Chase Packaging Corp – ‘10SB12G’ on 10/24/96

As of:  Thursday, 10/24/96   ·   Accession #:  929966-96-32   ·   File #:  0-21609

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Registration of Securities of a Small-Business Issuer   —   Form 10-SB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10SB12G     Registration of Securities of a Small-Business       110±   429K 
                          Issuer                                                 

Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION      
Washington, D.C. 20549      

Form 10-SB      

General Form for Registration of Securities of Small Business Issuers     
Under Section 12(b) or (g) of     
the Securities Exchange Act of 1934     

Chase Packaging Corporation     

(Name of Small Business Issuer In Its Charter)      

   Texas                                    93-1216127
(State or other jurisdiction                      (IRS Employer       
of incorporation or organization)                 Identification No.) 

2550 N.W. Nicolai Street      
Portland, OR 97210      

(Address of principal executive offices)      

(503) 228-4366      
(Issuer's telephone number)     

Securities to be registered pursuant to Section 12(b) of the Act:     

Title of each class to be so registered:            Name of each exchange       
                                              on which each class is
                                         to be registered:

None                                                        

Securities to be registered pursuant to Section 12(g) of the Act:     

Common Stock ($.10 Par Value) of Chase Packaging Corporation      

(Title of class)      

The Exhibit Index is located at page ___ of the sequentially numbered 
pages of the manually signed registration statement.                            

CROSS-REFERENCE SHEET BETWEEN INFORMATION     
STATEMENT AND ITEMS OF Form 10-SB     

Item                                                                            
No.       Caption                Location in Information Statement              

1.     Business . . . . . . . . . . "Summary of Information Statement,"         
                           "Introduction," "The Distribution,"
                            "Business of the Company," "Property
                          of the Company," and "Management's
                 Discussion and Analysis."

2.     Financial Information. . . . "Capitalization of the Company,"            
                    "Management's Discussion and
                 Analysis," and "Financial
    Statements."

3.     Properties . . . . . . . . . "Business of the Company," and              
                  "Property of the Company."

4.     Security Ownership of                                                    
Certain Beneficial Owners                                         
and Management . . . . . . . "Security Ownership of Certain       
                          Beneficial Owners and Management."
5.     Directors and Executive                                                  
Officers . . . . . . . . . . "Management of the Company."         

6.     Executive Compensation . . . "Management of the Company."                

7.     Certain Relationships and                                                
Related Transactions . . . . None.                                

8.     Legal Proceedings. . . . . . "Business of the Company," "Property        
                       of the Company," and "Financial
    Statements."

9.     Market Price of and                                                      
Dividends on the                                                  
Registrant's Common Equity                                        
and Related Stockholder                                           
  Matters  . . . . . . . . . . "Introduction," "The Distribution," and
       "Risk Factors."
10.    Recent Sales of                                                          
Unregistered Securities  . . None.                                

11.   Description of Registrant's                                               
Securities to be                                                    
Registered  . . . . . . . . . "Description of Securities."          

12.   Indemnification of Directors                                              
and Officers. . . . . . . . . "Liability and Indemnification of     
                Officers and Directors."

13.   Financial Statements and                                                  
Supplementary Data  . . . . . "Capitalization of the Company,"      
                               "Management's Discussion and Analysis,"
                   and "Financial Statements."
14.   Changes in and                                                            
Disagreements with                                                  
Accountants on Accounting                                           
and Financial Disclosures . . None.                                 

15.   Financial Statements and                                                  
 Exhibits. . . . . . . . . . . (a)   Financial Statements may found at
                                    the Index to Financial Statement
                          beginning on page F-1.

                          (b)   Exhibits may be found at the
                                  Index to Exhibits beginning on
            page 32.

___________, 1996                                                               

Dear TGC Shareholder:                                                           

The enclosed Information Statement contains important information     
regarding Chase Packaging Corporation ("Chase" or the "Company"), which is      
engaged in the specialty packaging business, principally supplying products     
to the agricultural business.  Prior to the spin-off (the "Spin-Off") of        
the Company by TGC Industries, Inc. ("TGC") to its shareholders effective       
July 31, 1996, the Company was a wholly-owned subsidiary of TGC.  Pursuant      
to the Spin-Off, TGC will make a distribution (the "Distribution") to the       
holders of TGC Common Stock and, on an as-if-converted basis, TGC Series C      
8% Convertible Exchangeable Preferred Stock ("Preferred Stock").  The           
record date was July 15, 1996 ("Record Date"); however, the TGC Common          
Stock has traded with "due bills" since the Record Date and will continue       
to do so through the distribution date of the Chase Common Stock, which         
date will be the first business day following the effectiveness of the Form     
10-SB Registration Statement that the Company has filed with the Securities     
and Exchange Commission.  The holders of 6,188,018 shares of TGC Common         
Stock and 1,150,350 shares of TGC Preferred Stock will receive the spin-off     
distribution of Chase Common Stock.  On the distribution date, the holders      
of TGC Common Stock will receive one-half (1/2) share of Chase Common Stock     
for each share of TGC Common Stock held, and the holders of TGC Preferred       
Stock will receive one-half (1/2) share of Chase Common Stock for each          
share of Common Stock of TGC as if the Preferred stockholder had converted      
at $.75 per share of Common Stock.  We suggest that you read this               
Information Statement carefully and retain it for future reference.             

Although the Spin-Off was effective as of July 31, 1996, actual       
distribution of the Common Stock certificates will not be made until the        
first business day after the Form 10-SB Registration Statement for the          
Common Stock has been declared effective by the Securities and Exchange         
Commission (the "Distribution Date").  It is anticipated that the               
Distribution Date will be on or about ____________, 1996, and that the          
Common Stock certificates will be mailed on such date.  The TGC Common          
Stock, which trades on the Nasdaq SmallCap Market under the symbol "TGCI,"      
will be "ex-dividend" with respect to the Distribution on the first             
business day following the Distribution Date.  The Common Stock of Chase        
will trade under the symbol "_______" and is expected to trade over the         
counter and to be quoted on the OTC Bulletin Board.                             

Since the effective date of the spin-off, TGC has continued in the    
geophysical services business, and Chase has continued in the specialty         
packaging business, both companies operating as independent companies with      
all transactions between them occurring on an arms-length basis.  The           
Boards of Directors of TGC and the Company believe that the Spin-Off is in      
the best interests of both corporations due to the different industries in      
which TGC and the Company operate as well as the differing specialized          
managerial needs and capital requirements of each corporation as more fully     
discussed in the Information Statement.                                         

Shareholders Should Be Aware Of Certain Risk Factors Set Forth In The 
Information Statement.  See "Risk Factors".                                     

This Information Statement is being sent to the shareholders of record
of TGC as of the date hereof.  We are not asking you for a proxy because        
shareholder approval of the Spin-Off is not required.                           

Sincerely,

        TGC Industries, Inc.

          By: Robert J. Campbell
                             Vice-Chairman and Chief Executive Officer

INFORMATION STATEMENT     

CHASE PACKAGING CORPORATION     

Common Stock of Chase Packaging Corporation     

This Information Statement is being furnished to shareholders of TGC  
Industries, Inc. ("TGC") in connection with the spin-off (the "Spin-Off")       
of TGC's specialty packaging subsidiary, Chase Packaging Corporation (the       
"Company") to the shareholders of TGC's Common Stock and, on an as-if-          
converted basis, Series C 8% Convertible Exchangeable Preferred Stock           
("Preferred Stock").  The record date was July 15, 1996 ("Record Date");        
however, the TGC Common Stock has traded with "due bills" since the Record      
Date and will continue to do so through the distribution date of the Chase      
Common Stock, which date will be the first business day following the           
effectiveness of the Form 10-SB Registration Statement filed with the           
Securities and Exchange Commission ("Distribution Date").  The Spin-Off was     
effective for financial and accounting purposes as of July 31, 1996.  TGC       
will continue in the geophysical services business.                             

To effect the Spin-Off, TGC will make a distribution (the             
"Distribution") to the holders of 6,188,018 shares of TGC Common Stock          
outstanding and 1,150,350 shares of TGC Preferred Stock outstanding.  On        
the Distribution Date, the holders of TGC Common Stock will receive             
one-half (1/2) share of Chase Common Stock for every share of TGC Common        
Stock held, and the holders of TGC Preferred Stock will receive one-half        
(1/2) share of Chase Common Stock for every share of Common Stock of TGC as     
if the Preferred Stockholder had converted.  The $5.00 per share Preferred      
Stock is initially convertible at $.75 per share of Common Stock through        
July 1, 1998.  An additional 539,837 shares of Common Stock of Chase will       
be held in escrow and distributed upon the exercise, if any, of outstanding     
warrants and options of TGC.  No fractional Shares will be distributed.         

There will be no trading in the Common Stock of Chase until the       
Distribution Date.  It is currently anticipated that the Distribution Date      
will be on or about ____________, 1996.  The Chase Common Stock is expected     
to trade in the over-the-counter market and to be quoted on the OTC             
Bulletin Board under the symbol "________."  There can be no assurance as       
to the prices of such stock, the volume of trading thereof, or that a           
liquid market for the stock will develop.                                       

No consideration will be required to be paid by shareholders of TGC   
for the Common Stock to be received in the Distribution, nor will they be       
required to surrender or exchange shares of TGC Common Stock in order to        
receive the Common Stock.  After the Distribution Date, the TGC Common          
Stock will continue to be traded on the Nasdaq SmallCap Market under the        
symbol "TGCI".  The TGC Common Stock will be "ex-dividend" with respect to      
the Distribution on the first business day following the Distribution Date.     

The Company's manufacturing facilities are located in Portland, Oregon
and Idaho Falls, Idaho.  The Portland, Oregon facility is utilized for the      
weaving of paper mesh fabric and polypropylene mesh fabric for industrial       
and agricultural applications, the conversion of woven fabric into bags,        
and the storage and shipment of the Company's finished goods.  The Idaho        
Falls facility is utilized for bag conversion, storage, and delivery of the     
Company's products to the Idaho potato market.                                  

THESE SECURITIES INVOLVE CERTAIN RISKS. In reviewing this Information 
Statement, you should carefully consider the matters described under the        
caption "RISK FACTORS."  Neither TGC nor the Company will receive any cash      
or other proceeds from the Distribution.                                        

NO VOTE OF SHAREHOLDERS IS REQUIRED IN CONNECTION WITH THE DISTRIBUTION.        
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A       
PROXY.  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE           
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR      
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE           
ACCURACY OR ADEQUACY OF THIS INFORMATION STATEMENT.  ANY REPRESENTATION TO      
THE CONTRARY IS A CRIMINAL OFFENSE.                                             

The date of this Information Statement is ____________, 1996.         

TABLE OF CONTENTS     

Item                                                               Page         

SUMMARY OF INFORMATION STATEMENT . . . . . . . . . . . . . . . . .   1          

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . .   4          

THE DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . .   4          

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . .   7          

RELATIONSHIP BETWEEN TGC AND THE COMPANY AFTER THE SPIN-OFF. . . .  11          

FINANCING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12          

CAPITALIZATION OF THE COMPANY. . . . . . . . . . . . . . . . . . .  13          

BUSINESS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . .  14          

PROPERTY OF THE COMPANY  . . . . . . . . . . . . . . . . . . . . .  15          

MANAGEMENT'S DISCUSSION AND ANALYSIS OF                                         
FINANCIAL CONDITION AND RESULTS OF OPERATIONS  . . . . . . . . . .  17          

MANAGEMENT OF THE COMPANY. . . . . . . . . . . . . . . . . . . . .  21          

SECURITY OWNERSHIP OF CERTAIN                                                   
BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . .  26          

DESCRIPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . .  28          

LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS. . . . . .  29          

INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . .  29          

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . .  29          

INDEX TO FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . F-1          

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31          

INDEX TO EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . .  32          

SUMMARY OF INFORMATION STATEMENT      

The following is a summary of certain information contained elsewhere 
in this Information Statement.  It is qualified by the more detailed            
information in this Information Statement which should be read in its           
entirety.  Capitalized terms in this Summary not defined herein are defined     
elsewhere in this Information Statement.                                        

The Distribution                                                                

Distributing Company . . TGC Industries, Inc., a Texas                          
corporation ("TGC").          

Distributed Company. . . Chase Packaging Corporation, a Texas                   
 corporation (the "Company") and
       formerly a wholly-owned subsidiary of
     TGC.  The Company is engaged in the
      specialty packaging business.  Since
       the effective date of the Spin-Off on
July 31, 1996, the Company has
     operated as an independent company.
     See "Business and Properties of the
Company."                     

Shares to Be                                                                    
Distributed. . . . . . . Approximately 6,928,509 shares of                      
     Common Stock will be distributed on
        the Distribution Date.  The holders of
        TGC Common Stock will receive one-half
       (1/2) share of Chase Common Stock for
      each share of TGC Common Stock held,
        and the holders of TGC Preferred Stock
      will receive one-half (1/2) share of
      Chase Common Stock for each share of
      TGC Common Stock as if the Preferred
        Stock holder had converted.  The $5.00
        per share Preferred Stock is initially
     convertible at the conversion price
   per share of $.75 through July 1,
        1998.  An additional 539,837 shares of
        Chase Common Stock have been placed in
       escrow for distribution, if any, upon
     the exercise of outstanding options
     and warrants of TGC.  No fractional
 shares will be distributed. The
    distribution agent will mail stock
        certificates on the Distribution Date.
  See "Description of Securities."

Shares to be                                                                    
Outstanding. . . . . . . Giving effect to the distribution,                     
   approximately 6,928,509 shares of
     Common Stock of the Company will be
outstanding.                  

Record Date. . . . . . . Close of business on July 15, 1996.                    
   However, the TGC Common Stock has
        traded with "due bills" since the July
      15, 1996 record and will continue to
        do so through the Distribution Date of
the Chase Common Stock.       

Effective Date of the                                                           
Spin-Off . . . . . . . . Close of business on July 31, 1996.                    

Distribution Date. . . . The first business day following                       
 effectiveness of the Form 10-SB
      Registration Statement for the Chase
        Common Stock filed with the Securities
and Exchange Commission.  The 
        Distribution Date is anticipated to be
      _____________, 1996.  The TGC Common
  Stock will be "ex-dividend" with
    respect to the Distribution on the
  first business day following the
Distribution Date.            

Trading of Common                                                               
Stock. . . . . . . . . . It is anticipated that the Chase                       
   Common Stock will trade over-the-
       counter and will be quoted on the OTC
 Bulletin Board beginning on the
    distribution date under the symbol
"______."                     

Distribution Agent,                                                             
Transfer Agent, and                                                             
Registrar. . . . . . . . American Stock Transfer and Trust                      
        Company.  Phone number: (718) 921-8200

Certain Federal Income                                                          
Tax Consequences . . . . Management believes that no portion of                 
        the Company's Common Stock distributed
 to the TGC shareholders will be
        taxable as a dividend.  Because of the
     time delay which would be involved,
       TGC has not applied for a ruling from
     the IRS covering the tax aspects of
        the spin-off transaction. Shareholders
        should consult their own tax advisors.
        See "The Distribution - Federal Income
        Tax Consequences of the Distribution."

Principal Business to                                                           
be Retained by TGC . . . TGC will continue in business as a                     
   provider of geophysical services.

Relationship Between                                                            
TGC and the Company                                                             
after the Spin-Off . . . TGC and the Company operate as                         
    independent companies and will not
      have joint dealings other than on an
       arms-length basis.  See "Relationship
       Between TGC and the Company after the
  Spin-Off" and "Management of the
Company-Directors."           

Risk Factors . . . . . . TGC shareholders should be aware of                    
        certain risk factors set forth herein,
    including, among other things, the
   following: (i) the Company has no
     operating history as an independent
        public company; (ii) there has been no
    prior public market for the Common
       Stock of Chase, and the market values
      thereof may be volatile; (iii) TGC's
      financial support of the Company has
        been discontinued since July 31, 1996;
    (iv) the Company has experienced a
      decline in revenue and has sustained
   losses in recent periods; (v) the
      Company has a very weak and illiquid
        financial position; (vi) the Company's
        continued existence as a going concern
       is dependent on the Company achieving
  its business strategy; and (vii)
  payment of cash dividends is not
     expected in the foreseeable future.
See "Risk Factors."           

Summary Financial Information of the Company                                    

For selected historical financial information of the Company for the  
five years ended December 31, 1995, see "Financial Information - Selected       
Historical Financial Data."  For pro forma financial information of the         
Company for the year ended December 31, 1995, and for the six months ended      
June 30, 1996, see "Financial Information - Introduction to Selected Pro        
Forma Financial Information."                                                   

Additional Information                                                          

For additional information or inquiries with respect to the           
Distribution, shareholders of TGC should contact the Company.  See              
"Additional Information."                                                       

[Remainder of Page Intentionally Left Blank]      

INTRODUCTION      

On July 9, 1996, the Board of Directors of TGC Industries, Inc., a    
Texas corporation ("TGC"), declared a distribution (the "Distribution") to      
its shareholders in conjunction with the spin-off (the "Spin-Off") of TGC's     
wholly-owned subsidiary, Chase Packaging Corporation, formerly New Chase        
Corporation, a Texas corporation ("Chase"), which was effective on July 31,     
1996.  Prior to the spin-off, TGC liquidated its wholly-owned subsidiary,       
Chase Packaging Corporation ("Old Chase"),  with TGC receiving all of Old       
Chase's properties and liabilities in cancellation of the Old Chase stock       
held by TGC.  TGC then formed Chase as a new wholly-owned subsidiary and        
transferred to Chase all the properties and liabilities previously received     
by TGC as a result of the liquidation of Old Chase, except TGC retained the     
Portland, Oregon facility of Old Chase, which TGC intends to sell.  TGC         
anticipates that the proceeds from this sale will be contributed to Chase       
to be applied against Chase's outstanding debt with respect to such             
facility.                                                                       

Effective July 31, 1996, TGC spun-off Chase as a dividend to the      
holders of TGC's Common Stock and, on an as-if-converted basis, to the          
holders of TGC's Series C 8% Convertible Exchangeable Preferred Stock (the      
"Preferred Stock"), which was sold in a private placement.  The record date     
was July 15, 1996 ("Record Date"); however, the TGC Common Stock has traded     
with "due bills" since the Record Date and will continue to do so through       
the distribution date ("Distribution Date") of the Chase Common Stock,          
which date will be the first business day following the effectiveness of        
the Form 10-SB Registration Statement which the Company has filed with the      
Securities and Exchange Commission.  Additional shares of Chase Common          
Stock will be held in escrow and distributed upon the exercise, if any, of      
outstanding Warrants and options of TGC.                                        

The Company anticipates that the Chase Common Stock will trade        
over-the- counter and will be quoted on the OTC Bulletin Board under the        
symbol "_____".  However, no assurance can be given that a market in Chase      
Common Stock will develop.  Trading in the Chase Common Stock will not          
commence until after the Distribution Date.  Since the effective date of        
the Spin-Off on July 31, 1996, the Company has operated, and will continue      
to operate, in the specialty packaging business independently of TGC.  TGC      
will continue to operate in the geophysical services business.  See             
"Relationship Between TGC and the Company after the Spin-Off."                  

The Company's executive offices are located at 2550 N.W. Nicolai      
Street, Portland, Oregon  97210.  Shareholders of TGC with inquiries            
relating to the Distribution should contact the Company.  See "Additional       
Information."                                                                   

THE DISTRIBUTION      

Reasons for the Distribution                                                    

Prior to the Spin-Off, TGC and Chase were engaged in two separate and   
distinct businesses.  TGC is engaged in the geophysical services business,      
conducting seismic surveys to acquire geophysical data for oil and gas          
companies.  Chase is engaged in the specialty packaging business,               
principally supplying packaging products to the agricultural industry.          
Each business requires different and specialized management personnel           
attuned to the specific operational, financial, and marketing requirements      
of that business.  In addition, each has different capital requirements         
that are often conflicting.  The boards of directors of the respective          
entities believe that separation of the entities will be in the best            
interests of both corporations.                                                 

More specifically, TGC is currently enjoying expanded revenues and      
requires additional capital to take full advantage of its growth                
opportunities.  On the other hand, the specialty packaging business is          
undergoing weak market conditions, and the Company continues to experience      
operating losses.                                                               

Manner of Effecting the Distribution                                            

The general terms and conditions relating to the Distribution are set 
forth in the Agreement for Spin-Off of Subsidiary Stock dated as of July        
31, 1996 (the "Spin-Off Agreement") between TGC and the Company.                

TGC will effect the Distribution on the Distribution Date by          
delivering the Common Stock to American Stock Transfer and Trust Company,       
as the distribution agent (the "Distribution Agent"), for distribution to       
holders of record of TGC Common Stock and TGC Series C 8% Convertible           
Exchangeable Preferred Stock (the "Preferred Stock").  The record date was      
July 15, 1996 ("Record Date"); however, the TGC Common Stock has traded         
with "due bills" since the Record Date and will continue to do so through       
the Distribution Date.  On the Distribution Date, the holders of TGC Common     
Stock will received one-half share of Chase Common Stock for each share of      
TGC Common Stock held, and the holders of TGC Preferred Stock will receive      
one-half share of Chase Common Stock for each share of TGC Common Stock as      
if the Preferred holder had converted.  The $5.00 per share Preferred Stock     
initially is convertible to TGC Common Stock for $.75 per share of TGC          
Common Stock.  Based upon the shares of TGC Common Stock and Preferred          
Stock outstanding on the Record Date, approximately 6,928,509 shares of         
Chase Common Stock will be distributed to holders of TGC Common Stock and       
Preferred Stock and approximately 539,837 shares of Chase Common Stock will     
be escrowed with the Company's transfer agent for the benefit of holders of     
TGC's outstanding options and warrants.  No fractional shares will be           
distributed.  All such shares will be fully paid and nonassessable, and the     
holders thereof will not be entitled to preemptive rights.  See                 
"Description of Securities."  Certificates representing the shares of           
Common Stock will be mailed to TGC shareholders on the Distribution Date,       
or as soon thereafter as practicable.                                           

No holder of TGC Common Stock or Preferred Stock will be required to  
pay any cash or other consideration for the Common Stock received in the        
distribution or to surrender or exchange shares of TGC Common Stock or          
Preferred Stock in order to receive shares.  The Distribution will not          
affect the number of, or the rights attached to, outstanding shares of TGC      
Common Stock and Preferred Stock.  See "The Distribution - Federal Income       
Tax Consequences of the Distribution."                                          

Listing and Trading of the Chase Common Stock                                   

Trading in the Chase Common Stock will not commence until the         
Distribution Date.  To insure against premature public trading, the             
transfer agent has been instructed to hold all stock certificates and not       
to effect any transfers on the books of the Company until after receipt of      
notice of the Distribution Date.  The Company anticipates that the Chase        
Common Stock will trade in the over-the-counter market and will be quoted       
on the OTC Bulletin Board under the symbol "_______."                           

Subject to the foregoing, the Common Stock distributed to TGC         
shareholders will be freely tradable, except for shares received by persons     
who may be deemed to be "affiliates" of the Company under the Securities        
Act of 1933, as amended (the "Securities Act").  Persons who may be deemed      
to be affiliates of the Company after the Distribution generally include        
individuals or entities that control, are controlled by, or are under           
common control with, the Company, and may include the directors and the         
executive officers of the Company as well as any principal shareholder of       
the Company.                                                                    

Persons who are affiliates of the Company will be permitted to sell   
their Common Stock only pursuant to an effective Registration Statement         
under the Securities Act or an exemption from the registration requirements     
of the Securities Act, such as the exemptions afforded by Section 4(2) of       
the Securities Act and Rule 144 thereunder.  Under Rule 144, holders of the     
Common Stock will be able to include in their holding period for the Common     
Stock the period during which they held the shares of TGC Common Stock on       
which the Distribution was made.                                                

In order to comply with certain states' securities laws, if           
applicable, the Common Stock should be sold in such jurisdictions only          
through registered or licensed brokers or dealers.  In addition, in certain     
states, the Common Stock may not be sold unless the Common Stock has been       
registered or qualified for sale in such State or an exemption from             
registration or qualification is available and is complied with.                

When the Distribution takes place, the Company is expected to have    
approximately 502 holders of record of the Common Stock.  Due to the number     
of shares held in nominee or street name, the Company believes that there       
is a significantly greater number of beneficial owners of its Common Stock.     

Federal Income Tax Consequences of the Distribution                             

The tax consequences to TGC and its shareholders will be controlled by
S 301 of the Internal Revenue Code of 1986 (the "Code") with the following      
tax consequences:                                                               

1.   To TGC Shareholders.  Each TGC shareholder will be considered to 
have received a potentially taxable distribution in an amount equal to
the fair market value on the Distribution Date of the Company's Common
Stock received, and such Stock will be taxed as a dividend resulting  
in ordinary income to each TGC shareholder in an amount equal to the  
lesser of the "earnings and profits" of TGC or the value of the       
Company's Common Stock distributed.  Based upon a preliminary         
analysis, management of TGC believes that TGC does not have any such  
"earnings and profits" with the result that no portion of the         
Company's Common Stock distributed to the TGC shareholders will be    
taxable as a dividend. Assuming this is the case, the distribution    
will be applied against (and will reduce) the adjusted basis which    
each TGC shareholder has in his (her or its) TGC Stock, and any       
remaining amount will be treated as gain from the sale or exchange of 
property.  A TGC shareholder's basis in the Company's Common Stock    
received in the Distribution will be equal to the fair market value of
the Company's Common Stock on the Distribution Date, and the TGC      
shareholders' holding period for the Company's Common Stock will begin
on the Distribution Date.                                             

2.   To TGC.  Management believes that TGC's basis in the Company's   
Common Stock which TGC distributes will exceed the fair market value  
of such stock at the time of distribution.  However, the resulting    
loss to TGC will not be recognizable for tax purposes.  In the        
unlikely event that the fair market value of the Company's Common     
Stock which TGC distributes exceeds TGC's basis in such stock, TGC    
will recognize a gain equal to the amount of such excess.             

3.   To Company.  The distribution of the Company's Common Stock will 
have no direct tax consequences to the Company.                       

THE SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR 
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE TO TGC SHAREHOLDERS WHO      
RECEIVE COMMON STOCK THROUGH THE EXERCISE OF AN OPTION OR OTHERWISE AS          
COMPENSATION OR WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES OR       
WHO ARE OTHERWISE SUBJECT TO SPECIAL TREATMENT UNDER THE CODE.  THE OPINION     
OF LEGAL COUNSEL TO TGC IS NOT BINDING ON THE IRS.  ALL SHAREHOLDERS SHOULD     
CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE     
DISTRIBUTION TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF STATE,          
LOCAL, AND FOREIGN TAX LAWS.                                                    

Management of the Company                                                       

Following the Distribution, the Company will continue to be operated  
in substantially the same manner by substantially the same management as it     
has been in the recent past.  See "Management of the Company."                  

RISK FACTORS      

Holders of TGC Common Stock and Preferred Stock should be aware that  
the Distribution and ownership of the Chase Common Stock involve certain        
risks, including those described below, which could adversely affect the        
value of their holdings.  Neither TGC nor the Company makes, nor is any         
other person authorized to make, any representation as to the future market     
value of the Common Stock.                                                      

Cyclicality of Business                                                         

The markets for woven mesh fabric and agricultural packaging products 
sold by the Company are sensitive to changes in the agriculture business.       
The primary bag markets served by Chase are the Pacific Northwest onion and     
potato markets.  Chase's mesh yardage goes to converters serving Western        
onion and potato markets as well as the California, Texas, and Florida          
citrus markets.  All of these markets are affected by weather, crop size        
and yield, and supply/demand pricing in domestic and foreign markets.           
Weather affects the sizing and yield of crops in all growing regions with       
each region impacting supply/demand balances, and therefore market prices.      
Export markets will also affect crop pricing as a high number of export         
shipments will generally improve prices by reducing the available domestic      
supply whereas low exports may depress prices by causing domestic supplies      
to remain at high levels.  Crop sizing, particularly for potatoes, will         
affect the type of packaging used by packers to ship the product to market.     
Smaller sizes are more favorable for Chase's consumer-size mesh bags with       
larger sizes usually shipped in bulk packaging not manufactured by the          
Company.  Due to the uncertain nature of predicting agricultural crops and      
their impact on Chase's products, the Company anticipates a continuation of     
unpredictable markets and cyclical revenues.                                    

