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 2, 1998 at 4:00 P.M.,
Central Standard Time, for the following purposes:
1. To elect seven (7) Directors to serve until the next Annual Meeting
of Stockholders 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 to increase the number of shares
covered thereunder from 600,000 to 1,000,000;
3. To amend Article Fourth of the Company's Certificate of
Incorporation to increase the authorized Common Stock of the Company
from 20,000,000 to 40,000,000 shares;
4. 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 8,
1997, 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 1997 accompanies this
Notice.
By Order of the Board of Directors,
/s/Charles O. Struckhoff
CHARLES O. STRUCKHOFF
Secretary
December 12, 1997
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 2, 1998
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 2, 1998, 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 seven persons named herein
as nominees for directors of the Company as set forth in proposal 1 as indicated
in the enclosed form of proxy; "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 600,000 to 1,000,000 as set forth in proposal 2 as indicated in the
enclosed form of proxy, and "FOR" the approval to amend Article Fourth of the
Company's Certificate of Incorporation to increase the authorized shares of
Common Stock of the Company from 20,000,000 to 40,000,000.
Stockholders who executed proxies may revoke them at any time before they are
exercised by giving written 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 first being mailed to stockholders on
or about December 12, 1997.
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 8, 1997, the record date of the determination of stockholders
entitled to vote at the Annual Meeting, there were 15,437,474 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
As of December 8, 1997 there are no persons known to the Company to be
beneficial owners of more than five percent (5%) of the outstanding shares of
Common Stock of the Company.
Management Ownership of the Company's Common 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 8, 1997, 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(1) Options(2) Class
<S> <C> <C> <C>
Gregg M. Eisenberg 84,708 -0- *
William E. Macaulay 11,500(3&4) 11,500 *
David H. Kennedy 11,500(3) 11,500 *
C. Robert Bunch 9,900 7,500 *
C. Adams Moore 3,500 3,500 *
Charles O. Struckhoff 30,000 -0- *
T. Scott Evans 18,286 6,000 *
Sudhakar Kanthamneni 61,008 50,000 *
Wayne Mang -0- -0- *
John Fox 6,000 -0- *
---------- ----------
All directors and officers as a group
(10 persons including those named) 236,402 90,000 1.53%
<FN>
(of 15,437,474 shares)
* Represents less than 1% of the class.
(1) On August 1, 1997, the Company announced a two-for-one stock split in the
form of a 100% stock dividend to all shareholders of record as of August
12, 1997. The distribution on August 21, 1997 increased the number of
shares outstanding to 15,088,142. All share amounts, including stock option
information, in this report have been restated to reflect this stock split.
(2) 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 8, 1997. Such shares are included in the number of shares
of Common Stock indicated under the column captioned "Number of Shares
Beneficially Owned" above.
(3) Excludes: (a) 300,000 shares of Common Stock owned by American Gas and Oil
Investors, Limited Partnership ("AmGO") and (b) 200,000 shares of Common
Stock owned by AmGO II, Limited Partnership, ("AmGO II"). First Reserve
Corporation is the managing general partner of AmGO and AmGO II. William E.
Macaulay and David H. Kennedy, each of whom is a Director of the Company,
serve as President and Chief Executive Officer and Managing Director,
respectively, of First Reserve Corporation. Messrs. Macaulay and Kennedy
disclaim beneficial ownership of these shares.
(4) Excludes: (a) 8,000 shares of Common Stock owned by the Anne R. Macaulay
Trust 1; (b) 8,000 shares of Common Stock owned by the Elizabeth R.
Macaulay Trust 1; and (c) 24,000 shares of Common Stock owned by Linda R.
Macaulay, the wife of 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 1998 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
seven nominees named below as Directors of the Company to serve until
the 1999 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 SEVEN 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 47 Chairman of the Board since 1988
February 1996, President, Chief
Executive Officer and a Director
of the Company since 1988.
