UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

 

Filed by the Registrant  x

 

Filed by a Party other than the Registrant  o

 

Check the appropriate box:

o

Preliminary Proxy Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material Pursuant to §240.14a-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.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:

 

 

 

o

Fee paid previously with preliminary materials.

o

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:

 

 

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

 

 

(3)

Filing Party:

 

 

 

 

(4)

Date Filed:

 

 

 

 



 

TGC INDUSTRIES, INC.

101 E. Park Blvd., Suite 955

Plano, Texas 75074

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held December 16, 2011

 

To Shareholders of

TGC INDUSTRIES, INC.:

 

The annual meeting of the shareholders of TGC Industries, Inc. (the “Company”) will be held at the Company’s principal executive offices located at 101 East Park Boulevard, Suite 955, Plano, Texas 75074, on December 16, 2011, at 10:00 a.m. local time, for the following purposes:

 

1.                                      To elect six 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 Lane Gorman Trubitt, L.L.P. as the Company’s Independent Registered Public Accounting Firm; 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 November 8, 2011, 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:

 

 

 

James K. Brata

 

Secretary

 

Plano, Texas

November 18, 2011

 

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.

 



 

SOLICITATION OF PROXIES

 

This Proxy Statement is furnished to shareholders in connection with the solicitation of proxies by the Board of Directors of TGC Industries, Inc. (the “Company” or “TGC”) for the Annual Meeting of Shareholders to be held at the Company’s principal executive offices located at 101 East Park Boulevard, Suite 955, Plano, Texas 75074, on December 16, 2011, at 10:00 a.m. local time, and at any adjournment thereof, for the purpose of submitting to a vote of the shareholders the actions and proposals set forth in this Proxy Statement.  The Notice of Meeting, the form of Proxy, and this Proxy Statement are being mailed to the Company’s shareholders on or about November 18, 2011.

 

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 employees and those of its transfer agent may solicit proxies personally, by telephone, facsimile, electronic mail or other forms of communication, 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, par value $.01 per share (the “Common Stock”), and in such event the Company will reimburse them for all reasonable out-of-pocket expenses so incurred.

 

A copy of the Annual Report to shareholders of the Company for its fiscal year ended December 31, 2010, is being mailed with this Proxy Statement to all such shareholders entitled to vote, but does not form any part of the information for solicitation of proxies.

 

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Shareholders

to be Held on December 16, 2011

 

This Proxy Statement, the accompanying proxy card, and the Company’s 2010 Annual Report to Shareholders are available at www.tgcseismic.com/proxy.

 

RECORD DATE AND VOTING SECURITIES

 

The Board of Directors of the Company has fixed the close of business on November 8, 2011 (the “Record Date”) as the date for determination of shareholders entitled to notice of and to vote at the meeting.  As of the Record Date, there were 19,258,159 shares of Common Stock outstanding.

 

The Company’s Restated Articles of Incorporation authorize 25,000,000 shares of Common Stock.  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 held in his, her, or its name on the Record Date.  The Company’s Restated Articles of Incorporation prohibit cumulative voting.

 

ACTION TO BE TAKEN AND VOTE REQUIRED

 

Action will be taken at the meeting to:  (1) elect six members to the Board of Directors; (2) ratify the selection of Lane Gorman Trubitt, L.L.P. as the Company’s Independent Registered Public Accounting Firm; and (3) transact such other business as may properly come before the meeting and any adjournment thereof.  Each 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 proxy on which no directions are specified will be voted for the election of directors named herein, for the ratification of the selection of the Company’s Independent Registered Public Accounting Firm, 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 revoked.

 

1



 

Shareholders elect the nominated directors by a plurality of the votes cast at the Annual Meeting.  This means that, with regard to Proposal No. 1, the shareholders will elect the six persons receiving the highest number of “for” votes at the Annual Meeting.  The affirmative vote of the holders of a majority of the shares of Common Stock present, in person or by proxy, and entitled to vote at the Annual Meeting is required to approve Proposal No. 2.  Abstentions are voted as “shares present” at the Annual Meeting for purposes of determining whether a quorum exists.  In the election of the directors, votes withheld will have no effect on the outcome of the vote.  Abstentions will have the effect of a vote against Proposal No. 2, and broker non-votes will not be counted and will not affect the outcome of the vote.

 

PROPOSAL NO. 1

ELECTION OF DIRECTORS

 

Six directors are to be elected at the Annual Meeting of Shareholders to comprise the entire membership of the Company’s Board of Directors.  Unless otherwise instructed, the proxy holders will vote the proxies received by them for the nominees shown below to serve until the next annual meeting of shareholders and until their respective successors shall be elected and qualified.  The Company’s Board of Directors is currently comprised of six members.  The nominees for election were recommended to the Board of Directors by a majority of the independent directors of the Board.

 

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.

 

Mr. Wayne A. Whitener, the Company’s President and Chief Executive Officer, is the only executive officer of the Company who is a nominee as set forth below.  There are no family relationships by blood, marriage, or adoption between any director, executive officer, or any person nominated or chosen by the Company to become an executive officer or a director.  The information set forth below with respect to each of the nominees has been furnished by each respective nominee.

 

Name, Age, and Business Experience

 

Positions with Company

 

 

 

Wayne A. Whitener, 60

Director of the Company since 1984; President of the Company since July 1986; Chief Executive Officer of the Company since 1999; Chief Operating Officer of the Company from July 1986 to December 1998; Vice President of the Company from 1983 to July 1986; Director of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses, since 2008; and Director of Chase Packaging Corporation, a development stage company, since 2009. Mr. Whitener was selected to serve as a director of the Company because of his depth of understanding of the Company’s operations, his strong leadership skills, his extensive employment experience with the Company, and his significant industry and management expertise.

