SCHEDULE 14A INFORMATION

              PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
                       SECURITIES EXCHANGE ACT OF 1934 

Filed by the Registrant  /X/

Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement            / / Confidential, for use of
/X/ Definitive Proxy Statement                 the Commission only (as
/ / Definitive Additional Materials            permitted by Rule
/ / Soliciting Material Pursuant to            14a-6 (e)(2)
    Rule 14a-11 (c) or Rule 14a-12


                         TGC INDUSTRIES, INC.
- ----------------------------------------------------------------------
             (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- ----------------------------------------------------------------------

    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (check the appropriate box):

/X/ No fee required.

//  Fee computed on table below per Exchange Act Rules 14a-6 (i) (4) and 
    0-11
    (1) Title of each class of securities to which transaction applies.
    (2) Aggregate number of securities to which transaction applies.
    (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).
    (4) Proposed maximum aggregate value of transaction.
    (5) Total fee paid.

/ / 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.


                       TGC INDUSTRIES, INC.

                   1304 Summit Avenue, Suite 2
                       Plano, Texas  75074

             NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                     To Be Held June 3, 1999

To the Shareholders of
TGC INDUSTRIES, INC.:

     The annual meeting of the shareholders of TGC Industries, Inc. 
(Company) will be held at Janney Montgomery Scott Inc., 8th Floor Conference
Room, 26 Broadway, New York, New York 10004 on June 3, 1999 at 10:00 A.M., 
New York time, for the following purposes:

               1.   To elect five (5) directors to serve until the next
          annual meeting of shareholders and until their
          respective successors shall be elected and qualified;

               2.   To ratify the selection of Grant Thornton LLP as
          independent auditors; and

               3.   To transact such other business as may properly come
          before the meeting and any adjournment thereof.

     Information regarding matters to be acted upon at this meeting is
contained in the accompanying Proxy Statement.  Only shareholders of record 
at the close of business on April 20, 1999, are entitled to notice of and 
to vote at the meeting and any adjournment thereof.

     All shareholders are cordially invited to attend the meeting.  Whether
or not you plan to attend, please complete, sign, and return promptly the
enclosed proxy in the accompanying addressed envelope for which postage is
prepaid.  You may revoke the proxy at any time before the commencement of 
the meeting.


                                                                              
                             By Order of the Board of Directors:
                                                                              
                             Allen T. McInnes
                             Secretary


Plano, Texas
April 28, 1999

                            IMPORTANT

     IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING 
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD.  PLEASE COMPLETE, SIGN, AND
RETURN PROMPTLY THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHETHER 
OR NOT YOU INTEND TO BE PRESENT AT THE MEETING.

                       TGC INDUSTRIES, INC.

                   1304 Summit Avenue, Suite 2
                       Plano, Texas  75074




                         PROXY STATEMENT
          ANNUAL MEETING OF SHAREHOLDERS  - June 3, 1999

     This Proxy Statement is furnished to shareholders in connection with 
the solicitation of proxies by the management of TGC Industries, Inc. (the
"Company") for use at the annual meeting of shareholders to be held at 
Janney Montgomery Scott Inc., 8th Floor Conference Room, 26 Broadway, New
York, New York on June 3, 1999, and at any adjournment thereof.  The Notice 
of Meeting, the form of Proxy, and this Proxy Statement are being mailed to
the Company's shareholders on or about April 28, 1999.


                   COSTS OF PROXY SOLICITATION

     Although solicitation (the total expense of which will be borne by the
Company) is to be made primarily through the mail, the Company's officers
and/or employees and those of its transfer agent may solicit proxies by
telephone, telegram, or personal contact, but in such event no additional
compensation will be paid by the Company for such solicitation.  Further,
brokerage firms, fiduciaries, and others may be requested to forward
solicitation material regarding the meeting to beneficial owners of the
Company's Common Stock, and in such event the Company will reimburse them 
for all accountable costs so incurred.


