SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2) )
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
MAVERICK TUBE CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statemnt, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(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 (Set forth the amount on which the filing fee is
calculated and state how it was determined.):
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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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<PAGE>
MAVERICK TUBE CORPORATION
16401 Swingley Ridge Road, Seventh 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 offices of Maverick Tube Corporation, 16401
Swingley Ridge Road, Seventh Floor, Chesterfield, Missouri 63017-4800, on
Monday, February 8, 1999 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 Amendment of the
Maverick Tube Corporation Director Stock Option Plan increasing the
number of shares covered thereunder from 50,000 to 200,000; 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 11,
1998, 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, 16401
Swingley Ridge Road, Seventh Floor, Chesterfield, Missouri 63017-4800.
A copy of the Company's Annual Report for its fiscal year 1998
accompanies this Notice.
By Order of the Board of Directors,
/s/ Barry R. Pearl
Barry R. Pearl
Secretary
December 15, 1998
Chesterfield, Missouri
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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.
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<PAGE>
MAVERICK TUBE CORPORATION
16401 Swingley Ridge Road, Seventh Floor
Chesterfield, Missouri 63017-4800
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 8, 1999
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 8, 1999, 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 each of the seven persons named
herein as nominees for directors of the Company, as set forth in ITEM 1 and as
indicated in the enclosed form of proxy, and "FOR" the approval of the amendment
of the Maverick Tube Corporation Director Stock Option Plan increasing the
number of shares covered thereunder, as set forth in ITEM 2 and as indicated in
the enclosed form of proxy.
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 15, 1998.
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 11, 1998, 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 of Common Stock 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
The following table sets forth information as of December 11, 1998 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> <C>
Pilgram Baxter & Associates Sole Voting: 975,100
825 Duportail Road Shared Voting: 1,134,700
Wayne, PA 19087 Dispositive: 1,134,700 7.35%
Nicholas-Applegate Capital Mgmt Sole Voting: 753,600
600 West Broadway, 29th Floor Shared Voting: 6,500
San Diego, Ca 92101 Dispositive: 870,300 5.64%
AMVESCAP, PLC Sole Voting: 0
11 Devonshire Square Shared Voting: 784,500
London EC2M 4YR Dispositive: 784,500 5.08%
England
</TABLE>
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 11, 1998, the beneficial ownership of (1)
each of the executive officers named in the Summary Compensation Table, (2) each
present director and executive officer of the Company and (3) 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>
Name of Individual or Number of Shares Beneficially Currently
Number in Group Owned Exercisable Percent of Class
Options(1)
<S> <C> <C> <C>
Gregg M. Eisenberg 94,708 -0- *
William E. Macaulay 19,000 (2&3) 19,000 *
David H. Kennedy 19,000 (2) 19,000 *
C. Robert Bunch 17,400 15,000 *
C. Adams Moore 11,000 11,000 *
Barry R. Pearl 10,000 -0- *
Charles O. Struckhoff 0 -0- *
T. Scott Evans 28,286 6,000 *
Sudhakar Kanthamneni 61,008 50,000 *
Wayne P. Mang 7,500 7,500 *
John M. Fox 13,500 7,500 *
All current directors and
executive officers as a group
(10 persons) 281,402 135,000 1.82%
(of 15,437,474 shares)
* Represents less than 1% of the class.
<FN>
(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 11, 1998. 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) 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
Corp. 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 Chairman and Chief Executive Officer and Managing Director,
respectively, of First Reserve Corp. Messrs. Macaulay and Kennedy disclaim
beneficial ownership of these shares.
(3) 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 1999 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 each of the seven
nominees named below as directors of the Company to serve until the 2000 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 EACH 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 OTHER DIRECTORSHIPS SERVED AS
A
NAME AGE DIRECTOR SINCE
<S> <C> <C> <C>
Gregg M. Eisenberg 48 Chairman of the Board since February 1996; President, 1988
Chief Executive Officer and a Director of the Company
since 1988.
William E. Macaulay 53 Chairman and Chief Executive Officer of First Reserve 1987
Corp. since 1983; Director of Weatherford, Inc.,
National-Oilwell, Inc. and Cal Dive, Inc.
David H. Kennedy 49 Managing Director of First Reserve Corp. since 1986; 1996
Director of Berkley Petroleum Corporation, Pursuit
Resources, Inc., Best Pacific Resources, Inc. and Cal
Dive International, Inc.
C. Robert Bunch 44 Partner, in the law firm of 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 65 Independent consultant in the steel distribution and 1996
fabrication businesses since February 1992; Vice
President of Sales of Bethlehem Steel Corporation and
President of Bethlehem Steel Export Corporation (July
1958 -February 1992); Director of Fisher Tank Company
and Warren Fabricating Corporation.
Wayne P. Mang 61 President & Chief Operating Officer Russel Metals 1997
(1964 - May 1997); President & Chief Executive
Officer Metals Group of Federal Industries Ltd.
(1982-1991); "Non-Executive" Chairman and Director of
Laclede Steel Co., Director of International Trading
Group and Associates Corporation.
John M. Fox 58 President, Chief Executive Officer since 1988 and a 1997
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 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. To the Company's knowledge, based solely on
its review of the copies of such forms furnished to the Company, the Company
believes all Section 16(a) filing requirements applicable to its directors and
executive officers were complied with during fiscal 1998, except as follows:
Barry R. Pearl, Chief Financial Officer, failed to file one report on Form 3
when he became an officer of the Company, and William E. Macaulay, director, and
David H. Kennedy, director, each failed to file one report on Form 5 to report
the granting of options after the stockholders' meeting in February, 1998.