Spinning kraft paper (a custom manufactured paper made according to   
the Company's specifications) and polypropylene resin, the principal raw        
materials in the manufacture of the Company's products, are purchased in        
highly competitive, price sensitive markets.  These raw materials have          
historically exhibited price and demand cyclicality.  In particular,            
polypropylene resin prices have risen dramatically with an increase of 65%      
during the past three years.  As the primary raw material in Chase's woven      
polypropylene mesh fabric and bags for the onion and citrus markets, these      
higher raw material costs depressed profit margins for the Company as           
competitive pricing pressures prevented Chase from passing these increased      
costs through to customers.                                                     

Competition                                                                     

The agricultural packaging industry is highly competitive.  Chase     
Packaging competes within this business as a producer of mesh fabric and        
bags and as a reseller of packaging manufactured by other companies.            
Management believes the principal competitive factors in the Company's          
markets are product quality and functionality, prices, service, and             
reputation.  Chase encounters competition from both domestic and foreign        
bag producers.  In the past several years, inroads made by Mexican and          
Asian imports have resulted in reduced selling prices for bags and fabric       
in markets served by the Company.  Management anticipates a continuation of     
these competitive pricing pressures for the foreseeable future.                 

History of Losses                                                               

The Company has experienced substantial operating losses as a result  
of unfavorable crop conditions, competitive pricing pressures, and high raw     
material costs.  Operating losses for the years ended December 31, 1995 and     
1994 were $2,717,255 and $700,511, respectively, and $1,438,180 for the six     
months ended June 30, 1996.  Included in the 1995 loss was a $701,378 write     
down for the impairment of goodwill.                                            

Operating History and Future Prospects                                          

Prior to July 31, 1996, the Company had not operated as an independent
company.  Chase Packaging Corporation ("Old Chase") was incorporated in         
Texas in July of 1993 as a wholly-owned subsidiary of TGC.  In July of          
1996, TGC liquidated Old Chase with TGC receiving all of the property and       
liabilities of Old Chase in cancellation of the Chase Stock held by TGC.        
TGC then formed a new wholly owned subsidiary, New Chase Corporation, a         
Texas corporation, the name of which TGC subsequently changed to Chase          
Packaging Corporation ("the Company").  TGC transferred all of the              
properties and liabilities previously received by TGC as a result of the        
liquidation of Old Chase, except TGC retained the facility located in           
Portland, Oregon, which TGC intends to sell.  TGC anticipates that the sale     
proceeds will be contributed to Chase to be applied against the mortgage        
indebtedness encumbering the facility.  The Company does not have an            
operating history as an independent public company.  The Company will           
continue to conduct its business of producing specialty packaging primarily     
for the agricultural industry, which has experienced a decline in revenue       
and has sustained losses in recent periods.  There can be no assurance as       
to future operating results.  The Company operates in markets that are          
highly competitive, seasonal, and cyclical.                                     

The Company's operations are largely dependent on agricultural        
markets, the price of raw materials, and regulations governing the quantity     
of import fabric and bags permitted into the U.S.  The Company is also          
dependent on the continuation of its financing arrangements with its bank       
and on its ability to attract long-term investment to fund future growth.       
Management has embarked on a plan to diversify into additional geographic       
markets and to aggressively reduce inventory, cut expenses, dispose of          
underperforming assets, reduce trade payables, and improve supply terms         
with vendors.  The objective of this plan will be to bring manufacturing        
expenses in line with projected levels of sales, thereby generating a           
positive cash flow.  However, due to competitive pressures and the              
uncertain nature of predicting agricultural crops, no assurance can be          
given that Management's plan will achieve the intended results.                 

If management cannot achieve its operating and financial plans because
of sales shortfalls or other unfavorable events, the Company may find it        
necessary to dispose of additional assets or undertake other actions as may     
be appropriate.                                                                 

Defaults on Indebtedness                                                        

During the 1996 first quarter the Company experienced certain defaults
under the terms of the Chase Packaging Promissory Note with Union Camp and      
under terms of the Chase revolving line of credit with the Company's            
primary lender.  With proceeds received by TGC from its private placement       
in July, 1996, a portion of which were contributed to the capital of the        
Company, payments were made to Union Camp and the bank in July, 1996 which      
cured the payment defaults and released TGC as guarantor of these               
obligations.  Chase remains in default under the terms of the Union Camp        
Promissory Note for violation of the tangible net worth covenant and under      
the terms of the bank revolving line of credit as a result of a                 
cross-default related to the Union Camp default.  The Company's management      
is currently engaged in negotiations with Union Camp and the bank that are      
expected to result in a waiver (at least on a temporary basis) of the           
default conditions.  TGC plans to sell the facility located in Portland,        
Oregon with the proceeds to be contributed to Chase to be applied against       
the mortgage indebtedness encumbering the facility.  In addition, Chase         
management plans to dispose of Chase's woven polypropylene extrusion and        
weaving equipment.  Future fabric requirements for Chase's woven                
polypropylene bag conversion operations will be met with the purchase of        
fabric from other domestic and foreign fabric suppliers.  Although there        
can be no assurance as to the timing and amount of these asset sales,           
Management of TGC and Chase presently anticipates that proceeds from such       
sales will enable Chase to eliminate the Union Camp debt and further reduce     
the loan balance with the bank thereby curing all remaining defaults.           

Absence of TGC Financial Support                                                

As a wholly-owned subsidiary of TGC, the Company has not been         
responsible for obtaining external sources of financing, and management of      
the Company has historically relied on TGC for various financial and            
administrative services.  This financial support was discontinued               
coincident with the effective date of the Spin-Off, and the Company is now      
responsible for maintaining its own financing and banking relationships as      
well as administrative functions.  TGC has no obligation to support the         
Company financially after the effective date of the Spin-Off.                   

During the past year the Company has incurred substantial losses from 
operations.  As discussed above under "Defaults on Indebtedness", the           
Company is currently in default on its obligations to Union Camp                
Corporation and is out of compliance with the bank revolving line of            
credit.  Management has entered into negotiations with Union Camp in an         
effort to restructure the note to remedy the default conditions.  It is         
anticipated that proceeds from the sale of the Company's Portland real          
estate and weaving operations will enable the Company to pay the Union Camp     
note in full; however, no assurance can be given as to the timing and           
dollar amount of these sales.  The Company has continued to utilize the         
bank revolving line of credit under the same terms as existed prior to the      
notice of default and management believes it will satisfactorily resolve        
all default issues with the bank.  See "Financing."                             

The Company's Continuation As A Going Concern                                   

The Company's continued existence as a going concern is dependent upon
its ability to generate sufficient cash flow from operations to meet its        
obligations on a timely basis.  Management presently believes that its          
asset sales, cost reduction program, and focus on conversion operations and     
resale transactions will enable the Company to meet its obligations and         
sustain its operations for the foreseeable future.  There can be no             
assurance, however, that the Company will be successful in its efforts to       
sell assets and reduce cash losses.  The failure of the Company to achieve      
these objectives could have a material adverse effect on the future             
operations of the Company.                                                      

Absence of Previous Trading Market for the Common Stock                         

There has been no previous public market for the Company's Common     
Stock, and, therefore, there can be no assurance as to the price at which       
the Common Stock will trade after the Distribution Date.  Until the Common      
Stock is fully distributed and an orderly market develops, the prices at        
which such Common Stock trades may fluctuate significantly.  Prices for         
Common Stock will be determined in the marketplace and may be influenced by     
many factors, including the depth and liquidity of the market for the           
Common Stock, investor perceptions of the Company, and general economic and     
market conditions.                                                              

The Company anticipates that the Common Stock will trade in the over- 
the-counter market and will be listed on the OTC Bulletin Board.  No            
assurance can be given that a market will develop in the Common Stock.  See     
"The Distribution - Listing and Trading of the Common Stock."                   

Distribution of Additional Shares of Common Stock                               

TGC has escrowed approximately 539,837 Shares of Chase Common Stock   
with its Transfer Agent for the benefit of holders of options and warrants      
of TGC.  Such stock will be distributed by the Transfer Agent to such           
holders upon the exercise, if any, of the options and warrants.  Upon           
distribution and trading of such Common Stock the percentage interest of        
existing shareholders in the trading market will be diluted.                    

Dividend Policy                                                                 

It is currently contemplated that, following the Distribution, the    
Company will not pay cash dividends on the Common Stock in the foreseeable      
future.  The Company's dividend policy will be reviewed by the Board of         
Directors of the Company at such future times as may be appropriate in          
light of relevant factors existing at such times.                               

RELATIONSHIP BETWEEN TGC AND THE COMPANY AFTER THE SPIN-OFF     

For purposes of effecting the Spin-Off and to provide for an orderly  
transition to the status of two separately managed and independent              
companies, TGC and the Company have entered into certain agreements, as         
described in this Section.  The forms of agreement summarized in this           
Section are included as Exhibits to the Registration Statement on Form          
10-SB of which this Information Statement forms a part, and the following       
summaries are qualified in their entirety by reference to the agreements as     
filed.                                                                          

Agreement for Spin-Off of Subsidiary Stock and Escrow Agreement                 

TGC and the Company have entered into an Agreement for Spin-Off of    
Subsidiary Stock (the "Spin-Off Agreement") dated as of July 31, 1996,          
which provides for, among other things, the principal corporate                 
transactions required to effect the Spin-Off and certain agreements             
governing the relationship between TGC and the Company following the            
Spin-Off.  The Spin-Off Agreement provides that expenses in connection with     
the Spin-Off transaction shall be absorbed by TGC.  The Spin-Off Agreement      
also provides that the Company must execute an Escrow Agreement (and the        
Company has done so) to cover its obligation to issue the Company's Common      
Stock to holders of TGC options and warrants in the event such options and      
warrants are exercised.                                                         

Relationship of Management of TGC and the Company                               

Although a majority of the Directors of the Company are also Directors
of TGC, all of the executive officers of the Company (with the exception of     
William J. Barrett, Secretary) work exclusively for the Company.                
Notwithstanding such interlocking Directors, it is intended that the            
Company and TGC operate as independent companies and that any transactions      
between them take place on an arms-length basis.                                

FINANCING     

Financing Arrangements for the Company                                          

The Company, as a wholly-owned subsidiary of TGC, historically has not
been responsible for obtaining external sources of financing.  Working          
capital, capital expenditures, and other cash requirements in excess of         
internally generated cash have been funded through financing arrangements       
structured by TGC.  Additionally, as part of TGC's reorganization plan, TGC     
contributed approximately $2,725,000 as a capital contribution to Chase.        
The proceeds were utilized by Chase in July and August, 1996, to pay down       
loan balances with the Company's lenders and to make payments to trade          
creditors.  TGC made the contribution to Chase from a portion of the            
proceeds received from a private placement in July, 1996.  Certain board        
members of TGC, who are also board members of Chase, are employed by a          
securities firm which received commissions from the sale of TGC securities      
sold in the private placement.  This financial support has been                 
discontinued as of July 31, 1996, and, thus, the Company is responsible for     
its own external financing.                                                     

The Company anticipates that funds generated by the sale of assets    
(See "Financial Condition") and reduced expenses from the implementation of     
the Company's cost reduction program will provide sufficient cash for Chase     
to meet its immediate working capital requirements.  To the extent the          
Company does not dispose of assets or reduce its losses as planned,             
external financing may be required.  With the historical losses at Chase,       
no assurance can be given that such financing can be obtained.  As a            
result, lack of external financing may impair the Company's ability to          
operate as a going concern.                                                     

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                                                                [Download Table]

                       CAPITALIZATION OF THE COMPANY                       

     The following table sets forth the capitalization of the Company at   
June, 1996.                                                                
                                                                           

                                                  Actual       Pro Forma   
                                              June 30, 1996  June 30, 1996 

Short-Term Debt (1). . . . . . . . . .        $5,791,693      $1,333,554(3)

Long-Term Liabilities:                                                     

   Note payable to bank                           29,167               0   

     Total long-term liabilities . . .            29,167               0(3)

Stockholders' Equity:                                                      

     Preferred Stock, $1 par value;                                        
     4,000,000 shares authorized;                                          
     none issued . . . . . . . . . . .                 0               0   

     Common Stock, $.10 par value;                                         
     25,000,000 shares authorized;                                         
     7,468,346 shares issued;                                              
     6,928,509 shares outstanding                                          
     (2) . . . . . . . . . . . . . . .               100         692,851   

     Additional Paid-In Capital. . . .         2,371,145       2,917,567(4)

     Accumulated Deficit . . . . . . .        (5,238,718)              0(5)

       Total Stockholders' Equity                                          
          Deficit  . . . . . . . . . .        (2,867,473)      3,610,418   

          Total Capitalization . . . .        $2,953,387      $4,943,972   

_____________                                                                   

(1)  Short-Term Debt consists entirely of the current portion of Long-Term      
debt.                                                                 

(2)  Assumes the distribution of the Company's Common Stock.  Excludes          
600,000 shares reserved for issuance pursuant to the Company's 1996   
Stock Option Plan.                                                    

(3)  Assumes a capital contribution of $2,716,403 from TGC.  Proceeds of        
$2,323,756 from the contribution were utilized to pay down loan       
balances with the Company's lenders.  The balance was utilized to make
payments to trade creditors.  Also, $2,134,383 owed to Union Camp     
is assumed to have been paid in full from the proceeds of the         
anticipated sale of the Portland, Oregon facility and equipment.  No  
assurance can be given that the sale will occur.                      

(4)  Assumes sale of Portland real estate for $2,134,383 which represents       
the mortgage indebtedness currently encumbering such facility.        
All proceeds from the sale will be contributed by TGC Industries to   
Chase for payment of this debt.                                       

(5)  To close out the accumulated deficit to additional paid-in capital to      
give effect to the formation of New Chase.                            

BUSINESS OF THE COMPANY     

Chase Packaging Corporation (the "Company") was established in July of
1993 as a wholly owned subsidiary of TGC.  On July 30, 1993, the Company        
purchased certain assets of Union Camp Corporation's Chase Packaging            
division ("Chase Bag"), for a purchase price of approximately $6.14             
million.  The Company financed the acquisition through a combination of         
debt and equity financing. These assets purchased included substantially        
all of the business of weaving and constructing Saxolin (R) paper mesh and      
polypropylene plastic mesh bagging material for agricultural and industrial     
applications and substantially all of the properties related to Chase Bag.      

The business and properties acquired by Chase consist of Union Camp's 
plant facilities located in Portland, Oregon, and Idaho Falls, Idaho, and       
all machinery, equipment, and inventories connected with these facilities.      
Union Camp retained all accounts receivable owing as of the July 30, 1993       
closing date.                                                                   

On May 25, 1994, the Company acquired, for approximately $1.77        
million, from Fisher Bag Company, Inc. ("Fisher Bag") of Seattle,               
Washington, substantially all of its business of manufacturing and              
marketing agricultural and industrial bags and other packaging materials.       
The business and assets acquired from Fisher Bag consist of all operating       
assets of Fisher Bag, including all equipment, inventories, accounts            
receivable, and proprietary information, but excluding all real property        
and interests in real estate.  During the fourth quarter of 1994 the            
manufacturing operation of Fisher Bag was phased into Chase Packaging's         
Portland facility.  Substantially all of the machinery and equipment and a      
major portion of the inventory was transferred to the Portland plant.           

The Company's operations include the conversion of Saxolin (R) paper  
mesh material for potato and other agricultural product bags.  Saxolin (R)      
is created by slitting, treating, and twisting paper into individual            
threads before weaving and dyeing the mesh.  This biodegradable paper mesh      
is then converted into finished bags or sold as yardage for conversion by       
others or sold for industrial applications.  The Portland plant has become      
a leading supplier of Saxolin (R) paper mesh to the Idaho potato market.        
Predominantly used for consumer size Idaho potato bags, Chase has extended      
the use of Saxolin (R) paper mesh to new areas, including covers for rail       
cars carrying wood chips and erosion control blankets.                          

The capability to extrude and weave polypropylene mesh materials was  
added in the early 1980s to service the needs of the large onion markets on     
the west coast for polypropylene mesh bags.  Approximately $650,000 was         
expended during 1993-95 to upgrade the Company's weaving machines enabling      
41 of the 44 looms to weave polypropylene mesh to meet the demand for           
agricultural and industrial polypropylene woven products.                       

Chase Packaging has (1) two principal suppliers of paper from which it
manufactures Saxolin (R) paper mesh, P.L. Thomas, Inc. and Mosinee Paper        
Corp., and (2) three principal suppliers of polypropylene resin from which      
it manufactures polypropylene mesh, Fina Oil & Chemical Co., Solvay             
Polymers, Inc., and Techmer PM.  Management does not believe that there is      
any material risk of disruption in supply of either of such raw materials;      
however, Chase has experienced a 13% increase in the price of polypropylene     
resin in the last twelve months.                                                

Sales by the Portland, Idaho Falls, and Seattle locations are         
currently handled on a direct basis through eight sales people covering         
California, Oregon, Idaho, Washington, Colorado, and Texas.  At the present     
time, about 84% of the sales of the field representatives are Chase             
Packaging's products, with the balance being consumer and industrial            
multiwall packaging, corrugated containers, as well as cotton and circular      
woven polypropylene bags produced by other companies.                           

Chase Packaging's top twenty customers account for approximately 49%  
of Chase Packaging's revenues.  One customer, Kenneth Fox Supply Co.,           
accounted for 10% of the packaging operation's revenue during 1995.             
Management does not believe that any one of such customers is material or       
that Chase's business is dependent upon one or a few major customers.           
Sales are generally made to customers pursuant to the terms of standard         
purchase orders or order confirmations.                                         

Prior to its acquisition by the Company, Chase Bag had failed to      
adequately respond to the needs of the market and the challenges of             
competition, resulting in a loss of market share of the Idaho potato            
market. During the past several years, label quality has been improved and      
product lines expanded to include polyknit mesh bags and woven                  
polypropylene mesh bags.  New customers have been gained from Chase's           
improved product offerings; however, Chase's net market share of the Idaho      
potato market through the first half of 1996 has continued to decline due       
to the loss of a key customer and competition from cheaper poly film bags.      
In the onion and citrus markets, Chase's market share of woven                  
polypropylene bags has increased due to the success of its high quality         
pre-print onion bags; however, the size of the overall market decreased in      
1995.  Onion bag revenues for 1995 were down from 1994 levels due to a          
large decline in the Pacific Rim export market.  The reduced exports            
created an oversupply of domestic onions which lowered U.S. market prices       
and reduced shipments in the 1995 fourth quarter.  This weak export market      
carried into 1996, resulting in a continuation of reduced onion bag             
shipments for Chase in the first six months of 1996.  Also, increased           
competition from imports, particularly from Mexico, eroded Chase's market       
share of sales of woven polypropylene fabric and bag sales to various onion     
and citrus markets.  Chase will continue to aggressively market its high        
quality fabric and bags but given the uncertain nature of predicting            
agricultural markets and increasing competition from imports, there can be      
no assurance that management's plans will achieve the intended results.         

PROPERTY OF THE COMPANY     

The Company owns 24,000 square feet of office, manufacturing, and     
warehouse space in Idaho Falls, Idaho.  This facility is used for bag           
conversion, storage, and delivery for the Company's Idaho operations and        
was purchased as part of the $3,761,537 purchase money note payable to          
Union Camp with the final outstanding balance on the note due and payable       
on July 30, 1998.                                                               

The main offices and the material manufacturing and conversion        
operations of the Company are currently housed in 88,000 square feet of         
office and manufacturing space with outdoor resin silos and parking lot in      
Portland, Oregon.  This facility was previously owned by the Company's          
predecessor, Chase Packaging Corporation ("Old Chase"). However, when TGC       
liquidated Old Chase, with TGC receiving all of the properties and              
liabilities of Old Chase in cancellation of the Old Chase stock held by         
TGC, and transferred all of such properties and liabilities to the Company,     
TGC retained this Portland, Oregon facility.  TGC intends to sell this          
facility, and the sale proceeds will be contributed to Chase to be applied      
against the mortgage indebtedness currently encumbering the facility.           

Both the Idaho Falls, Idaho and Portland, Oregon facilities, including
the real estate, machinery, and equipment, owned by the Company are             
encumbered by the security interest of Union Camp Corporation for the           
$2,134,383 owed to Union Camp in connection with Chase's purchase of Union      
Camp's Chase Packaging division in July, 1993.  Additionally, Congress          
Financial Corporation, the Company's primary lender, has a second security      
interest securing the Company's obligation to Congress under the revolving      
line of credit with Congress.  As of July 31, 1996, the Company owed            
$1,733,887 under the revolving line of credit.  See "Management's               
Discussion and Analysis of Financial Condition and Results of Operations."      

In addition to the sale of the Portland facility by TGC, Chase        
management plans to dispose of the woven polypropylene extrusion and            
weaving equipment located in Portland.  Future fabric requirements for          
Chase's woven polypropylene bag conversion operations will be met with the      
purchase of fabric from other domestic and foreign fabric suppliers.  The       
Company plans to continue operating as a bag converter and distributor of       
packaging products manufactured by other companies.  Chase management           
anticipates that the entire Portland, Oregon operation will be housed in        
the 80,000 square feet of leased space located in Portland (after giving        
the appropriate 30 days notice to the Company's sub-lessee).                    

Chase Packaging Corporation currently leases 80,000 square feet of    
manufacturing/ warehouse space with a four bay loading dock in Portland,        
Oregon.  The monthly rent is $13,850.  20,000 square feet of this facility      
is used for the Company's printing, warehousing, and delivery operations.       
60,000 square feet is sub-leased to one tenant for $15,000 per month.  The      
Company also leases 12,000 square feet of warehouse space in Idaho Falls,       
Idaho.  The monthly rent is $2,000.  This facility is used for storage of       
material and finished goods for the Company's Idaho operations.                 

The condition of all the above facilities is good and the Company's   
management believes that these properties are suitable and adequate for the     
Company's foreseeable needs.  Additionally, the Company's management            
believes the properties are adequately covered by insurance.                    

MANAGEMENT'S DISCUSSION AND ANALYSIS OF       
FINANCIAL CONDITION AND RESULTS OF OPERATIONS     

The following Management's Discussion and Analysis is based upon and  
should be read in conjunction with the Company's selected financial data        
and the Company's financial statements and notes thereto included elsewhere     
in this Information Statement.                                                  

Results of Operations                                                           

Six Months Ended June 30, 1996 Compared                                         
to the Six Months Ended June 30, 1995                                           

Revenues for the Company were $2,317,866 for the second quarter of    
1996 as compared to revenue of $3,933,095 for the second quarter of 1995.       
Operating losses before interest and taxes were $394,997 for the 1996           
second quarter as compared to operating losses before interest and taxes of     
$85,946 for the same period of 1995.  Revenues were $4,714,683 for the six      
months ended June 30, 1996 as compared to revenues of $7,694,053 for the        
same period of 1995.  Operating losses before interest and taxes were           
$1,019,530 for the first half of 1996 as compared to operating losses           
before interest and taxes of $149,358 for the first half of 1995.               

Factors that contributed to the lower revenues and higher operating   
losses at Chase in 1996 were a weak export market for domestic onions which     
reduced onion bag and fabric shipments and increased competition from an        
influx of cheap import fabric and bags from Mexico.  The result has been a      
$1.1 million decrease in sales of Chase's woven polypropylene fabric to         
other bag converters for the first half of 1996 when compared to the first      
half of 1995.  Also, unfavorable market pricing had a negative impact on        
sales of Chase's consumer-size mesh potato bags, reducing sales of such         
bags by $350,000 when comparing the first six months of 1996 with the first     
six months of 1995. High prices paid by potato processors to potato growers     
required packers to match the high prices when purchasing their potatoes        
from the growers.  This created very narrow margins for the potato packers      
and resulted in the use of cheaper film bags supplied by competitors for a      
large percentage of potato shipments to the fresh market.  In addition, the     
outsourcing on a commission basis of certain circular woven polypropylene       
bag orders for the grass seed market reduced revenues for this product line     
by approximately $710,000 during the first half of 1996.                        

The continued drop in demand for Chase's core products during 1996    
required management to expand its program of inventory reduction and below-     
standard production levels to balance plant operations with market demand.      
Although variable, indirect and overhead expenses have been reduced further     
during the second quarter, the curtailment of weaving, printing and sewing      
operations resulted in underabsorbed manufacturing overhead which increased     
the cost of units produced.  These unfavorable manufacturing variances          
combined with downward pressure on selling prices for Chase's products          
resulted in negative margins for the woven polypropylene (onion/citrus)         
product line and reduced margins for the other product lines.                   

Chase management will continue its previously disclosed 1996 business 
plan of lowering the operations' breakeven level by bringing manufacturing      
costs in line with the level of sales being generated by current                
agricultural markets.  To compete with the inroads being made by imports,       
Chase will continue its program of expense reduction and efficiency             
improvement to become a lower-cost producer of fabric and bags.  Chase will     
actively pursue expansion of sales efforts into other geographic markets,       
search for new product opportunities, eliminate unprofitable product lines      
and sell-off underperforming assets.                                            

The business plan includes the sale by TGC of the facility located in 
Portland, Oregon.  TGC anticipates that the proceeds from this sale will be     
contributed to Chase to be applied against Chase's outstanding debt with        
Union Camp.  In addition, Chase management plans to sell Chase's woven          
polypropylene extrusion and weaving equipment with proceeds to be utilized      
for debt reduction and for working capital purposes at Chase. Chase will        
continue to operate as a producer of paper mesh fabric and as a converter       
and  distributor of agricultural bags and other specialty packaging.            
Accounts payable status will be monitored closely with vendor communication     
a high priority to ensure that plant production continues at the most           
efficient level possible. Due to competitive pressures from within and          
outside the U.S. and the uncertain nature of predicting agricultural crops      
and their impact on Chase's products, no assurance can be given that            
Chase's plans for the remainder of 1996 will achieve the intended result.       

Fiscal Year Ended December 31, 1995 Compared                                    
to Fiscal Year Ended December 31, 1994.                                         

The Company had sales of $14,278,261 and an operating loss before     
interest and tax expense of $1,877,422 for the year ended December 31, 1995     
as compared to revenue of $17,046,671 and an operating loss before interest     
and tax expense of $52,149 for the same period of 1994.  Included in the        
1995 loss was a $701,378 write down for the impairment of goodwill (see         
Financial Condition).  Interest expense for the packaging operation was         
$839,833 in 1995 as compared to $648,346 in 1994 with the additional            
expense attributable to increased borrowing activity to finance working         
capital requirements.                                                           

Prior to its acquisition by the Company, Chase Bag had lost market    
share by failing to respond to competitive challenges and the needs of its      
market.  During the past two years Chase management has introduced a number     
of changes with the objective of reversing this trend and expanding Chase's     
customer base.  The purchase of high quality printing and labeling              
equipment, consolidation of sewing operations, retraining personnel, and        
upgrading and expanding weaving operations were all implemented during          
1994.  Also, in May of 1994 the Company acquired substantially all of the       
assets of Seattle-based Fisher Bag Company with the intention of merging        
the two companies' market share in a manner that would expand and               
strengthen Chase's presence in the Pacific Northwest.  In 1995, Chase           
continued to refine its pre-print label quality and expended $250,000 on        
weaving upgrades to expand woven polypropylene weaving capacity to 41 of 44     
looms (the remaining 3 looms will continue to weave Chase's paper mesh          
products).  The addition of polyknit and woven polypropylene mesh bags to       
the potato product line was also fully implemented during 1995.  These          
manufacturing modifications and expansion programs, combined with new           
product offerings, have positioned the packaging operation to take              
advantage of various market opportunities; however, these opportunities         
have not materialized for the reasons to be described herein.                   