William E. Macaulay 52 President and Chief Executive 1987
Officer of First Reserve since
July 1990; Director of Weatherford
Enterra, Inc., Hugoton Energy
Corporation, National-Oilwell, Inc.,
Transmontaigne Oil Company, Domain
Energy Corp., Cal Dive, Inc., Patina
Oil & Gas and Anker Coal Group, Inc.
David H. Kennedy 48 Managing Director of First Reserve 1996
since 1986, Director of Berkley
Petroleum Corporation, Burner
Exploration Ltd. and Pursuit
Resources Corp., Best Pacific
Resources Ltd., and Cal Dive, Inc.
Robert Bunch 43 Partner, King & Pennington, L.L.P. 1991
since 1997, Executive Vice President
and Chief Operating Officer of Oyo
Geospace Corporation (June 1995-May
1996); Attorney, Scott, Douglass &
Luton, L.L.P. (June 1994 - May 1995);
President, Geo-Capital Resources,
L.C.; (July 1993 - May 1994); Senior
Vice President of Siberian American
Limited-Liability Company (June 1992-
June 1993).
C. Adams Moore 64 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 1957 -February 1992);
Director of Fisher Tank Company and
Warren Fabricating and Machinery
Corporation,
Wayne Mang 60 President & Chief Operating Officer 1997
Russell Metals (1964 - May 1997);
President & Chief Executive Officer
Metals Group of Federal Industries
Ltd. (1982-1991) Chairman of the
Board of the Steel Service Center
Institute and a director of the Steel
Alliance,
John Fox 57 President, Chief Executive Officer since 1997
1988 and member of the Board of Directors
of Markwest Hydrocarbon, Inc. since 1996,
Founder of Western Gas Resources, Inc.
and Executive Vice President and Chief
Operating Officer (1972 - 1986).
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
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. Gregg M. Eisenberg, President and
Chief Executive Officer, failed to file timely three reports of Form 4 to report
that transactions occurred in February, April, and May 1997. John M. Fox,
Director, failed to file three reports of Form 4 to report that transactions
occurred in July, August and October 1997. Except as stated above and based
solely on review of the copies of such forms furnished to the Company, two Form
3's and twenty-six Form 4'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 1997.
Board Committees
The Board of Directors of the Company has established an Audit Committee
currently consisting of Messrs. Kennedy (Chairman), Moore and Fox and a
Compensation Committee currently consisting of Messrs. Bunch (Chairman), Moore
and Mang. 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, 1997, the Board of Directors held
four meetings, the Audit Committee held three meetings and the Compensation
Committee held one meeting. 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 the Committees of the Board of Directors on which he
served.
Compensation of Directors
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 $750, respectively. The Company also pays the
ordinary and necessary out-of-pocket expenses incurred by non-employee Directors
to attend Board of Directors and Committee meetings. Pursuant to the Director
Stock Option Plan, each "Eligible Director" will receive an annual grant of
options to acquire 7,500 shares of Common Stock at an exercise price equal to
the Fair Market Value of such shares at the time of grant. An "Eligible
Director" is a director of the Company who is neither an employee of the Company
nor a director or employee of an entity having the power to vote or dispose of
ten percent (10%) or more of the outstanding Common Stock.
Compensation Committee Interlocks and Insider Participations
No member of the Compensation Committee is now an officer or an employee of the
Company or any of its subsidiaries or has been at any time an officer of the
Company or any of its subsidiaries.