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, 1998, the Board of Directors
held four meetings, the Audit Committee held two 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 $750, respectively. The Company also pays the
ordinary and necessary out-of-pocket expenses incurred by non-employee directors
to attend Board of Directors and Committee meetings. Pursuant to the Director
Stock Option Plan, each "Eligible Director" will receive an annual grant of
options to acquire 7,500 shares of Common Stock at an exercise price equal to
the Fair Market Value of such shares at the time of grant. An "Eligible
Director" is a director of the Company who is neither an employee of the Company
nor a director or employee of an entity having the power to vote or dispose of
ten percent (10%) or more of the outstanding Common Stock.
Compensation Committee Interlocks and Insider Participations
No member of the Compensation Committee is now an officer or an
employee of the Company or any of its subsidiaries or has been at any time an
officer of the Company or any of its subsidiaries.
EXECUTIVE COMPENSATION
The following table sets forth information relating to compensation
paid to or accrued for the benefit of the Company's Chief Executive Officer,
each of the three current executive officers of the Company and the prior Chief
Financial Officer of the Company (together, the "named executive officers") for
all services rendered in all capacities to the Company during each of the
Company's last three completed fiscal years. No compensation was paid in the
form of restricted stock awards, stock appreciation rights or payouts pursuant
to long-term incentive plans during any of the last three fiscal years.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Other All
Fiscal Annual Securities Other
Year Compensation(3) Underlying Compen-
Name and Principal Position Ended Salary Bonus($)(2) Options(#) saton/$(4&5)
($)(1)
<S> <C> <C> <C> <C> <C> <C>
Gregg M. Eisenberg 1998 290,000 29,779 -- -- 38,858
Chairman of the Board, 1997 265,000 193,292 -- -- 37,424
President and Chief 1996 248,000 156,798 -- 70,000 20,399
Executive Officer
Barry R. Pearl 1998 47,596 (6) 4,811 -- 80,000 --
Vice President - 1997 N/A N/A N/A N/A N/A
Finance and Administration 1996 N/A N/A N/A N/A N/A
and Chief Financial Officer
T. Scott Evans 1998 165,000 15,233 -- -- 31,399
Vice President - 1997 150,000 108,635 -- -- 30,142
Commercial Operations 1996 138,000 86,575 -- 60,000 19,693
Sudhakar Kanthamneni 1998 170,000 16,135 -- -- 46,852
Vice President - 1997 155,000 115,042 -- -- 35,312
Manufacturing and Technology 1996 145,000 93,235 -- 70,000 24,883
Charles O. Struckhoff 1998 76,620 (7) 4,695 -- -- 12,896
Vice President - 1997 150,000 109,411 -- -- 14,920
Finance and Administration 1996 138,000 87,330 -- 60,000 4,643
and Chief Financial Officer
<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 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 1998, deferred
compensation awards of $15,000, $15,000 and $30,000 were made to
Messrs. Eisenberg, Evans and Kanthamneni, respectively.
(5) Includes additional amounts deferred under the Deferred Compensation Plan
established in fiscal 1996 for the benefit of executive officers and
certain key managers of the Company. The Deferred Compensation Plan was
established in order to retain the services of and provide long term
performance incentive to certain key employees of the Company. The awards
are established annually based on performance and profitability goals and
cannot exceed 6% of the participant's base salary.
(6) Barry R. Pearl joined the Company on June 15, 1998 and became Chief
Financial Officer of the Company at that time. Accordingly, compensation
information for the fiscal year 1998 relates only to the period Mr. Pearl
was employed by the Company.
(7) Charles O. Struckhoff's retired from the Company on January 31, 1998.
Accordingly, compensation information for fiscal year 1998 relates only to
the 4 month period ending on Mr. Struckhoff's retirement date with the
Company.
</FN>
</TABLE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
________________________________Individual Grants__________________________
Number of % of Total Potential Realizable
Securities Options Value at Assumed
Underlying Granted to Annual Rates of
Options Employees in Exercise, or Stock Price Appreciation
Name Granted (#) Fiscal Year Base Price Expiration for Option Term (1)
($/Sh) Date 5%___ 10%
------ ---- -- ----
<S> <C> <C> <C> <C> <C> <C>
Gregg M. Eisenberg 0 0 0 0 0 0
Barry R. Pearl 80,000(2) 100% 11.375 6-15-08 $572,294 $1,450,306
T. Scott Evans 0 0 0 0 0 0
Sudhakar Kanthamneni 0 0 0 0 0 0
Charles O. Struckhoff 0 0 0 0 0 0
<FN>
(1) The potential realizable values shown illustrate the values that might be
realized upon exercise of the option immediately prior to the
expiration of its 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.
(2) This option was granted on June 15, 1998 at which time the fair market
value of the Company's Common Stock was $10.56. This option does not become
exercisable until June 15, 2001, at which time it will become 100%
exercisable. This option also becomes exercisable within 30 days of a
Change of Control of the Company. See Employment Arrangements with
Executive Officers.
</FN>
</TABLE>
<TABLE>
<PAGE>
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Value
Securities of
Underlying Unexercised
Unexercised In-the-Money
Shares Options Options
Name Acquired on Value Realized at at
Exercise (#) ($) Fiscal Fiscal
Year-End(#) Year-End($)Exercisable/
Exercisable/ Unexercisable (2)
Unexercisable (1)
<S> <C> <C> <C> <C>
Gregg M. Eisenberg -- -- --/70,000 --/$122,500
Barry R. Pearl -- -- --/80,000 --/--
T. Scott Evans -- -- 6,000/60,000 $6,000/$93,750
Sudhakar Kanthamneni -- -- 50,000/70,000 $47,915/$122,500
Charles O. Struckhoff -- -- --/-- --/--
<FN>
(1) Effective August 29, 1997, the Compensation Committee of the Board of
Directors removed the exercise restriction with respect to certain options
granted in 1995 which made them immediately exercisable.