Chase's primary products, Saxolin (R) paper and polypropylene mesh    
bags for the potato, onion, and citrus industries amounted to approximately     
38% of total packaging revenues in 1995 as compared to 44% of total revenue     
in 1994.  An additional 7% of sales was contributed by polyknit and woven       
polypropylene potato bags.  Saxolin (R) and woven polypropylene mesh            
yardage sold to other converters for potato, onion, citrus, industrial, and     
environmental applications decreased to 23% of total sales (29% in 1994).       
Sales of lower margin burlap bags for bulk potatoes and circular woven          
polypropylene bags for grass seed, animal feed, and beans increased to 22%      
of total revenue from 13% in 1994.  The remaining revenue was generated by      
sales of cartons, multi-wall bags, and other miscellaneous items.       The     
bag markets served by Chase in order of importance are:  (1)                    
Idaho/Washington potato, (2) Western Idaho/Eastern Oregon onion, (3)            
Washington/Western Oregon onion, (4) California onion, and (5)                  
Oregon/Washington grass seed and other miscellaneous crops.  Chase's mesh       
yardage goes to converters serving the Idaho potato market; the Colorado,       
Texas, California, New Mexico and Arizona onion markets; and the                
California, Texas and Florida citrus markets.                                   

Due to the seasonal nature of agricultural crops, sales of Chase's    
products to the various markets mentioned above fluctuate during the            
Company's fiscal year.  Historically, the Northwest onion and potato            
harvests commence late in the third quarter with sales of Chase's products      
reaching a peak during the fourth quarter and the first quarter of the          
following year.                                                                 

Growing conditions in the Northwest for the 1994/1995 onion and potato
season were excellent, resulting in crops with large sizing and yield.          
Onion shipments commenced earlier than usual in the second half of 1994 as      
a large number of onions were packed for export to foreign markets.  This       
created a heavy demand for Chase's products in the third and fourth             
quarters of 1994, but depressed demand for Chase's onion bags in early 1995     
as onion inventory levels diminished quickly in the Northwest.  The high        
yield and large sizing of the Idaho potato crop resulted in low market          
prices for Idaho potatoes in the 1994/1995 season.  Demand for Chase's mesh     
products was down throughout the season as growers/ shippers sold at higher     
prices to processors, sold bulk potatoes in burlap, or shipped in cartons       
rather than move potatoes in Chase's consumer-size bags at extremely low        
prices.                                                                         

During 1995 the packaging operation did experience a sales increase   
for products outside its core business.  The success of the Seattle             
sales/service center resulted in a $560,000 increase in sales of products       
to the construction, shipping, and seafood industries.  Sales of circular       
woven polypropylene bags increased approximately $300,000 in 1995 when          
compared to 1994 as Chase captured a larger share of the Western grass          
seed, pea, and lentil markets.  The increased sales of these lower margin       
products, however, did not offset the decline in sales of Chase's more          
profitable onion and potato bags.                                               

The 1995/96 season for onions has been very poor for domestic bag     
suppliers as a weak export market in late 1995 resulted in an oversupply of     
onions in the Northwest.  Demand for Chase's onion fabric and bags has been     
low as depressed market prices for onions has forced growers/packers to         
hold onions rather than ship at a loss.  Also contributing to the reduced       
demand has been an influx of cheap import fabric and bags from Mexico.  The     
decline in onion exports and competition from Mexican fabric have been the      
primary factors in the 35% decline of onion fabric sales in 1995 when           
compared to 1994.  The 1995-96 potato season, after a promising start,          
turned unfavorable for Chase's mesh potato bags.  Traditionally, 70% of the     
potato harvest is sold to processors in bulk and 30% is sold to the fresh       
market.  In the current season, the high prices being paid by processors        
has reduced the incentive for growers to sell at lower prices to the fresh      
market. In addition, as a result of the high prices being paid by               
processors to growers, the potatoes that are purchased by packers from          
growers at such higher prices for sale to the fresh market are being            
shipped in cheaper film bags to minimize packing costs.  Sales of Chase's       
consumer-size mesh bags were much lower than anticipated during the 1995        
fourth quarter as potatoes were purchased by processors, held by growers in     
inventory with the expectation of higher prices or were shipped in lower        
cost film bags to the fresh market.                                             

The result of these unfavorable market conditions has been reduced    
revenues and a seven percentage point drop in gross profit margins at the       
packaging operation in 1995 when compared to 1994.  Inventories were            
increased in the 1995 third quarter in anticipation of large potato and         
onion crops with normal seasonal movement.  The unexpected drop in demand       
for Chase's core products in the 1995 fourth quarter required management to     
scale back production and reduce inventories to balance plant operations        
with market demand.  As weaving, printing, and sewing operations were           
curtailed, indirect and overhead expenses were underabsorbed, thereby           
increasing unit costs and reducing profit margins to extremely low levels.      
In addition, although polypropylene resin prices have moderated, the cost       
of resin at year-end 1995 remained 13% higher than at December, 1994.           
These higher raw material costs also depressed profit margins as                
competitive pricing pressures prevented Chase from passing these increased      
costs through to customers.                                                     

Chase's management business plan for 1996 will be to lower its        
breakeven level by bringing manufacturing costs in line with the level of       
sales being generated by current agricultural markets.  To compete with the     
inroads being made by Mexican (and to a lesser extent Asian) imports,           
programs to reduce expenses and increase efficiencies have been initiated       
to enable Chase to become a lower-cost producer of fabric and bags.  Labor      
expenses were reduced 30% in the 1995 fourth quarter and inventory was          
reduced $863,000 during this same period.  Chase will actively pursue           
expansion of sales efforts into other geographic markets and will continue      
to search for new opportunities to expand its product lines.  Each product      
line will be evaluated with unprofitable lines eliminated. Manufacturing        
processes may be changed with the possible outsourcing of some                  
semi-finished and finished goods production.  Accounts payable status will      
be monitored closely with vendor communication a high priority to ensure        
that plant production continues at the most efficient level possible.  Due      
to competitive pressures from within and outside the U.S. and the uncertain     
nature of predicting agricultural crops and their impact on Chase's             
products, no assurance can be given that the Company's plans for 1996 will      
achieve the intended results.                                                   

Financial Condition                                                             

Cash of $33,967 was provided by operations for the six months ended   
June 30, 1996 as compared to cash of $1,244,955 used in operations for the      
first six months of 1995.  The funds generated for the first half of 1996       
were primarily attributable to inventory reductions at Chase Packaging          
during this period.  Cash used in investing activities at Chase was             
primarily additions to machinery and equipment for the packaging operation.     
Cash used in financing activities was attributable to payments on the Chase     
line of credit of $720,160 and $185,001 in principal payments of debt           
obligations.                                                                    

During the 1996 first quarter the Company experienced certain defaults
under the terms of the Company's Promissory Note with Union Camp and under      
terms of the Company's revolving line of credit with the bank.  As a result     
of TGC's contribution to Chase from a portion of the proceeds TGC received      
from its private placement in July, 1996, payments were made to Union Camp      
and the bank in July, 1996 which cured the payment defaults and released        
TGC as guarantor of these obligations.  Chase remains in default under the      
terms of the Union Camp Promissory Note for violation of the tangible net       
worth covenant and under the terms of the bank revolving line of credit as      
a result of a cross - default related to the Union Camp default.  The           
Company's management is currently engaged in negotiations with Union Camp       
and the bank that are expected to result in a waiver (at least on a             
temporary basis) of the default conditions.  As previously discussed, TGC       
plans to sell the facility located in Portland, Oregon with proceeds to be      
applied against the mortgage indebtedness encumbering the facility.  In         
addition, Chase management plans to dispose of Chase's woven polypropylene      
extrusion and weaving equipment. Future fabric requirements for Chase's         
woven polypropylene bag conversion operations will be met with the purchase     
of fabric from other domestic and foreign fabric suppliers.  Although there     
can be no assurance as to the timing and amount of these asset sales,           
management of Chase anticipates that proceeds from such sales will enable       
Chase to eliminate the Union Camp debt and further reduce the loan balance      
with the bank thereby curing all remaining defaults.                            

As part of TGC's reorganization plan, TGC contributed approximately   
$2,725,000 as a capital contribution to Chase.  The proceeds were utilized      
by Chase to pay down loan balances with the operation's lenders and to make     
payments to trade creditors.  As a result, the Company's relationships with     
its suppliers are improved.  However, Management continues to work very         
closely with suppliers to ensure that any disruption in the flow of raw         
materials and other key items is minimized.  A clear line of communication      
with vendors is a priority and, to date, the packaging operation has            
continued to meet the demands of its market.  Management of the packaging       
operation will continue its plan to diversify into additional geographical      
markets and to aggressively reduce inventory, cut expenses, reduce trade        
payables, and improve supply terms with vendors.  The objective of this         
plan will be to bring manufacturing expenses in line with projected levels      
of sales, thereby generating a positive cash flow.  However, due to             
competitive pressures and the uncertain nature of predicting agricultural       
crops, no assurance can be given that management's plan will achieve the        
intended results.                                                               

MANAGEMENT OF THE COMPANY     

Directors                                                                       

The Board of Directors of the Company consists of five persons who    
will serve until the next annual meeting of shareholders of the Company.        
Three of TGC's current Directors, Messrs. Gardner, Barrett, and McInnes,        
will also act as Directors of the Company.  The following table sets forth      
certain information concerning the individuals serving as Directors of the      
Company following the Spin-Off:                                                 

Date Since                                        
Which                                             
Continuously a                                    
Director                                          
of the                                            
Name and Age   Company        Business Experience and Other Directorships       

Herbert M.       1993         Senior Vice President of Janney Montgomery        
Gardner, 56                   Scott Inc., investment bankers, since             
                  1978; Director of TGC Industries, Inc.
                   since 1986; Chairman of the Board and a
                   Director of Supreme Industries, Inc., a
                    manufacturer of specialized truck bodies
             and shuttle buses, since 1979 and
                 President since 1992; Chairman of the
                    Board and a Director of Contempri Homes,
                 Inc., a modular housing manufacturing
                      company, since 1987; a Director of Shelter
                     Components Corporation, a supplier to the
                 manufactured housing and recreational
              vehicle industries; Director of Nu
                     Horizons Electronics Corp., an electronic
              component distributor; Director of
                   Transmedia Network, Inc., a specialized
                   restaurant savings charge card company;
                      Director of Hirsch International Corp., an
               importer of computerized embroidery
                     machine application software; Director of
                   The Western Transmedia Company, Inc., a
                    franchisee of Transmedia Network for the
State of California.

William J.       1993         Senior Vice President of Janney Montgomery        
Barrett, 57                   Scott Inc., investment bankers, since 1978;       
             Secretary of TGC since 1979 and a
                  Director of TGC since 1986; Secretary,
                  Assistant Treasurer, and a Director of
                    Supreme Industries, Inc., a manufacturer
                   of specialized truck bodies and shuttle
                   buses, since 1979; Secretary, Assistant
                  Treasurer, and a Director of Contempri
          Homes, Inc., a modular housing
                 manufacturer, since 1987; Director of
                     Fredericks of Hollywood, Inc., an apparel
                  marketing company; Director of Shelter
                     Components Corporation, a supplier to the
                 manufactured housing and recreational
                      vehicle industries; Secretary and Director
                      of The Western Transmedia Company, Inc., a
            franchisee of Transmedia Network
                    principally for the State of California.

Allen T.         1993         Chairman of the Board of TGC Industries,          
McInnes, 59                   Inc. since 1993 and Chief Executive               
                  Officer from August, 1993 to March 31,
              1996; Executive Vice President and
                Director of Tenneco, Inc. 1960-1992;
                     Director of Tetra Technologies, President
                    and CEO since April 1, 1996; Director of
        NationsBank Texas 1990-1993.

Lewis W.         1996         President and Chief Operating Officer of          
Lovell, 59                    Chase Packaging Corporation since October,        
                  1995; Divisional President of Williams
                    Holdings, Inc. from 1988 to 1993; Senior
                      Vice-President of Packaging Corporation of
                     America from 1984 to 1988; Vice President
                    and General Manager of Tenneco West from
1976 to 1984.       

Doug             1996         Vice President, Chief Financial Officer,          
Kirkpatrick, 43               and Assistant Secretary of Chase Packaging        
                 Corporation since 1993; Controller of
                      Tidelands Geophysical Company from 1982 to
               1993; Vice President of Finance and
                  Treasurer of TGC Industries, Inc. from
1986 to 1996.       

Unaffiliated Directors of the Company are not paid fees, but will be  
reimbursed for expenses in connection with meetings of the Board of             
Directors attended by them.                                                     

Executive Officers                                                              

The following table sets forth certain information concerning the     
persons who serve as executive officers of the Company, and will continue       
to serve in such positions, at the discretion of the Board of Directors,        
after the Spin-Off.  For those persons who are also Directors of the            
Company, additional information appears under "Management of the Company -      
Directors" above.                                                               

Name           Age                        Position                

Lewis W. Lovell       59      Chief Operating Officer and President since       
                     October, 1995; Director since July, 1996.

Doug Kirkpatrick      43      Vice President, Chief Financial Officer, and      
                 Assistant Secretary since July, 1993;
      Director since July, 1996.

William J. Barrett    57     Secretary and Director since 1993.                 

Executive Compensation                                                          

The table below sets forth on an accrual basis all cash and cash      
equivalent remuneration paid by the Company during the year ended December      
31, 1995, to each of the most highly compensated executive officers of the      
Company whose aggregate cash compensation exceeded $60,000, and to a group      
consisting of two of the Company's executive officers.                          

Name              Position                              Cash Compensation   

Lewis W. Lovell     Chief Operating Officer and President   $23,106(1)          

Doug Kirkpatrick    Vice President of Finance, Chief        $72,817             
Financial Officer, Treasurer, and       
Assistant Secretary                     

All executive officers as a group (2 persons)               $95,923             

________________                                                                
(1) Mr. Lovell joined Chase in October, 1995.                                   

1996 Stock Option Plan                                                          

On July 10, 1996, the Company's Board of Directors and sole           
shareholder approved and adopted the Company's 1996 Stock Option Plan.  The     
following paragraphs summarize certain provisions of the 1996 Stock Option      
Plan and are qualified in their entirety by reference thereto.                  

The 1996 Stock Option Plan provides for the granting of Incentive     
Stock Options (collectively, the "Options") to purchase shares of the           
Company's Common Stock to certain key employees of the Company and              
non-statutory stock options to certain key employees of the Company,            
affiliates of the Company, and certain individuals who are not employees of     
the Company or its affiliates.  The 1996 Stock Option Plan authorizes the       
granting of options to acquire up to 600,000 shares of Common Stock,            
subject to certain adjustments described below, to be outstanding at any        
time.  Subject to the foregoing, there is no limit on the absolute number       
of awards that may be granted during the life of the 1996 Stock Option          
Plan.  At the present time, there are approximately 180 employees of the        
Company, including 2 officers of the Company (all of whom are also              
directors), who, in management's opinion, would be considered eligible to       
receive grants under the 1996 Stock Option Plan, although fewer employees       
may actually receive grants.                                                    

Authority to administer the 1996 Stock Option Plan has been delegated 
to a committee (the "Committee") of the Board of Directors.  Except as          
expressly provided by the 1996 Stock Option Plan, the Committee has the         
authority, in its sole discretion, to award Options and to determine the        
terms and conditions (which need not be identical) of such Options,             
including the persons to whom, and the time or times at which, Options will     
be awarded, the number of Options to be awarded to each such person, the        
exercise price of any such Options, and the form, terms, and provisions of      
any agreement pursuant to which such Options are awarded.  The 1996 Stock       
Option Plan also provides that the Committee may be authorized by the Board     
of Directors to make cash awards as specified by the Board of Directors to      
the holder of an Option in connection with the exercise thereof.                
Subject to the limitations set forth below, the exercise price of the           
shares of stock covered by each 1996 Option will be determined by the           
Committee on the date of award.                                                 

Unless a Holder's option agreement provides otherwise, the following  
provisions will apply to exercises by the Holder of his or her option:  No      
options may be exercised during the first twelve months following grant.        
During the second year following the date of grant, options covering up to      
one-third of the shares covered thereby may be exercised, and during the        
third year options covering up to two-thirds of such shares may be              
exercised.  Thereafter, and until the options expire, the optionee may          
exercise options covering all of the shares.  Persons over sixty-five on        
the date of grant may exercise options covering up to one-half of the           
shares during the first year and thereafter may exercise all optioned           
shares.  Subject to the limitations just described, options may be              
exercised as to all or any part of the shares covered thereby on one or         
more occasions, but, as a general rule, options cannot be exercised as to       
less than one hundred shares at any one time.                                   

The exercise price of the shares of stock covered by each incentive   
stock option ("ISO"), within the meaning of Sec. 422 of the Internal            
Revenue Code of 1986, as amended (the "Code"), will not be less than the        
greater of: (a) the par value per share of the stock; or (b) one hundred        
percent (100%) of the fair market value per share of the Company's stock on     
the date of award of such ISO, except that an ISO may not be awarded to any     
person who is not an employee of the Company and/or affiliate of the            
Company or to any person who owns stock possessing more than ten percent        
(10%) of the total combined voting power of all classes of stock of the         
Company or an affiliate of the Company, unless the exercise price is at         
least one hundred ten percent (110%) of the fair market value of the stock      
at the time the ISO is awarded and the ISO is not exercisable after the         
expiration of five years from the date it is awarded.  The exercise price       
of the shares of Common Stock covered by each Option that is not an ISO         
(NSO) will not be less than fifty percent (50%) of the fair market value of     
the stock on the date of award.                                                 

Payment for Common Stock issued upon the exercise of an Option may be 
made in cash or, with the consent of the Committee, in whole shares of          
Common Stock owned by the holder of the Option for at least six months          
prior to the date of exercise or, with the consent of the Committee, partly     
in cash and partly in such shares of Common Stock.  If payment is made, in      
whole or in part, with previously owned shares of Common Stock, the             
Committee may issue to such holder a new Option for a number of shares          
equal to the number of shares delivered by such holder to pay the exercise      
price of the previous Option having an exercise price equal to not less         
than one hundred percent (100%) of the fair market value of the Common          
Stock on the date of such exercise.  An Option so issued will not be            
exercisable until the later of the date specified in an individual option       
agreement or six months after the date of grant.                                

The duration of each Option will be for such period as the Committee  
determines at the time of award, but not for more than ten years from the       
date of award in the case of an ISO, and in either case may be exercised in     
whole or in part at any time or only after a period of time or in               
installments, as determined by the Committee at the time of award, except       
that after the date of award, the Committee may accelerate the time or          
times at which an Option may be exercised.                                      

In the event of any change in the number of outstanding shares of     
Common Stock effected without receipt of consideration therefor by the          
Company by reason of a stock dividend, or split, combination, exchange of       
shares or other recapitalization, merger, or otherwise, in which the            
Company is the surviving Corporation, the aggregate number and class of         
reserved shares, the number and class of shares subject to each outstanding     
Option, and the exercise price of each outstanding Option will be               
automatically adjusted to reflect the effect thereon of such change. Unless     
a holder's option agreement provides otherwise, a dissolution or                
liquidation of the Company, certain sales of all or substantially all of        
the assets of the Company, or certain mergers or consolidations in which        
the Company is not the surviving corporation will cause such holder's           
Options then outstanding to terminate, but such holder may, immediately         
prior to such transaction, exercise such Options without regard to the          
period and installments of exerciseability applicable pursuant to such          
holder's option agreement.                                                      

The 1996 Stock Option Plan will terminate on July 10, 2006, or on such
earlier date as the Board of Directors may determine.  Any stock option         
outstanding at the termination date will remain outstanding until it has        
been exercised, terminated, or has expired.                                     

The 1996 Stock Option Plan may be terminated, modified, or amended by 
the Board of Directors at any time without further shareholder approval,        
except that shareholder approval is required for any amendment which:  (a)      
changes the number of shares of Common Stock subject to the 1996 Stock          
Option Plan other than by adjustment provisions provided therein, (b)           
changes the designation of the class of employees eligible to receive           
Options, (c) decreases the price at which ISO's may be granted, (d) removes     
the administration of the 1996 Stock Option Plan from the Committee, or (e)     
without the consent of the affected holder, causes the ISO's granted under      
the 1996 Stock Option Plan and outstanding at such time that satisfied the      
requirements of Sec. 422 of the Code no longer to satisfy such                  
requirements.                                                                   

SECURITY OWNERSHIP OF CERTAIN       
BENEFICIAL OWNERS AND MANAGEMENT      

The following table sets forth the names of those persons known to    
Management that are expected to be beneficial owners of more than five          
percent of the Company's Common Stock upon the completion of the                
Distribution.  The table also sets forth information with respect to the        
Company's Common Stock which is expected to be beneficially owned by each       
director and executive officer of the Company, and by all directors and         
officers of the Company as a group, as of the Distribution Date based upon      
their respective holdings of TGC Common Stock and Preferred Stock               
(including shares beneficially owned by such persons, pursuant to the rules     
of beneficial ownership, as a result of the ownership of certain warrants       
or options) according to data furnished by the persons named.  Persons          
having direct beneficial ownership of the Company's Common Stock possess        
the sole voting and dispositive power in regard to such stock.                  

                                                                [Download Table]
                                                                 
                                     Amount and                  
                                      Nature of      Approximate 
                         Title of    Beneficial      Percentage  
    Name and Address      Class        Owner         of Class (1)

Lewis W. Lovell          Common         31,250 (2)          *    

Doug Kirkpatrick         Common         22,688 (2)          *    

Allen T. McInnes         Common        835,964 (2)        13.33% 

Herbert M. Gardner       Common        400,645 (2)(3)      6.42% 

William J. Barrett       Common        536,456 (2)(4)      8.60% 

Gerlach & Co.            Common        466,667             7.54% 
111 Wall Street,                                                 
8th Fl.                                                          
New York, NY 10005                                               

Special Situations       Common        166,667             2.70% 
Cayman Fund L.P.                                                 
153 E. 53rd Street                                               
51st Fl.                                                         
New York, NY  10022                                              

Special Situations       Common        500,000             8.08% 
Fund III L.P.                                                    
153 E. 53rd Street                                               
51st Fl.                                                         
New York, NY  10022                                              

All directors and        Common      1,827,003 (2)        28.42% 
officers as a group                                              
(5 persons)                                                      

______________                                                                  
*  Represents less than 1% of Class                                             

(1) The percentage calculations have been made in accordance with Rule      
13d-3(d)(1) promulgated under the Securities Exchange Act of 1934.  In          
making these calculations, shares beneficially owned by a person as a           
result of ownership of certain options and warrants of TGC, which upon          
exercise will entitle the holder to distribution of Chase Common Stock          
escrowed in the event of such exercise, were deemed to be currently             
outstanding with respect to the holders of such options and warrants at         
TGC.                                                                            

(2) Includes the number of shares of Common Stock set forth opposite the    
person's name in the following table, which shares are beneficially owned       
as a result of the ownership of options and warrants of TGC, which upon         
exercise will entitle the holder to distribution of Chase Common Stock          
escrowed in the event of such exercise.                                         

                                                                [Download Table]
                                                         
                               Stock Options     Warrants

Lewis W. Lovell                  31,250            -0-   

Doug Kirkpatrick                 14,250            -0-   

Allen T. McInnes                   -0-            84,337 

Herbert M. Gardner                 -0-            55,925 

William J. Barrett                 -0-            55,925*

All Directors and Officers       45,500          196,187 
as a group (5 persons)                                   

__________________                                                              

* Excludes 3,750 shares of Common Stock distributable to Mr. Barrett's  
wife upon the exercise of 7,500 Warrants of TGC owned by Ms. Barrett.   
Mr. Barrett disclaims beneficial ownership of such Warrants.            

(3) Excludes 48,590 shares of Common Stock owned by Herbert M. Gardner's  
wife.  Mr. Gardner has disclaimed beneficial ownership of these shares.         

(4) Excludes 69,220 shares of Common Stock owned by William J. Barrett's  
wife.  Mr. Barrett has disclaimed beneficial ownership of these shares.         

DESCRIPTION OF SECURITIES           

Company Capital Stock                                                           

The Company's Certificate of Incorporation authorizes the issuance of 
25,000,000 shares of the Company's $0.10 par value Common Stock and             
4,000,000 shares of Preferred Stock, $1.00 par value, as determined to be       
issued from time to time by the Board of Directors.  No shares of Preferred     
Stock have been issued.  Each holder is entitled to one vote per share held     
of record at each meeting of the stockholders.                                  

Subject to the rights of the holder of any shares of Preferred Stock  
which may be issued, holders of Common Stock are entitled to such dividends     
as may be declared from time to time by the Board of Directors of the           
Company out of funds legally available therefor and to participate pro-rata     
in dividends and, upon liquidation, any distribution to stockholders.  The      
Company's credit agreement with its primary lender contains restrictions as     
to the payment of dividends.  Any stock issued pursuant to stock dividends      
or stock splits must be authorized and issued at the same rate with respect     
to both classes.  The Common Stock carries no preemptive, subscription, or      
cumulative voting rights or redemption or sinking fund provisions.              

For a description of the Company's stock option plan, see "Management 
of the Company - 1996 Stock Option Plan."                                       

LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS 

As permitted by the provisions of the Texas Business Corporation Act, 
the Articles of Incorporation eliminates in certain circumstances the           
monetary liability of directors of the Company for a breach of their            
fiduciary duty as directors.  These provisions do not eliminate the             
liability of a director (i) for a breach of the director's duty of loyalty      
to the Company; (ii) for acts or omissions by a director not in good faith      
or which involve intentional misconduct or a knowing violation of law;          
(iii) for any transaction from which the director derives an improper           
benefit whether or not the benefit resulted from an action taken within the     
scope of the director's offices; (iv) for an act or omission for which the      
liability of a director is expressly provided by statute; or (v) for an act     
related to an unlawful corporate distribution.  In addition, these              
provisions do not limit the rights of the Company or its stockholders, in       
appropriate circumstances, to seek equitable remedies such as injunctive or     
other forms of non-monetary relief.  Such remedies may not be effective in      
all cases.                                                                      

The Company's Articles of Incorporation and Bylaws provide that the   
Company shall indemnify all directors and officers of the Company to the        
full extent permitted by the Texas Business Corporation Act.  Under such        
provisions any director or officer who, in his capacity as such, is made or     
threatened to be made a party to any suit or proceeding, shall be               
indemnified if such director or officer acted in good faith and in a manner     
he reasonably believed to be in, or not opposed to, the best interests of       
the Company.  The Articles of Incorporation, Bylaws, and the Texas Business     
Corporation Act further provide that such indemnification is not exclusive      
of any other rights to which such individuals may be entitled under the         
Articles of Incorporation and the Bylaws or any other agreement, vote of        
stockholders or disinterested directors, or otherwise.                          

Insofar as indemnification for liabilities arising under the          
Securities Act of 1933 may be permitted to directors or officers pursuant       
to the foregoing provisions, the Company has been informed that in the          
opinion of the Securities and Exchange Commission such indemnification is       
against public policy as expressed in the Act and is therefore                  
unenforceable.                                                                  

INDEPENDENT ACCOUNTANTS     

Grant Thornton LLP, independent accountants, have audited the         
Company's financial statements for each of the years in the two year period     
ending December 31, 1995, included elsewhere in this Information Statement.     