                        ACTION TO BE TAKEN

     Action will be taken at the meeting to (1) elect a Board of Directors,
(2) ratify the selection of Grant Thornton LLP as independent auditors, and
(3) transact such other business as may properly come before the meeting and
any adjournment thereof.  The proxy will be voted in accordance with the
directions specified thereon, and otherwise in accordance with the judgment 
of the persons designated as proxies.  Any person executing the enclosed 
proxy may nevertheless revoke it at any time prior to the actual voting
thereof by filing with the Secretary of the Company either a written
instrument expressly revoking it or a duly executed proxy bearing a later
date.  Furthermore, such person may nevertheless elect to attend the meeting
and vote in person, in which event the proxy will be suspended.  The
affirmative vote of the holders of a majority of the outstanding shares of 
the Company's Common Stock and Preferred Stock, voting together as a single
class, will constitute approval of all matters expected to come before the
meeting.


                        OUTSTANDING STOCK

     The Company's Restated Articles of Incorporation authorize 25,000,000
shares of Common Stock with a par value of $.30 per share and 4,000,000 
shares of Preferred Stock with a par value of $1.00 per share.  As of April
20, 1999 (the "Record Date"), which is the date as of which the record of
shareholders entitled to vote at the meeting was determined, there were
2,225,124 shares of the Company's Common Stock outstanding (adjusted for a
one-for-three reverse stock split effective November 6, 1998) and 1,127,050
shares of the Company's Series C 8% Convertible Exchangeable Preferred Stock
("Preferred Stock") outstanding.

     In voting on all matters expected to come before the meeting, a
shareholder will be entitled to one vote, in person or by proxy, for each
share of Common Stock and Preferred Stock held in his or her name on the
Record Date.  The Company's Restated Articles of Incorporation prohibit
cumulative voting.


                  SECURITY OWNERSHIP OF CERTAIN
                 BENEFICIAL OWNERS AND MANAGEMENT

     The following tabulation sets forth the names of those persons who are
known to Management to be the beneficial owner(s) as of March 18, 1999, of
more than five percent (5%) of the Company's Common Stock or Preferred Stock. 
Such tabulation also sets forth the number of shares of the Company's Common
Stock or Preferred Stock beneficially owned as of March 18, 1999, by all of
the Company's directors and nominees (naming them), executive officers, and
all directors and officers of the Company as a group (without naming them). 
Persons having direct beneficial ownership of the Company's Common Stock or
Preferred Stock possess the sole voting and dispositive power in regard to
such stock.  The $5.00 per share Preferred Stock is freely convertible into
shares of Common Stock at the conversion price per share of Common Stock of
$2.25 if converted prior to close of business on December 31, 2000, at the
conversion price per share of Common Stock of $3.75 if converted after
December 31, 2000, but prior to close of business on December 31, 2001, and 
at the conversion price per share of Common Stock at $6.00 thereafter. 
Ownership of Preferred Stock is deemed to be beneficial ownership of Common
Stock at the conversion price per share of $2.25 under Rule 13d-3(d)(1)
promulgated under the Securities Exchange Act of 1934.  As of March 18, 
1999, there were 2,220,013 shares of Common Stock and 1,129,350 shares of
Preferred Stock outstanding.

     The following tabulation also includes Common Stock covered by options
granted under the Company's 1986 and 1993 Stock Option Plans, which options
are collectively referred to as "Stock Options."  The Stock Options have no
voting or dividend rights.

                                                               

Name & Address               Title of Class         Amount & Nature          Percent
of Beneficial Owner                                 of Beneficial           of Class(1)
- -------------------          --------------         Ownership              -------------
                                                    ----------------
                             
Allen T. McInnes             Common                    532,427 (2)(3)         22.03%   
Tetra Technologies           Preferred                  63,162                 5.59%            
25025 Interstate 45 North
The Woodlands, TX 77380

Wayne A. Whitener            Common                     45,317 (2)(3)          2.01%    
TGC Industries, Inc.         Preferred                   3,000                    *
1304 Summit Ave., Ste 2             
Plano, Texas 75074

Herbert M. Gardner           Common                    331,593 (2)(3)(4)      13.84%
26 Broadway, Suite 829       Preferred                  49,500 (4)             4.38%
New York, New York 10004

William J. Barrett           Common                    474,619 (2)(3)(5)      19.50%
26 Broadway, Suite 829       Preferred                  67,500 (5)             5.98%
New York, New York 10004