(2) Represents the market value of the underlying Common Stock at the close of
business on September 30, 1998, less the aggregate exercise price.
</FN>
</TABLE>
Employment Arrangements with Executive Officers
Other than the employment agreement with Mr. Pearl discussed below, 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 (other than Mr. Struckhoff) providing for severance pay
upon the involuntary termination of such named executive officer (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 30 months 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, such executive shall be entitled to a lump-sum severance payment equal to
two and one-half times the sum of (i) his then base salary, and (ii) the value
of his bonus under the Company's Performance Bonus Plan, assuming that the
specified performance criteria for the year in question had been met.
Additionally, the executive will be entitled to the continuation of certain
benefits (such as health, life and disability insurance) for such 30 month
period, and a "gross-up" payment in respect of "excess parachute payments", if
any, resulting from payments under the Severance Agreement. 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 (other than Mr. Struckhoff)
with respect to options granted in November, 1995 and September, 1996 under the
Maverick Tube Corporation 1994 and 1990 Stock Option Plans respectively, and
pursuant to Mr. Pearl's employment agreement, shall become exercisable
immediately upon the occurrence of certain events which would result in a Change
of Control.
In connection with its employment of Barry R. Pearl, the Company
entered into an employment agreement with Mr. Pearl providing for (i) a base
salary of $165,000 per year subject to upward adjustments by the Board, and (ii)
the participation by Mr. Pearl in the Company's bonus, incentive compensation
and similar programs generally available to the executive officers of the
Company, currently consisting of the Company's "Performance Bonus Plan," (earned
on a quarterly basis) and its "Profitability Bonus Plan," (earned on an annual
basis) each of which are performance based bonus programs whereby the amount of
bonus is determined by reference to specified criteria which is established in
advance. In addition, Mr. Pearl was granted an option to purchase 80,000 shares
of Common Stock under the Company's 1994 Stock Option Plan at an option price
equal to the closing price of the Common Stock on the NASDAQ stock market on the
day immediately preceding the grant thereof. Such option is exercisable by Mr.
Pearl, in whole or in part, at any time on or after June 15, 2001 and ending on
June 15, 2008 (its expiration date). Mr. Pearl's employment may be terminated by
the Company for cause (as defined in the employment agreement) or without cause.
If his employment is terminated for cause or if Mr. Pearl resigns, his salary
and bonus rights will cease on the date of such termination or resignation. If
the Company terminates Mr. Pearl without cause, Mr. Pearl is entitled to receive
a lump sum payment equal to his then current base salary and his bonus through
the date of such termination, on a pro rata basis. Mr. Pearl's employment
agreement also requires that he refrain from disclosing information confidential
to the Company or engaging, directly or indirectly, in activities which would be
competitive with the Company to any significant extent at any time during his
employment or for a period of one year from the date of any termination of his
employment with the Company.
Certain Relationships and Related Transactions
Certain funds managed by First Reserve Corp. 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 1998, 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.
In connection with his relocation to the St. Louis area, the Company
has loaned to Barry R. Pearl, Chief Financial Officer of the Company, pending
the sale of his former residence, the amount of $370,000 on an interest free
basis. The loan is to be repaid in full on the earlier to occur of: (i) the sale
of Mr. Pearl's former residence; or (ii) June 10, 1999.
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 stockholders 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 or peer group
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 Company 401(k) Plan, incentive
compensation programs, 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 on
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 1999,
the Compensation Committee considered several factors relating to the
Company's financial and operating performance during fiscal 1998. Such
factors, to which the Committee did not attribute specific values or
weights, included (i) the Company's achievement of its second best
financial results, ever, in fiscal 1998, despite the negative impact of
market conditions, which included the effects of reduced land based
drilling and increased import and customer inventory competition, (ii) a
20% growth in the Company's industrial products segment and (iii) the
completion of the Company's acquisition of its new cold drawn product
facilities. Based on these considerations, the Compensation Committee set
Mr. Eisenberg's base salary for fiscal 1999 at $302,000, which reflects a
4.2% increase over fiscal 1998. Mr. Eisenberg was also awarded deferred
cash compensation of $15,000 during fiscal 1998 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 Performance Bonus Plan, not
to exceed 15% of base salary, based on the achievement of specified
objective criteria related to, among other things, sales and
manufacturing results. In 1998, the specified criteria were attained and
Mr. Eisenberg and the other executive officers received quarterly cash
bonuses.
The Company's executive officers are also eligible for annual cash
bonuses, under the terms of the Company's Profitability Bonus Plan. Under
such Plan, the Compensation Committee establishes bonuses as a percentage
of base salary, which for fiscal 1998 was limited to 60% of base salary
in the case of the Company's executive officers. The criteria for annual
bonuses in fiscal 1998 was the achievement by the Company of a specified
earnings per share target and the achievement of certain other
performance goals. In fiscal 1998, the specified earning per share target
was not met by the Company and no annual bonus payments were made to the
Company's executives.
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 receipt, 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 are
subjective in nature. In fiscal 1998, no options were granted by the
Compensation Committee to the Company's executive officers, other than to
Mr. Pearl, who, pursuant to his employment agreement entered into in
connection with his employment by the Company in June, 1998, received an
option for 80,000 shares of the Company's Common Stock at an exercise
price of $11.375.
