11-K 1 0001.txt TETRA TECHNOLOGIES, INC. - DATED DECEMBER 31, 1999 1 ----------------------------------------------------------------- FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- ANNUAL REPORT PURSUANT TO SECTION 15(d) THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 TETRA Technologies, Inc. 401(k) Retirement Plan (Full title of the plan) -------------------- TETRA Technologies, Inc. (Name and issuer of the securities held pursuant to the plan) 25025 I-45 North The Woodlands, Texas 77380 (Address of principal executive offices) ------------------- ------------------------------------------------------------ 2 FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES TETRA TECHNOLOGIES, INC. 401(K) RETIREMENT PLAN YEAR ENDED DECEMBER 31, 1999 3 TETRA Technologies, Inc. 401(k) Retirement Plan Financial Statements and Supplemental Schedules Year ended December 31, 1999 CONTENTS Report of Independent Auditors..........................................1 Audited Financial Statements Statements of Net Assets Available for Benefits.........................3 Statement of Changes in Net Assets Available for Benefits...............4 Notes to Financial Statements...........................................5 Supplemental Schedules Schedule H, Line 4(i) - Schedule of Assets Held for Investment Purposes At End of Year..................11 Schedule H, Line 4(j) - Schedule of Reportable Transactions............12 4 Report of Independent Auditors Participants and Administrator of the TETRA Technologies, Inc. 401(k) Retirement Plan We have audited the accompanying statements of net assets available for benefits of the TETRA Technologies, Inc. 401(k) Retirement Plan as of December 31, 1999 and 1998, and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1999 and 1998, and the changes in its net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes at end of year as of December 31, 1999, and reportable transactions for the year ended December 31, 1999, are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. 1 5 The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. May 24, 2000 Houston, Texas 2 6 TETRA Technologies, Inc. 401(k) Retirement Plan Statements of Net Assets Available for Benefits DECEMBER 31 1999 1998 ------------------------------------ ASSETS Cash $ 271,777 $ 48,304 Receivables: Employer contributions 79,019 70,022 Participant contributions 213,483 186,471 Accrued income 1,910 4,459 Other receivables 17,857 17,940 ------------------------------------ Total receivables 312,269 278,892 Investments (Note 3) 14,971,671 13,206,696 ------------------------------------ Total assets 15,555,717 13,533,892 LIABILITIES Excess contribution refunds - 106,423 ------------------------------------ Net assets available for benefits $ 15,555,717 $ 13,427,469 ==================================== See accompanying notes. 3 7 TETRA Technologies, Inc. 401(k) Retirement Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 1999 Additions: Employer contributions $ 782,968 Participant contributions 2,255,315 Rollover contributions 114,320 Interest and dividends 453,028 Net appreciation in fair value of investments (Note 3) 121,803 ------------------- Total additions 3,727,434 Deductions: Benefits paid to participants 1,586,211 Administrative expense 12,975 ------------------- Total deductions 1,599,186 ------------------- Net increase 2,128,248 Net assets available for benefits: Beginning of year 13,427,469 ------------------- End of year $ 15,555,717 =================== See accompanying notes. 4 8 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements December 31, 1999 1. DESCRIPTION OF PLAN The following description of the TETRA Technologies, Inc. 401(k) Retirement Plan (the "Plan") is provided for general information only. Participants should refer to the summary plan description for a more complete description of the Plan's provisions, a copy of which is available from TETRA Technologies, Inc. (the "Company" or "Plan Administrator"). GENERAL The Plan, which became effective January 1, 1990, is a profit sharing plan as defined by Section 401 of the Internal Revenue Code ("IRC") and contains a provision for salary reduction contributions under Section 401(k) of the IRC. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). ELIGIBILITY All employees of the Company and its subsidiaries who have reached the age of 18 are eligible to join the Plan on the first January 1 or July 1 following their date of hire. CONTRIBUTIONS Participants may elect to contribute from 1% to 15% (1% to 22% effective January 1, 2000) of their gross compensation to the Plan. Contributions for each participant are limited in any calendar year to an amount as determined by IRC regulations. The Company matches monthly, 50% of each participant's contributions up to 6% of compensation. The Company may also, at the discretion of the Board of Directors, make a profit sharing contribution to the Plan at the end of each fiscal year. Such Company contribution will be allocated to Plan participants in the same ratio that each participant's compensation, as defined in the Plan agreement, bears to the total compensation of all participants. All Company contributions are directed to the Company common stock fund. EXCESS CONTRIBUTION REFUNDS The IRC provides that the Plan cannot discriminate in favor of highly compensated individuals. To comply with these laws, contributions in excess of the IRC Section 401(k) and 401(m) limits and all earnings attributable to such contributions were required to be refunded to certain highly compensated participants. At December 31, 1998, this amount is designated on the statement of net assets available for benefits as "Excess contribution refunds." Refunds of 1999 excess contributions have not yet been determined. 5 9 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after five years of credited service. BENEFIT PAYMENTS Upon a participant's death, his/her entire account balance is payable to the named beneficiary. When eligible, benefits are payable in any of several forms. Under the Plan, amounts which are forfeited due to termination of employment reduce the employer's contribution. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000, up to a maximum equal to the lesser of $50,000 or 50% of their vested account balances. Loan terms range from 1 to 5 years, or up to 15 years for the purchase of a primary residence. The loans are secured by the balances in the participants' accounts and bear interest at rates commensurate with local prevailing rates as determined quarterly. Principal and interest are paid ratably through payroll deductions. 6 10 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 2. SUMMARY OF ACCOUNTING POLICIES BASIS OF ACCOUNTING The accompanying financial statements of the Plan have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. Benefit payments to participants are recorded upon distribution. ADMINISTRATIVE EXPENSES Certain administrative expenses are paid by the Company. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes and schedules. Actual results could differ from those estimates. INVESTMENT VALUATION The fair value of the mutual funds and the common stock is based on quoted market prices on the last business day of the Plan year. The fair value of the Chicago Trust Stated Principal Value Investment Trust for Employee Benefit Plans is valued by the Chicago Trust Company based on the value of the underlying investment contracts. Participant loans are stated at cost, which approximates fair value. RECLASSIFICATION Certain prior year amounts have been reclassified to conform to the current year presentation. 7 11 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 3. INVESTMENTS Individual investments that represent 5% or more of the Plan's net assets are as follows:

DECEMBER 31 1999 1998 ----------------- ---------------- Washington Mutual Investors Fund $ - $ 2,644,827 Wells Fargo Bank Short-Term Income Fund - 905,863 TETRA Technologies, Inc. common stock 2,537,805* 2,701,934* AIM Constellation Fund - 2,298,700 Fidelity Advisor Growth Opportunities Fund - 2,602,656 Chicago Trust Stated Principal Value Investment Trust for Employee Benefit Plans 1,093,875 - Flag Investors Equity Partners Fund 2,898,008 - Alleghany/Montag & Caldwell Growth Fund 3,893,867 - MFS Emerging Growth Fund 2,853,635 -

During 1999, the Plan's investments (including investments bought, sold, and held during the year) appreciated in value as follows:

Collective trust funds $ (281,839) Mutual funds 1,373,445 Common stock (969,803) ---------------- $ 121,803 ================

* Includes both participant and nonparticipant directed 4. NONPARTICIPANT DIRECTED INVESTMENTS Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant directed investments is as follows:

DECEMBER 31 1999 1998 ----------------- ---------------- TETRA Technologies, Inc. common stock $ 2,537,805 $ 2,701,934

8 12 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 4. NONPARTICIPANT DIRECTED INVESTMENTS (CONTINUED) YEAR ENDED DECEMBER 31 1999 ------------------- Changes in net assets: Employer contributions $ 782,968 Participant contributions 370,405 Interest and dividends 624 Net depreciation in fair value of investments (969,893) Benefits paid to participants (274,529) Interfund transfers 254,554 ------------------- $ 164,129 =================== 5. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated June 8, 1995, stating that the Plan is qualified under Section 401(a) of the IRC and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan is qualified and the related trust is tax exempt. 6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500: DECEMBER 31 1999 1998 ------------------------------------ Net assets available for benefits per financial statements $ 15,555,717 $ 13,427,469 Amounts allocated to withdrawing participants 1,941,512 (49,007) ------------------------------------ Net assets available for benefits per Form 5500 $ 13,614,205 $ 13,378,462 ==================================== 9 13 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED) The following is a reconciliation of benefits paid to participants per the financial statements to Form 5500: YEAR ENDED DECEMBER 311999 ------------------- Benefits paid to participants per the financial statements $ 1,586,211 Add amounts allocated to withdrawing participants at end of year 1,941,512 Less amounts allocated to withdrawing participants at end of prior year (49,007) ------------------- Benefits paid to participants per Form 5500 $ 3,478,716 =================== Amounts allocated to withdrawing participants are recorded on Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but which have not yet been paid as of that date. 7. CHANGE IN SERVICE PROVIDERS Effective October 1, 1999, trustee responsibilities were transferred from Wells Fargo Bank, N.A. to The Chicago Trust Company. The Chicago Trust Company is also the recordkeeper for the Plan. 10 14 Supplemental Schedules 15 TETRA Technologies, Inc. 401(k) Retirement Plan Schedule H, Line 4(i) - Schedule of Assets Held for Investment Purposes At End of Year EIN: 74-2148293 PN: 001 December 31, 1999

IDENTITY OF ISSUE, BORROWER, CURRENT LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE ----------------------------------------------------------------------------------------------------------- * Chicago Trust Safety of Principal Value Investment Fund $ ** $ 1,093,875 PIMCO Total Return Fund ** 308,204 * Alleghany/Montag & Caldwell Balanced Fund ** 58,227 Flag Investors Equity Partners Fund ** 2,898,008 * Alleghany/Montag & Caldwell Growth Fund ** 3,893,868 MFS Emerging Growth Fund ** 2,853,635 Franklin Small Cap Growth Fund ** 81,311 American Funds Euro-Pacific International Fund ** 661,794 * TETRA Technologies, Inc. TETRA Technologies, Inc. common stock 4,363,723 2,537,805 * Participant loans Loans with various maturities and interest rates ranging from 9% to 10% per annum ** 584,944 ----------------- $ 14,971,671 =================

*Party-in-interest ** Participant directed amounts are not required to be disclosed. 11 16 TETRA Technologies, Inc. 401(k) Retirement Plan Schedule H, Line 4(j) - Schedule of Reportable Transactions (continued) EIN: 74-2148293 PN: 001 Year ended December 31, 1999

CURRENT VALUE OF TRANSACTION NET IDENTITY OF PURCHASE SELLING COST OF ASSETS GAIN OR PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSETS DATE (LOSS) ----------------------------------------------------------------------------------------------------------------------------------- CATEGORY (III) - SERIES OF NONPARTICIPANT AND PARTICIPANT DIRECTED TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS AT THE BEGINNING OF THE PLAN YEAR FOR COMMON STOCK. TETRA Technologies, Inc. TETRA Technologies Inc. Common Stock Purchases $ 1,425,631 $ - $ 1,425,631 $ - $ - Sales - 620,167 914,700 620,167 (294,533) Note: Includes both participant and nonparticipant directed transactions since trustee does not segregate these transactions.

17 The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the administrative committee (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. TETRA Technologies, Inc. 401(k) Retirement Plan Date: June 20, 2000 By: /s/ JAMES R. HALE -------------------------- James R. Hale Committee Member 18 EXHIBIT INDEX Exhibit 23.1 - Consent of Independent Auditors