 

Chief Executive Officer,
President, and Director

 

2



 

Name, Age, and Business Experience

 

Positions with Company

 

 

 

Allen T. McInnes, Ph.D., 74

Director of the Company since 1993; Chairman of the Board from July 1993 to March 2004 and Presiding Director of the Board since March 2004; Secretary of the Company from November 1997 to March 2004; Chief Executive Officer of the Company from August 1993 to March 1996; Director of Tetra Technologies, a chemical manufacturer, since 1993; President and Chief Executive Officer of Tetra Technologies, Inc. from April 1996 to January 2000; Chairman of the Board, President, and Treasurer of Chase Packaging Corporation, a development stage company, since 1997; and Dean of the Rawls College of Business at Texas Tech University from September 2001 to present. Dr. McInnes was selected to serve as a director of the Company due to his extensive background as an experienced leader of major organizations, his experience serving on the boards of other public companies, and his experience as chief executive officer of another public company. In addition, Dr. McInnes’ current position as Dean of the Business School at Texas Tech University provides the Board with a link to recent developments in business management practices. Dr. McInnes qualifies as an “audit committee financial expert” under the guidelines of the Securities and Exchange Commission.

 

Director

 

 

 

William J. Barrett, 72

Director of the Company since 1980; Secretary of the Company from 1986 to November 1997; President of Barrett-Gardner Associates, Inc., an investment banking firm, from November 2002 until June 2009; and since then President of W. J. Barrett Associates, Inc.; previously Senior Vice President of Janney Montgomery Scott LLC, an investment banking firm, from 1978 to 2002; Director, Executive Vice President, and Secretary of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses, since 1979; Chairman of the Board of Rumson-Fair Haven Bank and Trust, a New Jersey state independent, commercial bank and trust company, since 2000; Director of MassMutual Corporate Investors, a closed-end investment company, since July of 2006; Director of MassMutual Participation Investors, a closed-end investment company, since July of 2006; Director of Chase Packaging Corporation, a development stage company, since 2001. Mr. Barrett brings to the Board of Directors of the Company keen business and financial judgment and an extraordinary understanding of the Company’s business, history, and organization, as well as extensive leadership experience.

 

Director

 

3



 

Name, Age, and Business Experience

 

Positions with Company

 

 

 

Herbert M. Gardner, 71

Director of the Company since 1980; Executive Vice President of Barrett-Gardner Associates, Inc., an investment banking firm, from November 2002 until June 2009; and previously Senior Vice President of Janney Montgomery Scott LLC, an investment banking firm, from 1978 to 2002; Chairman of the Board of Supreme Industries, Inc. (“Supreme”), a manufacturer of specialized truck bodies and shuttle buses, since 1979; Chief Executive Officer of Supreme from 1979 to January 2011; President of Supreme from June 1992 to February 2006; Director of Rumson-Fair Haven Bank and Trust Company, a New Jersey state independent, commercial bank and trust company, since 2000; Director of Chase Packaging Corporation, a development stage company, since 2001; former Director of Nu-Horizons Electronics Corp., an electronics component distributor, from 1984 until January 2011; and former Director of MKTG, Inc., a marketing and sales promotion company from 1997 until January 2010. Mr. Gardner was selected to serve as a director of the Company due to his extensive management experience, his deep understanding of the Company and its history and organization, his strong leadership skills, his outstanding business and financial judgment, and his experience as chief executive officer of another public company.

 

Director

 

 

 

Edward L. Flynn, 77

Director of the Company since 1999; Owner of Flynn Meyer Company, a management company for the restaurant industry, since 1976; Director and Treasurer of Citri-Lite Co., a soft drink company, since 1994; Director of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses, since 2007; Director of Bioject Medical Technologies, Inc., a medical device company, since 2007; and Director of Chase Packaging Corporation, a development stage company, since 2007. Mr. Flynn is an experienced leader of large organizations and brings to the Board of Directors of the Company strong executive management skills and experience serving on the boards of other public companies.

 

Director

 

 

 

Stephanie P. Hurtt, 67

Director of the Company since 2007; Member of Finance Committee of McKee Botanical Garden since 2006; Member of Board of Directors and First Vice-President of McKee Botanical Garden since 2008; Member of Indian River Medical Center Foundation Advisory Board; former Treasurer of Navesink River Auxiliary for Riverview Hospital; former Assistant in the Development Office and Secretary to the Headmaster of The Rumson Country Day School; and recipient of B.S., Business Administration from Simmons College, Boston, MA. Ms. Hurtt was selected to serve as a director of the Company due to her experience serving on the boards of other organizations through which she has exhibited significant leadership experience.

 

Director

 

The Company’s Board of Directors recommends that you vote FOR all of the nominees listed above.

 

4



 

EXECUTIVE OFFICERS

 

Name, Age, and Business Experience

 

Positions with Company

 

 

 

Wayne A. Whitener, 60

Director of the Company since 1984; President of the Company since July 1986; Chief Executive Officer of the Company since 1999; Chief Operating Officer of the Company from July 1986 to December 1998; Vice President of the Company from 1983 to July 1986; Director of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses, since 2008; and Director of Chase Packaging Corporation, a development stage company, since 2009.

 

Chief Executive Officer,

President, and Director

 

 

 

Daniel G. Winn, 61

Executive Vice President of the Company since November 2009; Vice President of the Company from June 2004 to November 2009; Operations Manager of the Company from August 1997 to June 2004; Operations Supervisor of the Company from January 1990 to August 1997; and Operations Supervisor for Halliburton Geophysical from January 1988 to January 1990.

 

Executive Vice President

 

 

 

James K. Brata, 56

Secretary and Treasurer of the Company since March 2009;  Chief Financial Officer of the Company since October 2008; Vice President of the Company since June 2008; Assistant Corporate Controller for Sport Supply Group from February 2007 to October 2007; President of South TX Outfitters from July 2002 to December 2006.  Mr. Brata is a Certified Public Accountant.

 

Vice President, Chief
Financial Officer,
Secretary, and Treasurer

 

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

 

The following tabulation sets forth the names of those persons who are known to the Company to be the beneficial owner(s) as of the Record Date of more than five percent (5%) of the Common Stock.  Such tabulation also sets forth the number of shares of Common Stock beneficially owned as of the Record Date by each of the Company’s directors, nominees for director, named executive officers, and all directors and executive officers of the Company as a group.  Persons having direct beneficial ownership of Common Stock possess the sole voting and dispositive power in regard to such stock.  As of the Record Date there were 19,258,159 shares of Common Stock outstanding.