Respectfully submitted,
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF
MAVERICK TUBE CORPORATION
C. Robert Bunch, Chairman
C. Adams Moore, Member
Wayne P. Mang, Member
<PAGE>
STOCK PERFORMANCE
Set forth below is a line graph comparing the cumulative total
shareholder return since October 1, 1993 through September 30, 1998 on the
Company's Common Stock against the cumulative total return of the NASDAQ Stock
Market - U.S., the Dow Jones Oilfield and Equipment Services-Other Index and the
Company's peer group selected by the Company. Included in the Company's peer
group is its direct public competitors whose main operations are the
manufacturing of tubular products and are Lone Star Steel Co., NS Group, Inc.
Co. and Prudential Steel, Ltd.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG MAVERICK TUBE CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE DOW JONES OTHER OILFIELD EQUIPMENT
& SERVICES INDEX AND A PEER GROUP
<CAPTION>
Measurement Period Maverick Tube NASDAQ Stock Dow Jones Oilfield Peer
(fiscal Year Covered) Corporation Market - U.S. Index Equipment & Services Index Group
<S> <C> <C> <C> <C>
FYE 9/30/93 100 100 100 100
FYE 9/30/94 70.43 100.83 86.51 67
FYE 9/30/95 55.65 139.28 103.75 72.55
FYE 9/30/96 97.39 165.24 137.57 105.89
FYE 9/30/97 573.91 226.81 251.85 465.55
FYE 9/30/98 95.65 231.84 152.38 106.51
</TABLE>
ITEM 2 - APPROVAL OF THE AMENDMENT OF THE MAVERICK TUBE CORPORATION
DIRECTOR STOCK OPTION PLAN INCREASING THE NUMBER OF SHARES COVERED
THEREUNDER
On October 22, 1996, the Board of Directors of the Company unanimously
adopted a resolution authorizing the adoption of an amendment (the "Amendment")
to the Maverick Tube Corporation Director Stock Option Plan (the "Plan") to
increase the number of authorized shares of Common Stock of the Company eligible
to be issued under such Plan, having a par value of $0.01 per share, from 50,000
to 200,000 (as adjusted for the two-for-one stock split effective August 8,
1997). To comply with the listing requirements of the NASDAQ Stock Market (on
which the Company's shares are traded), it is necessary that the Amendment be
approved by the stockholders of the Company. The vote required to approve the
Amendment is a majority of the shares of Common Stock present, in person or by
Proxy, and voting at the Annual Meeting. If stockholders approve the Amendment,
the Company will promptly apply to the NASDAQ Stock Market for the listing of
the additional shares of the Company's Common Stock. Currently, options to
acquire 82,500 total shares of Common Stock have been granted, of which 37,500
shares were covered by options granted during fiscal 1997. The purpose of the
Amendment is to enable the Company to continue to provide incentive to qualified
persons who are otherwise unaffiliated with the Company to become and remain
directors of the Company, and to encourage ownership of the Company's Common
Stock by such persons. The Board of Directors believes the Plan will directly
promote the interests of the Company and its stockholders because the incentives
and rewards made available to the outside directors thereunder would be directly
related to the share value of the Company's Common Stock. The Plan provides for
the automatic yearly grant, on the first business day after the annual meeting
of stockholders, to each non-employee director of nonqualified stock options to
acquire 7,500 shares of the Company's Common Stock. A non-employee director is a
director of the Company who is not an officer or employee of the Company or of
any subsidiary thereof and who is not a director, officer or employee of a
corporation, partnership, trust or other entity that is a beneficial owner (as
defined in Section 13(d)(3) of the Securities Act of 1933, as amended) of ten
percent or more of the Common Stock of the Company. Options granted under the
Plan are exercisable at a price equal to the fair market value of the Company's
Common Stock on the date of the grant, and are exercisable at any time after six
months from the date of grant until the earlier of the date the director ceases
to be a director for any reason or five years. Director stock options will
survive for a limited period of time if the director ceases to be a director due
to his or her death, disability or normal retirement from the Board of
Directors.
The Board of Directors may amend or revise the Plan, or the term of any
option granted thereunder, without stockholder approval unless such amendment or
revision would require stockholder approval to continue to meet the requirements
of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or as may
otherwise be required by the market on which the Company's Common Stock is
traded. No amendment, revision or termination of the Plan shall impair the
rights or obligations of any options previously granted without the consent of
the optionee. No option may be granted under the Plan more than five years after
the effective date, which was November 16, 1994.
The market value of the Company's Common Stock, as of December 11,
1998, was $5.375. Currently, six of the Company's seven directors qualify as
non-employee directors and thus participate in the Plan.
No income will be generally recognized upon the grant of an option
under the Plan. As a non-qualified option, the exercise thereof is a taxable
event which requires the optionee to recognize ordinary income in an amount
equal to the difference between the then fair market value of the shares and the
exercise price, and the Company generally will be entitled to a deduction for
federal income tax purposes equal to the amount of income taxable to the
optionee upon the exercise of the option.
The Board of Directors believes the adoption of the Amendment 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
Amendment if no specific instructions are included thereon for Item 2.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, the Company's independent public accountants for the
fiscal year ended September 30, 1998, has been selected as the Company's
independent public accountants for the fiscal year ending September 30, 1999.