ADDITIONAL INFORMATION    

Following the Distribution, the Company will be required to furnish   
holders of Company Common Stock with annual reports containing audited          
financial statements of the Company, as well as quarterly reports for the       
first three quarters of each fiscal year containing unaudited financial         
information.                                                                    

The Company has filed with the Securities and Exchange Commission     
("SEC") a Registration Statement on Form 10-SB under the Exchange Act           
covering the Company's Common Stock.  This Information Statement does not       
contain all of the information in the Registration Statement and the            
related exhibits.  The Registration Statement and the related exhibits          
filed by the Company with the SEC may be inspected at the public reference      
facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and     
at the SEC's regional offices at Everett McKinley Dirksen Building, 219         
South Dearborn Street, Room 1204, Chicago, Illinois 60604, and 75 Park          
Place, Room 1228, New York, New York 10007.  Copies of such materials can       
be obtained from the public reference section of the SEC at its Washington      
address at prescribed rates.  In addition, shareholders of TGC with             
inquiries relating to the Distribution should contact the Company.              
Inquiries should be directed to:  Mr. Doug Kirkpatrick, Chief Financial         
Officer, Chase Packaging Corporation, 2550 N.W. Nicolai Street, Portland,       
Oregon 97210, (503) 228-4366.                                                   

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY        
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS INFORMATION STATEMENT,       
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE          
RELIED UPON AS HAVING BEEN AUTHORIZED.                                          

[Remainder of Page Intentionally Left Blank]    

CONTENTS      

                                                                Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                    F-1       

HISTORICAL FINANCIAL STATEMENTS                                                 

Balance Sheets as of December 31, 1995 and                                
 as of June 30, 1996 (unaudited)                               F-2

Statements of Operations and Accumulated Deficit                          
for each of the years in the two year period                    
ended December 31, 1995 and for the six months                  
 ended June 30, 1995 and 1996 (unaudited)                      F-3

Statements of Cash Flows for each of the years in the                     
two year period ended December 31, 1995 and for                 
the six months ended June 30, 1995 and 1996                     
 (unaudited)                                                   F-4

Notes to Financial Statements                                      F-6    

UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS                               

Introduction                                                       F-15   

Balance Sheet as of June 30, 1996                                  F-16   

Statement of Operations for the year ended                                
  December 31, 1995                                             F-17

Statement of Operations for the six months ended                          
  June 30, 1996                                                 F-18

Note to Financial Statements                                       F-19   

Report of Independent Certified Public Accountants      

Board of Directors                                                              
Chase Packaging Corporation                                                     

We have audited the accompanying balance sheet of Chase Packaging               
Corporation (a wholly-owned subsidiary of TGC Industries, Inc.) as of           
December 31, 1995, and the related statements of operations and accumulated     
deficit and cash flows for each of the two years in the period ended            
December 31, 1995.  These financial statements are the responsibility of        
the Company's management.  Our responsibility is to express an opinion on       
these financial statements based on our audits.                                 

We conducted our audits in accordance with generally accepted auditing          
standards.  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 financial position of Chase Packaging             
Corporation as of December 31, 1995, and the results of its operations and      
its cash flows for each of the two years in the period ended December 31,       
1995, in conformity with generally accepted accounting principles.              

The accompanying financial statements have been prepared assuming the           
Company will continue as a going concern.  As discussed in Note C to the        
financial statements, the Company incurred a net loss of $2,717,255 during      
the year ended December 31, 1995 and has defaulted on certain loan payments     
and certain loan covenants which could result in termination of the             
Company's credit agreements raising substantial doubt about the Company's       
ability to continue as a going concern.  Management's plans in regard to        
these matters are also described in Note C.  The financial statements do        
not include any adjustments that might result from the outcome of this          
uncertainty.                                                                    

The accompanying balance sheet of Chase Packaging Corporation as of June        
30, 1996, and the related statements of operations and accumulated deficit      
and cash flows for the six months ended June 30, 1996 and 1995 were not         
audited by us and, accordingly, we do not express an opinion on them.           

/s/ Grant Thornton, LLP                                                         
Portland, Oregon                                                                
February 7, 1996 (except for Note B as to which                                 
the date is October 3, 1996)                

F-1   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

                                                                [Download Table]
                             BALANCE SHEETS                                
                                                                           

                                              December 31,       June 30,  
          ASSETS                                  1995             1996    
                                                                (unaudited)

CURRENT ASSETS                                                             
   Cash and cash equivalents                     $    25,123   $     1,473 
   Accounts receivable, net                        1,358,902     1,334,522 
   Inventories                                     3,516,344     2,378,718 
   Receivable from parent                            256,629       147,140 
   Prepaid expenses                                   73,772        41,382 

       Total current assets                        5,230,770     3,903,235 

PROPERTY AND EQUIPMENT - at cost                                           
   Machinery and equipment                         3,903,536     3,974,792 
   Buildings                                       1,400,951     1,400,951 
                                                   5,304,487     5,375,743 
      Less accumulated                                                     
       depreciation                               (1,018,468)   (1,319,906)
                                                   4,286,019     4,055,837 
   Land                                              483,992       483,992 
                                                   4,770,011     4,539,829 

OTHER ASSETS                                          29,311        18,232 

                                                 $10,030,092    $8,461,296 

      LIABILITIES AND STOCKHOLDER'S DEFICIT                                

CURRENT LIABILITIES                                                        
   Trade accounts payable                         $1,846,910    $1,640,480 
   Accrued liabilities                               504,175       729,708 
   Advance billings                                  108,753        34,476 
   Current maturities of                                                   
    long-term obligations                          6,598,520     5,791,693 
   Payable to parent                               2,273,527     3,103,245 

       Total current liabilities                  11,331,885    11,299,602 

LONG-TERM OBLIGATIONS,                                                     
 less current maturities                             127,500        29,167 

COMMITMENTS AND CONTINGENCIES                             -             -  

STOCKHOLDER'S DEFICIT                                                      
   Common stock, $.10 par value;                                           
     1,000 shares authorized,                                              
     issued and outstanding                              100           100 
   Additional paid-in capital                      2,371,145     2,371,145 
   Accumulated deficit                            (3,800,538)   (5,238,718)
                                                  (1,429,293)   (2,867,473)

                                                 $10,030,092    $8,461,296 

The accompanying notes are an integral part of these statements.        

F-2   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

                                                                [Download Table]
               STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT            

                                                                           

                        Year ended December 31,  Six months ended June 30, 
                          1994          1995        1995          1996     
                                                  (unaudited)   (unaudited)

Sales                 $17,046,671   $14,278,261   $7,694,053    $4,714,683 

Cost and expenses                                                          
  Cost of sales        14,756,673    13,068,812    6,669,324     4,656,976 
  Selling, general                                                         
    and administrative  2,342,147     2,385,493    1,174,087     1,077,237 
  Write-down for                                                           
    impairment of                                                          
    goodwill                  -         701,378          -             -   
  Interest expense        648,346       839,833      388,203       418,650 

                       17,747,166    16,995,516    8,231,614     6,152,863 

      Loss before                                                          
       income taxes      (700,495)   (2,717,255)    (537,561)   (1,438,180)

Income tax expense                                                         
  Current                      (16)         -            -             -   

      NET LOSS            (700,511)  (2,717,255)    (537,561)   (1,438,180)

Accumulated deficit at                                                     
  beginning of period     (382,772)  (1,083,283)  (1,083,283)   (3,800,538)

Accumulated deficit at                                                     
  end of period        $(1,083,283) $(3,800,538) $(1,620,844)  $(5,238,718)


The accompanying notes are an integral part of these statements.            

F-3   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

                                                                [Download Table]
                          STATEMENTS OF CASH FLOWS                         
                                                                           

                        Year ended December 31,  Six months ended June 30, 
                          1994          1995        1995          1996     
                                                  (unaudited)   (unaudited)

Cash flows from                                                            
 operating activities                                                      
   Net loss            $  (700,511) $(2,717,255) $  (537,561)  $(1,438,180)
   Adjustments to                                                          
     reconcile net                                                         
     loss to net cash                                                      
     provided by                                                           
     (used in) operating                                                   
     activities                                                            
        Depreciation and                                                   
          amortization     439,856      579,275      274,421       320,696 
        Gain on disposal                                                   
          of property and                                                  
          equipment           -             (13)         -           8,629 
        Write-down for                                                     
          impairment of                                                    
          goodwill            -         701,378          -             -   
        Noncash compensation  -             -            -           3,600 
        Change in assets                                                   
          and liabilities                                                  
          Accounts                                                         
            receivable    (380,972)     924,209       (1,552)       24,380 
          Inventories      197,104     (723,455)  (1,118,431)    1,137,626 
          Prepaid expenses  23,910       30,276       12,714        32,390 
          Accounts                                                         
            payable      1,007,238       77,478       99,558      (206,430)
          Accrued                                                          
            liabilities   (245,441)     166,548       57,208       225,533 
          Advance                                                          
            billings       213,120     (104,367)     (31,312)      (74,277)

          Net cash provided                                                
            by (used in)                                                   
            operating                                                      
            activities     554,304   (1,065,926)  (1,244,955)       33,967 

Cash flows from                                                            
 investing activities                                                      
   Capital                                                                 
     expenditures       (1,859,291)    (693,281)    (185,959)      (97,063)
   Proceeds from sale                                                      
     of property and                                                       
     equipment                 -            810          -           9,000 
   Other assets            (62,401)      (2,095)      (2,095)          -   

          Net cash used                                                    
            in investing                                                   
            activities   (1,921,692)   (694,566)    (188,054)      (88,063)

Cash flows from                                                            
 financing activities                                                      
   Proceeds from                                                           
     issuance of debt       650,000         -            -             -   
   Principal payments                                                      
     of debt obligations   (325,896)   (784,591)    (538,913)     (185,001)
   Net proceeds from                                                       
     (payments on)                                                         
     line of credit       1,606,395     406,218      989,747      (720,160)
   Receivable from/                                                        
     payable to parent     (537,518)  2,123,266      941,453       935,607 

          Net cash                                                         
            provided by                                                    
            financing                                                      
            activities    1,392,981   1,744,893    1,392,287        30,446 

          Net increase                                                     
            (decrease)                                                     
            in cash and                                                    
            cash                                                           
            equivalents      25,593     (15,599)     (40,722)      (23,650)
Cash and cash equivalents                                                  
  at beginning of period     15,129      40,722       40,722        25,123 

Cash and cash equivalents                                                  
  at end of period         $ 40,722    $ 25,123      $   -       $   1,473 

The accompanying notes are an integral part of these statements.                

F-4   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

                                                                [Download Table]
                    STATEMENTS OF CASH FLOWS - CONTINUED                   

                                                                           

                        Year ended December 31,  Six months ended June 30, 
                          1994          1995        1995          1996     
                                                  (unaudited)   (unaudited)

Supplemental cash flow                                                     
 information                                                               
   Cash paid                                                               
     during the                                                            
     period for                                                            
          Interest         $455,675   $259,340      $155,998     $122,050  
          Income taxes           16         -             -            -   

   Noncash investing and financing activities                              

      During 1994, the Company acquired assets with a fair value of        
      $1,770,000 for purchase money debt and bank debt financing.          

The accompanying notes are an integral part of these statements.          

F-5   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

NOTES TO FINANCIAL STATEMENTS               

(Information pertaining to the periods ended  
June 30, 1995 and 1996 is unaudited)

NOTE A -  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING            
POLICIES                                                    

A summary of the significant accounting policies consistently           
applied in the preparation of the accompanying financial                
statements follows:                                                     

1.   Nature of Operations                                             

Chase Packaging Corporation (Chase or the Company), a Texas           
corporation and wholly-owned subsidiary of TGC Industries, Inc. (TGC),
manufactures woven paper mesh and polypropylene mesh fabric bags for  
agricultural and industrial use.                                      

2.   Cash Equivalents                                                 

The Company considers all highly liquid investments with original     
maturity dates of three months or less to be cash equivalents.        

3.   Inventories                                                      

Inventories are stated at the lower of cost or market using the first-
in, first-out method to determine cost.                               

4.   Property and Equipment                                           

Property and equipment are stated at cost.  Depreciation is           
provided using the straight-line method over the estimated useful     
lives (3 to 10 years for equipment and 30 years for buildings) of the 
individual assets.                                                    

5.   Other Assets                                                     

Other assets consist principally of deferred loan costs which are     
being amortized over five years.                                      

6.   Income Taxes                                                     

Deferred income taxes reflect the impact of temporary differences     
between the amounts of assets and liabilities recognized for          
financial reporting purposes and such amounts recognized for tax      
purposes.                                                             

7.   Advance Billings                                                 

Certain customers pay in advance.  The related revenue is included in 
advance billings and recognized when earned.                          

F-6   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

NOTES TO FINANCIAL STATEMENTS - CONTINUED               

(Information pertaining to the periods ended  
June 30, 1995 and 1996 is unaudited)

NOTE A -  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING            
POLICIES - Continued                                        

8.   Interim Statements                                               

In the opinion of management, the unaudited interim financial         
statements as of June 30, 1996 and for the six-month periods          
ended June 30, 1995 and 1996 include all adjustments, consisting      
only of those of a normal recurring nature, necessary to present      
fairly the Company's financial position as of June 30, 1996 and       
the results of its operations and cash flows for the six-month        
periods ended June 30, 1995 and 1996.  The results of operations      
for the six months ended June 30, 1996 are not necessarily            
indicative of the results to be expected for the full year.           

9.   Use of Estimates                                                 

The preparation of financial statements in conformity with            
generally accepted accounting principles requires management to       
make estimates and assumptions that affect the reported amounts of    
assets and liabilities and disclosure of contingent assets and        
liabilities at the date of the financial statements and the           
reported amounts of revenues and expenses during the reporting        
period.  Actual results could differ from those estimates.            

NOTE B - REORGANIZATION PLAN AND BASIS OF PRESENTATION                          

In May 1996, a formal plan was adopted to reorganize TGC and          
Chase.  Pursuant to the plan, the following actions were taken:       

1.   TGC issued convertible exchangeable preferred stock in a         
     private placement offering with proceeds amounting to $5,126,250.
   The preferred stock is, at the option of TGC, exchangeable into
    8% subordinated convertible debentures.  The preferred stock and
    the debentures are convertible into shares of TGC's common stock
   for a period of four years and are convertible in years one and
two at $.75 per share, year three at $1.25 and thereafter at
$2.00.                                                      

2.   TGC liquidated Chase with TGC receiving all of Chase's properties
   and liabilities in cancellation of the Chase stock held by TGC.
TGC formed a new wholly-owned subsidiary (New Chase) and    
    transferred to it all of the properties and liabilities received
in the liquidation of Chase, except TGC will retain the     
manufacturing facility located in Portland, Oregon.         

3.   TGC contributed $2,716,403 as a capital contribution to New      
Chase.                                                      

F-7   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

NOTES TO FINANCIAL STATEMENTS - CONTINUED               

(Information pertaining to the periods ended  
June 30, 1995 and 1996 is unaudited)

NOTE B - REORGANIZATION PLAN AND BASIS OF PRESENTATION - Continued              

4.   Effective July 31, 1996, TGC spun-off New Chase by a dividend    
distribution to the stockholders of record of TGC common and
   preferred stock as of the closing of the private placement.  At
the same time, the name was changed from New Chase to Chase 
Packaging Corporation (Chase).                              

NOTE C - GOING CONCERN ISSUES                                                   

The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate      
continuation of the Company as a going concern.  However, the Company 
incurred substantial losses during the past year, and the Company is  
delinquent in the payment of principal and interest on the note       
payable to Union Camp.  In addition, the Company is not in compliance 
with certain debt covenants of the Union Camp note and the bank       
revolving line of credit.  Subsequent to December 31, 1995, these     
conditions of default resulted in Union Camp and the bank calling the 
notes due and payable.  Management has entered into negotiations with 
Union Camp in an effort to restructure the note to remedy such        
conditions of default.  The Company has continued to utilize the bank 
revolving line of credit under the same terms as existed prior to the 
notice of default and demand.  Management believes it will            
satisfactorily resolve the Union Camp note and bank revolving line of 
credit issues.                                                        

The Company's continued existence as a going concern is dependent upon
its ability to generate sufficient cash flow to meet its obligations  
on a timely basis, to comply with the terms and covenants of its      
financing agreements and to obtain additional financing or refinancing
as may be required.  Although it cannot be assured that the Company   
will be able to continue as a going concern in view of its weakened   
financial condition and the uncertain timing and strength of recovery 
in its markets, management adopted a plan to reorganize the Company   
(note B) and believes that continued diversification into additional  
geographical markets and successful completion of cost savings efforts
should enable the Company to meet its obligations and sustain its     
operations.                                                           

NOTE D - BUSINESS ACQUISITION                                                   

On May 25, 1994, Chase acquired substantially all of the business of  
manufacturing and marketing agricultural and industrial bags and other
packaging materials from Fisher Bag Company, Inc. (Fisher Bag).  The  
business and assets acquired consist of all operating assets including
all equipment, inventories, accounts receivable, and proprietary      
information, and exclude all real property and interests in real      
estate.                                                               

The purchase price paid by Chase amounted to a total of $1,770,000,   
which amount was determined on the basis of the fair market value     
of the current assets acquired, the appraised value of the fixed      
assets and other assets acquired, and goodwill.  The Company financed 
the acquisition through a combination of purchase money debt and bank 
debt financing.  The bank debt portion was financed under Chase's     
revolving credit agreement with its principal lender.                 

F-8   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

                                                                [Download Table]
            NOTES TO FINANCIAL STATEMENTS - CONTINUED                   

                 (Information pertaining to the periods ended           
                      June 30, 1995 and 1996 is unaudited)              

NOTE E - INVENTORIES                                                    
                                                                        

                                        December 31,          June 30,  
                                           1995                 1996    
                                                             (unaudited)

       Raw materials                    $  384,278            $  194,066
       Work-in-process                     170,423               108,220
       Finished goods                    2,691,643             2,076,432

                                        $3,516,344            $2,378,718
                                                                [Download Table]
NOTE F - ACCRUED LIABILITIES                                            

     Accrued liabilities consist of the following:                      
                                                                        

                                        December 31,          June 30,  
                                           1995                 1996    
                                                             (unaudited)

       Compensation and payroll taxes   $  130,522            $  159,803
       Professional services                59,335                37,534
       Interest                            118,488               167,962
       Other                               195,830               244,409

                                         $ 504,175            $  609,708

F-9   

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

NOTES TO FINANCIAL STATEMENTS - CONTINUED               

(Information pertaining to the periods ended  
June 30, 1995 and 1996 is unaudited)

                                                                [Download Table]
NOTE G - LONG-TERM OBLIGATIONS                                           

     Long-term obligations consist of the following:                     

                                                                         
                                        December 31,          June 30,   
                                           1995                 1996     
                                                             (unaudited) 

       Note payable to Union Camp,                                       
         interest at 8% through July 30,                                 
         1996, 9% from July 31, 1996 to                                  
         July 30, 1997, 10% from July 31,                                
         1997 to maturity on January 30,                                 
         1998, monthly principal payments                                
         of $31,346 plus interest        $3,384,383           $3,384,383 

       Note payable to a bank, revolving                                 
         line of credit, interest rate                                   
         of prime plus 2.5%, expires                                     
         July 30, 1997                    2,887,470            2,313,144 

       Note payable to Fisher Bag,                                       
         interest at 10%, monthly                                        
         principal payments of $13,333                                   
         plus interest                      200,000              123,333 

      Notes payable to a bank, interest                                  
        at prime plus 2.5%, payable                                      
        monthly through the revolving                                    
        line of credit, monthly principal                                
        payments of $22,222                 254,167                  -   
                                          6,726,020            5,820,860 
        Less current maturities          (6,598,520)          (5,791,693)

                                       $  127,500           $   29,167   

The note payable to Union Camp is collateralized by all real, intangible        
and personal property of Chase and contains certain loan covenants.  Among      
other things, the covenants restrict Chase's ability to pay dividends,          
define an acceptable level of tangible net worth and require prior written      
consent to acquire stock or assets of another company.  This note is            
guaranteed by TGC.                                                              

The note payable to Fisher Bag is secured by a security interest in all of      
the equipment acquired from Fisher Bag and is guaranteed by TGC.                

Chase has a $4,000,000 line of credit with its bank.  However, the maximum      
available at December 31, 1995 and June 30, 1996 was $2,823,858 and             
$2,146,347, respectively, due to collateral base limitations.  In addition,     
the bank granted a temporary extension of $200,000 of which $63,612 was         
utilized at December 31, 1995.  The temporary extension expired in May,         
1996.  The line of credit is guaranteed by TGC and is secured by all            
inventory and accounts receivable of Chase.  The line of credit also            
contains certain loan covenants similar to those of the Union Camp note.        

At December 31, 1995 and June 30, 1996, Chase was delinquent in the payment     
of principal and interest and was in violation of certain loan covenants on     
the note payable to Union Camp and on the bank revolving line of credit.        
These obligations are classified as current at December 31, 1995 and June       
30, 1996.                                                                       

F-10  

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

                                                                [Download Table]
            NOTES TO FINANCIAL STATEMENTS - CONTINUED                      

                 (Information pertaining to the periods ended              
                      June 30, 1995 and 1996 is unaudited)                 

NOTE H - INCOME TAXES                                                      

     The income tax provision reconciled to the tax computed at the        
statutory Federal rate is as follows:                                      
                                                                           

                                        December 31,          June 30,     
                                     1994        1995     1995       1996  

       Federal tax benefit                                                 
         at statutory rate      $ 238,168  $ 923,866  $ 182,771  $ 488,981 
       State tax benefit net of                                            
         federal tax effect        30,513    118,364     23,416     62,647 
       Permanent differences      (16,996)   (14,712)    (7,400)    (7,400)
       Other                          -      (38,996)   108,213     14,756 
       Change in valuation                                                 
         allowance               (251,701)  (988,522)  (307,000)  (558,984)

                                $     (16) $     -    $     -    $     -   

Deferred tax assets and liabilities consist of the following:         

                                                                [Download Table]
                                                                  
                                     December 31,       June 30,  
                                        1995              1996    

  Deferred tax assets                                             
    Net operating loss                                            
      carryforwards                 $ 1,398,899        $1,957,883 
    Goodwill                            269,020           269,020 
    Other                                50,509            50,509 
 Deferred tax liabilities                                         
    Depreciation of property and                                  
      equipment                        (331,616)         (331,616)
                                      1,386,812         1,945,796 
Less valuation allowance             (1,386,812)       (1,945,796)

                                     $      -          $      -   


At December 31, 1995, Chase had net operating loss carryforwards      
(NOL's) of approximately $3,650,000 ($5,120,000 at June 30, 1996)     
which expire at various dates through 2010.  The NOL's will remain    
with TGC upon completion of the spin-off of New Chase as discussed in 
note B and will not be available to offset future taxable income of   
Chase.                                                                

NOTE I - COMMITMENTS AND CONTINGENCIES                                          

The Company conducts a portion of its operations utilizing leased     
facilities and vehicles.  The approximate minimum rental commitments, 
net of subleases,  under operating leases are as follows:             

                                                                [Download Table]
                                                          
Year ended                                                
December 31,                                              

   1996                                         $  185,000
   1997                                            230,000
   1998                                            203,000
   1999                                            192,000
   2000                                            192,000
   Thereafter                                      149,000

                                                $1,151,000

F-11  

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

NOTES TO FINANCIAL STATEMENTS - CONTINUED               

(Information pertaining to the periods ended  
June 30, 1995 and 1996 is unaudited)

NOTE I - COMMITMENTS AND CONTINGENCIES - Continued                              

Rent expense was approximately $191,000 and $139,000 in 1994 and      
1995, respectively.                                                   

The Company is a defendant in various legal actions in the normal     
course of business.  In the opinion of management, none of the        
litigation is expected to result in any significant loss to the       
Company.                                                              

NOTE J - EMPLOYEE BENEFIT PLANS                                                 

401(K) Plan                                                           

The Company has a 401(k) salary deferral plan which covers all        
salaried and certain nonsalaried employees who have reached the       
age of 20.5 years and have been employed by the Company for at        
least one year.  The covered employees may elect to have an amount    
deducted from their wages for investment in a retirement plan.        
The Company matches contributions to the plan at the following        
rates:  (1) 75% of each participant's salary reduction contributions  
to the plan up to a maximum of 3% of the participant's compensation;  
and (2) 50% of each participant's salary reduction contributions to   
the plan which are in excess of 3% of the participant's compensation  
but not in excess of 8% of the participant's compensation.  The       
Company's matching contribution to the plan was approximately $50,000 
and $44,000 for the years ended December 31, 1994 and 1995,           
respectively.                                                         

In May, 1996, the Company created an additional 401(K) plan for hourly
employees in Portland.                                                

Pension Plan                                                          

At December 31, 1994 and 1995 the Company sponsored a defined benefit 
pension plan that covered all hourly employees at Chase's Portland,   
Oregon and Idaho Falls, Idaho locations.   The plan calls for benefits
to be paid to eligible employees at retirement based primarily upon   
years of service with the Company and compensation rates near         
retirement.  Contributions to the plan reflect benefits attributed    
to employees' services to date, as well as services expected to be    
earned in the future.                                                 

                                                                [Download Table]
                                                               
                                            December 31,       
                                       1994              1995  

Pension cost includes the following                            
  components:                                                  
  Service cost of the current period  $34,341          $36,080 
  Interest cost on the projected                               
    benefit obligation                  1,136            3,636 
  Expected return on plan assets       (1,883)          (4,051)
  Net amortization                        -                322 

  Pension cost                        $33,594          $35,987 

F-12  

Chase Packaging Corporation     
(a wholly-owned subsidiary of TGC Industries, Inc.)   

NOTES TO FINANCIAL STATEMENTS - CONTINUED               

(Information pertaining to the periods ended  
June 30, 1995 and 1996 is unaudited)

NOTE J - EMPLOYEE BENEFIT PLANS - Continued                                     

                                                                [Download Table]
The following sets forth the funded status of the plan and the amounts
included in the accompanying balance sheet at December 31, 1995:      
                                                                      

     Actuarial present value of benefit obligations:                  
       Vested benefits                                $56,198         
       Nonvested benefits                              27,393         

       Accumulated benefit obligation                  83,591         
       Effect of anticipated future compensation                      
          levels and other events                         -           

       Projected benefit obligation                    83,591         
       Less fair value of assets held in the plan      58,142         

       Unfunded excess of projected benefit           $25,449         
          obligation over plan assets                                 

       The unfunded excess consists of the following:                 
          Net unrecognized loss from past experience                  
             different than assumed                   $13,093         
          Pension liability included in the                           
             balance sheet                             12,356         


The weighted average discount rate used to measure the projected      
benefit obligation and the expected long-term rate of return on assets
is 7.5%.  The Company uses the straight-line method of amortization   
for prior service cost and unrecognized gains and losses.  Actuarial  
valuations of the plan are made each year.  The most recent valuation 
was dated January 1, 1995.                                            

Effective May 6, 1996 the pension plan was terminated.  The           
participants became fully vested and the Company recognized an        
additional liability of $120,000 for estimated past service costs.    

NOTE K - IMPAIRMENT OF GOODWILL                                                 

The Company reviews for asset impairment when events or changes in    
circumstances indicate that the carrying amount of goodwill may not be
recoverable.  As the goodwill arose from an acquisition by the        
packaging division, the Company estimates the sum of expected future  
undiscounted net cash flows from the packaging operations.  If the    
estimated net cash flows are less than the carrying amount of the     
goodwill, the Company recognizes an impairment loss in an amount      
necessary to write down the goodwill to fair value as determined from 
expected future cash flows.                                           

F-13  

Chase Packaging Corporation       
(a wholly-owned subsidiary of TGC Industries, Inc.)   

