Exhibit 10.1

TETRA Technologies, Inc.

NONQUALIFIED STOCK OPTION AGREEMENT

This Nonqualified Stock Option Agreement (the “Agreement”), dated to be
effective April 20, 2005 (the “Grant Date”), is between TETRA Technologies,
Inc., a Delaware corporation (“TETRA” or the “Company”), and Stuart M. Brightman
(“Optionee”).

In connection with the initial employment of Optionee with the Company as an
executive officer, in order to provide an equity incentive to Optionee by
affording him the opportunity to purchase shares of common stock of the Company,
$0.01 par value per share (“Common Stock”), and in consideration of the mutual
agreements set forth herein, the Company and Optionee hereby agree as follows:

1. Administration. This Agreement shall be administered by the Management and
Compensation Committee (the “Committee”) of the board of directors of the
Company (the “Board”), which shall consist of not less than two members of the
Board, each of whom shall qualify as a “non-employee director” (as that term is
defined in Rule 16b-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) appointed by and serving
at the pleasure of the Board to administer the Agreement or, if none, the Board.
The Committee shall (i) interpret the Agreement, (ii) make, amend and rescind
such rules as it deems necessary for the proper administration of the Agreement,
(iii) make all other determinations necessary or advisable for the
administration of the Agreement and (iv) correct any defect or supply any
omission or reconcile any inconsistency in the Agreement in the manner and to
the extent that the Committee deems desirable to effectuate the Agreement. Any
action taken or determination made by the Committee pursuant to this and the
other paragraphs of the Agreement shall be final, binding and conclusive on all
affected persons. No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the Agreement.

2. Grant of Option. TETRA hereby grants to Optionee the right, privilege and
option as herein set forth (the “Nonqualified Option”) to purchase up to 80,000
shares (the “Shares”) of Common Stock, in accordance with the terms of this
Agreement. The Shares issued under this Agreement may be either previously
authorized but unissued shares or previously issued shares reacquired by the
Company. The Shares, when issued to Optionee upon exercise of the Nonqualified
Option, shall be fully paid and nonassessable and the Optionee (or the person
permitted to exercise the Nonqualified Option in the event of Optionee’s death)
shall be and have all of the rights and privileges of a stockholder of record of
the Company with respect to the Shares acquired upon exercise of the
Nonqualified Option, effective upon such exercise. The Nonqualified Option is
not intended to qualify as an “incentive stock option” within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

3. Option Terms. Subject to earlier termination as provided herein, the
Nonqualified Option shall expire on the 10th anniversary of the date of grant of
Nonqualified Option, which anniversary shall be April 20, 2015. The period
during which the Nonqualified Option is in effect is referred to as the Option
Period.

4. Option Exercise Price. The exercise price (the “Option Price”) of the Shares
subject to the Nonqualified Option shall be $27.23 per Share, the closing price
of shares of Common Stock on April 19, 2005, which has been determined to be no
less than the Fair Market Value per Share of the Common Stock on that date.
“Fair Market Value” means the Fair Market Value per Share of the Common Stock as
of the determination date which shall be the closing price on the principal
exchange or over-the-counter market on which such shares are trading, if any, or
as reported on any composite index which includes such principal exchange, for
the date of the determination, or if no trade of the Common Stock shall have
been reported for such date, the closing price quoted on such exchange or market
for the most recent trade prior to the determination date. The term “closing

 

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price” shall mean (i) if the shares of Common Stock are listed or admitted for
trading on a national securities exchange, the last reported sales price on the
determination date, or, in case no such reported sale takes place on such day or
days, the average of the high and low sales prices reported for the most recent
trade prior to the determination date, in either case on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
for trading, or (ii) if the shares of Common Stock are not listed or admitted
for trading on a national securities exchange, (A) the last transaction price on
the determination date of the shares of Common Stock on the Nasdaq Market, Inc.
(“NASDAQ”) or, in the case no such reported transaction takes place on such day,
the average of the high and low sales prices reported on NASDAQ for the most
recent trade prior to the determination date, or (B) if the shares of Common
Stock are not quoted on NASDAQ on the determination date, the average of the
closing bid and asked prices of the shares of Common Stock on the determination
date in the over-the-counter market, as reported by The National Quotation
Bureau, Inc., or an equivalent generally accepted reporting service. If shares
of the Common Stock are not listed or admitted to trading on any exchange,
over-the-counter market or any similar organization as of the determination
date, the FMV Per Share shall be determined by the Committee in good faith using
any fair and reasonable means selected in its discretion.