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
Under the By-laws of the Company, any stockholder who wishes to bring a
matter before the annual meeting of stockholders must deliver a written notice
to the Secretary of the Company not less than 45 days nor more than 90 days
before the anniversary date of the day that proxy materials were first mailed
for the prior year's annual meeting of stockholders, provided the actual date of
the annual meeting of stockholders is within 30 days of the anniversary date of
the prior year's annual meeting. The written notice must contain the name and
record address of the stockholder submitting the proposal, a brief description
of the proposal sought to be raised at the meeting, the number of shares of
Company stock beneficially owned by the proposing stockholder and certain other
information specified in the By-laws. Failure to comply with this advance notice
requirement will preclude the stockholder from submitting the proposal to the
meeting. For the 2000 Annual Meeting of Stockholders, such written notice must
be given not later than October 31, 1999, and not earlier than September 16,
1999. In addition, under the SEC's proxy rules, if a stockholder wishes to bring
a matter before the annual meeting of stockholders but does not provide written
notice of the proposal to the Company at least 45 days before the anniversary
date of the day that proxy materials were first mailed for the prior year's
annual meeting of stockholders, any proxies received by the Board of Directors
from stockholders in response to its solicitation will be voted by the Company's
designated proxies in their discretion on such matter (if the matter is allowed
to be brought before the meeting, consistent with the Company's By-laws
described above), regardless of whether specific authority to vote on such
matter has been received from the stockholders submitting such proxies. Thus,
any stockholder who wishes to submit a proposal at the 2000 Annual Meeting of
Stockholders and also wishes to avoid the possibility of discretionary voting by
the Company's proxies on such matter must give written notice to the Secretary
of the Company on or before October 31, 1999.
Under the SEC's proxy rules, any stockholder proposal to be presented
at the 2000 Annual Meeting of Stockholders must be received by the Company's
Secretary at the Company's principal executive offices not later than August 17,
1999, for inclusion in the Board of Director's Proxy Statement and form of proxy
related 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 on
which he acquired such shares. If the proponent is not a stockholder of record,
proof of beneficial ownership should also be submitted. All such 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 1998 ACCOMPANIES THIS PROXY STATEMENT.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR
1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING
RELATED FINANCIAL STATEMENTS AND SCHEDULES) IS AVAILABLE TO STOCKHOLDERS
WITHOUT CHARGE, UPON WRITTEN REQUEST TO MAVERICK TUBE CORPORATION, 16401
SWINGLEY RIDGE ROAD, SEVENTH FLOOR, CHESTERFIELD, MISSOURI 63017-4800; 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/ Barry R. Pearl
BARRY R. PEARL
Secretary
APPENDIX TO MAVERICK'S 1999 PROXY STATEMENT
1999 Proxy Card
Maverick Tube Corporation Director Stock Option Plan
First Amendment to the Maverick Tube Corporation Director
Stock Option Plan
<PAGE>
(FRONT OF PROXY CARD)
MAVERICK TUBE CORPORATION
This Proxy is Solicited By the Board of Directors
For the Annual Meeting of Stockholders - February 8, 1999
The undersigned hereby appoints GREGG M. EISENBERG and BARRY R. PEARL, and each
of them the attorneys and proxies of the undersigned, with full power of substi-
tution, to vote on behalf of the undersigned all of 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 the offices of
Maverick Tube Corporation, 16401 Swingley Ridge Road, Chesterfield, Missouri
63017-4800 at 4:00 P.M., Central Standard time on Monday, February 8, 1999, 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.)
(BACK OF PROXY CARD)
MAVERICK TUBE CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors, Nominees: Gregg M. Eisenberg, For Withhold For All
William E. Macaulay, C. Robert Bunch, C. Adams Moore, All All Except
David H. Kennedy, Wayne P. Mang and John M.Fox.
____________________________________________________ / / / / / /
(Except nominees written above)
2. Proposal to approve the Amendment of the Maverick
Tube Corporation Director Stock Option Plan For Against Abstain
increasing the number of shares covered thereunder
from 50,000 to 200,000. / / / / / /
3. In their discretion, the proxies are authorized to
vote upon such other matters as may properly come
before the meeting and all adjournments thereof.
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.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
<PAGE>
Maverick Tube Corporation
Director Stock Option Plan
Section 1. Establishment and Purpose 1
Section 2. Definitions 1
Section 3. Administration 3
Section 4. Shares Subject to the Plan 3
Section 5. Granting of Options 3
Section 6. Terms of Options 4
Section 7. No Right to Remain a Director 4
Section 8. Exercise of Options 4
Section 9. General Provisions 5
Section 10. Adjustment Provisions 5
Section 11. Duration, Amendment and Termination 7
Section 12. Stockholder Approval 7
Section 13. Miscellaneous 7
<PAGE>
Maverick Tube Corporation
Director Stock Option Plan
SECTION 1. Establishment and Purpose
Maverick Tube Corporation (the "Company") hereby establishes a stock
option plan to be named the Maverick Tube Corporation Director Stock Option
Plan. The purpose of the Plan is to provide (i) further inducement to qualified
persons to become and remain Eligible Directors of the Company, and (ii)
additional incentive to Eligible Directors of the Company by encouraging them to
acquire shares of Stock upon the exercise of the Options granted hereunder in
return for services rendered by them to the Company, thereby increasing such
Eligible Directors' proprietary interest in the business of the Company. Options
granted under the Plan will not be incentive stock options within the meaning of
Section 422 of the Code.
SECTION 2. Definitions
(a) Act means the Securities Exchange Act of 1934, as amended from
time to time.
(b) Administrator means the person, board of directors, committee or
entity performing the functions of the administrator of the Plan
as provided for herein, as designated by the Board from time to
time and, in absence of such designation, the Board shall be the
Administrator.
(c) Board means the Board of Directors of the Company.
(d) Code means the Internal Revenue Code of 1986, as amended
and in effect from time to time.
(e) Company means Maverick Tube Corporation, a corporation
organized and existing under the laws of the State of Delaware.
(f) Eligible Director means, at any given time, a director of the
Company who is not an officer or employee of the Company or of
any subsidiary thereof and who is not a director, officer or
employee of a corporation, partnership, trust or other entity
that is a beneficial owner (as defined in Section 13 (d)(3) of
the Act) of ten percent or more of the Stock of the Company.
