11-K 1 h97925e11vk.txt TETRA TECHNOLOGIES, INC. - 401(K) RETIREMENT PLAN 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, 2001 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, TX 77380 (Address of principal executive offices) -------------------------------------------------------------------------------- TETRA Technologies, Inc. 401(k) Retirement Plan Financial Statements and Supplemental Schedules Year ended December 31, 2001 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 At End of Year)..........11 Schedule H, Line 4(j) - Schedule of Reportable Transactions...............12 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, 2001 and 2000, and the related statement of changes in net assets available for benefits for the year ended December 31, 2001. 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, 2001 and 2000, and the changes in its net assets available for benefits for the year ended December 31, 2001, 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 at end of year) as of December 31, 2001, and reportable transactions for the year then ended, 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 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. The information presented in the schedule of assets (held at end of year) and schedule of reportable transactions does not disclose the historical cost of nonparticipant directed assets and nonparticipant directed sales transactions. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ ERNST & YOUNG LLP Houston, Texas May 23, 2002 2 TETRA Technologies, Inc. 401(k) Retirement Plan Statements of Net Assets Available for Benefits
DECEMBER 31 2001 2000 -------------------------------- ASSETS Cash $ - $ 13,484 Receivables: Employer contributions 77,692 80,673 Participant contributions 190,588 211,802 Accrued income 2,325 68,984 Other receivables 7,959 5,724 Pending trades 22,140 13,916 -------------------------------- Total receivables 300,704 381,099 Investments 20,759,342 16,836,904 -------------------------------- Total assets 21,060,046 17,231,487 LIABILITIES Excess contributions refund payable 14,711 21,753 Administrative expenses payable 2,525 - Cash overdraft 2,005 - -------------------------------- Total liabilities 19,241 21,753 -------------------------------- Net assets available for benefits $21,040,805 $17,209,734 ================================
See accompanying notes. 3 TETRA Technologies, Inc. 401(k) Retirement Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2001 Additions: Employer contributions $ 1,113,664 Participant contributions 2,873,263 Rollover contributions 225,401 Interest and dividends 212,192 Net appreciation in fair value of investments 1,170,875 ------------ Total additions 5,595,395 Deductions: Benefits paid to participants 1,706,022 Corrective distributions 14,711 Administrative expenses 43,591 ------------ Total deductions 1,764,324 ------------ Net increase 3,831,071 Net assets available for benefits: Beginning of year 17,209,734 ------------ End of year $21,040,805 ============
See accompanying notes. 4 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements December 31, 2001 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 401of 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 day of any calendar quarter following two months of service. CONTRIBUTIONS Participants may elect to contribute from 1% to 22% 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. Beginning January 1, 2001, unless the employee elects otherwise, 3% of each eligible employee's compensation is automatically contributed to the Plan on a pre-tax basis. 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 TETRA Stock Fund. 5 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, their 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 future contributions. 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. 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. 6 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) 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 investments in 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 investment in the Chicago Trust Stated Principal Value Investment Trust for Employee Benefit Plans is valued by The Chicago Trust Company based on the fair value of the underlying investment contracts. Participant loans are stated at cost, which approximates fair value. 3. INVESTMENTS Individual investments that represent 5% or more of the Plan's net assets are as follows:
DECEMBER 31 2001 2000 -------------- -------------- S> TETRA Technologies, Inc. common stock $ 8,574,416* $ 5,977,203* Chicago Trust Stated Principal Value Investment Trust for Employee Benefit Plans 2,198,512 1,312,963 Flag Investors Equity Partners Fund 2,268,014 1,924,024 Alleghany/Montag & Caldwell Growth Fund 2,478,586 2,889,758 MFS Emerging Growth Fund 1,281,348 1,767,758
* Includes both participant and nonparticipant directed 7 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) During 2001, the Plan's investments (including investments bought, sold, and held during the year) appreciated (depreciated) in value as follows: Collective trust fund $ 100,686 Mutual funds (1,062,597) Common stock 2,132,786 ----------- $ 1,170,875 ===========