 

The following tabulation also includes Common Stock covered by options granted under the Company’s 2006 Stock Awards Plan, which options are collectively referred to as “Stock Options.”  The Stock Options have no voting or dividend rights.

 

5



 

Name & Address
of Beneficial Owner

 

Title of Class

 

Amount & Nature of
Beneficial Ownership

 

Approximate
% of Class (1)

 

 

 

 

 

 

 

 

 

Wayne A. Whitener

TGC Industries, Inc.

101 E. Park Blvd., Ste 955

Plano, Texas 75074

 

Common

 

126,501

(2)

*

 

 

 

 

 

 

 

 

 

William J. Barrett

19 Point Milou

St. Barthelemy, FWI

 

Common

 

1,962,712

(2)(3)

10.17

%

 

 

 

 

 

 

 

 

Herbert M. Gardner

636 River Road

Fair Haven, NJ 07704

 

Common

 

748,212

(2)(4)

3.88

%

 

 

 

 

 

 

 

 

Allen T. McInnes

4532 7th Street

Lubbock, TX 79416

 

Common

 

1,070,278

(2)

5.55

%

 

 

 

 

 

 

 

 

Edward L. Flynn

7511 Myrtle Avenue

Glendale, New York 11385

 

Common

 

1,542,334

(2)(5)

8.00

%

 

 

 

 

 

 

 

 

Stephanie P. Hurtt

188 East Bergen Place

Ste 205

Red Bank, NJ 07701

 

Common

 

359,224

(2)

1.86

%

 

 

 

 

 

 

 

 

James K. Brata

TGC Industries, Inc.

101 E. Park Blvd., Ste 955

Plano, TX 75074

 

Common

 

44,100

(2)

*

 

 

 

 

 

 

 

 

 

Daniel G. Winn

TGC Industries, Inc.

101 E. Park Blvd., Ste 955

Plano, TX 75074

 

Common

 

64,038

(2)

*

 

 

 

 

 

 

 

 

 

Royce & Associates, LLC

745 Fifth Avenue

New York, NY 10151

 

Common

 

1,638,517

(6)

8.50

%

 

6



 

Name & Address
of Beneficial Owner

 

Title of Class

 

Amount & Nature of
Beneficial Ownership

 

Approximate
% of Class (1)

 

 

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

145 Ameriprise Financial Center

Minneapolis, MN 55474

Columbia Management Investment Advisers, LLC

100 Federal St.

Boston, MA 02110

 

Common

 

1,115,284

(7)

5.79

%

 

 

 

 

 

 

 

 

All directors and officers as a group of eight (8) persons

 

Common

 

5,917,399

(2)(3)(4)(5)

30.11

%

 


* 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, as amended.  In making these calculations, shares of Common Stock beneficially owned by a person as a result of the ownership of certain Stock Options were deemed to be currently outstanding solely with respect to the holders of such Stock Options.

 

(2)                                  Includes the number of shares of Common Stock underlying Stock Options set forth opposite the person’s name in the following table, which shares are deemed to be beneficially owned for purposes hereof as a result of the ownership of Stock Options.

 

 

 

Stock Options

 

Wayne A. Whitener

 

55,125

 

William J. Barrett

 

55,245

 

Herbert M. Gardner

 

55,245

 

Allen T. McInnes

 

55,245

 

Edward L. Flynn

 

55,245

 

Stephanie P. Hurtt

 

55,245

 

Daniel G. Winn

 

33,075

 

James K. Brata

 

33,075

 

 

 

 

 

All directors and officers as a group

 

397,500

 

 

(3)                                  Includes 161,221 shares of Common Stock owned by William J. Barrett’s wife. Mr. Barrett has disclaimed beneficial ownership of these shares.

 

(4)                                  Includes 72,975 shares of Common Stock owned by Herbert M. Gardner’s wife.  Mr. Gardner has disclaimed beneficial ownership of these shares.

 

(5)                                  Includes 274,768 shares of Common Stock owned by Edward L. Flynn’s wife.  Mr. Flynn has disclaimed beneficial ownership of these shares.  Also includes 27,562 shares held by Flynn Meyer PSP&T #1.  Mr. Flynn has disclaimed beneficial ownership of these shares.

 

7



 

(6)                                  Information based solely on a Schedule 13F filed with the Securities and Exchange Commission on August 9, 2011.

 

(7)                                  Information based solely on a Schedule 13F filed with the Securities and Exchange Commission on August 12, 2011.

 

Depositories such as The Depository Trust Company (Cede & Company) as of the Record Date held, in the aggregate, more than 5% of the 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 5% of the Company’s outstanding voting securities.

 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and officers, and persons who own more than 10% of the Common Stock, to file with the Securities and Exchange Commission certain reports of beneficial ownership of Common Stock.  Based solely on copies of such reports furnished to the Company and written representations that no other reports were required, the Company believes that all applicable Section 16(a) filing requirements were complied with by its directors, officers, and 10% shareholders during the last fiscal year, except that Ms. Hurtt filed on an untimely basis one Statement of Changes in Beneficial Ownership on Form 4 reporting a transfer of shares of Common Stock resulting from an inheritance.

 

BOARD OF DIRECTORS

 

Board Leadership Structure

 

As a smaller reporting company, even prior to the negative impact on our business from the recession in the United States and the worldwide financial crises of the past three years, we have made an effort to have a cost-effective, yet constructive and efficient, leadership structure.  The Board of Directors has not appointed a Chairman of the Board, but has designated Dr. McInnes as the Company’s presiding, or lead, independent director, who works with our President and Chief Executive Officer to manage our business operations.  We believe that this leadership structure has been effective and fits our history, culture, size, and operating characteristics and are therefore in the long-range best interests of our shareholders.

 

Further, we have concluded that four independent directors, representing a majority of our Board of Directors, is appropriate given the size of our business, and enables the Company to obtain the benefits of diverse expertise, skill sets, and backgrounds for proper governance of the Company.  In addition, to be cost effective, the Company has only four committees, one of which is an Audit Committee comprised solely of independent directors.  Our Audit Committee Charter is available at www.tgcseismic.com. Matters relating to other governance issues including, but not limited to, nominating directors, are managed by the Board of Directors.  This structure enables effective communication among the directors by utilizing their participation in all of the critical areas of governance, including risk oversight and interaction with management.