Edward L. Flynn              Common                    488,767 (2)            19.65%
75-11 Myrtle Ave.            Preferred                 120,131                10.64%
Glendale, New York 11385

David P. Williams            Common                      9,556 (3)                *
TGC Industries, Inc.
1304 Summit Ave, Suite 2
Plano, TX 75074

Kenneth Uselton              Common                      9,558 (3)                *
TGC Industries, Inc.
1304 Summit, Ste 2
Plano, Texas 75074

Gerlach & Co.                Common                    177,777                 7.41%
111 Wall Street, 8th Fl.     Preferred                  80,000                 7.08%
New York, NY


Special Situations Cayman    Common                    111,111 (2)             4.77%
Fund L.P.                    Preferred                  50,000                 4.43%

Special Situation Fund III   Common                    333,333 (2)            13.05%
L.P.                         Preferred                 150,000                13.28%


All directors and officers   Common                  1,891,837 (2)(3)(4)(5)   60.59%
as a group of seven (7)      Preferred                 303,293                26.85%     
Persons

*Less than 1%

(1) The percentage calculations have been made in accordance with Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934. In making these calculations, shares of Common Stock beneficially owned by a person as a result of the ownership of Preferred Stock and certain options and warrants were deemed to be currently outstanding solely with respect to the holders of such Preferred Stock, options, and warrants. (2) Includes the number of shares of Common Stock which are deemed to be beneficially owned as a result of ownership of shares of Preferred Stock, which Preferred shares ($5.00 per share) are freely convertible into shares of Common Stock at the conversion price per shares of Common Stock of $2.25 through December 31, 2000. (3) Includes the number of Shares of Common Stock set forth opposite the person's name in the following table, which shares are beneficially owned as a result of the ownership of Stock Options and Stock Purchase Warrants. Stock Warrants Options Allen T. McInnes -0- 56,225 Wayne A. Whitener 28,333 -0- David P. Williams 9,556 -0- Herbert M. Gardner -0- 37,284 William J. Barrett -0- 39,784* Ken Uselton 4,334 -0- ------ -------- All directors and officers as a group (6 persons) 42,223 133,293 - ----------------------- *Includes 2,500 Warrants owned by Mr. Barrett's wife. Mr. Barrett disclaims beneficial ownership of such Warrants. (4) Includes 29,050 shares of Common Stock owned by Herbert M. Gardner's wife and also includes 4,444 of Common Stock shares purchasable upon the conversion of 2,000 shares of Preferred Stock owned by Mr. Gardner's wife. Mr. Gardner has disclaimed beneficial ownership of these shares. (5) Includes 23,925 shares of Common Stock owned by William J. Barrett's wife and also includes 22,222 shares of Common Stock purchasable upon the conversion of 10,000 shares of Preferred Stock owned by Mr. Barrett's wife. Mr. Barrett has disclaimed beneficial ownership of these shares. Depositories such as The Depository Trust Company (Cede & Company) as of March 18, 1999 held, in the aggregate, more than five percent (5%) of the Company's then outstanding Common Stock voting shares. The Company understands that such depositories hold such shares for the benefit of various participating brokers, banks, and other institutions which are entitled to vote such shares according to the instructions of the beneficial owners thereof. The Company has no reason to believe that any of such beneficial owners hold more than five percent (5%) of the Company's outstanding voting securities. MANAGEMENT AND NOMINEES FOR DIRECTOR Five (5) directors, comprising the entire membership of the Company's Board of Directors, are to be elected at the annual meeting of shareholders. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the nominees shown below for a term of one year and until their successors are duly elected and have qualified. Although it is not contemplated that any nominee will be unable to serve as a director, in such event the proxies will be voted by the holders thereof for such other person as may be designated by the current Board of Directors. The Management of the Company has no reason to believe that any of the nominees will be unable or unwilling to serve if elected to office, and to the knowledge of Management, the nominees intend to serve the entire term for which election is sought. There are no family relationships by blood, marriage, or adoption between any director or executive officer. Only five(5) nominees for director are named, even though the Company's bylaws allow a maximum of nine, since the proposed size of the board is deemed adequate to meet the requirements of the Board of Directors. Up to two vacancies may be filled by the Board of Directors under Texas law during the time between any two successive annual shareholder