EXECUTIVE COMPENSATION
The following table sets forth information relating to compensation paid to or
accrued for the benefit of the Company's Chief Executive Officer and each of the
three other executive officers of the Company (together, the "named executive
officers") for all services rendered in all capacities to the Company during
each of the Company's last three completed fiscal years. No compensation was
paid in the form of restricted stock awards, stock appreciation rights or
payouts pursuant to long-term incentive plans during any of the last three
fiscal years.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Other Securities
Fiscal Salary Annual Underlying All Other
Year Salary Bonus Compen- Options/ Compensa-
Name and Principal Position Ended ($)(1) ($)(2) sation(3) Shares tion/$(6&7)
- --------------------------- ----- ------ ----- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gregg M. Eisenberg 1997 265,000 193,292 -- 0 37,424
President and Chief 1996 248,000 156,798 -- 70,000 20,399
Executive Officer 1995 236,250 7,561 -- 140,000(4) 6,657
Charles O. Struckhoff 1997 150,000 109,411 -- 0 14,920
Vice President - 1996 138,000 87,330 -- 60,000 4,643
Finance and Admin- 1995 131,250 4,233 -- 120,000(4)(5) 3,904
istration and Chief
Financial Officer
T. Scott Evans 1997 150,000 108,635 -- 0 30,142
Vice President - 1996 138,000 86,575 -- 60,000 19,693
Commercial 1995 131,250 4,231 -- 120,000(4)(5) 4,087
Operations
Sudhakar Kanthamneni 1996 155,000 115,042 -- 0 35,312
Vice President - 1996 145,000 93,235 -- 70,000 24,883
Manufacturing and 1995 131,250 4,231 -- 140,000(4)(5) 3,913
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) These options which were originally exercisable in the three traunches,
each with respect to one-third of the shares covered thereunder, in
November 1997, 1998, and 1999 respectively, were amended in September, 1997
to permit the immediate exercise thereof (the "Option Acceleration").
(5) Messrs. Eisenberg, Struckhoff, Kanthamneni and Evans each entered into
derivative securities transactions with respect to 84,600, 30,000, 11,000
and 9,600 shares, respectively. Accordingly, such shares are subject to
open market sale under appropriate market conditions within such time
periods.
(6) Includes amount contributed by the Company under the Company 401(K) plan
and additional compensation deferred under the Executive Deferred
Compensation Plan established in fiscal 1996 for the benefit of certain
executive officers. The Executive Deferred Compensation Plan provides for
annual fixed 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 1997, deferred compensation awards of $15,000, $15,000 and
$30,000 were made to Messrs. Eisenberg, Evans and Kanthamneni,
respectively.
(7) Includes additional amounts deferred under the Deferred Compensation Plan
established in fiscal 1996 for the benefit of executive officers and
certain key managers of the Company. The Deferred Compensation Plan was
established in order to retain the services of and provide long term
performance incentive to certain key employees of the Company. The awards
are established annually based on performance and profitability goals and
cannot exceed 6% of the participant's base salary.
</FN>
</TABLE>
<TABLE>
AGGREGATE OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at Fiscal Year- at Fiscal Year-
End (#) End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable(1) Unexercisable(2)
<S> <C> <C> <C> <C>
Gregg M. Eisenberg 130,000 3,813,330 --/70,000 --/$2,528,750
Charles O. Struckhoff 50,000 1,610,415 --/60,000 --/$1,957,500
T. Scott Evans 94,000 2,007,098 6,000/60,000 $ 217,125/$2,156,250
Sudhakar Kanthamneni 60,000 861,250 50,000/70,000 $1,766,665/$2,528,750
<FN>
(1) Those options granted in November, 1994, were subject to the Option
Acceleration.
(2) Represents the market value of the underlying Common Stock at the close of
business on September 30, 1997, 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 hold 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 1997, National Oilwell accounted for 14
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, Chairman, 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 1998, the
Compensation Committee considered several factors relating to the
Company's financial and operating performance during fiscal 1997.
Such factors, to which the Committee did not attribute specific
values or weights, included the record breaking financial results of
the Company for fiscal 1997, 52% growth in the energy products
segment, and 19% growth in the Company's industrial products segment.
Based on these considerations, the Compensation Committee set Mr.