5. Vesting. Subject to the following provisions of this Paragraph 5, the total
number of Shares subject to this Nonqualified Option shall vest and be
exercisable only in accordance with the following schedule:

 

Date

Cumulative Amount Vested

   

April 20, 2005

 

40,000

   

April 20, 2006

 

60,000

   

April 20, 2007

 

80,000

 

 

Vested Shares may be purchased at any time after they vest, in whole or in part,
during the Option Period. In addition, if the Committee so determines in its
sole discretion, the total number of Shares subject to this Nonqualified Option
shall become fully vested upon the occurrence of a Change in Control.

6. Method of Exercise. To exercise the Nonqualified Option, Optionee shall
deliver written notice to the Company at its principal executive office and
addressed to the Secretary of the Company, such exercise to be effective at the
time of receipt of such written notice at the Company’s principal executive
office during normal business hours, stating the number of Shares with respect
to which the Nonqualified Option is being exercised together with payment for
such Shares plus any required withholding taxes, unless other arrangements for
withholding tax liability has been made with the Committee. Any exercise of the
Nonqualified Option must be for a minimum of 100 Shares or, if less, for all
remaining Shares subject to the Nonqualified Option.

7. Payment of Exercise Price and Required Withholding. In order to exercise the
Nonqualified Option, the Optionee or other person or persons entitled to
exercise such option shall deliver to the Company payment in full for (i) the
Shares being purchased and (ii) unless other arrangements have been made with
the Committee, any required withholding taxes. The payment of the Option Price
for the Nonqualified Option shall either be (i) in cash, or by check payable and
acceptable to the Company, (ii) with the consent of the Committee, by tendering
to the Company shares of Common Stock owned by the person exercising the
Nonqualified Option for more than six months having an aggregate Fair Market
Value as of the date of exercise that is not greater than the full exercise
price for the Shares with respect to which the Nonqualified Option is being
exercised and by paying any remaining amount of the Option Price (and any
required withholding taxes) as provided in (i) above, or (iii) with the consent
of the Committee and compliance with such instructions as the Company may
specify, at the person’s written request the Company may deliver certificates
for the Shares of Common Stock for which the Nonqualified Option is being
exercised to a broker for sale on behalf of the person, provided that the person
has irrevocably instructed such

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broker to remit directly to the Company on the person’s behalf from the proceeds
of such sale the full amount of the Option Price plus all required withholding
taxes. In the event that the person elects to make payment as allowed under
clause (ii) above, the Committee may, upon confirming that the Optionee owns the
number of additional shares being tendered, authorize the issuance of a new
certificate for the number of Shares being acquired pursuant to the exercise of
the Nonqualified Option less the number of shares being tendered upon the
exercise and return to the person (or not require surrender of) the certificate
for the shares being tendered upon the exercise. If the Committee so requires,
such person or persons shall also deliver a written representation that all
Shares being purchased are being acquired for investment and not with a view to,
or for resale in connection with, any distribution of such Shares.

8. Termination of Employment. The termination of employment, retirement, death
or ”disability” as defined in Section 409A(2)(C) of the Code (“Disability) of
Optionee, shall affect Optionee’s rights under the Nonqualified Option as
follows:

(a) Termination of Employment. If Optionee’s employment by the Company or any
affiliate of the Company is terminated for any reason whatsoever other than
death, Disability or Retirement, subject to the provisions of this Section 8,
any nonvested portion of the Nonqualified Option granted pursuant to the
Agreement outstanding at the time of such termination and all rights thereunder
shall wholly and completely terminate and no further vesting shall occur, and
Optionee shall be entitled to exercise his or her rights with respect to the
portion of the Nonqualified Option vested as of the date of termination for a
period that shall end on the earlier of (i) the expiration date set forth in the
Nonqualified Option with respect to the vested portion of the Nonqualified
Option or (ii) the date that occurs three (3) months after such termination
date.

(b) Retirement. “Retirement” means termination of Optionee’s employment by the
Company or any affiliate under circumstances as shall constitute retirement as
determined by the Committee. Upon the Retirement of Optionee:

(i) any nonvested portion of the Nonqualified Option shall immediately terminate
and no further vesting shall occur; and

(ii) any vested portion of the Nonqualified Option shall expire on the earlier
of (A) the expiration date set forth in the Nonqualified Option; or (B) the
expiration of twelve (12) months after the date of Retirement.