NOTES TO FINANCIAL STATEMENTS - CONTINUED               

(Information pertaining to the periods ended  
June 30, 1995 and 1996 is unaudited)

NOTE K - IMPAIRMENT OF GOODWILL - Continued                                     

At December 31, 1995, the Company had a $701,378 write-down for       
impairment of goodwill as a result of the Company's review process.   

NOTE L - FINANCIAL INSTRUMENTS                                                  

The Company's financial instruments consist of cash, accounts         
receivable, and accounts and notes payable.  The carrying values      
approximate fair values because of their short-term maturities.       

NOTE M - MAJOR CUSTOMERS                                                        

One customer accounted for 10% of sales during 1995.                  

F-14  

Chase Packaging Corporation     

INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS    

The following unaudited pro forma condensed financial statements give           
effect to the spin-off of Chase Packaging Corporation by TGC Industries,        
Inc. as if it had occurred at June 30, 1996 for the balance sheet and as if     
it had occurred at the beginning of each period presented for the               
statements of operations.  The pro forma information is based on the            
estimates and assumptions set forth below and in the note to such               
statements.                                                                     

This pro forma information has been prepared utilizing the historical           
financial statements of Chase Packaging Corporation.  This information          
should be read in conjunction with the historical financial statements and      
notes thereto.  The pro forma financial data have been included as required     
by the rules and regulations of the Securities and Exchange Commission and      
are provided for comparative purposes only.  The pro forma financial data       
does not purport to be indicative of the results which actually would have      
been obtained if the spin-off had been effected on the dates indicated or       
of those results which may be obtained in the future.                           

F-15  

Chase Packaging Corporation     

PRO FORMA CONDENSED BALANCE SHEET     

                                                                [Download Table]
                               June 30, 1996                            
                                                                        

                                             Pro Forma           Pro    
                             Historical     Adjustments         Forma   
            ASSETS                                                      
CURRENT ASSETS                                                          
   Cash                     $     1,473    $        -        $     1,473
   Accounts receivable, net   1,334,522             -          1,334,522
   Inventories                2,378,718             -          2,378,718
   Other assets                 188,522        (147,140) (1)      41,382

      Total current assets    3,903,235        (147,140)       3,756,095

PROPERTY AND EQUIPMENT - NET  4,539,829      (1,329,000) (2)   3,210,829

OTHER ASSETS                     18,232             -             18,232

                            $ 8,461,296    $ (1,476,140)     $ 6,985,156

      LIABILITIES AND STOCKHOLDER'S EQUITY                              
CURRENT LIABILITIES                                                     
   Accounts payable         $ 1,640,480    $   (363,480) (3) $ 1,277,000
   Accrued liabilities          764,184             -            764,184
   Current obligations        5,791,693      (2,323,756) (3)            
                                             (2,134,383) (4)   1,333,554
   Payable to parent          3,103,245      (3,103,245) (1)         -  

      Total current                                                     
        liabilities          11,299,602      (7,924,864)       3,374,738

LONG-TERM OBLIGATIONS            29,167         (29,167) (3)         -  

STOCKHOLDER'S EQUITY                                                    
   Paid-in capital            2,371,245      (5,238,718) (8)            
                                              2,956,105  (1)            
                                             (1,329,000) (2)            
                                              2,716,403  (3)            
                                              2,134,383  (4)  3,610,418 
   Accumulated deficit       (5,238,718)      5,238,718  (8)        -   

      Total stockholder's                                               
        equity               (2,867,473)      6,477,891       3,610,418 

                            $ 8,461,296    $ (1,476,140)    $ 6,985,156 

See accompanying note.      

F-16  

Chase Packaging Corporation     

PRO FORMA CONDENSED STATEMENT OF OPERATIONS   

                                                                [Download Table]
                       Year ended December 31, 1995                     
                                                                        

                                             Pro Forma           Pro    
                             Historical     Adjustments         Forma   

Sales                      $ 14,278,261       $     -      $ 14,278,261 

Cost and expenses                                                       
   Cost of Sales             13,068,812         248,520  (5)            
                                                (32,300) (7) 13,285,032 

   Selling, general                                                     
     and administration       2,385,493          13,080  (5)            
                                                 (1,700) (7)  2,396,873 

   Write-down for impairment                                            
      of goodwill               701,378             -           701,378 
  Interest expense              839,833        (436,500) (6)    403,333 

                             16,995,516        (208,900)     16,786,616 

      Loss before                                                       
        income taxes         (2,717,255)        208,900      (2,508,355)

Income taxes                        -               -               -   

      Net loss             $ (2,717,255)    $   208,900    $ (2,508,355)

Earnings (loss)                                                         
  per common share                                                      
    Shares outstanding            1,000       6,927,509  (9)  6,928,509 

    Per share amount        $ (2,717.26)                      $   (0.36)

See accompanying note.      

F-17  

Chase Packaging Corporation     

PRO FORMA CONDENSED STATEMENT OF OPERATIONS   

Six months ended June 30,1996     

                                                                [Download Table]
                                                                         

                                             Pro Forma           Pro     
                             Historical     Adjustments         Forma    

Sales                      $  4,714,683       $     -      $  4,714,683  

Cost and expenses                                                        
   Cost of sales              4,656,976         124,260  (5)             
                                                (16,150) (7)  4,765,086  

   Selling, general and                                                  
     administrative           1,077,237           6,540  (5)             
                                                   (850) (7)  1,082,927  

   Interest expenses            418,650        (218,250) (6)    200,400  

                              6,152,863        (104,450)      6,048,413  

      Loss before                                                        
        income taxes         (1,438,180)        104,450      (1,333,730) 

Income taxes                        -               -               -    

      Net loss             $ (1,438,180)    $   104,450     $ (1,333,730)

Earnings (loss)                                                          
  per common share                                                       
    Shares outstanding            1,000       6,927,509  (9)   6,928,509 

    Per share amount        $ (1,438.18)                      $   (0.19) 

See accompanying note.                                                          

F-18  

Chase Packaging Corporation     

NOTE TO PRO FORMA CONDENSED FINANCIAL STATEMENTS          

NOTE A - PRO FORMA FINANCIAL STATEMENTS                                         

Prior to July 31, 1996, Chase Packaging Corporation (Old Chase) was a 
wholly-owned subsidiary of TGC Industries, Inc. (TGC).  During July   
1996, TGC liquidated Old Chase, with TGC receiving all of its assets  
and liabilities in cancellation of the Old Chase stock held by TGC.   
TGC then formed New Chase and transferred all assets and liabilities  
of Old Chase to New Chase, except for the Portland, Oregon production 
facility, which TGC intends to sell.  Upon the sale of the facility,  
TGC has agreed to contribute the net proceeds to Chase as a capital   
contribution.                                                         

Effective July 31, 1996, TGC spun-off New Chase (whose name was then  
changed to Chase) as a dividend to the stockholders of TGC.           

The accompanying pro forma condensed balance sheet gives effect to the
spin-off of Chase Packaging Corporation as if it had occurred on June 
30, 1996.  The pro forma condensed statements of operations give      
effect to the spin-off as if it had occurred at the beginning of the  
period presented.  The pro forma information is based on the estimates
and assumptions set forth below.                                      

This pro forma information has been prepared utilizing the historical 
financial statements of Chase.  This information should be read in    
conjunction with the historical financial statements and notes there  
to and is included as required by the rules and regulations of the    
Securities and Exchange Commission and is provided for comparative    
purpose only.  The pro forma financial data do not purport to be      
indicative of the results which actually would have been obtained if  
the acquisition had been effected on the date indicated or of those   
results which may be obtained in the future.                          

Pro forma adjustments consist of the following:                                 

(1)  To eliminate the payable to/receivable from parent and to record 
the net balance as a capital contribution from TGC.         

(2)  To remove the Portland, Oregon production facility which was     
retained by TGC.                                            

(3)  To record a capital contribution from TGC and a corresponding use
of the funds for payment of accounts payable and long-term  
obligations by Chase.                                       

(4)  To record a capital contribution for the estimated proceeds of   
the sale of the Portland, Oregon production facility and the
corresponding use of the funds for payment of long-term     
  obligations by Chase.  (The contribution is estimated to equal
the remaining mortgage on the facility).                    

(5)  To record fair market rent expense payable to TGC as the new     
property owner.                                             

(6)  To record the reduction in interest expense as a result of the   
debt payments in (3) and (4) above.                         

(7)  To record the elimination of depreciation expense on the         
Portland, Oregon production facility.                       

(8)  To close out the accumulated deficit to additional paid-in       
capital to give effect to the formation of New Chase.       

(9)  To adjust the common shares of Old Chase which were owned by TGC 
     to the common shares of New Chase to be issued to stockholders of
TGC.                                                        

F-19  

SIGNATURES                

Pursuant to the requirements of Section 12 of the Securities Exchange 
Act of 1934, as amended, the Registrant has duly caused this Registration       
Statement to be signed on its behalf by the undersigned, thereunto duly         
authorized.                                                                     

             CHASE PACKAGING CORPORATION

      By: /S/ L. W. LOVELL
          L. W. Lovell
                 President and Chief
               Operating Officer

INDEX TO EXHIBITS               

Exhibit                                                 Sequential              
No.                  Description                        Page No.            

2.1          Form of Agreement for Spin-Off of Subsidiary                       
Stock                                                 

2.2          Form of Escrow Agreement                                           

3.1          Form of Articles of Incorporation, as                              
amended, of the Company                               

3.1          Form of Bylaws of the Company                                      

4.1          Specimen Certificate for Company's Common                          
Stock                                                 

10.1         Form of 1996 Stock Option Plan of the Company                      

10.2         Purchase and Sale Agreement Between Union                          
Camp Corporation and Chase Packaging Corporation      
dated June 27, 1993, filed as Exhibit 1 to TGC's      
Form 8-K (Commission and incorporated herein by       
reference.                                            

10.3         Asset Purchase Agreement among Fisher Bag                          
Company, Inc. and all of its shareholders and Chase   
Packaging Corporation dated April 25, 1994, filed     
as Exhibit 1 to TGC's Form 8-K (Commission File       
No. 0-14908) dated May 25, 1994, filed with           
the Commission and incorporated herein by reference.  

10.4         Closing Agreement among Fisher Bag Company, Inc. and               
all of its shareholders and Chase Packaging Corpora-  
tion dated May 25, 1994, amending and supplementing   
the Asset Purchase Agreement, filed as Exhibit 2 to   
TGC's Form 8-K (Commission File No. 0-14908) dated    
May 25, 1994, filed with the Commission and incor-    
porated herein by reference.                          

10.5         Promissory Note dated July 30, 1993 in the principal               
amount of $3,761,537 payable by Chase Packaging Cor-  
poration to Union Camp Corporation, filed as Exhibit  
3 to TGC's Form 8-K (Commission File No. 0-14908)     
dated July 30, 1993, filed with the Commission and    
incorporated herein by reference.                     

10.6         Accounts Financing Agreement [Security Agreement] dated            
July 30, 1993 between Congress Financial Corporation  
       (Northwest) and Chase Packaging Corporation, filed as Exhibit
 4 to TGC's Form 8-K (Commission File No. 0-14908) dated
   July 30, 1993, filed with the Commission and incorporated
herein by reference.                                  

10.7         First Amendment to Accounts Financing Agreement [Security          
   Agreement] dated May 25, 1994, between Congress Financial
  Corporation (Northwest) and Chase Packaging Corporation,
     filed as Exhibit 4.3 to TGC's annual report on Form 10-SB-K
      for the fiscal year ended December 31, 1994 and incorporated
herein by reference.                                  

10.8         Letter Agreement dated July 25, 1994, amending Accounts            
    Financing Agreement [Security Agreement], between Congress
Financial Corporation (Northwest) and Chase Packaging 
     Corporation, filed as Exhibit 4.4 to TGC's annual report on
   Form 10-K for the fiscal year ended December 31, 1994 and
incorporated herein by reference.                     

10.9         Second Amendment to Accounts Financing Agreement [Security         
Agreement] dated September 19, 1994, between Congress 
Financial Corporation (Northwest) and Chase Packaging 
     Corporation, filed as Exhibit 4.5 to TGC's annual report on
   Form 10-K for the fiscal year ended December 31, 1994 and
incorporated herein by reference.                     

10.10        Third Amendment to Accounts Financing Agreement [Security          
        Agreement] dated February 27, 1995, between Congress Financial
  Corporation (Northwest) and Chase Packaging Corporation,
  filed as Exhibit 4.6 to TGC's annual report on Form 10-K
      for the fiscal year ended December 31, 1994 and incorporated
herein by reference.                                  

10.11        Fourth Amendment to Accounts Financing Agreement [Security         
    Agreement] dated July 26, 1995, between Congress Financial
  Corporation (Northwest) and Chase Packaging Corporation,
  filed as Exhibit 4.7 to TGC's annual report on Form 10-K
      for the fiscal year ended December 31, 1995 and incorporated
herein by reference.                                  

Exhibit 2.1     

Form of Agreement for Spin-Off of Subsidiary Stock      

Agreement for Spin-Off of Subsidiary Stock    

This Agreement is executed to be effective as of the 31st day of July,
1996, by and between TGC Industries, Inc., a Texas corporation ("TGC"), and     
Chase Packaging Corporation, formerly New Chase Corporation, a Texas            
corporation ("Chase").                                                          

W I T N E S S E T H:    

WHEREAS, TGC owns 100% of the issued and outstanding shares of Common 
Stock of Chase and thereby holds 100% of the voting stock in Chase;             

WHEREAS, TGC will distribute to the holders of its Common Stock and   
Series C 8% Convertible Exchangeable Preferred Stock, except for the escrow     
for the holders of TGC Derivative Securities (as defined below), all Chase      
Common Stock currently held by TGC; and                                         

NOW, THEREFORE, on the basis of the respective representations and    
warranties herein set forth and of the covenants and agreements herein          
contained, the parties hereto agree as follows:                                 

ARTICLE I.    

Plan for Distribution of Chase Common Stock   

A.   For financial and accounting purposes, the effective date (the   
"Effective Date") of the spin-off transaction herein contemplated shall be      
July 31, 1996.                                                                  

B.   Promptly after the effective date of the Form 10 Registration    
Statement to be filed with the SEC by TGC and Chase, TGC shall make a           
distribution to the holders of its Common Stock and to the holders of           
Series C 8% Convertible Exchangeable Preferred Stock ("Preferred Stock") of     
all of its shares of Chase Common Stock except as provided in Article I.C       
below.  The record date was July 15, 1996 ("Record Date"); however, the         
Common Stock of TGC has traded with "due bills" since the Record Date and       
will continue to do so through the distribution date of the Chase Common        
Stock.  On the distribution date, the holders of Common Stock of TGC will       
receive one-half (1/2) share of Chase Common Stock for each share of TGC        
Common Stock held.  The holders of TGC Preferred Stock will receive             
one-half (1/2) share of Chase Common Stock for each share of Common Stock       
of TGC as if the Preferred Stockholder had converted.  The $5.00 per share      
Preferred Stock is initially convertible at $.75 per share of Common Stock      
through July 1, 1998.                                                           

C.   Additional shares of Chase Common Stock shall be placed in escrow
with an escrow agent so that if, and when, holders as of the Record Date of     
all outstanding Warrants of TGC and all outstanding Options of TGC              
exercisable as of the Record Date ("Derivative Securities") exercise such       
Derivative Securities for shares of TGC Common Stock, they will receive         
from such escrow account Chase Common Stock.                                    

D.   No fractional shares will be distributed.                        

ARTICLE II.   

No Ruling from the Commissioner of Internal Revenue   

Neither TGC nor Chase will apply to the Commissioner of Internal      
Revenue for a ruling regarding the federal income tax consequences of any       
of the transactions contemplated herein.                                        

ARTICLE III.    

Representations and Warranties    

A.   TGC REPRESENTS AND WARRANTS THAT:                                

 1. Organization and Good Standing.  TGC is a corporation duly
organized, validly existing, and in good standing under the laws of the         
State of Texas and has corporate power to carry on its business as it is        
now being conducted.  Copies of TGC's Certificate of Incorporation and          
Bylaws (certified to be correct by the Secretary of TGC) have been              
delivered to Chase and are complete and correct as of the date hereof.          
TGC's minute book contains a complete and accurate record of all meetings       
and other corporate action of its shareholders and Board of Directors.          

 2.   Capitalization.  As of the date of this Agreement, TGC's
authorized capital stock consists of 25,000,000 shares of $.10 par value        
Common Stock, of which 6,252,694 shares were issued and outstanding as of       
the Effective Date; and 4,000,000 shares of $1.00 par value Preferred           
Stock, of which 1,150,350 shares of Series C 8% Convertible Exchangeable        
Preferred Stock are issued and outstanding as of the Effective Date.  All       
of the outstanding shares of Common Stock and Preferred Stock of TGC are        
validly issued, fully paid, and non-assessable.                                 

 3.   Litigation.  There is no pending litigation, proceeding,
governmental investigation, or other action that, if successful, would          
prevent TGC from performing its agreements and covenants and fulfilling its     
obligations under this Agreement; and, to the knowledge of TGC, there is no     
threat of, or reasonable basis for, any such litigation, proceeding,            
governmental investigation, or other action.                                    

4.   No Violation.  The execution of this Agreement and the 
performance hereunder will not violate the provisions of TGC's Articles of      
Incorporation, Bylaws, any note of which TGC is the maker, or any               
indenture, agreement, or other instrument to which TGC is party, except         
insofar as any such instrument may require consent by a lender, mortgagee,      
lessor, or other party to such actions, whose consent TGC agrees to obtain      
before the Closing Date hereof.                                                 

    5.   Authorization.  The execution, delivery, and performance of
this Agreement have been duly authorized and approved by TGC's Board of         
Directors.  This Agreement and the consummation of the transactions             
contemplated herein have been duly and validly authorized by all necessary      
corporate action on the part of TGC, and this Agreement is binding upon and     
enforceable against TGC in accordance with its terms.                           

B.   CHASE REPRESENTS AND WARRANTS AS FOLLOWS:                        

  1.   Organization and Good Standing.  Chase is duly organized,
validly existing, and in good standing under the laws of the State of Texas     
and has corporate power to carry on its business as it is now being             
conducted.  Copies of the Articles of Incorporation and Bylaws of Chase         
(certified to be correct by the Secretary of Chase) have been delivered to      
TGC and are complete and correct as of the date hereof.                         

 2.   Litigation.  There is no pending litigation, proceeding,
governmental investigation, or other action that, if successful, would          
prevent Chase from performing its agreements and covenants and fulfilling       
its obligations under this Agreement; and, to the knowledge of Chase, there     
is no threat of or reasonable basis for any such litigation, proceeding,        
governmental investigation, or other action.                                    

     3.   Disclosure.  To the knowledge of Chase, no representation or
warranty by it and no statement or certificate furnished or to be furnished     
by it to TGC pursuant to the provisions hereof contains or will contain any     
untrue statement of a material fact, or omits or will omit to provide the       
information required by the provisions hereof relating to such                  
representation, warranty, statement, or certificate.                            

     4.   No Violation.  The execution of this Agreement by Chase does
not, and performance hereof will not, violate the provisions of the             
Articles of Incorporation or Bylaws of Chase, the provisions of any note of     
which Chase is the maker, or the provisions of any indenture, agreement, or     
other instrument to which Chase is a party.                                     

    5.   Authorization.  The execution, delivery, and performance of
this Agreement by Chase have been duly and validly authorized and approved      
by all necessary corporate action.                                              

6.   Capitalization.  The authorized common capital stock of
Chase consists of 25,000,000 shares of .10 par value Common Stock of which      
7,500,684 shares of Common Stock were issued and outstanding as of the          
Effective Date.                                                                 

ARTICLE IV.   

General Provisions    

A.   Escrow Agreement.  In addition to paragraph "A" above, an express
condition precedent to the obligations of TGC under this Agreement is that      
Chase must execute an escrow agreement (in the form of Agreement attached       
hereto as "Exhibit A") to cover TGC's obligation to issue Chase Common          
Stock to holders of TGC Derivative Securities as required by Article I.C.       
hereof.                                                                         

B.   Benefit and Assignment.  This Agreement shall be binding upon,   
and inure to the benefit of, the parties hereto, TGC and Chase.  The rights     
of TGC and Chase hereunder may not be assigned except by an agreement in        
writing signed by TGC and Chase.                                                

C.   Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.                              

D.   Notices.  All notices, requests, demands, and other              
communications hereunder shall be in writing and shall be deemed to have        
been duly given if delivered or mailed, certified mail, first class,            
postage prepaid, to TGC at:                                                     

Mr. Herbert M. Gardner                  
26 Broadway, Suite 815                  
New York, New York 10004                

and                   

Mr. Rice M. Tilley, Jr.                 
Law, Snakard & Gambill                  
500 Throckmorton Street, Suite 3200     
Fort Worth, Texas 76102                 

or if to Chase, to                                                              

Mr. Doug Kirkpatrick                    
Chief Financial Officer                 
Chase Packaging Corp.                   
2550 Northwest Nicolai Street           
Portland, OR  97210                     

E.   Expenses.  All expenses incurred in connection with this         
Agreement and the transactions herein provided for shall be paid by TGC.        

F.   Counterparts.  This Agreement may be executed simultaneously in  
two or more counterparts, each of which shall be deemed an original, but        
all of which together shall constitute one and the same instrument.             

G.   Headings.  All paragraph headings herein are inserted for        
convenience only and shall not modify or affect the construction or             
interpretation of any provision of this Agreement.                              

H.   Amendment, Modification, and Waiver.  This Agreement may be      
modified, amended, and supplemented by mutual written agreement of the          
parties hereto.                                                                 

I.   Entire Agreement.  This Agreement, the Exhibits attached hereto, 
and the other agreements specifically provided for herein represent the         
entire Agreement of the parties hereto with respect to the subject matter       
hereof.                                                                         

J.   Prior Negotiations.  All prior negotiations and discussions by   
and among the parties hereto which are not reflected or set forth in this       
Agreement or the Exhibits attached hereto are merged into this Agreement        
and shall have no force or effect.                                              

K.   Termination.  This Agreement may be terminated at any time prior 
to the Closing Date as follows:                                                 

   1.   By the consents of the Boards of Directors of both TGC and
Chase;                                                                          

   2.   By TGC if the conditions contained herein to which Chase's
obligations are subject have not been fulfilled or waived by Chase;             

   3.   By Chase if the conditions contained herein to which TGC's
obligations are subject have not been fulfilled or waived by TGC.               

IN WITNESS WHEREOF, the parties have executed this Agreement on the   
date first above written.                                                       

  TGC INDUSTRIES, INC.

By:___________________________________________                                  

Name:______________________________________                                     

Title:_____________________________________                                     

         CHASE PACKAGING CORPORATION

By:___________________________________________                                  

Name:______________________________________                                     

Title:____________________________________                                      

Exhibit 2.2     

Form of Escrow Agreement      

ESCROW AGREEMENT    

This Escrow Agreement (the "Agreement") is entered into as of July 31,
1996, by and among TGC Industries, Inc., a Texas corporation ("TGC"), Chase     
Packaging Corporation, formerly New Chase Corporation, a Texas corporation      
("Chase"), and American Stock Transfer & Trust Company (the "Escrow Agent")     
for the benefit of the holders (as of a record date of July 15, 1996) of        
those TGC Warrants and Options (the "Derivative Securities") which are          
listed in the Exhibit "A" attached hereto and which are convertible into        
TGC's Common Stock (the maximum number of shares of TGC Common Stock into       
which such securities are convertible being specifically set out in such        
Exhibit "A").                                                                   

Effective as of the date of this Agreement, TGC has effected a        
spin-off (the "Spin-Off") to its shareholders of all of the Common Stock of     
Chase, a wholly-owned operating subsidiary of TGC.  As a result of such         
Spin-Off transaction, the holders of TGC Common Stock and Preferred Stock       
will receive Chase Common Stock.  The record date is July 15, 1996 ("Record     
Date"); however, the Common Stock of TGC has traded with "due bills" since      
the Record Date and will continue to do so through the distribution date of     
the Chase Common Stock, which date will be the first business day following     
the effectiveness of the Registration Statement which the Company intends       
to file with the Securities and Exchange Commission.  On the distribution       
date, the holders of TGC Common Stock will receive one-half (1/2) share of      
Chase Common Stock for each share of TGC Common Stock held.  The holders of     
TGC Preferred Stock will receive one-half (1/2) share of Chase Common Stock     
for each share of Common Stock of TGC as if the Preferred Stockholder had       
converted.  The $5.00 per share Preferred Stock is initially convertible at     
$.75 per share of Common Stock through July, 1998.  No fractional shares        
will be distributed.                                                            

Under the terms of the Derivative Securities, the holders thereof will
be entitled to receive, in the event of exercise of their option or right       
to convert, Chase Common Stock.  Upon any such exercise of Derivative           
Securities, Chase will issue and deliver the Chase Common Stock to be           
received by the holder of the Derivative Securities.                            

In order to insure that there will be available for delivery to the   
holders of the Derivative Securities the Chase Common Stock to which each       
holder will be entitled upon conversion of his, her, or its Derivative          
Securities, Chase has issued 539,837 shares of its Common Stock to TGC in       
connection with the organization of Chase, and TGC shall thereupon deliver      
to the Escrow Agent a certificate or certificates representing such 539,837     
shares of Chase Common Stock.                                                   

The purpose of this Agreement is to state the rights and obligations  
of the parties hereto concerning such 539,837 shares of Chase Common Stock      
which will be held by the Escrow Holder in escrow pursuant to the terms of      
this Agreement for the benefit of the holders of the Derivative Securities.     

NOW, THEREFORE, in consideration of the mutual covenants hereinafter  
set forth, the parties do hereby represent, warrant, and agree with each        
other, and the Escrow Agent, as follows:                                        

1.   Issuance and Delivery of Stock into Escrow.                      

     a. Chase Stock. Under the terms of the Spin-Off Agreement between
     TGC and Chase, Chase hereby agrees to issue 539,837 shares of its
 Common Stock to TGC for issuance upon the exercise of the TGC
  Derivative Securities, which are listed in Exhibit A, together
   with such other documents and instruments as may be required to
    effectuate such delivery and to transfer title to such shares to
     the Escrow Agent and to satisfy the other intents and purposes of
  this Agreement.  TGC agrees to deliver to the Escrow Agent the
 certificate or certificates representing such shares of Chase
Common Stock.                                               

     b. Obligation of Escrow Agent. The Escrow Agent agrees to dispose
    of the securities to be deposited in escrow hereby in accordance
with the terms and provisions of this Agreement.            

2.   Beneficial Ownership.  Pending exercise of the Derivative        
Securities, beneficial ownership of such shares shall be in the Escrow          
Agent.  The Escrow Agent hereby waives the right to receive any dividends       
or other considerations with respect to such shares (except in connection       
with the "stock adjustments" referred to in Section "5" to follow).             
Neither the Escrow Agent nor anyone else may vote the shares.                   