meetings if suitable persons are designated. The information set forth below with respect to each of the nominees has been furnished by each respective nominee. Each executive officer of the Company is a nominee as set forth below with the exception of Kenneth Uselton (age 55) who has served as Controller since 1995 and Treasurer since August 1, 1996, and David P. Williams (age 44) who has served as Marketing Manager since 1991 and Vice President of Marketing since November, 1997. Name, Age, and Served as Business Experience Executive Positions Officer Since with Company - ------------------- ------------- ------------ Allen T. McInnes, 61 July 1993 Chairman of the Board Chairman of the Board since July and 1993; Secretary since November 1997; Secretary of Chief Executive Officer of the Company the Company from August 1993 to March 1996; Executive Vice-President and Director of Tenneco, Inc. 1960-1992; Director of Tetra Technologies, President and CEO since April 1, 1996; Director of NationsBank 1990-1993. Wayne A. Whitener, 47 1986 CEO and President Chief Executive Officer of the Company of the since January 1999; Chief Operating Company Officer of the Company from July 1986 to December 1998; President of the Geophysical Division since 1984; served as Vice President of TGC from 1983 to 1984; Area Manager for Grant Geophysical Co. from December 1978 until July 1983. William J. Barrett, 59 1986 None Director of the Company, Secretary of the Company from 1986 to November 1997; Senior Vice President of Janney Montgomery Scott Inc., investment bankers, since 1976, and a Director of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses, since 1979; and Director of American Country Holdings Company, Inc., a property and casualty insurance holding company with focus on transportation and hospitality markets. Herbert M. Gardner, 59 1986 None Director of the Company; Senior Vice President of Janney Montgomery Scott Inc., investment bankers, since 1978; Chairman of the Board and a Director of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses, since 1979, and President since 1992; Director of Nu Horizons Electronics Corp., an electronic component distributor; Director of Transmedia Network, Inc., a company that markets a charge card offering savings to the company's card members at participating restaurants and also provides savings on certain other products and services; Director of Hirsch International Corp., an importer of computerized embroidery machines and supplies, and developer of embroidery machine application software; and Director of Inmark Enterprises, Inc., a marketing and sales promotion company. Edward L. Flynn, 64 January None 1999 Owner of Flynn Meyer Company, a management company for the restaurant industry, since 1976, Director and Treasurer, Citri-Lite Co., a soft drink company. The Company's Board of Directors recommends that you vote FOR the nominees named above for election to the Board of Directors. COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS The Board of Directors has an Executive Committee comprised of Messrs. McInnes, Barrett and Gardner, an Audit Committee comprised of Messrs. McInnes, Barrett and Gardner, and a Stock Option Committee comprised of Messrs. McInnes, Barrett and Gardner. The Executive Committee is charged by the Company's bylaws with the responsibility of exercising such authority of the Board of Directors as is specifically delegated to it by the Board, subject to certain limitations contained in the bylaws. The Audit Committee which was formed in December, 1997, conducted one meeting in 1998. The purpose and functions of the Audit Committee are to recommend the appointment of independent auditors; review the scope of the audit proposed by the independent auditors; review year-end financial statements prior to issuance; consult with the independent auditors on matters relating to internal financial controls and procedures; and make appropriate reports and recommendations to the Board of Directors. Prior to formation of the Audit Committee, these duties were performed by the Executive Committee. The Stock Option Committee met once during the year. The Committee is responsible for awarding Stock Options to key employees or individuals who provide substantial advice or other assistance to the Company so that they will apply their best efforts for the benefit of the Company. The Board of Directors does not have nominating or compensation committees. During the fiscal year ended December 31, 1998, the Board of Directors held eight (8) special meetings in addition to its regular meeting. All of the Directors listed herein attended 75% or more of the total meetings of the Board and of the committees on which they serve. EXECUTIVE COMPENSATION The table below sets forth on an accrual basis all cash and cash equivalent remuneration paid by the Company during the year ended December 31, 1998, to the Chief Executive Officer and any other executives whose salary and bonus exceeded $100,000. Summary