(c) Disability or Death. Upon termination of Optionee’s employment by the
Company or any affiliate of the Company as a result of Disability or death of
Optionee or if Optionee is retired and dies during the period described in
Section 8(b), (hereinafter the “Applicable Retirement Period”), or is disabled
and dies during the period that expires on the earlier of the expiration date
set forth in the Nonqualified Option or the first anniversary of the Optionee’s
termination of Employment due to Disability, (hereinafter the “Applicable
Disability Period”),

(i) any nonvested portion of the Nonqualified Option that has not already
terminated shall immediately terminate and no further vesting shall occur; and

(ii) any vested portion of the Nonqualified Option shall expire upon the earlier
of (A) the expiration date set forth in the Nonqualified Option or (B) the later
of (1) the first anniversary of such termination of Employment as a result of
Disability or death, or (2) the first anniversary of Optionee’s death during the
Applicable Retirement Period or the Applicable Disability Period.

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(d) Notwithstanding any other provision of the Nonqualified Option, the
Committee, in its discretion, may provide for the continuation of the
Nonqualified Option for such period and upon such terms and conditions as are
determined by the Committee in the event that the Optionee ceases to be an
Employee.

9. Change in Control. A “Change of Control” shall be deemed to have occurred
upon any of the following events:

(i) any “person” (as defined in Section 3(a)(9) of the Exchange Act, and as
modified in Section 13(d) and 14(d) of the Exchange Act) other than (A) the
Company or any of its subsidiaries, (B) any employee benefit plan of the Company
or any of its subsidiaries, (C) or any affiliate of the Company, (D) a company
owned, directly or indirectly, by stockholders of the Company in substantially
the same proportions as their ownership of the Company, or (E) an underwriter
temporarily holding securities pursuant to an offering of such securities (a
“Person”), becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the shares of voting stock of the Company then outstanding;

(ii) the consummation of any merger, organization, business combination or
consolidation of the Company or one of its subsidiaries with or into any other
company, other than a merger, reorganization, business combination or
consolidation which would result in the holders of the voting securities of the
Company outstanding immediately prior thereto holding securities which represent
immediately after such merger, reorganization, business combination or
consolidation more than 50% of the combined voting power of the voting
securities of the Company or the surviving company or the parent of such
surviving company;

(iii) the consummation of a sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition if
the holders of the voting securities of the Company outstanding immediately
prior thereto hold securities immediately thereafter which represent more than
50% of the combined voting power of the voting securities of the acquiror, or
parent of the acquiror, of such assets;

(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company; or

(v) individuals who, as of the Grant Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
Grant Date whose election by the Board, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an election contest with respect to the election or
removal of directors or other solicitation of proxies or consents by or on
behalf of a person other than the Board.

To the extent the Nonqualified Option is determined to be subject to Section
409(A) of the Code, this definition is intended to comply with the definition of
change in control under Section 409A of the Code as in effect commencing January
1, 2005 and, to the extent that the above definition does not so comply, such
definition shall be void and of no effect and, to the extent required to ensure
that this definition complies with the requirements of Section 409A of the Code,
the definition of such term set forth in regulations or other regulatory
guidance issued under Section 409A of the Code by the appropriate governmental
authority is hereby incorporated by reference into and shall form part of this
Agreement as fully as if set forth herein verbatim and the Agreement shall be
operated in accordance with the above definition of Change in Control as
modified to the extent necessary to ensure that the above definition complies
with the definition prescribed in such regulations or other regulatory guidance
insofar as the definition relates to this Agreement.

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(a) Change in Control. In the event of a Change in Control described in clauses
(ii), (iii) and (iv) above, the Committee may accelerate vesting and the time at
which the Nonqualified Option may be exercised so that those types of Options
may be exercised in full for a limited period of time on or before a specified
date fixed by the Committee, after which the unexercised Nonqualified Options
and all rights of Optionee thereunder shall terminate, or the Committee may
accelerate vesting and the time at which the Nonqualified Option may be
exercised so that the Nonqualified Option may be exercised in full for its then
remaining term.

Notwithstanding the above, the Committee shall not be required to take any
action described in the preceding sentence and any decision made by the
Committee, in its sole discretion, not to take some or all of the actions
described in the preceding sentence shall be final, binding and conclusive with
respect to the Company and all other interested persons.