 

8


 


 

Our Board of Directors and principal executive officers have significant ownership of the equity securities of the Company.  As a result, the Board of Directors believes that management focuses on both the short- and long-term objectives of the Company with neither being disadvantaged by the other. Management bonuses each year are tied to the profitability of the Company and also to the future values of the Company’s equity securities through ownership of Common Stock and Stock Options.  As a result, the Board of Directors has concluded that the incentive promoting structure of the Company does not promote risks that are inappropriate for the operation of the business.

 

The Board of Directors has assessed the composition of the Board and has concluded that the Board has the appropriate mix of business experience and skills to address effectively the Company’s business needs and challenges.  In view of the small size of the Board of Directors, there are no membership requirements based on race or gender.  However, we believe that our Board of Directors has a wide range of diversity with regard to professional experience, skills, education, and other attributes that contribute to the Board’s ability to operate in the long-range best interests of the Company’s shareholders.

 

Independence

 

The Board of Directors has determined that the following four directors have no material relationship with the Company that would interfere with the exercise of independent judgment and are “independent directors” as that term is defined in NASDAQ’s listing standards:  Allen T. McInnes, Herbert M. Gardner, Edward L. Flynn, and Stephanie P. Hurtt.

 

Committees and Meetings of the Board of Directors

 

The Company’s Executive Committee is comprised of Dr. McInnes, and Messrs. Barrett and Gardner.  The Executive Committee, which met one time in 2010, 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 Company’s Compensation Committee is comprised of Dr. McInnes, Mr. Gardner, Mr. Flynn, and Ms. Hurtt.  The Compensation Committee conducted one meeting in 2010.  The Compensation Committee is responsible for the oversight of the Company’s executive compensation and benefit policies to ensure that they are fair, reasonable and competitive.  The Compensation Committee does not rely on a Compensation Committee Charter.

 

The Company’s Audit Committee is comprised of Dr. McInnes, Mr. Gardner, Mr. Flynn, and Ms. Hurtt.  The Audit Committee conducted four meetings in 2010.  The purpose and functions of the Audit Committee are to: appoint or terminate the independent auditors; evaluate and determine compensation of the 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.

 

The Company’s Stock Awards Committee is comprised of Dr. McInnes, and Messrs. Barrett and Gardner.  The Stock Awards Committee did not meet during 2010, but unanimously consented to actions without meetings one time.  The Stock Awards Committee is responsible for awarding incentive stock options, nonqualified stock options, reload options, Common Stock, and restricted stock 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.

 

9



 

The Company does not have a standing Nominating Committee, and nominations for directors are made by the Company’s independent directors.  The Board of Directors believes that, considering the size of the Company and the Board of Directors, nominating decisions can be made effectively on a case-by-case basis by the Board of Directors.

 

In carrying out the functions of a Nominating Committee, the Board of Directors does not rely on a Nominating Committee Charter.  The independent directors of the Company utilize the following criteria as guidelines in considering nominations to the Company’s Board of Directors. The criteria include:

 

·                  personal characteristics, including such matters as integrity, age, education, diversity of background and experience, and absence of potential conflicts of interest with the Company or its operations;

 

·                  the availability and willingness to devote sufficient time to the duties of a director of the Company;

 

·                  experience in corporate management, such as serving as an officer or former officer of a publicly held company;

 

·                  experience in the Company’s industry and with relevant social policy concerns;

 

·                  experience as a board member of another publicly held company;

 

·                  academic expertise in an area of the Company’s operations; and

 

·                  practical and mature business judgment.

 

The criteria are not exhaustive and the independent directors and the Board of Directors may consider other qualifications and attributes which they believe are appropriate in evaluating the ability of an individual to serve as a member of the Board of Directors. The independent directors’ goal is to assemble a Board of Directors that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience. In order to ensure that the Board consists of members with a variety of perspectives and skills, the independent directors have not set any minimum qualifications and also consider candidates with appropriate non-business backgrounds. Other than ensuring that at least one member of the Board is a financial expert and that the overall composition of the Board meets all applicable independence requirements, the independent directors do not require individual directors to possess any specific skills.  Instead, the independent directors evaluate potential nominees based on the contribution such nominee’s background and skills could have upon the overall functioning of the Board.

 

Acting in the capacity of a Nominating Committee, the Board of Directors has not adopted any policy with regard to the consideration of director candidates recommended by security holders for the reason that such a policy is deemed unnecessary since at no time in the history of the Company has any such recommendation been received from any of the Company’s security holders.

 

During the fiscal year ended December 31, 2010, the Board of Directors held three 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.

 

10



 

The Company encourages all directors to attend its Annual Meeting of Shareholders.  All of the directors attended the 2010 Annual Meeting of Shareholders with the exception of Mr. Flynn.

 

Code of Ethics

 

The Company has adopted a Code of Ethics that applies to the Company’s executive officers and directors, including the Company’s principal executive officer and principal financial and accounting officer.  A copy of the Code of Ethics may be obtained without charge by written request to the Company as follows:  TGC Industries, Inc., 101 Park Blvd., Suite 955, Plano, Texas 75074, Attn: James K. Brata, Secretary.

 

Shareholder Communications

 

The Company has established a process for shareholders to send their communications to the Board of Directors. Any shareholder who desires to contact an individual director, the entire Board of Directors, or a committee of the Board of Directors may mail a written communication to the Secretary, TGC Industries, Inc., 101 E. Park Blvd., Suite 955, Plano, Texas 75074.  The Secretary will submit all shareholder communications to the appropriate directors, unless the communication is frivolous or includes advertising, solicitation for business, requests for employment, requests for contribution, or a communication of a similar nature. A shareholder communication relating to the Company’s accounting, internal accounting controls, or auditing will be referred to the members of the Audit Committee.

