not a stockholder of record, proof of beneficial
ownership should also be submitted. All proposals must be a proper subject for
action and comply with the proxy rules of the Securities and Exchange
Commission.
A COPY OF THE COMPANY'S ANNUAL REPORT TO STOCKHOLDERS FOR ITS FISCAL YEAR
1996 ACCOMPANIES THIS PROXY STATEMENT.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR 1996.
EACH FILED WITH THE COMMISSION (INCLUDING RELATED FINANCIAL STATEMENTS AND
SCHEDULES) IS AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE, UPON WRITTEN REQUEST TO
MAVERICK TUBE CORPORATION, 400 CHESTERFIELD CENTER, SECOND FLOOR, CHESTERFIELD,
MISSOURI 63017; ATTN.: SECRETARY
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO NOT
EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE REQUESTED TO COMPLETE, SIGN
AND RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE.
OTHER BUSINESS
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as set forth in the Notice which
accompanies this Proxy Statement. However, if any other matters properly come
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors,
CHARLES O. STRUCKHOFF
Secretary
Appendix A
(Front of the Proxy Card)
PROXY CARD
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors Nominees: Gregg M.
Eisenberg, John A. Hill, William E. Except Nominees
Macaulay, C. Robert Bunch, C. Adams For Withhold written below
Moore and David H. Kennedy. O O O
____________________________________
____________________________________
2. Proposal to approve the amend- For Against Abstain
ment to the Maverick Tube Corporation O O O
1994 Stock Option Plan.
3. In their discretion, upon other For Against Abstain
matter as may properly come O O O
before the meeting.
Dated:__________________________________, 19__
____________________________________________
Signature(s)
____________________________________________
This proxy when properly executed will be
voted in the manner directed herein by the
undersigned stockholder. If no direction is
given, this proxy will be voted FOR Proposals
1 and 2.
This Proxy must be signed exactly as name
appears hereon. Executors, administrators,
trustees, etc. should give full title as such.
If the signer is a corporation, please sign
full corporate name by duly authorized
officer.
(Back of the Proxy Card)
MAVERICK TUBE CORPORATION
This Proxy is Solicited By the Board of Directors
For the Annual Meeting of Stockholders - February 10, 1997
The undersigned hereby appoints GREGG M. EISENBERG and CHARLES O.
STRUCKHOFF, and each of them, the attorneys and proxies of the undersigned,
with power of substitution, to vote on behalf of the undersigned all the shares
of stock of MAVERICK TUBE CORPORATION which the undersigned is entitled to vote
at the Annual Meeting of Stockholders of the Company to be held at Doubletree
Hotel and Conference Center, 16225 Swingley Ridge Road, Chesterfield, MO 63017
at 4:00 P.M., Central Standard Time, on Monday, February 10, 1997, and at all
adjournments thereof, hereby revoking any proxy heretofore given with respect to
such stock, and the undersigned authorizes and instructs said proxies to vote as
follows:
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