3.   Termination.  The shares deposited in escrow shall remain in     
escrow until disposed of in accordance with the terms of this Agreement;        
provided, however, that to the extent and only to the extent that the           
Derivative Securities have not been exercised within the time limitation        
prescribed in the Derivtaive Securities, this Agreement shall terminate and     
the Escrow Agent shall release to Chase all of the shares of Common Stock       
which remain deposited hereunder.                                               

4.   Exercise.  If, as, and when the holders of the Derivative        
Securities elect to exercise their exercise privilege, they will be             
entitled to receive the number of Shares that they would have owned had         
they exercised their Derivative Securities prior to the July 15, 1996           
record date for the Spin-off. In the event of any adjustment in the number      
and/or type of shares (held in escrow or issuable upon exercise of other        
securities held in escrow), the securities to be received upon exercise of      
the Derivative Securities outstanding as of the date of adjustment shall be     
proportionately increased or decreased to reflect such adjustment.  Upon        
TGC's receipt of notice that a holder of a Derivative Security has              
exercised his, her, or its exercise privilege, TGC shall notify Chase and       
the Escrow Agent of the number of Shares to be transferred to such holder.      
The Escrow Agent shall then return to Chase for cancellation the                
certificate representing the Common Stock and any other Chase securities        
held by it and shall instruct Chase to:  (a)  issue a new certificate or        
certificates to such holder representing the number of shares of Common         
Stock which he, she, or it is entitled to receive and to deliver such           
certificate or certificates to the Escrow Agent for further delivery to         
such holder; and (b) issue a new certificate to the Escrow Agent                
representing the number of shares (if any) of Common Stock not                  
covered by such exercise of the exercise privilege.                             

Until all shares held in escrow have been released from escrow, Chase 
shall issue and deliver to the Escrow Agent one or more new certificates        
evidencing ownership of the number of shares of Common Stock equal to the       
difference between 539,837 and the total number previously released from        
escrow, together with such other documents and instruments as may be            
required to effectuate the transfer of title to the Common Stock and the        
other intents and purposes of this Agreement which instruments shall            
include one or more stock powers duly endorsed in blank with signatures         
guaranteed.  If the number of shares to be transferred to one or more           
holders of Derivative Securities exceeds the number of shares held by the       
Escrow Agent, Chase shall issue one or more new certificates evidencing the     
ownership by the holders of the Derivative Securities of the number of          
shares equal to the difference between the number they are entitled to          
receive and the number actually held by the Escrow Agent.                       

5.   Stock Adjustments.  Chase agrees to make adjustments in the      
securities held in escrow upon the occurrence of the events and in the          
manner set forth below:                                                         

a.  Stock dividends.  In the event Chase declares a dividend
payable otherwise than out of consolidated earnings or      
consolidated earned surplus, determined in accordance with  
 generally-accepted accounting principles, Chase agrees to add
  such dividend to the escrow pursuant to this Escrow Agreement.
For purposes of the foregoing, a dividend other than in cash
 shall be considered payable out of earnings or surplus (other
     than revaluation or paid-in surplus) only to the extent that such
     earnings or surplus are charged an amount equal to the fair value
of such dividend as determined by the Board of Directors of 
Chase;                                                      

  b.  Subdivision or Combination of Stock.  In case Chase at any
 time subdivides its outstanding shares of Common Stock into a
greater number of shares, the increased number of shares of 
 Common Stock resulting from such subdivision shall be held in
  escrow pursuant to this Escrow Agreement.  Conversely, in case
 the outstanding number of shares of Common Stock of Chase are
  combined into a smaller number of shares, the shares of Common
   Stock held in escrow pursuant to this Escrow Agreement shall be
reduced to reflect such combinations; and                   

   c.  Reorganization, Reclassification, Consolidation, Merger, or
Sale.  In the event of any capital reorganization or        
   reclassification of the capital stock of Chase, a consolidation
   or merger of Chase with another corporation, or the sale of all
or substantially all of its assets to another corporation   
effected in such a way that the holders of Common Stock are 
    entitled to receive stock, securities, or assets with respect to
    or in exchange for the Common Stock or other types of securities
     then held in escrow, then, as a condition to such reorganization,
 reclassification, consolidation, merger, or sale, Chase shall
place the stock, securities, or assets that would have been 
distributed to holders of outstanding Common Stock or other 
     securities in the amount of such Common Stock or other securities
then held in escrow into escrow pursuant to this Escrow     
Agreement.  Chase further agrees not to effect any such     
   consolidation, merger, or sale unless prior to the consummation
     thereof the successor corporation (if other than Chase) resulting
     from such consolidation or merger, or the corporation into or for
    which the outstanding shares of Common Stock or other securities
   held in escrow are changed or exchanged in connection with such
merger or consolidation, or the corporation purchasing such 
    assets, agrees by an instrument in writing, satisfactory in form
    and substance to the holders of the Derivative Securities, to be
bound by the terms of this Escrow Agreement as the full or  
partial successor, as the case may be, of Chase.            

6.   Escrow Agent.  In acting hereunder, the Escrow Agent shall not be
liable for any act done or omitted by it in good faith.  The Escrow Agent       
shall have no duties or obligations other than those stated herein and          
shall be protected in acting upon any notice, certificate, or other             
communication, not only as to its due execution and the validity and            
effectiveness of its provisions, but also as to the truth and acceptability     
of the information therein contained.  The Escrow Agent shall be entitled       
to receive from TGC a reasonable fee for its services.  In addition, in the     
event of any actual or threatened litigation concerning the role of the         
Escrow Agent under this Agreement, the Escrow Agent shall be entitled to        
receive from TGC reimbursement for all reasonable costs and disbursements       
which may be imposed upon the Escrow Agent or incurred in connection with       
its acceptance of appointment as Escrow Agent hereunder or the performance      
of its duties hereunder.  However, under no circumstances will the Escrow       
Agent have a security interest, lien, or other type of encumbrance on the       
securities or other properties held in escrow.                                  

7.   Interpleader.  Should any controversy arise between the          
undersigned with respect to this Agreement or with respect to the right to      
receive the Shares, the Escrow Agent may institute a bill of interpleader       
or other appropriate legal proceeding in any court of competent                 
jurisdiction to determine the rights of the parties.                            

8.   Notices.  All notices, requests, demands, and other communication
hereunder shall be in writing and shall be deemed to have been duly             
delivered if delivered in person or sent by certified United States mail,       
postage prepaid:                                                                

  a.  If to the Escrow Agent, to American Stock Transfer & Trust
   Company, 40 Wall Street, 46th Floor, New York, New York, 10005;

    b.  If to Chase, to Mr. Doug Kirkpatrick, Chase Packaging Corp.,
2550 Northwest Nicolai Street, Portland, OR  97210;         

     c.  If to TGC, to Mr. Herbert M. Gardner, 26 Broadway, Suite 815,
New York, New York, 10004.                                  

9.   Controlling Law.  This Escrow Agreement shall be controlled,     
construed, and enforced in accordance with the laws of the State of Texas,      
cannot be changed or terminated orally, and shall be binding upon and inure     
to the benefit of the parties hereto, and their respective successors or        
personal representatives.                                                       

  TGC INDUSTRIES, INC.

By:___________________________________________                                  

                        Name: ______________________________

                          Title: _______________________________

   CHASE PACKAGING CORP.

By:___________________________________________                                  

Name:       
_____________________________________                                           

Title:      
____________________________________                                            

       AMERICAN STOCK TRANSFER &
TRUST COMPANY     

By:___________________________________________                                  

Name:       
_____________________________________                                           

Title:      
____________________________________                                            

The undersigned hereby acknowledges completion of the services of the 
Escrow Agent in the handling of the Escrow Agreement described above in a       
manner satisfactory and acceptable to us, and in consideration of the           
premises we do hereby release and discharge the Escrow Agent from any and       
all liability thereunder.                                                       

Date:________________________                                                   

  TGC INDUSTRIES, INC.

By:___________________________________________                                  

Name:       
_____________________________________                                           
Title:      
____________________________________                                            

   CHASE PACKAGING CORP.

By:___________________________________________                                  

Name:       
_____________________________________                                           

Title:      
____________________________________                                            

Exhibit 3.1     

       Form of Articles of Incorporation, as amended, of the Company

Articles of Incorporation   

of    

NEW CHASE CORPORATION   

The undersigned natural person of the age of eighteen (18) years or   
more, acting as the incorporator of a corporation under the Texas Business      
Corporation Act (the "TBCA"), does hereby adopt the following Articles of       
Incorporation for such Corporation:                                             

Article One   
Name    

The name of the Corporation is New Chase Corporation.                 

Article Two   
Duration    

The period of duration of the Corporation is perpetual.               

Article Three   
Purposes    

The purpose or purposes for which the Corporation is organized is the 
transaction of any one or more of those lawful businesses for which             
corporations may be incorporated under the TBCA.                                

Article Four    
Shares    

The Corporation may issue two classes of shares as follows:           

Section 4.1.   Common Stock.  The aggregate number of shares of Common
Stock which the Corporation may issue is 25,000,000 shares, each having a       
par value of ten cents ($.10).  The shares shall be designated as Common        
Stock and shall have identical rights and privileges in every respect.          

Section 4.2.   Preferred Stock.  The aggregate number of shares of    
Preferred Stock which the Corporation may issue is 4,000,000, each having a     
par value of one dollar ($1.00).  The Preferred Stock authorized by these       
Restated Articles of Incorporation may be issued from time to time in           
series.  The shares of each series shall be subject not only to the             
provisions of this Section 4.2 which is applicable to all series of             
preferred shares, but also to the additional provisions with respect to         
such series as are fixed from time to time by the Board of Directors.  All      
preferred shares of each series shall be identical and of equal rank,           
except as may be modified by the Board of Directors.  Each share of each        
series shall be identical in all respects with the other shares of such         
series, except as to the date from which dividends thereon shall be             
cumulative in the event the Board of Directors designates any such series       
to be cumulative preferred.  The Board of Directors is hereby authorized        
and required to fix, in the manner and to the full extent provided and          
permitted by law, all provisions of the shares of each series not otherwise     
set forth in these Articles, including, but not limited to:                     

     L.   Designation of Series and Number of Shares.  The distinctive
designation of each series and the number of shares constituting such 
series, which number may be increased (except where otherwise provided
by the Board of Directors in its resolution creating such series) or  
decreased (but not below the number of shares thereof then            
outstanding) from time to time by resolution of the Board of          
Directors;                                                            

     M.   Dividend Rates and Rights.  The annual rate and frequency of
payment of dividends payable on the shares of all series and the      
dividend rights applicable thereto, including, in the event of        
Cumulative Preferred Stock, the date from which dividends shall be    
cumulative on all shares of any series issued prior to the record date
for the first dividend on shares of such series;                      

     N.  Redemption. The rights, if any, of the Corporation to redeem;
the terms and conditions of redemption; and the redemption price or   
prices, if any, for the shares of each, any, or all series;           

     O.   Sinking Fund.  The obligation, if any, of the Corporation to
maintain a sinking fund for the periodic redemption of shares of any  
series and to apply the sinking fund to the redemption of such shares;

  P.   Voluntary Liquidation Preferences.  The amount payable on
shares of each series in the event of any voluntary liquidation,      
dissolution, or winding up of the affairs of the Corporation;         

  Q.   Conversion Rights.  The rights, if any, of the holders of
shares of each series to convert such shares into the Corporation's   
Common Stock and the terms and conditions of such conversion; and     

     R.   Voting Rights.  The voting rights, if any, of the holders of
the shares of each series, and any other preferences, and relative,   
participating, optional, or other special rights, and any             
qualifications, limitations, or restrictions thereof.                 

Article Five    
Commencement of Business    

The Corporation will not commence business until it has received for  
the issuance of its shares consideration having a value of One Thousand         
Dollars ($1,000) and consisting only of money, labor done, or property          
actually received.                                                              

Article Six   
Preemptive Rights   

No shareholder or other person may have any preemptive rights         
whatsoever to acquire additional, unissued, or treasury shares of the           
Corporation, or securities of the Corporation convertible into or carrying      
a right to subscribe to or acquire shares, or any other securities or           
property whatsoever.                                                            

Article Seven   
Miscellaneous   

Section 7.1.   Bylaws.  The power to alter, amend, repeal, or adopt   
the Bylaws of the Corporation is hereby vested in the Board of Directors,       
subject to repeal or change by action of the shareholders.                      

Section 7.2.   Non-Cumulative Voting.  Directors are to be elected by 
plurality vote.  Cumulative voting is not permitted.                            

Section 7.3.   Purchase Own Stock.  The Corporation may, directly or  
indirectly, purchase its own shares to the extent of the aggregate of           
unrestricted capital surplus available therefor and unrestricted reduction      
surplus available therefor.                                                     

Section 7.4.   Supermajority Vote for Business Combinations.  The     
affirmative vote of the holders of eighty percent (80%) or more of the          
issued and outstanding shares of the Corporation at a duly called meeting       
of the stockholders shall be required for the approval or authorization of      
(1) any merger or consolidation of the Corporation with or into another         
corporation or entity, or (2) any sale of all or substantially all of the       
Corporation's assets to another corporation or entity.                          

Section 7.5.   Consideration of Fairness of Business Combinations.    
The Board of Directors of the Corporation, when evaluating any offer of         
another party to (1) purchase or otherwise acquire all or substantially all     
of the properties or assets of the Corporation, (2) merge or consolidate        
the Corporation with or into another corporation or entity, or (3) make a       
tender or exchange offer for any equity security of the Corporation, may,       
in connection with the exercise of its judgment in determining what is in       
the best interests of the Corporation and its shareholders, give due            
consideration to all relevant factors, including, without limitation:           
(a) the fairness of the price or financial terms of the proposal, (b) the       
relationship of the proposal to the value of the Corporation in a               
transaction of a similar type resulting from arm's length negotiations; and     
(c) the social and economic effects of the proposed transaction on the          
employees, shareholders, and other constituents of the Corporation and on       
the communities in which the Corporation operates or is located.                

Section 7.6.   Number and Classification of Directors.  The Board of  
Directors shall consist of not less than three (3) nor more than nine (9)       
directors.  The number of Directors may be increased or decreased (within       
the limits stated above) by resolution of the Board of Directors, but no        
decrease may have the effect of shortening the term of any incumbent            
director.  A director may be removed prior to the end of the term for which     
he is elected only for cause and by the affirmative vote of the holders of      
eighty percent (80%) or more of the issued and outstanding shares of the        
Corporation at a meeting of the stockholders duly called for the                
consideration of such removal.  At any such time as the Board of Directors      
shall consist of five (5) or more directors, the Board of Directors may by      
resolution classify the Board into three (3) classes.  The term of office       
of directors of the first class shall expire at the first annual meeting of     
shareholders after their election, that of the second class shall expire at     
the second annual meeting after their election, and that of the third class     
shall expire at the third annual meeting after their election.  At each         
annual meeting after such classification the number of directors equal to       
the number of the class whose term expires at the time of such meeting          
shall be elected to hold office until the third succeeding annual meeting.      

Section 7.7.   Supermajority Vote for Amendment of This Article.  The 
provisions set forth in this Article Seven may not be amended, altered,         
changed, or repealed in any respect unless such action is approved by the       
affirmative vote of the holders of eighty percent (80%) or more of the          
issued and outstanding shares of the Corporation at a meeting of the            
stockholders duly called for the consideration of such amendment,               
alteration, change, or repeal.                                                  

Section 7.8.   Action Without a Meeting.  Any action required by the  
TBCA to be taken at any annual or special meeting of shareholders, or any       
action which may be taken at any annual or special meeting of shareholders,     
may be taken without a meeting, without prior notice, and without a vote,       
if a consent or consents in writing setting forth the actions so taken, are     
signed by the holder or holders of shares having not less than the minimum      
number of votes that would be necessary to take such action at a meeting at     
which the holders of all shares entitled to vote on the action were present     
and voting.                                                                     

Section 7.9.   Limitation of Liability.  To the fullest extent        
permitted by applicable law, no director of the Corporation may be held         
personally liable to the Corporation or its shareholders for monetary           
damages for an act or omission in the director's capacity as a director,        
except that this Article does not eliminate or limit the liability of a         
director for:  (i) a breach of the director's duty of loyalty to the            
Corporation or its shareholders; (ii) an act or omission not in good faith      
that constitutes a breach of duty of the director to the Corporation or an      
act or omission that involves intentional misconduct or a knowing violation     
of the law; (iii) a transaction from which the director received an             
improper benefit, whether or not the benefit resulted from an action taken      
within the scope of the director's office; or (iv) an act or omission for       
which the liability of a director is expressly provided for by statute.         
Neither the amendment nor repeal of this Section will eliminate or reduce       
the effect of this Section in respect of any matter occurring, or any cause     
of action, suit, or claim that, but for this Section, would accrue or           
arise, prior to such amendment or repeal.  If the TBCA or the Texas             
Miscellaneous Corporations Laws Act (the "TMCLA") is amended to authorize       
corporate action further limiting or eliminating the personal liability of      
directors, then the liability of a director of the Corporation shall be         
limited or eliminated to the fullest extent permitted by the TBCA or the        
TMCLA, as so amended from time to time.                                         

Section 7.10.  Indemnification.                                       

  A.  The Corporation shall indemnify, to the extent provided in
the following paragraphs, any person who is or was a director,        
officer, agent, or employee of the Corporation and any person who     
serves or served at the Corporation's request as a director, officer, 
agent, employee, partner, or trustee of another corporation or of a       
partnership, joint venture, trust, or other enterprise.  In the event 
the provisions of indemnification set forth below are more restrictive
than the provisions of indemnification allowed by Article 2.02-1 of   
the Texas Business Corporation Act, then such persons named above     
shall be indemnified to the full extent permitted by Article 2.02-1 of
the Texas Business Corporation Act as it may exist from time to time. 

B.   In case of a suit by or in the right of the Corporation
against a person named in subsection A above by reason of such        
person's holding a position named in such subsection A hereafter      
referred to as a derivative suit, the Corporation shall indemnify such
person for reasonable expenses actually incurred by such person in    
connection with the defense or settlement of the suit, but only if    
such person satisfies the standard in subsection D to follow.         

     C. In case of a threatened or pending suit, action, or proceeding
(whether civil, criminal, administrative, or investigative), other    
than a derivative suit, hereafter referred to as a non-derivative     
suit, against a person named in subsection A above by reason of such  
person's holding a position named in such subsection A, the           
Corporation shall indemnify such person if such person satisfies the  
standard contained in subsection D, for amounts actually and          
reasonably incurred by such person in connection with the defense or  
settlement of the non-derivative suit as expenses (including court    
costs and attorneys' fees), amounts paid in settlement, judgements,   
and fines.                                                            

     D.   Whether in the nature of a derivative suit or non-derivative
suit, a person named in subsection A above will be indemnified only if
it is determined in accordance with subsection A above that such      
person:                                                               

    1.     acted in good faith in the transaction which is the
subject of the suit;                                        

2.     reasonably believed:                           

             a.    if acting in his official capacity as director,
      officer, agent, or employee of the Corporation, that his
       conduct was in the best interests of the Corporation; and

          b.    in all other cases, that his conduct was not
   opposed to the best interests of the Corporation; and

3.     in the case of any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful.                            

The termination of a proceeding by judgment, order, settlement,       
conviction, or upon a plea of nolo contendere or its equivalent will  
not, of itself, create a presumption that this person failed to       
satisfy the standard contained in this section.                       

    E.   A determination that the standard of subsection D above has
been satisfied must be made:                                          

      1.    by a majority vote of a quorum consisting of directors
who at the time of the vote are not named defendants or     
respondents in the proceeding; or                           

        2.    if such quorum cannot be obtained, by a majority vote of
   a committee of the Board of Directors, designated to act in the
    matter by a majority vote of all directors, consisting solely of
   two or more directors who at the time of the vote are not named
defendants or respondents in the proceeding; or             

 3.    by special legal counsel selected by the Board of
Directors or a committee of a board by vote as set forth in 
    subsections 1 and 2 above, or, if such quorum cannot be obtained
   and such committee cannot be established, by a majority vote of
all directors; or                                           

        4.     by the shareholders in a vote that excludes the vote of
directors who are named defendants or respondents in the    
proceeding.                                                 

 F.   Authorization of indemnification and determination as to
reasonableness of expenses must be made in the same manner as the     
determination that indemnification is permissible, except that if the 
determination that indemnification is permissible is made by special  
legal counsel, authorization of indemnification and determination as  
to reasonableness of expenses must be made in the manner specified by 
subsection E.3. above for the selection of special legal counsel.     

G.   The Corporation may reimburse or pay in advance any    
reasonable expenses (including court costs and attorneys' fees) which 
may become subject to indemnification under subsections A through F   
above, but only in accordance with the provisions as stated in        
subsection E above, and only after the person to receive the payment  
(i) signs a written affirmation of his good faith belief that he has  
met the standard of conduct necessary for indemnification under       
subsection D, and (ii) undertakes in writing to repay such advances   
unless it is ultimately determined that such person is entitled to    
indemnification by the Corporation.  The written undertaking required 
by this subsection must be an unlimited general obligation of the     
director but need not be secured.  It may be accepted without         
reference to financial ability to make repayment.                     

H.   The indemnification provided by subsections A through F
above will not be exclusive of any other rights to which a person may 
be entitled by law, bylaw, agreement, vote of shareholders or         
disinterested directors, or otherwise.                                

I.   The indemnification and advance payment provided by    
subsections A through G above will continue as to a person who has    
ceased to hold a position named in subsection A above and will inure  
to such person's heirs, executors, and administrators.                

J.   The Corporation may purchase and maintain insurance on 
behalf of any person who holds or has held any position named in      
subsection A above against any liability incurred by such person in   
any such position, or arising out of such person's status as such,    
whether or not the Corporation would have power to indemnify such     
person against such liability under subsections A through G above.    

 K.   Indemnification payments and advance payments made under
subsections A through J above are to be reported in writing to the    
shareholders of the Corporation in the next notice or waiver of notice
of annual meeting, or within twelve (12) months, whichever is sooner. 

Article Eight   
Registered Office and Agent   

The street address of the Corporation's initial registered office is  
500 Throckmorton Street, Suite 3200, Fort Worth, Texas 76102-3859, and the      
name of the Corporation's initial registered agent at such address is Rice      
M. Tilley, Jr.                                                                  

Article Nine    
Initial Directors   

The number of directors constituting the initial Board of Directors is
five and the names and addresses of the persons who will serve as directors     
until the first annual meeting of the shareholders of the Corporation, or       
until their successors have been elected and qualify, are:                      

Name                                             Address  

William J. Barrett        Janney Montgomery Scott Inc.                
    26 Broadway, 8th Floor
 New York, NY  10004

Doug Kirkpatrick          Chase Packaging Corporation                 
   2550 N.W. Nicolai St.
Portland, OR 97210

Herbert M. Gardner        Janney Montgomery Scott Inc.                
    26 Broadway, 8th Floor
 New York, NY  10004

Lewis W. Lovell           Chase Packaging Corporation                 
   2550 N.W. Nicolai St.
 Portland, OR  97210

Allen T. McInnes          Tetra Technologies                          
              25025 Interstate 45 N., Ste. 600
      The Woodlands, TX  77380

Article Ten   
Incorporator    

The name and address of the incorporator is:                          

Name                            Address       

Rice M. Tilley, Jr.       Law, Snakard & Gambill                      
             500 Throckmorton St., Ste. 3200
        Fort Worth, TX  76102-3859

This instrument is dated and signed by the undersigned on the 10th day
of July, 1996.                                                                  

     INCORPORATOR:

                     /s/ Rice M. Tilley, Jr.

                       Rice M. Tilley, Jr.

Articles of Amendment   
to the    
Articles of Incorporation   
of    
New Chase Corporation   

Pursuant to the provisions of Article 4.04 of the Texas Business      
Corporation Act, the undersigned corporation adopts the following Articles      
of Amendment to its Articles of Incorporation:                                  

Article 1   

The name of the corporation is New Chase Corporation (Charter No.     
01406881).                                                                      

Article 2   

The following amendment to the Articles of Incorporation was adopted  
by the directors of the corporation on July 26, 1996.  The amendment alters     
or changes Article 1 of the Articles of Incorporation, and Article 1 is         
amended to read as follows:                                                     

  "Article One.  Name.  The name of the corporation is
Chase Packaging Corporation."                               

Article 3   

No shares have been issued.                                           

This instrument is signed and dated by the undersigned majority       
directors and may be executed in multiple counterparts, each of which will      
for all purposes be deemed to be an original, on this the 26th day of July,     
1996.                                                                           

             NEW CHASE CORPORATION

                By:     /s/ L. W. Lovell

                        L. W. Lovell, Director

                    By:     /s/ Allen T. McInnes

                            Allen T. McInnes, Director

                      By:     /s/ William J. Barrett

                              William J. Barrett, Director

Exhibit 3.2     

Form of Bylaws of the Company     

BYLAWS    
OF    
CHASE PACKAGING CORPORATION   

ARTICLE I   
OFFICES   

    Sec. 1:1. Registered Office and Agent.  The registered office of
the corporation is 500 Throckmorton Street, Suite 3200, Fort Worth, Texas       
76102.  The name of the registered agent at such address is Rice M. Tilley,     
Jr.                                                                             

   Sec. 1:2. Other Offices.  The corporation may also have offices
at such other places both within and without the State of Texas as the          
Board of Directors may from time to time determine or the business of the       
corporation may require.                                                        

ARTICLE II    
SHAREHOLDERS    

  Sec. 2:1. Place of Meetings.  All meetings of the shareholders
for the election of directors are to be held at such time and place, within     
or without the State of Texas, as is stated in the notice of the meeting or     
in a duly executed waiver of notice thereof.                                    

     Sec. 2:2. Annual Meetings.  An annual meeting of the shareholders
is to be held on the first Thursday of June of each year at the hour of         
2:00 p.m. CDT.  If such day is a legal holiday, then the meeting is to be       
on the next secular day following.  At the meeting, the shareholders shall      
elect directors and transact such other business as may properly be brought     
before the meeting.                                                             

     Sec. 2:3. Special Meetings.  Special meetings of the shareholders
for any purpose or purposes, unless otherwise prescribed by statute, by the     
Articles of Incorporation, or by these Bylaws, may be called by the             
President, the Board of Directors, or by the holders of at least twenty         
percent (20%) of all the shares entitled to vote at the meetings.  Business     
transacted at a special meeting is to be confined to the objects stated in      
the notice of meeting.                                                          

   Sec. 2:4. Notice.  Written or printed notice stating the place,
day, and hour of the meeting, and in case of a special meeting, the purpose     
or purposes for which the meeting is called, shall be delivered not less        
than ten (10) nor more than sixty (60) days before the date of the meeting,     
either personally or by mail, by or at the direction of the President, the      
Secretary, or the officer or person calling the meeting, to each                
shareholder of record entitled to vote at such meeting.  If mailed, such        
notice will be deemed to be delivered when deposited in the United States       
mail with postage thereon prepaid addressed to the shareholder at such          
shareholder's address as it appears on the stock transfer books of the          
corporation.                                                                    

Sec. 2:5. Order of Business at Meetings.  The order of business at    
annual meetings and so far as practicable at other meetings of shareholders     
will be as follows unless changed by the Board of Directors:                    

(A)  Call to order                                          

(B)  Proof of due notice of meeting                         

(C)  Determination of quorum and examination of proxies     

(D)  Announcement of availability of voting list            

(E)  Announcement of distribution of annual statement       

(F)  Reading and disposing of minutes of last meeting of    
shareholders                                      

(G)  Reports of officers and committees                     

(H)  Appointment of voting inspectors                       

(I)  Unfinished business                                    

(J)  New business                                           

(K)  Nomination of directors                                

(L)  Opening of polls for voting                            

(M)  Recess                                                 

(N)  Reconvening; closing of polls                          

(O)  Report of voting inspectors                            

(P)  Other business                                         

(Q)  Adjournment                                            

Sec. 2:6. Quorum.  A quorum will be present at a meeting of 
shareholders if the holders of one-third (1/3) of the shares entitled to        
vote are represented at the meeting in person or by proxy.  If a quorum is      
not represented in person or by proxy at a meeting of the shareholders, the     
shareholders entitled to vote thereat, represented in person or by proxy,       
may adjourn the meeting from time to time, without notice other than            
announcement at the meeting, until a quorum is represented in person or by      
proxy.  At such adjourned meeting at which a quorum is represented in           
person or by proxy, any business may be transacted which might have been        
transacted at the meeting as originally notified.                               