 

The Secretary will send a written acknowledgment to a shareholder upon receipt of his or her communication submitted in accordance with the provisions set forth in this proxy statement unless such shareholder communication is frivolous or includes advertising, solicitation for business, requests for employment, requests for contribution, or a communication of a similar nature. A shareholder wishing to contact the directors may do so anonymously; however, shareholders are encouraged to provide the name in which the Company’s shares of stock are held and the number of such shares held.

 

The following communications to the directors will not be considered a shareholder communication: (i) communication from a Company officer or director; (ii) communication from a Company employee or agent, unless submitted solely in such employee’s or agent’s capacity as a shareholder; and (iii) any shareholder proposal submitted pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended.

 

REPORT OF THE AUDIT COMMITTEE

 

The responsibilities of the Audit Committee, which are set forth in the Audit Committee Charter adopted by the Board of Directors, include providing oversight to the Company’s financial reporting process through periodic meetings with the Company’s independent auditors and management to review accounting, auditing, internal controls, and financial reporting matters. The Audit Committee Charter is available at www.tgcseismic.com.

 

11



 

The members of the Audit Committee are independent as defined in NASDAQ’s listing standards (which is the national securities exchange definition of “independent” the Audit Committee has chosen to use as required under Securities and Exchange Commission rules).  All members of the Audit Committee are financially literate and are able to read and understand fundamental financial statements, including a balance sheet, income statement, and cash flow statement. The Board of Directors has determined that Dr. McInnes qualifies as an “Audit Committee Financial Expert” as defined by applicable Securities and Exchange Commission rules, and his experience and background are described above under the heading “Proposal No. 1, Election of Directors.”  The management of the Company is responsible for the preparation and integrity of the financial reporting information and related systems of internal controls. The Audit Committee, in carrying out its role, relies on the Company’s senior management, including senior financial management, and its independent auditors. The Audit Committee has the authority and available funding to engage any independent legal counsel and any accounting or other expert advisors as necessary to carry out its duties.

 

We have reviewed and discussed with senior management the Company’s audited financial statements included in the 2010 Annual Report to Shareholders. Management has confirmed to us that such financial statements:  (i) have been prepared with integrity and objectivity and are the responsibility of management; and (ii) have been prepared in conformity with accounting principles generally accepted in the United States of America.

 

We have discussed with Lane Gorman Trubitt, L.L.P., the Company’s independent accountants, the matters required to be discussed by Statement of Auditing Standards (“SAS”) No. 61, “Communications with Audit Committees,” as amended and as adopted by the Public Company Accounting Oversight Board (“PCAOB”).  SAS No. 61 requires the Company’s independent accountants to provide us with additional information regarding the scope and results of their audit of the Company’s financial statements, including with respect to:  (i) their responsibility under auditing standards of the PCAOB (United States); (ii) significant accounting policies; (iii) management judgments and estimates; (iv) any significant audit adjustments; (v) any disagreements with management; and (vi) any difficulties encountered in performing the audit.

 

We have received from Lane Gorman Trubitt, L.L.P. a letter providing the disclosures required by Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees,” with respect to any relationships between Lane Gorman Trubitt, L.L.P. and the Company that in its professional judgment may reasonably be thought to bear on its independence.  Lane Gorman Trubitt, L.L.P. has discussed its independence with us and has confirmed in such letter that, in its professional judgment, it is independent of the Company within the meaning of the federal securities laws.

 

Based on the review and discussions described above with respect to the Company’s audited financial statements included in the Company’s 2010 Annual Report to Shareholders, we recommended to the Board of Directors that such financial statements be included in the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

 

12



 

As specified in the Audit Committee Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with accounting principles generally accepted in the United States of America. That is the responsibility of management and the Company’s independent accountants. In giving our recommendation to the Board of Directors, we have relied on:  (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with generally accepted accounting principles; and (ii) the report of the Company’s independent accountants with respect to such financial statements.

 

 

The Audit Committee:

 

Allen T. McInnes, Chairman

 

Herbert M. Gardner

 

Edward L Flynn

 

Stephanie P. Hurtt

 

Audit and Non-Audit Fees

 

The following table presents the aggregate fees billed by the Company’s Independent Registered Public Accounting Firm, Lane Gorman Trubitt, L.L.P. (the “Independent Auditor”), for professional services rendered for the audits of our annual financial statements and audit-related fees, tax fees, and all other fees for the fiscal years ended December 31 of 2010 and 2009, as compiled on an invoice-date basis:

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Audit fees (1)

 

$

175,005

 

$

129,400

 

Audit-related fees (2)

 

12,000

 

20,885

 

Tax fees (3)

 

93,690

 

44,910

 

 

 

 

 

 

 

Total fees

 

$

280,695

 

$

195,195

 

 


(1)                  Audit fees for professional services rendered in connection with the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2010 and 2009, and the reviews of the financial statements included in the Company’s quarterly reports.

 

(2)                  Audit-related fees are fees for benefit plan audits and various other assurance services.

 

(3)                  Tax fees consist of fees for professional services rendered to the Company for tax compliance.

 

The Audit Committee has the sole authority to authorize all audit and non-audit services to be provided by the Independent Auditor engaged to conduct the annual audit of the Company’s financial statements.  In addition, the Audit Committee has adopted pre-approval policies and procedures that are detailed as to each particular service to be provided by the Independent Auditor, and such policies and procedures do not permit the Audit Committee to delegate its responsibilities under the Securities Exchange Act of 1934, as amended, to management.  The Audit Committee pre-approved fees for all audit and non-audit services provided by the Independent Auditor during the fiscal years ended December 31, 2010 and 2009.

 

13



 

The Audit Committee has advised the Company that it has determined that the non-audit services rendered by the Company’s Independent Auditor during the year ended December 31, 2010, were compatible with maintaining the independence of such accountants.

 

EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

Overview of Compensation

 

Since October 16, 2007, the members of the Compensation Committee have been Dr. McInnes, Mr. Gardner, Mr. Flynn, and Ms. Hurtt.  The responsibilities of the Compensation Committee include establishing and implementing the Company’s overall executive compensation philosophy.  Throughout this proxy statement, the individuals who served as the Company’s Chief Executive Officer, Executive Vice President, and Vice President, Chief Financial Officer, Secretary, and Treasurer during 2010, included in the Summary Compensation Table, are referred to as the “named executive officers.”