Compensation Table Annual Compensation Name and Principal Options/ All Other Position Year Salary Bonus Stock SAR's Compensation R. J. Campbell 1998 $130,014 $30,000 -0- -0- $10,664 (1) Vice-Chairman 1997 $ 97,083 $10,000 -0- -0- $10,513 (2) & CEO 1996 $ 95,580 -0- -0- -0- $ 8,721 (3) Wayne A. Whitener 1998 $ 98,524 $55,000 -0- -0- $ 9,363 (4) President 1997 $ 94,527 $20,000 -0- -0- $ 8,209 (5) & COO 1996 $ 87,736 -0- -0- -0- $ 5,753 (6) (1) Mr. Campbell resigned as Vice-Chairman of the Board and CEO of the Company on December 31, 1998. Represents personal use of Company vehicle ($3,669), Company's payment for personal income tax preparation ($950), Company's contribution to 401-K program ($4,848), and life insurance premiums ($1,197) in 1998. (2) Represents personal use of Company vehicle ($3,748), Company's payment for personal income tax preparation ($900), Company's contribution to 401-K program ($4,668), and life insurance premiums ($1,197) in 1997. (3) Represents personal use of Company vehicle ($2,593), Company's payment for personal income tax preparation ($900), Company's contribution to 401-K program ($3,149), and life insurance premiums ($2,079) in 1996. (4) Represents personal use of Company vehicle ($4,225), Company's payment for personal income tax preparation ($110), Company's contribution to 401-K program ($4,680), and life insurance premiums ($348) in 1998. (5) Represents personal use of Company vehicle ($3,242), Company's payment for personal income tax preparation ($113), Company's contribution to 401-K program ($4,506), and life insurance premiums ($348) in 1997. (6) Represents personal use of Company vehicle ($2,418), Company's payment for personal income tax preparation ($110), Company's contribution to 401-K program ($2,877), and life insurance premiums ($348) in 1996. The Company maintains Club memberships for certain of its executive officers. Although these memberships may be utilized from time-to-time for non-business purposes, the costs attributable to non-business purposes were not material. The Company believes that the aggregate amounts of such personal benefits do not exceed 10% of cash compensation paid to any individual in the table or, with respect to the group of all executive officers, ten percent (10%) of the aggregate cash compensation paid to the members of such group. 401(k) PLAN In 1987, the Company implemented a 401(k) salary deferral plan (the "Plan") which covers all employees who have reached the age of 20-1/2 years and have been employed by the Company for at least one year. The covered employees may elect to have an amount deducted from their wages for investment in a retirement plan. The Company has the option, at its discretion, to make contributions to the Plan. Effective January 1, 1990, the Company determined in its discretion to make a matching contribution to the Plan equal to 10% of the employees' contributions up to 6% of those employees' compensation. On July 24, 1991, to be effective August 5, 1991, the Board of Directors increased the Company's matching contribution to the Plan to fifty cents ($.50) for every one dollar ($1.00) of compensation a participant defers under the Plan up to 6% of those employees' compensation. Beginning January 4, 1993, the Board of Directors discontinued the matching contribution to the Plan. Concurrently with the acquisition of the Company's former subsidiary, Chase Packaging Corporation, the Board of Directors reinstated contributions to the 401(k) salary deferral plan. The Company made a matching contribution to the Plan equal to the sum of seventy-five percent (75%) of each Participant's Salary reduction contributions to the Plan for such Plan year which are not in excess of three percent (3%) of the Participant's compensation for such Plan year, and fifty percent (50%) of each Participant's salary reduction contributions to the Plan for such Plan Year which are in excess of three percent (3%) of the Participant's compensation but not in excess of eight percent (8%) of the Participant's compensation for such Plan Year. As of January 1, 1997, the Company determined to make a contribution to the Plan equal to one hundred percent (100%) of each participant's salary reduction contributions to the Plan up to 4.75% of the participant's compensation. The total amount of the Company's contribution during 1998 for the two (2) executive officers of the Company participating in the 401(k) Plan was a follows: Robert J. Campbell - $4,847.85 and Wayne A. Whitener - $4,679.91. STOCK OPTION PLANS 1986 Incentive and Nonqualified Stock Option Plan In 1986 the Company adopted the 1986 Incentive and Non-Qualifying Stock Option Plan (the "1986 Plan"). The term of the 1986 Plan was for a period of ten years with the result that the 1986 Plan terminated on July 24, 1996. The provisions which were contained in the 1986 Plan were comparable to the provisions contained in the 1993 Plan (hereafter described) which succeeded the 1986 Plan. Options granted under the 1986 Plan cover 6,333 shares (adjusted for one-for-three reverse stock split) which are currently outstanding. Stock options outstanding as of the date of termination of the 1986 Plan remain outstanding until they are exercised, terminated, or expire. 