    Sec. 2:7. Majority Vote; Withdrawal of Quorum.  When a quorum is
present at any meeting, the vote of the holders of a majority of the shares     
having voting power, present in person or represented by proxy, will decide     
any question brought before such meeting; unless the question is one upon       
which, by express provisions of the statutes, of the Articles of                
Incorporation, or of these Bylaws, a different vote is required in which        
case such express provisions will govern and control the decision of such       
question.  The shareholders present at a duly organized meeting may             
continue to transact business until adjournment notwithstanding the             
withdrawal of enough shareholders to leave less than a quorum.                  

   Sec. 2:8. Method of Voting.  Each outstanding share, regardless
of class, will be entitled to one vote on each matter submitted to a vote       
at a meeting of shareholders, except to the extent that the voting rights       
of the shares of any class or classes are limited or denied by the Articles     
of Incorporation and except as otherwise provided in the Texas Business         
Corporation Act.  A shareholder may vote either in person or by proxy           
executed in writing by the shareholder or by such shareholder's duly            
authorized attorney-in-fact.  No proxy will be valid after eleven months        
from the date of its execution unless otherwise provided in the proxy.  A       
proxy will be revocable unless expressly provided therein to be irrevocable     
and unless otherwise made irrevocable by law.  Each proxy is to be filed        
with the Secretary of the corporation prior to or at the time of the            
meeting.  Any vote may be taken orally or by show of hands unless someone       
entitled to vote objects in which case written ballots are to be used.          

    Sec. 2:9. Election of Directors.  Directors are to be elected by
plurality vote.  Cumulative voting is not permitted.                            

    Sec. 2:10.      Voting List.  The officer or agent having charge
of the stock transfer books for shares of the corporation shall make, at        
least ten days before each meeting of shareholders, a complete list of the      
shareholders entitled to vote at such meeting or any adjournment thereof,       
arranged in alphabetical order, with the address of each and the number of      
voting shares held by each, which list, for a period of ten days prior to       
such meeting, is to be kept on file at the registered office of the             
corporation and is to be subject to inspection by any shareholder at any        
time during usual business hours.  Such list is to be produced and kept         
open at the time and place of the meeting and will be subject to the            
inspection of any shareholder during the whole time of the meeting.             

 Sec. 2:11.      Record Date; Closing Transfer Books.  For the
purpose of determining shareholders entitled to notice of or to vote at any     
meeting of shareholders or any adjournment thereof, or entitled to receive      
payment of any dividend, or in order to make a determination of                 
shareholders for any other proper purpose, the Board of Directors of the        
corporation may provide that the stock transfer books will be closed for a      
stated period not to exceed sixty days.  If the stock transfer books are        
closed for the purpose of determining shareholders entitled to notice of or     
to vote at a meeting of shareholders, such books are to be closed for at        
least ten days immediately preceding such meeting.  In lieu of closing the      
stock transfer books, the Board of Directors may fix in advance a date as       
the record date for any such determination of shareholders, such date in        
any case to be not more than sixty days and, in case of a meeting of            
shareholders, not less than ten days prior to the date on which the             
particular action, requiring such determination of shareholders, is to be       
taken.  If the stock transfer books are not closed and no record date is        
fixed for the determination of shareholders entitled to notice of or to         
vote at a meeting of shareholders, or the determination of shareholders         
entitled to receive payment of a dividend, the date on which notice of the      
meeting is mailed or the date on which the resolution of the Board of           
Directors declaring such dividend is adopted, as the case may be, will be       
the record date for such determination of shareholders.  When a                 
determination of shareholders entitled to vote at any meeting of                
shareholders has been made as provided herein, such determination will          
apply to any adjournment thereof except when the determination has been         
made through the closing of stock transfer books, and the stated period of      
closing has expired.                                                            

   Sec. 2:12.      Action Without Meeting.  Any action required by
the Texas Business Corporation Act to be taken at any annual or special         
meeting of shareholders, or any action which may be taken at any annual or      
special meeting of shareholders, may be taken without a meeting, without        
prior notice, and without a vote, if a consent or consents in writing           
setting forth the actions so taken, are signed by the holder or holders of      
shares having not less than the minimum number of votes that would be           
necessary to take such action at a meeting at which the holders of all          
shares entitled to vote on the action were present and voting.                  

ARTICLE III   
DIRECTORS   

Sec. 3:1. Management.  The business and affairs of the      
corporation are to be managed by the Board of Directors who may exercise        
all such powers of the corporation and do all such lawful acts and things       
as are not (by statute or by the Articles of Incorporation or by these          
Bylaws) directed or required to be exercised by, or done or reserved to,        
the shareholders.                                                               

     Sec. 3:2. Place of Meetings.  Meetings of the Board of Directors,
regular or special, may be held either within or without the State of           
Texas.                                                                          

  Sec. 3:3. Regular Meetings; Notice.  Regular meetings of the
Board of Directors are to be held without notice immediately following the      
annual meeting of shareholders and at the same place unless (by unanimous       
consent of the directors then elected and serving) such time or place is        
changed.                                                                        

Sec. 3:4. Special Meetings; Notice.  Special meetings of the
Board of Directors may be called by the President on three days' notice to      
each director either personally or by mail or telegram.  Special meetings       
shall be called by the President or Secretary in like manner and on like        
notice in response to the written request of any two directors.  Neither        
the business to be transacted at, nor the purpose of, any special meeting       
of the Board of Directors need be specified in the notice or waiver of          
notice of such meeting unless required by these Bylaws.  Attendance of a        
director at a meeting will constitute a waiver of notice of such meeting        
except where a director attends a meeting for the express purpose of            
objecting to the transaction of any business on the ground that the meeting     
is not lawfully called or convened.                                             

     Sec. 3:5. Quorum; Majority Vote.  A quorum will be present at the
meeting of directors only if one-third (1/3) or more of the directors are       
present at the meeting.  The act of the majority of the directors present       
at a meeting at which a quorum is present will be the act of the Board of       
Directors unless the act of a greater number is required by the Articles of     
Incorporation or these Bylaws.  If a quorum is not present at a meeting of      
the Board of Directors, the directors present thereat may adjourn the           
meeting from time to time, without notice other than announcement at the        
meeting, unless a quorum is present.                                            

  Sec. 3:6. Number; Qualification; Election; Term.  The Board of
Directors will consist of not less than one nor more than nine directors        
(none of whom need be shareholders or residents of the State of Texas).         
The directors are to be elected at the annual meeting of shareholders           
except as hereafter provided.  At any such time as the Board of Directors       
shall consist of nine (9) directors, the Board of Directors may by              
resolution classify the Board into three (3) classes, each class to consist     
of three (3) directors.  The term of office of directors of the first class     
shall expire at the first annual meeting of shareholders after their            
election, that of the second class shall expire at the second annual            
meeting after their election, and that of the third class shall expire at       
the third annual meeting after their election.  At each annual meeting          
after such classification the number of directors equal to the number of        
the class whose term expires at the time of such meeting shall be elected       
to hold office until the third succeeding annual meeting.  Unless removed       
in accordance with the provisions of these Bylaws, each director will hold      
office for the term for which such director is elected and until such           
director's successor has been elected and qualified.                            

Sec. 3:7. Change in Number.  The number of directors may be 
increased or decreased (within the limits stated in Sec. 3:6 above) by          
resolution of the Board of Directors, but no decrease may have the effect       
of shortening the term of any incumbent director.  Any directorship to be       
filled by reason of an increase in the number of directors is to be filled      
by election at an annual meeting or at a special meeting of shareholders        
called for that purpose.                                                        

    Sec. 3:8. Removal. A Director may be removed prior to the end of
the term for which he is elected only for cause at a special or annual          
meeting of shareholders by the affirmative vote of the holders of eighty        
percent (80%) or more of the issued and outstanding shares of the               
Corporation if notice of intention to act upon such matter has been given       
in the notice calling such meeting.                                             

Sec. 3:9. Vacancies.  Any vacancy occurring in the Board of 
Directors (by death, resignation, removal, or otherwise) may be filled by       
the affirmative vote of a majority of the remaining directors though less       
than a quorum of the Board of Directors.  A director elected to fill a          
vacancy is to be elected for the unexpired term of such director's              
predecessor in office.                                                          

 Sec. 3:10.      Procedure.  The Board of Directors shall keep
regular minutes of its proceedings.  The minutes are to be placed in the        
minute book of the corporation.                                                 

Sec. 3:11.      Compensation.  By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of attendance      
at each meeting of the Board of Directors and may be paid a fixed sum for       
attendance at each meeting of the Board of Directors or a stated salary as      
a director.  No such payment will preclude any director from serving the        
corporation in any other capacity and receiving compensation therefor.          
Members of the executive committee or of special or standing committees         
may, by resolution of the Board of Directors, be allowed like compensation      
for attending committee meetings.                                               

Sec. 3:12.      Action Without Meeting.  Unless otherwise   
restricted by the Articles of Incorporation or these Bylaws, any action         
required or permitted to be taken at a meeting of the Board of Directors        
may be taken without a meeting if a consent in writing, setting forth the       
action so taken, is signed by all the members of the Board of Directors.        
Such consent will have the same force and effect as a unanimous vote at a       
meeting.  Any such signed consent, or a signed copy thereof, is to be           
placed in the minutes book of the corporation.  Further, but subject to the     
provisions required or permitted for notice of meetings, the directors may      
participate in and hold a meeting of such directors by means of conference      
telephone or similar communications equipment by means of which all persons     
participating in the meeting can hear each other, and participation in a        
meeting pursuant to this provision will constitute presence in person at        
such meeting except where a person participates in the meeting for the          
express purpose of objecting to the transaction of any business on the          
ground that the meeting is not lawfully called or convened.                     

ARTICLE IV    
OFFICERS    

Sec. 4:1. Number and Qualification.  The officers of the    
corporation shall consist of a President, a Vice-President, a Secretary,        
and a Treasurer, to be elected by the Board of Directors on the expiration      
of an officer's term or whenever a vacancy exists.  The corporation may         
also have such other officers including additional vice-presidents and          
agents as the Board of Directors may deem necessary, each of whom may be        
elected by the Board at any meeting.  Any two or more offices may be held       
by the same person.  No officer or agent need be a shareholder, a director,     
or a resident of the State of Texas.                                            

   Sec. 4:2. Term and Compensation.  Unless otherwise specified by
the Board at the time of election or appointment or in an employment            
contract approved by the Board, each officer's and agent's term is to end       
at the first meeting of directors held after the next annual meeting of the     
shareholders.  Such officer or agent shall serve until the end of such          
person's term or, if earlier, such person's death, resignation, or removal.     
The compensation of officers and agents is to be fixed from time to time by     
the Board of Directors.                                                         

  Sec. 4:3. Removal; Vacancies.  Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board of              
Directors whenever in its judgment the best interests of the corporation        
will be served thereby, but such removal will be without prejudice to the       
contract rights, if any, of the person so removed.  Election or appointment     
of an officer or agent will not of itself create contract rights.  Any          
vacancy occurring in any office of the corporation (by death, resignation,      
removal, or otherwise) may be filled by the Board of Directors.                 

     Sec. 4:4. Authority.  All officers and agents of the corporation,
as between themselves and the corporation, will have such authority and         
perform such duties in the management of the corporation as may be provided     
in these Bylaws or as may be determined by resolution of the Board of           
Directors not inconsistent with these Bylaws.                                   

Sec. 4:5. President.  The President of the corporation will 
preside at all meetings of the shareholders and the Board of Directors,         
will be the Chief Executive Officer and will have general and active            
management of the business and affairs of the corporation, and shall see        
that all orders and resolutions of the board are carried into effect.  The      
President shall perform such other duties and have such other authority and     
powers as the Board of Directors may from time to time prescribe.               

   Sec. 4:6. Vice President.  The Vice Presidents, in the order of
their seniority unless otherwise determined by the Board of Directors,          
shall, in the absence or disability of the President, perform the duties of     
the President.  They shall perform such other duties and have such other        
authority and powers as the Board of Directors may from time to time            
prescribe or as the President may from time to time delegate.                   

    Sec. 4:7. Secretary.  The Secretary shall attend all meetings of
the Board of Directors and all meetings of the shareholders, shall record       
all votes and the minutes of all proceedings in a book to be kept for that      
purpose, and shall perform like duties for the executive committee when         
required.  The Secretary shall give, or cause to be given, notice of all        
meetings of the shareholders and special meetings of the Board of               
Directors.  The Secretary shall keep in safe custody the seal of the            
corporation and, when authorized by the Board of Directors or the executive     
committee, affix the same to any instrument requiring it.  When so affixed,     
such seal is to be attested by the Secretary's signature or the signature       
of the Treasurer or an assistant Secretary.  The Secretary shall perform        
such other duties and have such other authority and power as the Board of       
Directors may from time to time prescribe or as the President may from time     
to time delegate.                                                               

 Sec. 4:8.      Treasurer.  The Treasurer will have custody of
the corporate funds and securities and shall keep full and accurate             
accounts of receipts and disbursements of the corporation and shall deposit     
all moneys and other valuable effects in the name and to the credit of the      
corporation in such depositories as may be designated by the Board of           
Directors.  The Treasurer shall disburse the funds of the corporation as        
may be ordered by the Board of Directors, taking proper vouchers for such       
disbursements, and shall render to the President and directors, at the          
regular meetings of the Board or whenever they may require it, an account       
of all transactions as Treasurer and of the financial condition of the          
corporation.  If required by the Board of Directors, the Treasurer shall        
give the corporation a bond in such form, in such sum, and with such surety     
or sureties as is satisfactory to the Board for the faithful performance of     
the duties of the Treasurer's office and for the restoration to the             
corporation, in case of the Treasurer's death, resignation, retirement, or      
removal from office, of all books, papers, vouchers, money, and other           
property of whatever kind in such person's possession or under such             
person's control belonging to the corporation.  The treasurer shall perform     
such other duties and have such other authority and powers as the Board of      
Directors may from time to time prescribe or as the President may from time     
to time delegate.                                                               

ARTICLE V   
CERTIFICATES OF STOCK   

Sec. 5:1. Certificates.  The corporation shall deliver      
certificates representing all shares to which shareholders are entitled;        
and such certificates shall be signed by the President or a Vice-President      
and Secretary or Assistant Secretary or such other officers as the              
Directors of the Corporation may prescribe, and may be sealed with the seal     
of the corporation or a facsimile thereof.  The signatures of such officer      
or officers upon a certificate may be facsimiles if the certificate is          
countersigned by a transfer agent or registered by a registrar, either of       
which is other than the corporation itself or an employee of the                
corporation.  In case any officer who has signed or whose facsimile             
signature has been placed upon such certificate ceases to be such officer       
before such certificate is issued, it may be issued by the corporation with     
the same effect as if such person were such officer at the date of its          
issuance.   Each certificate representing shares is to state upon the face      
thereof:  (A) that the corporation is organized under the laws of the State     
of Texas;  (B) the name of the person to whom issued;  (C) the number and       
class of shares and the designation of the series, if any, which such           
certificate represents; and  (D) the par value of each share represented by     
such certificate or a statement that the shares are without par value.          

 Sec. 5:2. Issuance.  Shares (both treasury and authorized but
unissued) may be issued for such consideration (not less than par value)        
and to such persons as the Board of Directors may from time to time             
determine.  Shares may not be issued until the full amount of the               
consideration, fixed as provided by law, has been paid.                         

 Sec. 5:3. Payment for Shares.  The consideration paid for the
issuance of shares is to consist of money paid, labor done (including           
services actually performed for the corporation), or property (tangible or      
intangible) actually received.  Neither promissory notes nor the promise of     
future services may constitute payment or part payment for shares of the        
corporation.  In the absence of fraud in the transaction, the judgment of       
the Board of Directors as to the value of the consideration received for        
shares will be conclusive.  When such consideration has been paid to the        
corporation, the shares will be deemed to have been issued, the shareholder     
entitled to receive such issue will be a shareholder with respect to such       
shares, and the shares will be considered fully paid and nonassessable.         
The consideration received for shares will be allocated by the Board of         
Directors in accordance with law between stated capital and capital surplus     
accounts.                                                                       

Sec. 5:4. Pre-Emptive Rights.       No shareholder or other 
person may have any preemptive rights whatsoever to acquire additional,         
unissued, or treasury shares of the corporation, or securities of the           
corporation convertible into or carrying a right to subscribe to or acquire     
shares, or any other securities or property whatsoever.                         

 Sec. 5:5. Lien.  For any indebtedness of a shareholder to the
corporation, the corporation will have a first and prior lien on all shares     
of its stock owned by such shareholder and on all dividends or other            
distributions declared thereon.                                                 

Sec. 5:6. Lost, Stolen, or Destroyed Certificates.  The     
corporation shall issue a new certificate in place of any certificate for       
shares previously issued if the registered owner of the certificate:  (A)       
makes proof in affidavit form that it has been lost, destroyed, or              
wrongfully taken;  (B) requests the issuance of a new certificate before        
the corporation has notice that the certificate has been acquired by a          
purchaser for value in good faith and without notice of an adverse claim;       
(C) gives a bond in such form, and with such surety or sureties, with fixed     
or open penalty as the corporation may direct, to indemnify the corporation     
(and its transfer agent and registrar, if any) against any claim that may       
be made on account of the alleged loss, destruction, or theft of the            
certificate; and  (D) satisfies any other reasonable requirements imposed       
by the corporation.  When a certificate has been lost, apparently               
destroyed, or wrongfully taken, and the holder of record fails to notify        
the corporation within a reasonable time after such holder has notice of        
it, and the corporation registers a transfer of the shares represented by       
the certificate before receiving such notification, the holder of record is     
precluded from making any claim against the corporation for the transfer or     
for a new certificate.                                                          

Sec. 5:7. Registered Owner.  Prior to due presentment for   
registration of transfer of a certificate for shares, the corporation may       
treat the registered owner as the person exclusively entitled to vote, to       
receive notices, and otherwise to exercise all the rights and powers of a       
shareholder.                                                                    

Sec. 5:8. Registration of Transfer.  The corporation shall  
register the transfer of a certificate for shares presented to it for           
transfer if:  (A) the certificate is properly endorsed by the registered        
owner or by such owner's duly authorized attorney;  (B) the signature of        
such person has been guaranteed by a national banking association or member     
of the New York Stock Exchange and reasonable assurance is given that such      
endorsements are effective;  (C) the corporation has no notice of an            
adverse claim or has discharged any duty to inquire into such a claim;  and     
(D) any applicable law relating to the collection of taxes has been             
complied with.                                                                  

ARTICLE VI    
EXECUTIVE COMMITTEE   

   Sec. 6:1. Designation; Authority; Responsibility.  The Board of
Directors may, by resolution adopted by a majority of the full Board of         
Directors fixed by the Bylaws, designate from among its members an              
executive committee and one or more other committees, each of which shall       
be comprised of one or more members and, to the extent provided in such         
resolution will have and may exercise all of the authority of the Board of      
Directors, except that no such committee may have the authority of the          
Board of Directors to amend the Articles of Incorporation, approve a plan       
of merger or consolidation, recommend to the shareholders the sale, lease,      
or exchange of all or substantially all of the property and assets of the       
corporation otherwise than in the usual and regular course of its business,     
recommend to the shareholders a voluntary dissolution of the corporation or     
a revocation thereof, amend, alter, or repeal the Bylaws of the corporation     
or adopt new Bylaws for the corporation, fill vacancies in or remove            
members of the Board of Directors of any such committee, fix the                
compensation of any member of such committee, or alter or repeal any            
resolution of the Board of Directors which by its terms provides that it is     
not so amendable or repealable; and, unless such resolution, the Articles       
of Incorporation, or these Bylaws of the Corporation expressly so provide,      
no such committee may declare a dividend or authorize the issuance of           
shares of the corporation.  The designation of such committee and the           
delegation thereto of authority will not operate to relieve the Board of        
Directors or any member thereof of any responsibility imposed by law.           

     Sec. 6:2. Procedure; Removal; Vacancies.  The executive committee
shall keep regular minutes of its proceedings and report the same to the        
Board of Directors when required.  The minutes of the proceedings of the        
executive committee are to be placed in the minute book of the corporation.     
Any member of the executive committee elected or appointed by the Board of      
Directors may be removed by the Board of Directors whenever in its judgment     
the best interests of the corporation will be served thereby.  A vacancy        
occurring in the executive committee (by death, resignation, removal, or        
otherwise) may be filled by the Board of Directors in the manner provided       
above for original designation.                                                 

    Sec. 6:3. Meetings; Quorum; Majority Vote.  The time, place, and
notice (if any) of executive committee meetings shall be determined by the      
executive committee.  At meetings of the executive committee, a majority of     
the number of members designated by the Board of Directors will constitute      
a quorum for the transaction of business.  The act of a majority of the         
members present at any meeting at which a quorum is present will be the act     
of the executive committee except as otherwise specifically provided by         
statute or by the Articles of Incorporation or by these Bylaws.  If a           
quorum is not present at a meeting of the executive committee, the members      
present thereat may adjourn the meeting from time to time, without notice       
other than announcement at the meeting, until a quorum is present.              

Sec. 6:4. Action Without Meeting.  Any action required or   
permitted to be taken at a meeting of the executive committee may be taken      
without a meeting if a consent in writing, setting forth the action so          
taken, is signed by all the members of the executive committee.  Any such       
signed consent, or a signed copy thereof, is to be placed in the minute         
book of the corporation.  Further, but subject to the provisions required       
or permitted for notice of meetings, the members of the executive committee     
may participate in and hold a meeting of such members of the executive          
committee by means of conference telephone or similar communications            
equipment by means of which all persons participating in the meeting can        
hear each other, and participation in a meeting pursuant to this provision      
will constitute presence in person at such meeting except where a person        
participates in the meeting for the express purpose of objecting to the         
transaction of any business on the ground that the meeting is not lawfully      
called or convened.                                                             

ARTICLE VII   
MISCELLANEOUS PROVISIONS    

Sec. 7:1. Notice.  Whenever by statute, the Articles of     
Incorporation, or these Bylaws notice is required to be given to a director     
or shareholder, and no provision is made as to how the notice is to be          
given, it is not to be construed to mean personal notice, but any notice        
may be given (A) in writing, by mail, sufficient postage prepaid, addressed     
to the director or shareholder at the address appearing on the books of the     
corporation, or (B) in any other method permitted by law.  Any notice           
required or permitted to be given by mail will be deemed given at the time      
when the same is deposited in the United States mail.  Whenever any notice      
is required to be given to a shareholder or director of the corporation         
under the provisions of the Texas Business Corporation Act or under the         
provisions of the Articles of Incorporation or these Bylaws, a waiver           
thereof in writing signed by the person or persons entitled to such notice,     
whether before or after the time stated therein, will be equivalent to the      
giving of such notice.                                                          

    Sec. 7:2. Tax Year and Seal.  The tax year of the corporation is
to be fixed by resolution of the Board of Directors.  The corporate seal        
(of which there may be one or more exemplars) will contain the name of the      
corporation and the name of the state of incorporation.  The seal may be        
used by impressing it or reproducing a facsimile of it or otherwise.            

 Sec. 7:3. Checks and Notes; Books and Records.  All checks or
demands for money and notes of the corporation are to be signed by such         
officer or officers or such other person or persons as the Board of             
Directors may from time to time designate.  The corporation shall keep          
correct and complete books and records of account, shall keep minutes of        
the proceedings of its shareholders and Board of Directors, and shall keep      
at its registered office or principal place of business, or at the office       
of its transfer agent or registrar, a record of its shareholders giving the     
names and addresses of all shareholders and the number and class of the         
shares held by each.  Any books, records, and minutes may be in written         
form or in any other form capable of being converted into written form          
within a reasonable time.                                                       

Sec. 7:4. Resignation.  Any director, officer, or agent may 
resign by giving written notice to the President or the Secretary.  Any         
such resignation will become effective at the time specified therein or         
immediately if no time is specified therein.  Unless otherwise so               
specified, the acceptance of such resignation will not be necessary to make     
it effective.                                                                   

Sec. 7:5. Interested Directors, Officers, Shareholders.     

      (A)  If paragraph (B) below is satisfied, no contract or
transaction between the corporation and one or more of its directors or         
officers, or between the corporation and any other corporation,                 
partnership, association or other organization in which one or more of the      
corporation's directors or officers are directors or officers or have a         
financial interest, shall be void or voidable solely for this reason,           
solely because the director or officer is present at or participates in the     
meeting of the Board of Directors or committee thereof which authorizes the     
contract or transaction, or solely because his or their votes are counted       
for such purpose.                                                               

(B)  Paragraph (A) above will apply only if:      

        (1)   The contract or transaction is fair to the
corporation as of the time it is authorized, approved, or ratified by the       
Board of Directors, a committee of the board, or the shareholders; or           

          (2)   The material facts as to the relationship or
interest of the director or officer and as to the contract or transaction       
are disclosed or are known to the Board of Directors or the committee, and      
the Board or committee in good faith authorizes the contract or transaction     
by the affirmative vote of a majority of the disinterested directors, even      
though the disinterested directors be less than a quorum; or                    

          (3)   The material facts as to the relationship or
interest of the director or officer and as to the contract or transaction       
are disclosed or are known to the shareholders entitled to vote thereon,        
and the contract or transaction is specifically approved in good faith by a     
vote of the shareholders.                                                       

          (C)  For purposes of paragraphs (A) and (B) above, common or
interested directors may be counted in determining the presence of a quorum     
at a meeting of the Board of Directors or of a committee which authorizes       
the contract or transaction.                                                    

Sec. 7:6. Limitation of Liability.  To the fullest extent   
permitted by applicable law, no director of the corporation may be held         
personally liable to the corporation or its shareholders for monetary           
damages for an act or omission in the director's capacity as a director,        
except that this Section does not eliminate or limit the liability of a         
director for:  (i) a breach of the director's duty of loyalty to the            
corporation or its shareholders; (ii) an act or omission not in good faith      
that constitutes a breach of duty of the director to the corporation or an      
act or omission that involves intentional misconduct or a knowing violation     
of the law; (iii) a transaction from which the director received an             
improper benefit, whether or not the benefit resulted from an action taken      
within the scope of the director's office; or (iv) an act or omission for       
which the liability of a director is expressly provided for by statute.         
Neither the amendment nor repeal of this Section will eliminate or reduce       
the effect of this Section in respect of any matter occurring, or any cause     
of action, suit, or claim that, but for this Section, would accrue or           
arise, prior to such amendment or repeal.  If the Texas Business                
Corporation Act (the "TBCA") or the Texas Miscellaneous Corporations Laws       
Act (the "TMCLA") is amended to authorize corporate action further limiting     
or eliminating the personal liability of directors, then the liability of a     
director of the Corporation shall be limited or eliminated to the fullest       
extent permitted by the TBCA or the TMCLA, as so amended from time to time.     