 

Compensation Philosophy and Objectives

 

The primary objectives of our compensation policy are to build shareholder value and recognize the contributions each executive makes to the Company’s success.  In setting compensation levels, the Compensation Committee has established the following compensation philosophy and objectives for the Company’s executive officers:

 

·                  Align the interests of executives, including the Company’s executive officers, with those of the shareholders. The Compensation Committee believes it is appropriate to tie a portion of executive compensation to the value of the Common Stock in order to more closely align the interests of executive officers with the interests of the shareholders. The Compensation Committee also believes that executives should have a meaningful ownership interest in the Company and has established and regularly reviews executive stock ownership.

 

·                  Have a significant portion of pay that is performance-based. The Company expects superior performance. The Company’s executive compensation programs are designed to reward executives based on performance.  The Compensation Committee believes that compensation paid to executives should closely align their performance with the performance of the Company on both a short-term and long-term basis.

 

·                  Provide competitive compensation. The Company’s executive compensation programs are designed to attract, retain, and motivate highly qualified executives critical to achieving the Company’s strategic objectives and building shareholder value.

 

14



 

The Compensation Committee reviews the Company’s compensation philosophy and objectives each year to determine if revisions are necessary in light of market conditions, the Company’s strategic goals, or other relevant factors. The Company’s Chief Executive Officer, who is also a member of the Board, does not serve as a member of the Compensation Committee, but does participate in setting executive compensation other than his own.  The Compensation Committee reviews the individual performance of each executive officer and the financial performance of the Company.  The Compensation Committee also takes into account salary levels, bonus plans, stock incentive plans, and other compensation packages made available to executive officers of companies of similar size and nature.

 

The Compensation Committee uses a variety of compensation elements to reach its compensation objectives, including current salary, bonus opportunity, and long term equity-based incentives, all of which are discussed in detail below.  Specifically, the Compensation Committee believes that executive compensation should include the following three components:

 

·                  Annual Base Salary.  The Company’s objectives are to target annual base salary at the median level and to make it competitive, when taken in conjunction with the other compensatory elements, to attract and retain executives.

 

·                  Annual Cash Bonus Opportunity.  The Company uses annual cash bonuses to reward executives for the roles they play in the achievement of annual Company profitability.

 

·                  Long-Term Equity-Based Incentives.  The Company utilizes stock-related plans including options and stock grants as long-term equity-based incentives to foster a long-term view of what is in the best interests of the Company and its shareholders by better aligning the interests of the executives with those of the shareholders.

 

The Compensation Committee reviews and approves, on an annual basis, annual compensation for executive officers, which compensation consists of base salary and bonus (discussed below).  The Compensation Committee may request additional information and analysis and ultimately determines in its discretion whether to approve any recommended changes in compensation.

 

Annual Base Salary

 

The Company pays its executive officers a base salary to remain competitive in the market.  The base salaries are less performance-based than the annual cash bonuses and long-term equity-based incentives.  During 2010, the base salaries of Messrs. Winn and Brata were increased to make them competitive in the market.

 

15


 


 

Annual Cash Bonus Opportunity

 

In order to provide incentives for future annual performance, the Company believes that a meaningful portion of certain executive officers’ and other key employees’ compensation should be in the form of a cash incentive bonus.  Cash incentive bonus payments are discretionary and are based primarily on the executive officer’s contribution to the Company’s profitability over the applicable performance measurement periods. The Company believes that profitability is the most useful measure of management’s effectiveness in creating value for the shareholders of the Company. The Company’s policy is to set aside in a bonus pool a portion of its pre-tax profit as determined by the Company’s Chief Executive Officer and approved by the Board.  No specific formula is used in making such bonus determinations to the individuals eligible to participate in the bonus pool, but senior management recommends to the Compensation Committee the allocation of the bonus pool based on each employee’s contribution to the Company’s profitability during the year.  In measuring each employee’s contribution to the Company’s profitability, the Compensation Committee relies on personal qualitative factors (such as effective leadership and communication) rather than quantitative performance goals of the Company (such as specific revenue or earnings targets).

 

Messrs. Winn and Brata are the two named executive officers who were eligible for annual cash bonuses under the Company’s bonus plan in 2010.  In December of 2010, Messrs. Winn and Brata received cash bonuses of $31,000 and $23,000, respectively.  These bonuses were paid out of the bonus pool based on the Company’s 2010 performance.  In December of 2009, Messrs. Winn and Brata were paid cash bonuses of $28,000 and $20,000, respectively.  These bonuses were paid out of the bonus pool based on the Company’s 2009 performance.  The bonuses received by Mr. Whitener are determined by the Board of Directors based upon the results of the Company’s operations for the preceding year.

 

Long-Term Equity-Based Incentives

 

The Company believes that the best way to align the interests of the executive officers and its shareholders is for such officers to own a meaningful amount of its Common Stock.  In order to reach this objective and to retain its executives, the Company grants equity-based awards to the executive officers under its 2006 Stock Awards Plan.

 

Compensation Committee Report

 

The Compensation Committee has reviewed and discussed the Compensation Disclosure and Analysis with management of the Company.  Based on the review and discussions referred to in the preceding sentence, the Compensation Committee has recommended to the Board of Directors that the Compensation Disclosure and Analysis be included in the Proxy Statement.

 

 

The Compensation Committee:

 

Allen T. McInnes, Chairman

 

Herbert M. Gardner

 

Edward L Flynn

 

Stephanie P. Hurtt

 

16



 

The table below sets forth, on an accrual basis, all cash and cash equivalent remuneration paid by the Company during 2010 and 2009 to the Company’s Chief Executive Officer and the Company’s two most highly compensated executive officers who were serving as executive officers at the end of 2010, the “named executive officers.”  The individuals listed below are the only executive officers employed by the Company during 2010.