Eisenberg's base salary for fiscal 1998 at $290,000, which reflects a
9.4% increase over fiscal 1997, Mr. Eisenberg was also awarded
deferred cash compensation of $15,000 during fiscal 1997 under the
Company's Deferred Compensation Program.
Bonuses
The Company's executive officers are eligible for quarterly cash
bonuses under the terms of the Company's Gainsharing Program and
annual cash bonuses under the terms of the Company's Executive Bonus
Plan. Under such Plan, the Compensation Committee establishes bonuses
as a percentage of base salary, which for fiscal 1997 was limited to
60% of base salary, in the case of the Company's executive officers.
The criteria for annual bonuses for fiscal 1997 was the achievement
by the Company of a specified earnings per share target and the
achievement of certain other performance goals. The bonus paid to Mr.
Eisenberg reflects the application of the objective standards set by
the Compensation Committee in November, 1996.
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.
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. In determining not
to grant options in fiscal 1997 to Mr. Eisenberg and the other
executive officers named in the Summary Compensation Table, the
Compensation committee took into account the limited number of
options available for grant under the Company's stock option plans
and the Option Acceleration with respect to certain previously
granted options to such executive officers.
Respectfully submitted,
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF MAVERICK TUBE CORPORATION
C. Robert Bunch, Chairman
Adams Moore, Member
Wayne Mang, Member
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return since October 1, 1992 through September 30, 1997 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 TOTAL RETURN AMONG MAVERICK TUBE CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE DOW HONES OTHER OILFIELD EQUIPMENT
& SERVICES INDEX
<CAPTION>
Measurement Period Maverick Tube Nasdaq Stock Dow Jone Oilfield
(fiscal Year Covered) Corporation Market -- U.S. Index Equipment and Services Index
<S> <C> <C> <C>
FYE 9/30/92 100 100 100
FYE 9/30/93 217 131 104
FYE 9/30/94 153 132 90
FYE 9/30/95 121 182 108
FYE 9/30/96 211 216 144
FYE 9/30/97 1245 297 263
</TABLE>
<PAGE>
ITEM 2 - AMENDMENT OF THE MAVERICK TUBE CORPORATION 1994 STOCK OPTION PLAN
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 which, as amended, permits the
issuance of 600,000 shares of Common Stock upon the exercise of options granted
thereunder (the "1994 Plan"). On July 22, 1997, the Board amended the 1994 Plan
in order to increase the number of shares of Common Stock available for issuance
from 600,000 to 1,000,000 (the "the 1994 Plan Amendment") and directed that the
1994 Plan Amendment be submitted to the Stockholders for their approval.
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 600,000 of shares of Common Stock currently may be
issued pursuant to options granted under the 1994 Plan and of that amount, only
3,000 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.
The 1994 Plan is administered by the Board. The 1994 Plan authorized the
Board to grant to key employees ISOs and non-qualified options which may be
granted thereunder until November 16, 2004, subject to the right of the Board of
Directors to terminate such 1994 Plan at any time prior thereto. The Board may
amend the 1994 Plan at any time.
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. An
optionee will not realize any income, nor will the Company be entitled to a
deduction, at the time an ISO is granted to him or within two years from the
date the ISO was granted to him, for federal income tax purposes: (a) the
optionee will not recognize any income at the time of exercise of his ISO; (b)
the amount by which the fair market value (determined without regard to any
restriction other than a restriction which by its terms will never lapse) of the
shares at the time of exercise exceeds the exercise price is an item of tax
preference subject to the alternative minimum tax on individuals; and (c) the
difference between the ISO price and the amount realized upon sale of the shares
of the optionee will be treated as long-term capital gain or loss. The Company
will not be entitled to a deduction upon the exercise of an ISO. The Company is
entitled to a deduction for federal income tax purposes at the time and in the
amount in which income is taxed to the optionee as ordinary income by reason of
the sale of stock acquired upon the exercise of an ISO. An optionee will not
realize any income at the time a non-qualified stock option is granted, nor will
the Company be entitled to a deduction at that time. Upon exercise of a
non-qualified stock option, the optionee will recognize ordinary income (whether
the non-qualified stock option price is paid in cash or by the surrender of
previously owned Common Stock), in an amount equal to the difference between the
option price and the fair market value of the shares to which the non-qualified
stock option pertains. The Company will be entitled to a tax deduction in an
amount equal to the amount of ordinary income realized by the optionee.