1993 Stock Option Plan On June 3, 1993, the Company's Board of Directors approved and adopted the Company's 1993 Stock Option Plan (the "1993 Plan"). At the 1994 Annual Meeting, the Company's shareholders approved the 1993 Stock Option Plan. The following paragraphs summarize certain provisions of the 1993 Stock Option Plan and are qualified in their entirety by reference thereto. The 1993 Plan provides for the granting of options (collectively, the "Options") to purchase shares of the Company's Common Stock to certain key employees of the Company (and/or any of its affiliates), and certain individuals who are not employees of the Company but who from time-to-time provide substantial advice or other assistance or services to the Company (and/or any of its affiliates). The 1993 Stock Option Plan authorizes the granting of options (both statutory and non-statutory) to acquire up to 283,333 shares of Common Stock (adjusted for the one-for-three reverse stock split effective November 6, 1998), subject to certain adjustments described below, to be outstanding at any time. Subject to the foregoing, there is no limit on the absolute number of awards that may be granted during the life of the 1993 Stock Option Plan. Currently, there are approximately 108 employees of the Company, including four officers of the Company (two of whom are also directors), who, in management's opinion, are considered eligible to receive grants under the 1993 Plan, although fewer employees may actually receive grants. Authority to administer the 1993 Plan has been delegated to a committee (the "Committee") of the Board of Directors. Except as expressly provided by the 1993 Stock Option Plan, the Committee has the authority, in its discretion, to award Options and to determine the terms and conditions (which need not be identical) of such Options, including the person to whom, and the time or times at which, Options will be awarded, the number of Options to be awarded to each such person, the exercise price of any such Options, and the form, terms, and provisions of any agreement pursuant to which such Options are awarded. The 1993 Plan also provides that the Committee may be authorized by the Board of Directors to make cash awards as specified by the Board of Directors to the holder of an Option in connection with the exercise thereof. Subject to the limitations set forth below, the exercise price of the shares of stock covered by each 1993 Option will be determined by the Committee on the date of award. Unless a holder's option agreement provides otherwise, the following provisions will apply to exercise by the holder of his or her option: No option may be exercised during the first twelve months following grant. During the second year following the date of grant, options covering up to one-third of the shares covered thereby may be exercised, and during the third year following the date of grant, options covering up to two-thirds of such shares may be exercised. Thereafter, and until the options expire, the optionee may exercise options covering all of the shares. Persons over sixty-five on the date of grant may exercise options covering up to one-half of the shares during the first year and thereafter may exercise all optioned shares. Subject to the limitations just described, options may be exercised as to all or any part of the shares covered thereby on one or more occasions, but, as a general rule, options cannot be exercised as to less than one- hundred shares at any one time. The exercise price of the shares of stock covered by each incentive stock option ("ISO"), within the meaning of Sec. 422 of the Internal Revenue Code of 1986, as amended (the "Code"), will not be less than the fair market value of stock on the date of award of such ISO except that an ISO may not be awarded to any person who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company unless the exercise price is at least one hundred ten percent (110%) of the fair market value of the stock at the time the ISO is awarded and the ISO is not exercisable after the expiration of five years from the date it is awarded. The exercise price of the shares of Common Stock covered by each Option that is not an ISO will not be less than fifty percent (50%) of the fair market value of the stock on the date of award. Payment for Common Stock issued upon the exercise of an Option may be made in cash or with the consent of the Committee, in whole shares of Common Stock owned by the holder of the Option for at least six months prior to the date of exercise or, with the consent of the Committee, partly in cash and partly in such shares of Common Stock. If payment is made, in whole or in part, with previously-owned shares of Common Stock, the Committee may issue to such holder a new Option for a