 

Summary Compensation Table

 

Name and

 

 

 

Base

 

 

 

All Other

 

 

 

Principal

 

 

 

Salary

 

Bonus

 

Compensation

 

Total

 

Position

 

Year

 

($)

 

($)

 

($)(1)

 

($)(2)

 

(a)

 

(b)

 

(c)

 

(d)

 

(i)

 

(j)

 

 

 

 

 

 

 

 

 

 

 

 

 

Wayne A. Whitener

 

2010

 

250,000

 

250,000

 

15,747

 

515,747

 

President and CEO

 

2009

 

250,000

 

150,000

 

9,974

 

409,974

 

 

 

 

 

 

 

 

 

 

 

 

 

Daniel G. Winn

 

2010

 

154,476

 

31,000

 

9,470

 

194,946

 

Vice President

 

2009

 

142,593

 

28,000

 

5,933

 

176,526

 

 

 

 

 

 

 

 

 

 

 

 

 

James K. Brata

 

2010

 

140,865

 

23,000

 

2,430

 

166,295

 

Vice President, Secretary,

 

2009

 

125,000

 

20,000

 

1,940

 

146,940

 

Treasurer, and CFO

 

 

 

 

 

 

 

 

 

 

 

 


(1)          Includes (in addition to certain perquisites and personal benefits) the Company’s matching contribution to its Section 401(k) Retirement Plan.

 

(2)          Includes columns (c), (d), and (i).

 

All Other Compensation

 

The following table describes each component of column (i) of the Summary Compensation Table.

 

 

 

 

 

Car

 

Insurance

 

401(k)

 

Club

 

Tax

 

 

 

 

 

 

 

Allowance

 

Premium

 

Match

 

Membership

 

Prep

 

Total

 

 

 

Year

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wayne A. Whitener

 

2010

 

5,802

 

516

 

6,461

 

2,273

 

695

 

15,747

 

 

 

2009

 

5,109

 

516

 

385

 

3,289

 

675

 

9,974

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daniel G. Winn

 

2010

 

3,926

 

792

 

4,752

 

 

 

9,470

 

 

 

2009

 

4,445

 

516

 

972

 

 

 

5,933

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James K. Brata

 

2010

 

1,214

 

516

 

700

 

 

 

2,430

 

 

 

2009

 

1,664

 

276

 

 

 

 

1,940

 

 

Grants of Plan-Based Awards

 

During 2009 and 2010, the Company did not grant any Stock Options or stock awards to any of its named executive officers.

 

17



 

Employment Contract

 

Effective September 11, 2008, the Company entered into an Amended and Restated Employment Contract (the “Employment Contract”) with Mr. Whitener. The Employment Contract, which expired on July 31, 2010, provided for a base salary of $250,000 per year and an annual performance bonus if approved by the Company’s Board of Directors.  Pursuant to the Employment Contract, upon termination of Mr. Whitener by the Company other than for cause (which includes termination resulting from a change in control), Mr. Whitener would receive the remaining portion of his base salary through July 31, 2010, plus his proportionate share of the bonus.  Pursuant to the Employment Contract, if Mr. Whitener is terminated by the Company for cause, or if he terminates his employment for any reason, Mr. Whitener will not receive any future payments under the Employment Contract other than any amounts accrued to him as of the date of termination.  The Employment Contract contains a confidentiality provision that is effective during and after his employment with the Company and a non-competition provision that is effective for one year after the termination of Mr. Whitener’s employment for any reason (other than termination resulting from a change of control of the Company).  Since August 1, 2010, Mr. Whitener’s compensation (and other employment terms) has been the same as if the Employment Contract had remained in effect.  Negotiations are currently under way between Mr. Whitener and the Company’s Board of Directors, and it is expected that a new Employment Contract will go into effect in the near future.

 

Outstanding Equity Awards at Fiscal Year End

 

The following table provides information about the holdings of Stock Options by the named executive officers at December 31, 2010.

 

Option Awards

 

Stock Awards

 

 

 

 

 

 

 

 

 

 

 

Equity

 

Equity

 

 

 

 

 

 

 

 

 

 

 

Incentive

 

Incentive

 

 

 

 

 

 

 

 

 

 

 

Plan

 

Plan

 

 

 

 

 

 

 

 

 

 

 

Awards:

 

Awards:

 

 

 

 

 

 

 

 

 

 

 

Number of

 

Market

 

 

 

 

 

Number of

 

 

 

 

 

Unearned

 

Payout Value

 

 

 

Number of

 

Securities

 

 

 

 

 

Shares or

 

of Unearned

 

 

 

Securities

 

Underlying

 

 

 

 

 

Other

 

Shares or

 

 

 

Underlying

 

Unexercised

 

 

 

 

 

Rights

 

Other Rights

 

 

 

Unexercised

 

Options

 

Option

 

Option

 

That Have

 

That Have

 

 

 

Options

 

(#)

 

Exercise

 

Expiration

 

Not Vested

 

Not Vested

 

 

 

(#)

 

Unexercisable

 

Price

 

Date

 

(#)

 

($)

 

Name

 

Exercisable

 

(1)

 

($)

 

-

 

(2)

 

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wayne A. Whitener

 

36,383

 

18,742

 

3.06

 

10/24/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daniel G. Winn

 

21,830

 

11,245

 

3.06

 

10/24/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James K. Brata

 

21,830

 

11,245

 

3.06

 

10/24/2013

 

3,749

 

14,246

 

 


(1)          All of such Stock Options vested on October 24, 2011.

 

(2)   All of such shares of Restricted Stock vested on June 16, 2011.

 

(3)          The market value is based on the December 31, 2010 closing price of $3.80 per share.

 

18



 

DIRECTOR COMPENSATION

 

For services performed in 2010, each outside director received fees of $54,000, consisting of $21,000 representing quarterly cash payments of $5,000 for the first and second quarters, and $5,500 for the third and fourth quarters, and $33,000 which was paid in cash in lieu of stock options.  In the past, outside directors received stock options as a portion of their compensation for service on the Board.  In 2010, the Company’s Stock Awards Committee failed to grant stock options to the outside directors, and in 2011 the Board determined to issue an additional cash payment of $33,000 to each outside director instead.  In addition, through June 14, 2010, each outside director received $1,500 for each Board meeting attended and $750 for each committee meeting attended, respectively.  Effective June 15, 2010, each outside director received $1,650 for each Board meeting attended and $825 for each committee meeting attended.  The Chairman of the Audit Committee received an additional $10,500.  Directors who are employees of the Company do not receive directors’ fees.