The Board of Directors believes that the adoption of the 1994 Plan Amendment, to
increase the number of shares issuable upon the exercise of options granted
thereunder from 600,000 to 1,000,000, is in the best interests of the Company
and its stockholders and accordingly recommends a vote FOR this proposal which
is Item 2 on the proxy card. Proxies received in response to the Board's
solicitation will be voted "FOR" approval of the 1994 Plan Amendment if no
specific instructions are included thereon for Item 2.
ITEM 3 - AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED
SHARES OF COMMON STOCK FROM 20,000,000 TO 40,000,000
The Board of Directors of the Company has declared it advisable that the
Company's Certificate of Incorporation, as amended (the "Certificate"), be
amended to increase the authorized number of shares of Common Stock of the
Company, having a par value of $.01 per share, from 20,000,000 to 40,000,000
shares.
The purpose of the proposed amendment is to provide additional authorized shares
of Common Stock for possible use in connection with future financings,
investment opportunities, acquisitions or other distributions (such as stock
dividends or stock splits) or for other corporate purposes. The Board of
Directors will make the determinations for future issuances of authorized shares
of Common Stock which generally will not require further action by the
stockholders. The Company has no plans or commitments at this time for the
issuance of additional or authorized Common Stock, but seeks the authority to
issue such shares in order to provide the Board the desired flexibility to take
such action at any time, without the delay of seeking stockholder approval
(unless required by law, the NASD rules or otherwise), whenever, in the judgment
of the Board, it is in the best interest of the Company to do so.
Of the 20,000,000 shares of Common Stock presently authorized, as of December 8,
1997, 15,437,474 shares were outstanding , and 607,168 shares were reserved for
issuance pursuant to the exercise of options granted or available for future
grant under the 1994 Plan. Thus, only 3,955,358 shares of Common Stock are
currently available for future use.
Stockholders do not have preemptive rights and will not have a right of first
refusal to purchase any of the additional authorized shares of Common Stock.
Upon adoption of this proposal, Article IV of the Company's Certificate will be
amended as set forth below:
"FOURTH. The total number of shares of stock which the Corporation shall
have the authority to issue is 45,000,000 shares of Capital Stock,
consisting of 5,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"), and 40,000,000 shares of Common Stock,
par value $.01 per share (the "Common Stock").
The affirmative vote of a majority of all the Company's issued and outstanding
shares of Common Stock is required in order to adopt the proposed amendment.
Dissenting votes do not give rise to appraisal or other similar rights on the
part of dissenters. Abstentions and non-votes (i.e., shares held by brokers,
fiduciaries or other nominees which are not permitted to vote on the proposed
amendment) will have the same effect as negative votes.
The Board of Directors believes adoption of the amendment will be in the best
interest of the Company and its stockholders and, accordingly, recommends a vote
FOR this proposal which is Item 3 on the proxy card. Proxies received in
response to the Board's solicitation will be voted "FOR" approval of the
amendment if no specific instructions are included thereon for Item 3.
ITEM 4 - RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, the Company's independent public accountants for the fiscal
year ended September 30, 1997, has been selected as the Company's independent
public accountants for the fiscal year ending September 30, 1998.
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 1999 Annual Meeting of
Stockholders must be received by the Company's Secretary at the Company's
principal executive offices not later than August 18, 1998, 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
1997 ACCOMPANIES THIS PROXY STATEMENT.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR 1997,
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,
/s/Charles O. Struckhoff
CHARLES O. STRUCKHOFF
Secretary