number of shares equal to the number of shares delivered by such holder to pay the exercise price of the previous Option having an exercise price equal to at least one-hundred percent (100%) of the fair market value per share of the Common Stock on the date of the exercise of the previous Option. The duration of each Option will be for such period as the Committee determines at the time of award, but not for more than ten years from the date of award in the case of an ISO. In the event of any change in the number of shares of Common Stock effected without receipt of consideration therefor by the Company by reason of a stock dividend, or split, combination, exchange of shares or other recapitalization, merger, or otherwise, in which the Company is the surviving Corporation, the aggregate number and class of reserved shares, the number and class of shares subject to each outstanding Option, and the exercise price of each outstanding Option will be automatically adjusted to reflect the effect thereon of such change. Unless a holder's option agreement provides otherwise, a dissolution or liquidation of the Company, certain sales of all or substantially all of the assets of the Company, certain mergers or consolidations in which the Company is not the surviving corporation, or certain transactions in which another corporation becomes the owner of fifty percent (50%) or more of the total combined voting power of all classes of stock of the Company, will cause such holder's Options then outstanding to terminate, but such holder may, immediately prior to such transaction, exercise such options without regard to the period and installments of exerciseability applicable pursuant to such holder's option agreement. The 1993 Plan will terminate on June 3, 2003, or such earlier date as the Board of Directors may determine. Any stock option outstanding at the termination date will remain outstanding until it has been exercised, terminated, or has expired. The 1993 Plan may be terminated, modified, or amended by the Board of Directors at any time without further shareholder approval, except that shareholder approval is required for any amendment which: (a) changes the number of shares of Common Stock subject to the 1993 Stock Option Plan other than by adjustment provisions provided therein, (b) changes the designation of the class of employees eligible to receive Options, (c) decreases the price at which ISO's may be granted, (d) removes the administration of the 1993 Stock Option Plan from the Committee, or (e) without the consent of the affected holder, causes the ISO's granted under the 1993 Stock Option Plan and outstanding at such time that satisfied the requirements of Sec. 422 of the Code no longer to satisfy such requirements. Granted stock options under the 1993 Stock Option Plan covering 148,063 shares (adjusted for one-for-three reverse split) were outstanding at December 31, 1998. 95,005 incentive stock options are outstanding to officers and employees of the Company, and 53,055 non-statutory stock options are outstanding to officers and employees of the Company's former subsidiary, Chase Packaging Corporation. During 1998, 35,000 stock options were granted under the Company's 1993 Stock Option Plan to officers and employees of the Company. Effective July 31, 1996, the Company's wholly owned subsidiary, Chase Packaging Corporation ("Chase"), was spun-off to the Company's shareholders. In view of this situation, and in order to provide the employees of both Chase and the Company with the maximum period available under the tax laws for exercising their options after a termination of employment, the 1993 Plan was amended to extend from thirty days to three months, the period of time following termination of employment, during which the terminating employee can exercise his or her incentive stock option. The 53,055 options not so exercised were converted to non-statutory options. The purpose of the 1993 Plan is to provide an incentive for key employees of the Company to remain in the service of the Company and to apply their best efforts for the benefit of the Company so as to improve the Company's financial performance. Options Granted in Last Fiscal Year During the year ended December 31, 1998, Mr. Whitener, the Company's President and COO, was granted options to purchase 15,000 shares of Common Stock at an exercise price of $1.00 per share, expiring December 23, 2003. There were no stock appreciation rights granted in the last fiscal year to any of the executive officers of the Company. Aggregate Options/SAR Exercises in Last Fiscal Year and Fiscal Year-End Options/SAR Values The following table sets forth certain information regarding the year-end value of Options held by the Company's executive officers during the fiscal year ended December 31, 1998. There are no stock appreciation rights outstanding.