(g) Fair Market Value means, with respect to a share of stock,
for any particular date, the following: (i) if the Stock is
listed for trading on a national or regional stock exchange or is
included on the NASDAQ National Market or Small-Cap Market, the
closing selling price quoted on such exchange or in such market
which is published in the Wall Street Journal for the trading day
immediately preceding such date, or if no trade of the Stock
shall have been reported for that day, the closing selling price
quoted on such exchange or in such market which is published in
the Wall Street Journal for the next day prior thereto on which a
trade of stock was reported; or (ii) if the Stock is not so
listed, admitted to trading, or included in such market, the
average of the highest reported bid and lowest reported asked
prices as quoted in the "pink sheets" published by the National
Daily Quotation Bureau for the first day immediately preceding
such date on which the Stock is traded. If the Stock is not
listed or admitted to trading on any exchange, or included or
quoted in the "pink sheets," the "Fair Market Value" of a share
of Stock shall be determined by the Board in good faith using any
fair and reasonable means selected in its discretion.
(h) Option means an option granted under this plan to acquire Stock.
(i) Optionee means the person to whom an option is granted.
(j) Option Agreement means the agreement between the Company and an
Optionee setting forth the terms and provisions of an option.
(k) Option Date means the date as of which an Option is granted,
which shall be the first business day after the 1995 annual
meeting of stockholders of the Company and the first business day
after each subsequent annual meeting of the stockholders of the
Company.
(l) Period of Excercisability means the period during which an
Option may be exercised as determined under Section 6 of this
Plan.
(m) Plan means the Maverick Tube Corporation Director Stock Option
Plan.
(n) Post-Death Representative(s) means the executor(s),
administrator(s) or personal representative(s) of the optionee's
estate or the person or person(s) to whom the optionee's
rights under his or her Option pass by the Optionee's will
or the laws of descent and distribution.
(o) Rule 16b-3 means Ruble 16b-3 promulgated by the Securities and
Exchange Commission under the Act, as amended from time to time,
or any successor rule.
(p) Stock means authorized and unissued shares of $0.01 par value
common stock of the Company or shares reacquired by the Company
held in its treasury.
Section 3. Administration
The Plan is intended to be a "formula award" plan under Rule 16b-3. The
Plan shall be administered on behalf of the Company by the Administrator. The
Administrator may adopt, amend, and rescind from time to time such
administrative rules, and may take from time to time such actions, with or
without notice to affected Optionees, as the Administrator may deem
appropriate to implement or interpret the provisions of the Plan or to
exercise any authority, discretion or power explicitly or implicitly granted
to the Administrator under the Plan; provided however, that no such rules or
actions may be inconsistent with the provisions of the Plan or Rule 16b-3.
The Administrator may make rules or take action pursuant to this Section by
any appropriate means.
Section 4. Shares Subject to the Plan
(a) Subject to the provisions of Section 10 hereof, a maximum of
25,000 shares of Stock may be issued pursuant to the exercise of
options granted under the Plan.
(b) At any time during the existence of the Plan, there shall be
reserved for issuance upon the exercise of Options granted under
the Plan an amount of Stock (subject to adjustment as provided in
Section 10 hereof) equal to the total number of shares then
issuable pursuant to all such Option grants which shall have
been made prior to such time. The Company in its discretion may
use reacquired shares held in the treasury in lieu of authorized
but unissued shares.
(c) If an Option terminates, in whole or in part, by expiration
or for any reason other than exercise of such Option, the
shares previously reserved for issuance upon grant of the
Option shall again be available for issuance as if such shares
had never been subject to an Option.
Section 5. Granting of an Option
(a) Each person who is an Eligible Director on an Option Date
(commencing on the Option Date for 1995) shall receive an Option to
acquire 2,000 shares of Stock at a per share purchase price equal
to the Fair Market Value of the Stock on the Option Date. In each
subsequent year, each person who is an Eligible Director on the
Option Date shall receive Options to acquire 2,000 shares to Stock
at a per share purchase price equal to the per share Fair Market
Value of the Stock on the Option Date.
(b) All options granted under the Plan shall be granted as of an
Option Date. Promptly after each Option Date, the Company shall
notify the Optionee of the grant of the Option, and shall hand
deliver or mail to the Optionee an Option Agreement, duly executed
by and on behalf of the Company, with the request that the Optionee
execute and return the Option Agreement within thirty days after
the Option Date. If the optionee shall fail to execute and return
the Option Agreement within said thirty-day period, his or her
Option shall be automatically terminated, except that if the
Optionee dies within said thirty-day period, such Option
Agreement shall be effective notwithstanding the fact that it
has not been signed prior to death.
Section 6. Terms of Options
Notwithstanding any other provision of the Plan, each Option shall be
evidenced by an Option Agreement, which shall include the substance of the
following terms and conditions:
(a) The option price for each share of Stock covered by an Option
shall be an amount equal to 100 percent of the Fair Market Value
of a share of Stock on the Option Date of such Option.
(b) The Option shall not be transferable by the Optionee other than by
will or be the laws of descent and distribution or pursuant to
qualified domestic relations order as defined by the code or the
regulations thereunder. The designation of a beneficiary does not
constitute a transfer. The option shall be exercisable during the
Optionee's lifetime only by the Optionee.
(c) the Option shall be exercisable, in whole or in part, at any time
and from time to time on or after the date which is six months
after the Option Date and before its expiration, which shall occur
upon the earlier of (I) the date on which an Optionee ceases to
hold office as a director of the company for any reason other than
retirement, death or disability, (ii) the date that is three
months after the effective date of the Optionee's retirement from
service on the Board, (iii) the date that is one year after the
date on which the Optionee's service on the Board ceases due to
death or disability, (iv) the date on which the Optionee
ceases to qualify as an Eligible Director for any reason
other than retirement, death or disability, and (v) the
fifth anniversary of the Option Date.