 

The following table provides information about the compensation earned by the outside members of the Board during fiscal year 2010.

 

Name

 

Fees Earned or
Paid in Cash ($)

 

Total ($)

 

 

 

 

 

 

 

William J. Barrett

 

58,650

 

58,650

 

Edward L. Flynn

 

60,300

 

60,300

 

Herbert M. Gardner

 

61,800

 

61,800

 

Stephanie P. Hurtt

 

60,300

 

60,300

 

Allen T. McInnes

 

72,300

 

72,300

 

 

At December 31, 2010, our directors had Stock Options exercisable into the following numbers of shares of Common Stock: Mr. Barrett — 55,245 shares; Mr. Flynn — 55,245 shares, Mr. Gardner — 55,245 shares; Ms. Hurtt — 55,245 shares and Mr. McInnes —55,245 shares.

 

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS, AND

CERTAIN CONTROL PERSONS

 

The Company borrowed $2,602,075 from Rumson-Fair Haven Bank & Trust (the “Bank”) on January 18, 2008.  Messrs Barrett and Gardner, who serve as directors of the Company, also serve as directors of the Bank.  In addition, Mr. Barrett owns approximately 12% of the equity of the Bank, and Mr. Gardner owns approximately 2% of the equity of the Bank.  The loan has an interest rate of 6.35% and will mature on February 1, 2013.  As of November 7, 2011, the outstanding principal of the loan was $767,439.  During 2010, the Company paid $94,593 in interest and $507,444 in principal on the loan.  The Board believes that the terms of the loan are the same as would have resulted from arms-length negotiations with an unrelated third party.

 

19



 

EQUITY COMPENSATION PLAN INFORMATION

 

The following table summarizes certain information regarding securities authorized for issuance under our 2006 Stock Awards Plan.

 

Equity Compensation Plan Information

 

 

 

 

 

 

 

Number of Securities

 

 

 

Number of

 

 

 

Remaining Available for

 

 

 

Securities

 

 

 

Future Issuance Under

 

 

 

to be Issued

 

Weighted-Average

 

Equity Compensation Plans

 

 

 

Upon Exercise of

 

Exercise Price of

 

(excluding securities reflected

 

Plan Category

 

Outstanding Options

 

Outstanding Options

 

in Column (a)

 

 

 

(a)

 

(b)

 

(c)

 

 

 

 

 

 

 

 

 

Equity compensation plans approved by security holders

 

761,959

 

$

3.75

 

2,171,835

(1)

 

 

 

 

 

 

 

 

Equity compensation plans not approved by security holders

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

761,959

 

$

3.75

 

2,171,835

(1)

 


(1)  There were 2,171,835 shares available to be issued under the 2006 Stock Awards Plan at December 31, 2010.  The Company’s 1999 Stock Option Plan expired in 2009.  All outstanding options under the 1999 Stock Option Plan expired, unexercised, during the year ended December 31, 2010.  As a result, no options were outstanding under the 1999 Stock Option Plan at December 31, 2010, and no additional options may be granted under the 1999 Stock Option Plan.

 

PROPOSAL NO. 2

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee has appointed Lane Gorman Trubitt, L.L.P. to serve as auditors of the Company.  It is not expected that a representative of Lane Gorman Trubitt, L.L.P. will be present at the Annual Meeting of Shareholders.  Proposal No. 2 is for the ratification of the selection of Lane Gorman Trubitt, L.L.P. as the Company’s Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2011.

 

The Company’s Board of Directors recommends that you vote FOR Proposal No. 2.

 

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.

 

20



 

SHAREHOLDER PROPOSALS

 

A shareholder proposal intended to be presented at the Company’s Annual Meeting of Shareholders in 2012 must be received by the Company at its principal executive offices in Plano, Texas on or before March 7, 2012, in order to be included in the Company’s proxy statement and form of proxy relating to that meeting.

 

In order for a shareholder proposal made outside of Rule 14a-8 to be considered timely pursuant to the Company’s Amended and Restated Bylaws, such proposal must be received by the Company at its principal executive offices in Plano, Texas no later than March 7, 2012.

 

FINANCIAL STATEMENTS

 

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission, including financial statements, was included with the Annual Report mailed to each shareholder.  Shareholders may obtain without charge another copy of the Form 10-K, excluding certain exhibits, by written request to the Company as follows:  TGC Industries, Inc., 101 Park Blvd., Suite 955, Plano, Texas 75074, Attn: James K. Brata, Secretary.

 

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0 --------------- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ---------------- 14475 COMMON STOCK PROXY TGC INDUSTRIES, INC. Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting of Shareholders, December 16, 2011 The undersigned hereby appoint(s) James K. Brata or Wayne A. Whitener, each with full power of substitution, as proxies, to vote all Common Stock in TGC Industries, Inc. which the undersigned would be entitled to vote on all matters which may come before the Annual Meeting of the Shareholders of the Company to be held on December 16, 2011, 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 THE ELECTION OF DIRECTORS AND FOR PROPOSAL NO. 2. (Continued and to be signed on the reverse side.)

 

 


ANNUAL MEETING OF SHAREHOLDERS OF TGC INDUSTRIES, INC. December 16, 2011 COMMON STOCK PROXY NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The notice of meeting, proxy statement and proxy card are available at http://www.tgcseismic.com/proxy Please sign, date and mail your proxy card in the envelope provided as soon as possible. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. 1. ELECTION OF DIRECTORS OF THE COMPANY O Wayne A. Whitener O William J. Barrett O Herbert M. Gardner O Allen T. McInnes O Edward L. Flynn O Stephanie P. Hurtt 2. RATIFICATION OF SELECTION OF LANE GORMAN TRUBITT, L.L.P. AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 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. FOR AGAINST ABSTAIN FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: NOMINEES: THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x Please detach along perforated line and mail in the envelope provided. --------------- ---------------- 20630000000000000000 6 121611