Aggregated Options Exercised and FY-End Options Values Value of Number of Unexercised Unexercised In-the-Money Options at Options at FY-End (#) FY-End (2) Shares Name and Acquired on Value Exercisable/ Exercisable Principal Position Exercise (1) Realized($) Unexercisable Unexercisable Robert J. Campbell -0- -0- 12,335 $ -0- Vice Chairman & CEO Wayne A. Whitener 1,000 (3) -0- 20,556 $ -0 President & COO 22,778 $ -0-
(1) The exercise price and tax withholding obligations related to exercise may be paid by delivery of already owned shares, subject to certain conditions. (2) The value of outstanding options is based on the December 31,1998 closing stock price which was $1.00. (3) On August 18, 1998, options for 3,000 shares of Common Stock at an exercise price of $0.375 per share were exercised (after adjusting for the one-for-three reverse stock split effective November 6, 1998, Mr. Whitener holds 1,000 shares as a result of the option exercise). TRANSACTIONS WITH MANAGEMENT The Company had no transactions with management in 1998. In 1996, the Company had outstanding Subordinated Notes payable in the amount of $365,812 to certain executive officers and directors. Interest expense of $18,579 was paid on this debt during 1996. In July 1996, the holders exchanged this debt for 73,162 shares of Preferred Stock in connection with a private placement by the Company. INDEPENDENT PUBLIC ACCOUNTANTS The Board of Directors has appointed Grant Thornton LLP to serve as auditors of the Company. It is expected that a representative of Grant Thornton LLP will be present at the shareholders' meeting with the opportunity to make a statement if he/she desires to do so and also will be available to respond to appropriate questions at the meeting. The Company's Board of Directors recommends that you vote FOR ratification of the selection of Grant Thornton LLP as the Company's auditors for the fiscal year ending December 31, 1999. OTHER MATTERS The Company's management knows of no other matters that may properly be, or which are likely to be, brought before the meeting. However, if any other matters are properly brought before the meeting, the persons named in the enclosed proxy, or their substitutes, will vote in accordance with their best judgment on such matters. SHAREHOLDER PROPOSALS A shareholder proposal intended to be presented at the Company's Annual Meeting of Shareholders in 2000 must be received by the Company at its principal executive offices in Plano, Texas on or before December 1, 1999 in order to be included in the Company's proxy statement and form of proxy relating to that meeting. FINANCIAL STATEMENTS Financial statements of the Company are contained in the Annual Report to Shareholders for the fiscal year ended December 31, 1998 enclosed herewith. By Order of the Board of Directors /s/ ALLEN T. McINNES Allen T. McInnes Secretary Plano, Texas April 28, 1999 - ------------------------------------------------------------------------------ Front of Card - ------------------------------------------------------------------------------ TGC INDUSTRIES, INC. Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting of Shareholders, June 3, 1999 The undersigned hereby appoint(s) Allen T. McInnes or Wayne A. Whitener, each with full power of substitution, as proxies, to vote all Common Stock and Preferred Stock in TGC Industries, Inc. which the undersigned would be entitled to vote on all matters which may come before the 1999 Annual Meeting of the Shareholders of the Company and any adjournments thereof. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED FOR PROPOSALS 1 and 2. (Continued on other side) - ------------------------------------------------------------------------------ Back of Card - ------------------------------------------------------------------------------ /X/ Please mark your votes as in this example. The Board of Directors recommends a vote FOR each of the following items: 1. ELECTION OF DIRECTORS. ______ FOR all nominees ______ Withhold authority Nominees: listed at right to vote for all Allen T. McInnes (except as marked nominees listed Wayne A. Whitener to the contrary at right William J. Barrett as indicated below) Herbert M. Gardner Edward L. Flynn INSTRUCTIONS: To withhold authority to vote for any individual nominee, vote for all nominees and strike a line through the individual nominee's name listed at right. 2. RATIFICATION OF SELECTION OF GRANT THORNTON LLP AS _____ FOR _____ AGAINST _____ ABSTAIN INDEPENDENT AUDITORS. Returned proxy forms when properly executed will be voted: (1) as specified on the matters listed above; (2) in accordance with the Directors' recommendations where a choice is not specified; and (3) in accordance with the judgment of the proxies on any other matters that may properly come before the meeting. PLEASE COMPLETE, SIGN, DATE AND RETURN THE CARD PROMPTLY. Signature(s) _____________________________________ Date:______________ Note: Executors, trustees and others signing in a representative capacity should include their names and capacity in which they sign. PLEASE DATE AND SIGN AS SHOWN HERE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE. 111164.1