(b) Right of Cash-Out. If approved by the Board prior to or within thirty (30)
days after such time as a Change in Control (described above) shall be deemed to
have occurred, the Board shall have the right for a forty-five (45) day period
immediately following the date that the Change in Control is deemed to have
occurred to require Optionee to transfer and deliver to the Company the
Nonqualified Option in exchange for an amount equal to the “cash value” (defined
below) of the Nonqualified Option. Such right shall be exercised by written
notice to Optionee. The cash value of the Nonqualified Option shall equal the
excess of the “market value” (defined below) per Share over the Option Price, if
any, multiplied by the number of Shares subject to the Nonqualified Option. For
purposes of the preceding sentence, “market value” per Share shall mean the
higher of (i) the average of the Fair Market Value per Share of Common Stock on
each of the five trading days immediately following the date a Change in Control
is deemed to have occurred or (ii) the highest price, if any, offered in
connection with the Change in Control. The amount payable to Optionee by Company
pursuant to this Section 9(b) shall be in cash or by certified check and shall
be reduced by any taxes required to be withheld.

10. Reorganization of Company and Subsidiaries. The existence of the
Nonqualified Option shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Shares or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

11. Adjustment of Shares. In the event of stock dividends, spin-offs or assets
or other extraordinary dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving the
Company, appropriate adjustments shall be made to the terms and provisions of
this Nonqualified Option.

12. No Rights in Shares. Optionee shall have no rights as a stockholder in
respect of any Shares until Optionee becomes the holder of record of such
Shares.

13. Certain Restrictions. The Committee in its sole discretion may issue a
separate certificate for the Shares subject to the restrictions described in
this Paragraph 13, which certificate shall contain an appropriate legend
describing such restrictions, and/or may establish an escrow or other custodial
arrangement for holding of the certificate by a person (other than Optionee)
selected by the Committee.

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By exercising the Nonqualified Option, Optionee agrees that if at the time of
such exercise the sale of Shares issued hereunder is not covered by an effective
registration statement filed under the Securities Act of 1933 (Act), Optionee
will acquire the Shares for Optionee’s own account and without a view to resale
or distribution in violation of the Act or any other securities law, and upon
any such acquisition Optionee will enter into such written representations,
warranties and agreements as the Company may reasonably request in order to
comply with the Act or any other securities law or with this document. Optionee
agrees that the Company shall not be obligated to take any affirmative action in
order to cause the issuance or transfer of Shares hereunder to comply with any
law, rule or regulation that applies to the Shares subject to the Nonqualified
Option.

14. Shares Reserved. The Company shall at all times during the Option Period
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Nonqualified Option.

15. Nontransferability of Option. The Nonqualified Option granted pursuant to
this document is not transferable other than by will, the laws of descent and
distribution or by a qualified domestic relations order. The Nonqualified Option
will be exercisable during Optionee’s lifetime only by Optionee or by Optionee’s
guardian or legal representative. No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities, or torts
of Optionee.

16. Amendment and Termination. No amendment or termination of the Agreement will
adversely affect the rights, privileges and option of Optionee under the
Nonqualified Option without the written consent of Optionee.

17. No Guarantee of Employment. The Nonqualified Option shall not confer upon
Optionee any right with respect to continuance of employment or other service
with the Company or any affiliate of the Company, nor shall it interfere in any
way with any right the Company or any affiliate of the Company would otherwise
have to terminate such Optionee’s employment or other service at any time.

18. Withholding of Taxes. The Company shall have the right to (i) make
deductions from the number of Shares otherwise deliverable upon exercise of the
Nonqualified Option in an amount sufficient to satisfy withholding of any
federal, state or local taxes required by law, or (ii) take such other action as
may be necessary or appropriate to satisfy any such tax withholding obligations.

19. No Guarantee of Tax Consequences. None of the Company, any affiliate of the
Company, the Board or the Committee makes any commitment or guarantee that any
federal or state tax treatment will apply or be available to Optionee under the
Nonqualified Option.

20. Severability. In the event that any provision of the Nonqualified Option
shall be held illegal, invalid, or unenforceable for any reason, such provision
shall be fully severable, but shall not affect the remaining provisions of the
Nonqualified Option, and the Nonqualified Option shall be construed and enforced
as if the illegal, invalid, or unenforceable provision had never been included
herein.

21. Application of Funds. The proceeds received by the Company from the sale of
Shares pursuant hereto will be used for general corporate purposes.

22. Governing Law. The Nonqualified Option shall be construed in accordance with
the laws of the State of Texas to the extent federal law does not supersede and
preempt Texas law.

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Executed to be effective as set forth above.

COMPANY

TETRA Technologies, Inc.

By: /s/Geoffrey M. Hertel

Geoffrey M. Hertel

President & Chief Executive Officer

OPTIONEE

By: /s/Stuart M. Brightman

Stuart M. Brightman, Employee

 

 

 

 

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