4. NONPARTICIPANT DIRECTED INVESTMENTS The TETRA Stock Fund includes both participant and nonparticipant directed amounts which cannot be separately determined. Therefore, for purposes of this disclosure, the TETRA Stock Fund is deemed nonparticipant directed. Information about the net assets and the significant components of the changes in net assets relating to the TETRA Stock Fund is as follows:
DECEMBER 31 2001 2000 ----------- ----------- Short-term investment $ - $ 18,485 TETRA Technologies, Inc. common stock 8,574,416 5,977,203 Receivable for securities sold 22,140 - Employer contribution receivable 77,692 80,673 Accrued income 110 134 Cash overdraft (2,005) - ----------- ----------- $ 8,672,353 $ 6,076,495 =========== ===========
8 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 4. NONPARTICIPANT DIRECTED INVESTMENTS (CONTINUED)
YEAR ENDED DECEMBER 31 2001 ----------- Changes in net assets: Employer contributions $ 1,113,664 ----------- Participant contributions 389,537 Interest 13,029 Net appreciation in fair value of investments 2,132,786 Benefits paid to participants (560,948) Administrative expenses (9,223) Interfund transfers (482,987) ----------- $ 2,595,858 ===========
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. Subsequent to receiving the determination letter, the Plan was amended. 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, as amended, is qualified and the related trust is tax exempt. 6. SUBSEQUENT EVENTS Effective January 1, 2002, the Plan was amended for the purpose of requiring six months of service to be eligible for participation in the Plan. An employee will become a participant on the first day of the calendar quarter coincident with or following the completion of age and service requirements of the Plan. Effective January 1, 2002, the Plan was amended for the purpose of increasing the maximum elective contribution limit from 22% of compensation to 70% of compensation, subject to annual "regular" and "catch-up" contribution limits. 9 TETRA Technologies, Inc. 401(k) Retirement Plan Notes to Financial Statements (continued) 6. SUBSEQUENT EVENTS (CONTINUED) Effective January 1, 2002, the Plan was amended such that on or after January 1 of each year, any participant who has become fully vested in their employer matching contribution account during the prior year shall, at the participant's direction, be allowed to re-direct their investment in the TETRA Stock Fund in the matching contribution account to any other fund maintained by the Plan. Effective January 1, 2002, the Plan was amended to adopt the Master Plan Document established and maintained by ABN AMRO Trust Services Company (formerly, The Chicago Trust Company) on behalf of its clients. As a result of the asset purchase agreement between International Mineral Technologies, LLC and TETRA Micronutrients, Inc., assets in the amount of $816,662 transferred out of the Plan in February 2002 into a plan established by International Mineral Technologies, LLC. All employees who were acquired by International Mineral Technologies, LLC became 100% vested upon the effective date of the asset purchase agreement. 10 TETRA Technologies, Inc. 401(k) Retirement Plan Schedule H, Line 4(i) - Schedule of Assets (Held At End of Year) EIN: 74-2148293 PN: 001 December 31, 2001
IDENTITY OF ISSUE, BORROWER, CURRENT LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE ----------------------------------------------------------------------------------------------------------- * The Chicago Trust Company Stated Principal Value Investment Trust for Employee Benefit Plans ** $ 2,198,512 PIMCO Total Return Fund ** 584,541 * Alleghany/Montag & Caldwell Balanced Fund ** 498,190 Flag Investors Equity Partners Fund ** 2,268,014 * Alleghany/Montag & Caldwell Growth Fund ** 2,478,586 MFS Emerging Growth Fund ** 1,281,348 Franklin Small Cap Growth Fund ** 741,214 American Funds Euro-Pacific International Fund ** 671,560 * TETRA Technologies, Inc. TETRA Technologies, Inc. common stock (A) 8,574,416 * Participant loans Loans with various maturities and interest rates ranging from 9% to 10.5% per annum ** 1,462,961 ------------- $ 20,759,342 =============
* Party-in-interest ** Participant directed amounts are not required to be disclosed (A) Cost not available 11 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, 2001
CURRENT VALUE OF ASSET ON NET IDENTITY OF PURCHASE SELLING COST OF TRANSACTION GAIN OR PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET 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 $1,420,917 $ - $1,420,917 $1,420,917 $ - Sales - 926,400 (A) 926,400 (A) TETRA Technologies, Inc. ABN AMRO/Chicago Capital Money Purchases $2,460,564 $ - $2,460,564 $2,460,564 $ - Sales - 2,479,050 2,479,050 2,479,050 -
Note: Includes both participant and nonparticipant directed transactions since trustee does not segregate these transactions. (A) Cost and net gain or loss is not available. 12 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 23.1 Consent of Independent Auditors.