(d) An option may be exercised only during the period of Exercisability
determined under Section 6(c) hereof.
Section 7. No Right to Remain a Director.
The grant of an Option shall not create any right in any person to
remain as a director of the Company.
Section 8. Exercise of Options.
(a) An Option may be exercised in whole or in part during the
Period of Exercisability, except as otherwise may be provided in
the Option Agreement, by giving written notice to the Company
stating the number of shares of Stock for which the Option is
being exercised, accompanied by payment in full of the aggregate
purchase price for the shares of Stock being purchased. Payment
of the aggregate purchase price for the shares of Stock may be
made (i) in cash for the full amount of such purchase price, (ii)
by delivery to the Company of certificates representing shares of
Stock owned by the Optionee for longer than six months and
registered in the Optionee's name, having a Fair Market Value as
of the date of exercise and tender equal to the full amount of
such purchase price, or (iii) a combination of (i) and (ii) which
collectively equals the full amount of such purchase price.
(b) An Optionee shall have none of the rights of a stockholder with
respect to shares of Stock subject to an Option until shares of
Stock are issued to him or her upon the exercise of such option.
Section 9. General Provisions.
The Company shall not be required to issue or deliver any certificate
for shares of Stock to an Optionee upon the exercise of an Option prior to:
(a) (i) if requested by the Company, the filing with the company by
the Optionee or the Optionee's Post-Death Representative of a
representation in writing that at the time of such exercise it was
his or her then present intention to acquire such shares for
investment and not for resale, and/or (ii) the completion of any
registration or other qualification of such shares of Stock under
any state or federal securities laws or rulings or regulations of
any governmental regulatory body which the company shall determine
to be necessary or advisable; and
(b) the obtaining of any other consent, approval or permit from any
state or Federal governmental agency which the Administrator may ,
in its sole and absolute discretion upon the advice of counsel,
determine to be necessary or advisable.
Section 10. Adjustment Provisions.
The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment recapitalization, reorganization or
other change in the Company's capital structure of its business, any merger or
consolidation of the Company with or into another entity, any issuance of bonds,
debentures, preferred or prior preference stocks ahead of or affecting the Stock
or the rights thereof, the dissolution or liquidation of the Company for any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding.
The shares with respect to which Options may be granted are shares of
Stock as presently constituted. If, however, the outstanding shares of Stock are
subdivided or consolidated, or such shares are exchanged for a different number
or kind of shares or securities of the Company through a reorganization, merger,
recapitalization, reclassification, stock dividend, stock split, combination of
shares of other similar transaction, the aggregate number of shares of Stock
subject to the Plan as provided in Section 4 hereof, and the shares of Stock
subject to issuance under outstanding Options under the Plan shall be
appropriately and proportionately adjusted by the Administrator. Any such
adjustment in an outstanding Option shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the Option but
with an appropriate adjustment in the price for each share or other unit of any
security covered by the Option.
Notwithstanding anything to the contrary contained in this Section 10,
upon the dissolution or liquidation of the Company, or upon a reorganization,
merger or consolidation of the Company with one or more corporations as a result
of which the Company is not the surviving corporation (or, in the case of a
three-party merger where the Company, while the surviving corporation, becomes a
subsidiary of another corporation), or upon a sale of substantially all of the
assets of the Company, then the Plan shall terminate on the date and any
Options granted under the Plan shall terminate on the date before the
consummation of the transaction, and the Administrator shall have the right, but
shall not be obligated, to accelerate the time in which any Option may be
exercised prior to such termination, unless provision shall be made in writing
in connection with such transaction for the continuance of the Plan, for the
assumption of Options previously granted, or the substitution for such Options
with new options to purchase the stock of a successor corporation, or parent or
subsidiary thereof, with appropriate adjustments as to number and kind of shares
and the option price, in which event the Plan and Options previously granted
shall continue in the manner and under the terms so provided; provided, however,
that the Administrator and the Board shall have the authority to amend this
Section to require that a successor assume all obligations under any outstanding
Options.
Adjustments under this Section 10 shall be made by the Administrator,
and any determination of the Administrator as to what adjustments shall be made,
and the extent thereof, shall be final, binding and conclusive. No fractional
shares of Stock shall be issued under the Plan or in connection with any such
adjustment.
Except as may otherwise be expressly provided in the Plan, the issuance
by the Company of shares of capital stock of any class or securities convertible
into shares of capital stock of any class for cash, property, labor, or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefre, or upon conversion of shares or obligations of the Company convertible
into such shares of capital stock or other securities, and in any case whether
or not for fair value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of shares of Stock available under the
Plan or subject to Options therefore granted or the purchase price per share
with respect to outstanding Options.
Section 11. Duration, Amendment and Termination.
(a) The Board may at any time terminate the Plan or make such
amendments thereto as it shall deem advisable and in the best
interests of the Company, without further action on the part of
the stockholders of the Company; provided, however, that no such
termination or amendment shall, without the consent of the
Optionee, adversely affect or impair the rights of such Optionee,
and provided further, that no amendment requiring shareholder
approval in order to meet the requirements of Rule 16b-3 shall be
effective unless such shareholder approval is obtained, and
provided further that the provisions relating to eligible
persons, the amount and price of awards and the timing of awards
may not be amended more than once every six months except to
comport with changes in the Code or the Employee Retirement
Income Security Act of 1974, or the rules thereunder.
(b) The period during which Options may be granted under the Plan
shall terminate on November 16, 1999, unless the Plan earlier
shall have been terminated as provided above.
Section 12. Stockholder Approval.
The Plan became effective on November 16, 1994, subject to approval by
the stockholders of the Company at its annual meeting to be held on or about
February 10, 1995, or any adjournment thereof.
Section 13. Miscellaneous
(a) Optionee shall have no rights as a stockholder with respect to
shares issuable upon exercise of an Option until the date of the
issuance of shares to the Optionee pursuant to such exercise. No
adjustment will be made for dividends or other distributions or
rights for which the record date is prior to the date of such
issuance.
(b) Nothing contained in the Plan shall be construed as giving any
Optionee, such Optionee's beneficiaries, or any other person any
equity or other interest of any kind in any assets of the Company
or any subsidiary or creating a trust of any kind or a fiduciary
relationship of any kind between the Company or any subsidiary and
any such person.
(c) Nothing contained in the Plan shall be construed to prevent the
Company or any subsidiary from taking any corporate action that is
deemed by the Company or such subsidiary to be appropriate or in
its best interests, whether or not such action would have an
adverse effect on the Plan or any Option granted under the Plan.
No Optionee, beneficiary or other person shall have any claim
against the Company or any subsidiary as a result of any such
action.
(d) The proceeds received by the Company from the sale of shares of
Stock pursuant to the Plan shall be used for general corporate
purposes.
(e) All rights and obligations under the Plan shall be governed by,
and the Plan shall be construed in accordance with, the laws of
the State of Delaware without regard to the law of conflicts.
Titles and heading to articles in the Plan are for purposes of
reference only, and shall in no way limit, define or otherwise
affect the meaning or interpretation of any provisions of the
Plan.
(f) The Company shall have the right to take such action as may be
necessary in connection with any exercise of Options to satisfy
any applicable obligation to withhold amounts pursuant to federal,
state, or local tax law. The Administrator may permit shares
of Stock having an aggregate value equal to or less than the
amount required to be withheld to be used to satisfy tax
withholding requirements, and such shares shall be valued at the
Fair market Value per Share as of the date of such exercise.
(g) It is intended that the Options that may be granted and Stock
issuable under the Plan will be registered under the Securities
Act of 1933, as amended. At the time any shares of Stock are
issued or transferred pursuant to the exercise of an Option, such
shares will have been accepted for trading on the NASDAQ Stock
Market.
FIRST AMENDMENT TO
MAVERICK TUBE CORPORATION
DIRECTOR STOCK OPTION PLAN
THIS FIRST AMENDMENT TO MAVERICK TUBE CORPORATION DIRECTOR STOCK OPTION
PLAN ("First Amendment") is adopted as of this 22nd day of October, 1996.
WHEREAS, Maverick Tube Corporation, a Delaware corporation ("Maverick") has
established the Maverick Tube Corporation Director Stock Option Plan (the
"Plan") dated February 15, 1995;
WHEREAS, Section 11 of the Plan provides, among other things, that the
Board of Directors of Maverick (the "Board") may amend the Plan as it shall deem
advisable and in the best interests of Maverick, subject to certain conditions;
and
WHEREAS, the Board believes that it would be in the best interest of
Maverick to amend the Plan as provided herein.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Paragraph (k) of Section 2 of the Plan is hereby amended by adding the
following proviso before the period ending said paragraph (a), which proviso
shall read as follows:
"; provided, however, that with respect to a director who has
served as a director since the beginning of a fiscal year but
first becomes an Eligible Director subsequent to the first
business day after the annual meeting of the stockholders of
the Company ensuing from the beginning of such fiscal year,
the Option Date shall mean the first business day after such
director becomes an Eligible Director."
2. Paragraph (a) of Section 5 of the Plan is hereby deleted in its entirety
and the following substituted in lieu thereof:
"(a) For fiscal year 1996, each person who is an
Eligible Director on an Option Date (commencing on the
Option Date for 1996) shall receive an Option to acquire
2,000 shares of Stock at a per share purchase price equal
to the Fair Market Value of the Stock on the Option Date;
provided, however, that each person who has served as a
director of Maverick since the beginning of fiscal year
of 1996 and, subsequent to the annual meeting held in 1996
becomes an Eligible Director on or before October 31, 1996
shall receive Options to acquire 2,000 shares of Stock at
a per share purchase price equal to the per share
Fair Market Value of the Stock on the applicable Option
Date. In each subsequent fiscal year (commencing with
fiscal year 1997), each person (i) who is an Eligible
Director on the first business day after the annual
meeting of the stockholders of the Company held in such
fiscal year, or (ii) who has served as a director of
Maverick since the beginning of such fiscal year and,
subsequent to the annual meeting occurring in such fiscal
year, becomes an Eligible Director on or before the end of
such fiscal year, shall receive Options to acquire 3,750
shares of Stock at a per share purchase price equal to
the per share Fair Market Value of the Stock on the
applicable Option Date."
3. Paragraph (a) of Section 4 of the Plan is hereby deleted in its entirety
and the following substituted in lieu thereof:
"(a) Subject to the provisions of Section 10 hereof,
a maximum of 100,000 shares of Stock may be issued pursuant
to the exercise of Options granted under the Plan."
4. This First Amendment shall be effective for fiscal year 1996 and all
subsequent fiscal years of Maverick, and all references in the Plan to "the
Plan" shall be deemed to include this First Amendment from and after the
effectiveness hereof.
IN WITNESS WHEREOF, this First Amendment has been duly executed by
authority of the Board as of the day and year first above written.
MAVERICK TUBE CORPORATION
/s/ Gregg M. Eisenberg
By:
Title: President and Chief
Executive Officer