     Sec. 7:7. Indemnification.  As permitted by Article 2.02-1 of the
TBCA as in effect on the date the corporation's Articles of Incorporation       
were filed with the Secretary of State for the State of Texas (the              
"Indemnification Statute"), the corporation hereby:                             

      (A)  makes mandatory the indemnification permitted under
Section B of the Indemnification Statute as contemplated by Section G           
thereof;                                                                        

      (B)  makes mandatory the payment or reimbursement of the
reasonable expenses incurred by a director who was, is, or is threatened to     
be made a named defendant or respondent in a proceeding upon such               
director's compliance with the requirement of Section K of the                  
Indemnification Statute; and                                                    

       (C)  extends the mandatory indemnification referred to in
subsection (A) above and the mandatory payment or reimbursement of expenses     
referred to in subsection (B) above to all officers, employees, and agents      
of the corporation and to all persons who are or were serving at the            
request of the corporation as a director, officer, partner, venturer,           
proprietor, trustee, employee, agent, or similar functionary of another         
foreign or domestic corporation, partnership, joint venture, sole               
proprietorship, trust, employee benefit plan, or other enterprise, to the       
same extent that the corporation is obligated to indemnify and pay or           
reimburse expenses to directors.                                                

 Sec. 7:8. Dividends and Reserves.  Subject to statute and the
Articles of Incorporation, dividends may be declared by the Board of            
Directors at any regular or special meeting and may be paid in cash, in         
property, or in shares of the corporation.  The declaration and payment         
will be at the discretion of the Board of Directors.  By resolution the         
Board of Directors may create such reserve or reserves out of the earned        
surplus of the corporation as the directors from time to time in their          
discretion think proper to provide for contingencies, to equalize               
dividends, to repair or maintain any property of the corporation, or for        
any other purpose they believe to be beneficial to the corporation.  The        
directors may modify or abolish any such reserve in the manner in which it      
was created.                                                                    

    Sec. 7:9. Purchase Own Shares.  The corporation may, directly or
indirectly, purchase its own shares to the extent of the aggregate of           
unrestricted capital surplus available therefor and unrestricted reduction      
surplus available therefor.                                                     

    Sec. 7:10.      Annual Statement.  At least ten days before each
annual meeting, the Board of Directors shall mail to each shareholder of        
record a full and clear statement of the business and condition of the          
corporation including a reasonably detailed balance sheet, income               
statement, and surplus statement, all prepared in conformity with generally     
accepted accounting principles applied on a consistent basis.                   

  Sec. 7:11.    Construction.  Whenever the context so requires,
the masculine will include the feminine and neuter, and the singular will       
include the plural, and conversely.  If any portion of these Bylaws is          
determined invalid or inoperative, then, so far as is reasonable and            
possible, the remainder of these Bylaws is to be considered valid and           
operative, and effect is to be given to the intent manifested by the            
portion held invalid or inoperative.  The table of contents and headings        
used in these Bylaws have been inserted for convenience only and do not         
constitute matters to be construed in interpretation.                           

    Sec. 7:12.      Amendment of Bylaws.  The power to alter, amend,
repeal, or adopt the Bylaws of the corporation is hereby vested in the          
Board of Directors, subject to repeal or change by action of the                
shareholders.                                                                   

- END OF BYLAWS -   

Exhibit 4.1     

Specimen Certificate for Company's Common Stock     

Incorporated Under the                
Laws of the State of Texas                

COMMON STOCK                                     COMMON STOCK                   
Number           (Company logo located here,       Shares                   
with the word "Chase" in                
C____________     a larger font size than the                               
words "Packaging Corp." with            
the letter "S" lower than the           
other letters, a line                   
graph after the word "Corp." with       
a picture of a section of mesh          
bag (wavy graph) above the              
graph line.)                            

CHASE PACKAGING CORPORATION               

                         See Reverse for
                         Certain Definitions
                         CUSIP 161635 10 7

THIS CERTIFIES THAT                                                             

SPECIMEN            

is the record holder of                                                         

Fully paid and Nonassessable Shares of Common Stock, Par Value of $0.10, of     

CHASE PACKAGING CORPORATION               

transferable on the books of the Corporation in person or by duly               
authorized attorney upon surrender of this Certificate properly endorsed.       
This Certificate and the shares evidenced hereby are issued under and shall     
be subject to the provisions of the laws of the State of Texas and to the       
provisions of the Articles of Incorporation and the Bylaws of the               
Corporation and any amendments thereto, to all of which the holder by           
acceptance hereof, asserts.  This Certificate is not valid until                
countersigned by the Transfer Agent and registered by the Registrar.            

WITNESS the facsimile seal of the corporation and the facsimile       
signatures of its duly authorized officers.                                     

Dated:                                                                          

(Corporate Seal Printed Here)               
includes the words                        
"Chase Packaging Corporation"             
and a picture of a 5 point Star           
with the word "Texas" between             
the points)                               

/s/ L W Lovell                             /s/ Doug Kirkpatrick                 
PRESIDENT                                  CHIEF FINANCIAL OFFICER              

Countersigned and Registered:                                                   
AMERICAN STOCK TRANSFER & TRUST COMPANY                               
                  Transfer Agent and Registrar

By                                                                              

                                  Authorized signature

CHASE PACKAGING CORPORATION               

Reference is made to the Articles of Incorporation of the Corporation,    
and all amendments thereto, now or hereafter on file with the Secretary of      
State of the State of Texas, for a statement of the designations,               
preferences, limitations, and relative rights of the shares of each class       
of stock authorized to be issued by the Corporation, the authority of the       
Board of Directors to fix and determine the relative rights and preferences     
of series of stock, if any, the denial of preemptive rights of                  
shareholders, and other restrictions on the transfer or other disposition       
of shares of stock of the Corporation; and reference is also made to the        
resolution or resolutions of the Board of Directors of the Corporation, now     
or hereafter on file with such Secretary of State for a statement of the        
variations in the relative rights and preferences of the shares of each         
series of each preferred or special class of stock which the Corporation is     
authorized to issue so far as the same has or shall have been fixed and         
determined.  The Corporation will provide a copy of the Articles of             
Incorporation of the Corporation and the above referenced resolutions of        
the Board of Directors of the Corporation, if any, to the record holder of      
this certificate, without charge, on written request to the Corporation at      
its principal place of business or registered office.                           

PRE-EMPTIVE RIGHTS.  Pre-emptive rights of the shareholders to acquire    
unissued or treasury shares of the Corporation are denied in Article Six of     
the Articles of Incorporation, a copy of which is on file in the office of      
the Secretary of State of the State of Texas and will be furnished to any       
shareholder without charge upon written request to the Corporation at its       
principal place of business or registered office.                               

The following abbreviations, when used in the inscription on the face of  
this certificate, shall be construed as though they were written out in         
full according to applicable laws or regulations:                               

TEN COM - as tenants in common   UNIF GIFT MIN ACT - ______ Custodian _____     
TEN ENT - as tenants by the entireties               (Cust)         (Minor)     
JT TEN - as joint tenants with right          Under Uniform Gifts to Minors     
of survivorship and not as            Act                     
_________________________                                                       
tenants in common                             (State)         

Additional abbreviations may also be used though not in the above list.     

FOR VALUE RECEIVED, _______________________________ hereby sell, assign   
and transfer unto                                                               

Please Insert Social Security or Other                                          
Identifying Number of Assignee                                            
___________________________________________________________________________     

___________________________________________________________________________     
Please Print or Typewrite Name and Address,     
Including Postal Zip Code of Assignee         
___________________________________________________________________________     

___________________________________________________________________________     

____________________________________________________________________ Shares     
of the Common Stock represented by the within Certificate, and do hereby        
irrevocably constitute and appoint                                              

__________________________________________________________________________      
Attorney to transfer the said stock on the books of the within-named            
Company with full power of substitution in the premises.                        

Dated__________________________                                                 

                            X ________________________________________
                             (Signature)
NOTICE:                                                 
The signature(s) to this                                                  
assignment must correspond                                                
with the name(s) as written                                               
upon the face of the certificate                                          
in every particular without                                               
alteration or enlargement or                                              
X_________________________________________                                      
any change whatever.                          (Signature)                 

                           The signature(s) should be guaranteed by an
                      eligible guarantor institution (banks,
                           stockbrokers, savings and loan associations
                       and credit unions with membership in an
                      approved signature guarantee medallion
                         program, pursuant to S.E.C. Rule 17Ad-15.

           SIGNATURE(S) GUARANTEED BY:

                          __________________________________________

Exhibit 10.1    

Form of 1996 Stock Option Plan of the Company     

1996 Stock Option Plan    
of    
Chase Packaging Corporation   

Table of Contents   

Page                                                                            

Article I:  Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1     
Sec. 1:1. Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1:2. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1:3. Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:4. Board of Directors . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:5. Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:6. Committee. . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:7. Eligible Individuals . . . . . . . . . . . . . . . . . . . 2
Sec. 1:8. Fair Market Value. . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:9. Holder . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:10.     Incentive Stock Options . . . . . . . . . . . . . . . 2
Sec. 1:11.     Nonstatutory Stock Options. . . . . . . . . . . . . . 2
Sec. 1:12.     Options . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:13.     Stock . . . . . . . . . . . . . . . . . . . . . . . . 2

Article II:  Stock and Maximum Number of Shares Subject to the Plan . . . 3     
Sec. 2:1. Description of Stock and Maximum Shares Allocated. . . . . 3
Sec. 2:2. Restoration of Shares. . . . . . . . . . . . . . . . . . . 3

Article III:  Administration of the Plan. . . . . . . . . . . . . . . . . 3     
Sec. 3:1. Stock Option Committee . . . . . . . . . . . . . . . . . . 3
Sec. 3:2. Duration, Removal, Etc.. . . . . . . . . . . . . . . . . . 3
Sec. 3:3. Meetings and Actions of Committee. . . . . . . . . . . . . 3
Sec. 3:4. Committee's Powers . . . . . . . . . . . . . . . . . . . . 4

Article IV:  Eligibility and Participation. . . . . . . . . . . . . . . . 4     
Sec. 4:1. Eligible Individuals . . . . . . . . . . . . . . . . . . . 4
Sec. 4:2. No Right to Option . . . . . . . . . . . . . . . . . . . . 4

Article V:  Grant of Options and Certain Terms of the Agreements. . . . . 5     
Sec. 5:1. Determination of Eligible Individuals. . . . . . . . . . . 5
Sec. 5:2. Date of Grant. . . . . . . . . . . . . . . . . . . . . . . 5
Sec. 5:3. Stock Option Agreement . . . . . . . . . . . . . . . . . . 5
Sec. 5:4. Forfeiture of Stock. . . . . . . . . . . . . . . . . . . . 5
Sec. 5:5. Cash Awards. . . . . . . . . . . . . . . . . . . . . . . . 6

Article VI:  Terms and Conditions of Options. . . . . . . . . . . . . . . 6     
Sec. 6:1. Number of Shares . . . . . . . . . . . . . . . . . . . . . 6
Sec. 6:2. Exercise Price . . . . . . . . . . . . . . . . . . . . . . 7
Sec. 6:3. Medium and Time of Payment, Method of Exercise, and         
               Withholding Taxes . . . . . . . . . . . . . . . . . . 7
Sec. 6:4. Terms, Time of Exercise, and Transferability of             
               Options . . . . . . . . . . . . . . . . . . . . . . . 9
Sec. 6:5. Limitation on Aggregate Value of Shares That May Become     
           First Exercisable During Any Calendar Year Under an
               Incentive Stock Option. . . . . . . . . . . . . . . .12
Sec. 6:6. Adjustments Upon Changes in Capitalization, Merger,         
               Etc.. . . . . . . . . . . . . . . . . . . . . . . . .12
Sec. 6:7. Rights as a Shareholder. . . . . . . . . . . . . . . . . .13
Sec. 6:8. Modification, Extension, and Renewal of Options. . . . . .13
Sec. 6:9. Furnish Information. . . . . . . . . . . . . . . . . . . .14
Sec. 6:10. Obligation to Exercise; Termination of Employment . . . .14
Sec. 6:11. Agreement Provisions. . . . . . . . . . . . . . . . . . .14

Article VII:  Duration of Plan. . . . . . . . . . . . . . . . . . . . . .14     

Article VIII:  Amendment of Plan. . . . . . . . . . . . . . . . . . . . .14     

Article IX:  General. . . . . . . . . . . . . . . . . . . . . . . . . . .15     
Sec. 9:1. Application of Funds . . . . . . . . . . . . . . . . . . .15
Sec. 9:2. Right of Company and Affiliates to Terminate                
     Employment. . . . . . . . . . . . . . . . . . . . . . . . . . .15
Sec. 9:3. No Liability for Good Faith Determinations . . . . . . . .15
Sec. 9:4. Information Confidential . . . . . . . . . . . . . . . . .15
Sec. 9:5. Other Benefits . . . . . . . . . . . . . . . . . . . . . .16
Sec. 9:6. Execution of Receipts and Releases . . . . . . . . . . . .16
Sec. 9:7. No Guarantee of Interests. . . . . . . . . . . . . . . . .16
Sec. 9:8. Payment of Expenses. . . . . . . . . . . . . . . . . . . .16
Sec. 9:9. Company Records. . . . . . . . . . . . . . . . . . . . . .16
Sec. 9:10.     Information . . . . . . . . . . . . . . . . . . . . .16
Sec. 9:11.     No Liability of Company . . . . . . . . . . . . . . .16
Sec. 9:12.     Company Action. . . . . . . . . . . . . . . . . . . .16
Sec. 9:13.     Severability. . . . . . . . . . . . . . . . . . . . .16
Sec. 9:14.     Notices . . . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:15.     Waiver of Notice. . . . . . . . . . . . . . . . . . .17
Sec. 9:16.     Successors. . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:17.     Headings. . . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:18.     Governing Law . . . . . . . . . . . . . . . . . . . .17
Sec. 9:19.     Word Usage. . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:20.     Remedies. . . . . . . . . . . . . . . . . . . . . . .17

Article X:  Approval of Directors . . . . . . . . . . . . . . . . . . . .18     

1996 Stock Option Plan    
of    
Chase Packaging Corporation   

This Chase Packaging Corporation 1996 Stock Option Plan (the "Plan")  
provides for the granting of:                                                   

     (a)  Incentive Stock Options (hereinafter defined) to certain key
employees of Chase Packaging Corporation, a Texas corporation         
("Company"), and/or its Affiliates (hereinafter defined), and         

    (b)  Nonstatutory Stock Options (hereinafter defined) to certain
key employees of Company, and/or its Affiliates, and to certain       
individuals who are not employees of Company or its Affiliates.       

The purpose of the Plan is to provide an incentive for key employees  
of Company and/or its Affiliates, and for individuals who are not employees     
of Company and/or its Affiliates but who from time to time provide              
substantial advice or other assistance or services to Company and/or its        
Affiliates, to remain in the service of Company and/or its Affiliates or        
continue to provide such assistance, to extend to them the opportunity to       
acquire a proprietary interest in Company so that they will apply their         
best efforts for the benefit of Company, and to aid Company in attracting       
able persons to enter the service of Company and/or its Affiliates or           
provide such assistance.                                                        

Article I   
Definitions   

   Sec. 1:1. Act.  "Act" shall mean the Securities Exchange Act of
1934, as amended.                                                     

Sec. 1:2. Affiliates.  "Affiliates" shall mean:  (a) any    
corporation, other than Company, in an unbroken chain of corporations 
ending with Company if each of the corporations, other than Company,  
owns stock possessing fifty percent (50%) or more of the total        
combined voting power of all classes of stock in one of the other     
corporations in such chain; and (b) any corporation, other than\      
Company, in an unbroken chain of corporations beginning with Company  
if each of the corporations, other than the last corporation in the   
unbroken chain, owns stock possessing fifty percent (50%) or more of  
the total combined voting power of all classes of stock in one of the 
other corporations in such chain.                                     

Sec. 1:3. Agreement.  "Agreement" shall mean the written    
agreement between Company and a Holder evidencing the Option granted  
by Company and the understanding of the parties with respect thereto. 

  Sec. 1:4. Board of Directors.  "Board of Directors" shall mean
the board of directors of Company.                                    

   Sec. 1:5. Code.  "Code" shall mean the Internal Revenue Code of
1986, as amended.                                                     

Sec. 1:6. Committee.  "Committee" shall mean the committee  
designated in Article III hereof by the Board of Directors to         
administer this Plan.                                                 

 Sec. 1:7. Eligible Individuals.  "Eligible Individuals" shall
mean:  (a) key employees, including officers and/or directors who are 
also employees of Company and/or of any of its Affiliates; and (b)    
individuals who are not employees of Company and/or of its Affiliates 
but who from time to time provide substantial advice or other         
assistance or services to Company and/or its Affiliates.              

    Sec. 1:8. Fair Market Value.  "Fair Market Value" shall mean, if
the Stock is traded on one or more established markets or exchanges,  
the mean of the opening and closing prices of the Stock on the primary
market or exchange on which the Stock is traded, and if the Stock is  
not so traded or the Stock does not trade on the relevant date, the   
value determined in good faith by the Board of Directors.  For        
purposes of valuing Incentive Stock Options, the Fair Market Value of 
stock shall be determined without regard to any restriction other than
one which, by its terms, will never lapse.                            

    Sec. 1:9. Holder.  "Holder" shall mean an Eligible Individual to
whom an Option has been granted.                                      

  Sec. 1:10. Incentive Stock Options.  "Incentive Stock Options"
shall mean stock options that are intended to satisfy the requirements
of Sec. 422 of the Code.                                              

    Sec. 1:11.      Nonstatutory Stock Options.  "Nonstatutory Stock
Options" shall mean stock options that are not intended to be, or are 
not denominated as, Incentive Stock Options.                          

   Sec. 1:12.      Options.  "Options" shall mean either Incentive
Stock Options or Nonstatutory Stock Options, or both.                 

    Sec. 1:13.  Stock.  "Stock" shall mean Company's authorized $.01
par value Common Stock.                                               

Article II    
Stock and Maximum Number of Shares      
Subject to the Plan     

     Sec. 2:1. Description of Stock and Maximum Shares Allocated.  The
Stock which Options granted hereunder give a Holder the right to      
purchase may be unissued or reacquired shares of Stock, as the Board  
of Directors may, in its sole and absolute discretion, from time to   
time determine.  Subject to the adjustments in Sec. 6.6 hereof, the   
aggregate number of shares of Stock to be issued pursuant to the      
exercise of all Options granted hereunder may equal, but may not      
exceed, 600,000 shares of Company's Stock.                            

     Sec. 2:2. Restoration of Shares.  If an Option hereunder expires,
terminates, or is not exercised for any reason during the term of this
Plan, the shares of Stock which were subject to such Option shall be  
"restored" to the Plan by again being available for Options granted   
after the shares' restoration, effective as of the first day of the   
year following such expiration, termination, or non-exercise.         

Article III   
Administration of the Plan      

     Sec. 3:1. Stock Option Committee.  This Plan will be administered
by a Committee consisting of three members to be appointed by         
Company's Board of Directors.  The members of the Stock Option        
Committee must be members of the Company's Board of Directors.        

   Sec. 3:2. Duration, Removal, Etc.  The members of the Committee
shall serve at the pleasure of the Board of Directors, which shall    
have the power, at any time and from time to time, to remove members  
from the Committee or to add members thereto.  Vacancies on the       
Committee, however caused, shall be filled by the Board of Directors. 

     Sec. 3:3. Meetings and Actions of Committee.  The Committee shall
elect one of its members as its Chairman and shall hold its meetings  
at such times and places as it may determine.  All decisions and      
determinations of the Committee shall be made by the majority vote of 
all of its members present at a meeting; provided, however, that any  
decision or determination reduced to writing and signed by all of the 
members of the Committee shall be as fully effective as if it had been
made at a meeting duly called and held.  The Committee may make any   
rules and regulations for the conduct of its business that are not    
inconsistent with the provisions hereof and with the Bylaws of        
Company.                                                              

    Sec. 3:4. Committee's Powers.  Subject to the express provisions
hereof, the Committee shall have the authority, in its sole and       
absolute discretion to: (a) adopt, amend, and rescind administrative  
and interpretive rules and regulations relating to the Plan; (b)      
determine the terms and provisions of the respective Agreements (which
need not be identical), including provisions defining or otherwise    
relating to:  (i) subject to Article VI of the Plan, the term and the 
period or periods and extent of exercisability of the Options, (ii)   
the extent to which the transferability of shares of Stock issued upon
exercise of Options is restricted, (iii) the effect of termination of 
employment upon the exercisability of the Options, and (iv) the effect
of approved leaves of absence (consistent with any applicable         
regulations of the Internal Revenue Service); (c) accelerate the time 
of exercisability of any Option that has been granted; (d) construe   
the respective Option Agreements and the Plan; and (e) make all other 
determinations and perform all other acts necessary or advisable for  
administering the Plan, including the delegation of such ministerial  
acts and responsibilities as the Committee deems appropriate.  The    
Committee may correct any defect or supply any omission or reconcile  
any inconsistency in the Plan or in any Agreement in the manner and to
the extent it shall deem expedient to carry it into effect, and it    
shall be the sole and final judge of such expediency.  The            
determination of the Committee on the matters referred to in this Sec.
3.4 shall be final and conclusive.                                    

Article IV    
Eligibility and Participation     

     Sec. 4:1. Eligible Individuals.  Options may be granted hereunder
only to persons who are Eligible Individuals at the time of the grant 
thereof.  Notwithstanding any provision contained herein to the       
contrary, a person may not receive an Incentive Stock Option hereunder
unless he or she is an employee of Company and/or an Affiliate, nor   
shall a person be eligible to receive an Incentive Stock Option       
hereunder if he or she, at the time such Option is granted, would own 
(within the meaning of Secs. 422 and 425 of the Code) stock possessing
more than ten percent (10%) of the total combined voting power or     
value of all classes of stock of Company or an Affiliate, unless at   
the time such Incentive Stock Option is granted the exercise price per
share is at least one hundred ten percent (110%) of the Fair Market   
Value of each share of stock to which the Incentive Stock Option      
relates and the Incentive Stock Option is not exercisable after the   
expiration of five (5) years from the date it is granted.             

     Sec. 4:2. No Right to Option.  The adoption of the Plan shall not
be deemed to give any person a right to be granted an Option.         

Article V   
Grant of Options and Certain Terms of the Agreements  

    Sec. 5:1. Determination of Eligible Individuals.  Subject to the
express provisions hereof, the Committee shall determine which        
Eligible Individuals shall be granted Options hereunder from time to  
time.  In making grants, the Committee shall take into consideration  
the contribution the potential Holder has made or may make to the     
success of Company and/or its Affiliates along with such other        
considerations as the Board of Directors may from time to time        
specify.  The Committee shall also determine the number of shares     
subject to each of such Options and shall authorize and cause Company 
to grant Options in accordance with such determinations.              

Sec. 5:2. Date of Grant.  The date on which the Committee   
completes all action constituting an offer of an Option to an         
individual, including the specification of the number of shares of    
Stock to be subject to the Option, shall be the date on which the     
Option covered by an Agreement is granted, even though certain terms  
of the Agreement may not be determined at such time and even though   
the Agreement may not be executed until a later time.  For purposes of
the preceding sentence, an offer shall be deemed made if the Committee
has completed all such action and has communicated the grant thereof  
to the potential Holder.  In no event, however, may an Optionee gain  
any rights in addition to those specified by the Committee in its     
grant, regardless of the time that may pass between the grant of the  
Option and the actual execution of the Agreement by Company and the   
Optionee.                                                             

    Sec. 5:3. Stock Option Agreement.  Each Option granted hereunder
shall be evidenced by an Agreement, executed by Company and the       
Eligible Individual to whom the Option is granted, incorporating such 
terms as the Committee deems necessary or desirable.  More than one   
Option may be granted hereunder to the same Eligible Individual and be
outstanding concurrently hereunder.  In the event an Eligible         
Individual is granted both one or more Incentive Stock Options and one
or more Nonstatutory Stock Options, such grants shall be evidenced by 
separate Agreements, one for each of the Incentive Stock Option grants
and one for each of the Nonstatutory Stock Option grants.             

  Sec. 5:4. Forfeiture of Stock.  Each Agreement may provide for
conditions giving rise to the forfeiture of the Stock acquired        
pursuant to an Option granted hereunder and/or such restrictions on   
the transferability of shares of Stock acquired pursuant to an Option 
granted hereunder as the Committee in its sole and absolute discretion
deems proper or advisable.  Such conditions giving rise to forfeiture 
may include, but need not be limited to, the requirement that the     
Holder render substantial services to Company and/or its Affiliates   
for a specified period of time.  Such restrictions on transferability 
may include, but need not be limited to, options and rights of first  
refusal in favor of Company.                                          

   Sec. 5:5. Cash Awards.  In addition, the Board of Directors may
authorize the Committee to grant cash awards payable in connection    
with the exercise of an Option upon such terms and conditions as are  
specified by the Board of Directors; provided that no such cash award 
shall be effective unless it complies with any applicable requirements
for exemption from liability pursuant to Rule 16b-3 promulgated under 
the Act.                                                              

Article VI    
Terms and Conditions of Options       

All Options granted hereunder shall comply with, be deemed to include,
and shall be subject to, the following terms and conditions:                    

Sec. 6:1. Number of Shares.  Each Agreement shall state the 
number of shares of Stock to which it relates.  Except to the extent  
an Agreement otherwise provides, the following limitations shall apply
to the exercise of each Option:                                       

    A.   First Year.  A Holder may not exercise his or her
  Option during the first twelve (12) month period following the
date of grant of such Option.                               

          B.   After First Year.  A Holder may exercise up to (but not
    more than) one-third of the total shares of Stock subject to his
or her Option at any time after the first twelve (12) month 
period following the day of grant of such Option.           

       C.   After Second Year.  A Holder may exercise up to (but
     not more than) two-thirds of the total shares of Stock subject to
  his or her Option at any time after the first twenty-four (24)
month period following the date of grant of such Option.    

      D.   After Third Year.  A Holder may exercise all of the
  shares of Stock subject to his or her Option at any time after
the first thirty-six (36) month period following the date of
grant of such Option.                                       

         E.   Senior Status.  Notwithstanding the limitations stated
  above, if a Holder is sixty-five (65) years of age or older at
   the time his or her Option is granted, such Holder may exercise
   up to (but not more than) one-half of the total shares of Stock
   subject to such Option at any time during the first twelve (12)
month period following the date of grant of such Option and 
 thereafter may exercise all of the shares of Stock subject to
such Option.                                                

     F.   De Minimis Limitation.  Subject to the limitations
stated above, each Option may be exercised at one time or on
 several successive occasions; however, each Option may not be
    exercised in an amount less than one hundred (100) shares at any
 one time (unless such exercise is being made as to the entire
   portion of Stock which may be purchased pursuant to this Plan).

Sec. 6:2. Exercise Price.  Each Agreement shall state the   
exercise price per share of Stock.  The exercise price per share of   
stock subject to an Incentive Stock Option shall not be less than the 
greater of:  (a) the par value per share of the Stock; or (b) one     
hundred percent (100%) of the Fair Market Value per share of Company's
Stock on the date of the grant of the Option.  The exercise price per 
share of stock subject to a Nonstatutory Stock Option shall not be    
less than fifty percent (50%) of the Fair Market Value per share of   
the Stock on the date of the grant of the Option.                     

 Sec. 6:3. Medium and Time of Payment, Method of Exercise, and
Withholding Taxes.                                                    

          A.   Payment of Exercise Price.  The exercise price of stock
  covered by an Option shall be payable upon the exercise of the
 Option in cash, by certified or cashier's check, or, with the
   consent of the Committee, with shares of Stock of Company which
     have been held by the Holder for at least six (6) months prior to
    the date of exercise, or with the consent of the Committee, by a
     combination of cash and such shares.  Exercise of an Option shall
 not be effective until Company has received written notice of
     exercise.  Such notice must specify the number of whole shares to
be purchased and be accompanied by payment in full of the   
aggregate exercise price of the number of shares purchased. 
Company shall not in any case be required to sell, issue, or
deliver a fractional share with respect to any Option.      

    B.   New Options.  In the event that a Holder pays the
exercise price of his Option, in whole or in part, with     
     previously owned shares of Stock, pursuant to the rules specified
   above, then, if and to the extent approved by the Committee, in
    addition to the shares of Stock purchased pursuant to the Option
     exercise, such Holder shall also receive a new Option, subject to
the terms and conditions set forth below and in the Holder's
   individual Stock Option Agreement.  Upon exercise of the Option
with payment in the form of either shares of Stock or a     
  combination of cash and shares of Stock, the Committee may, in
   its sole and absolute discretion, grant the Holder a new Option
for shares of Stock equal to the number of shares that were 
   delivered by the Holder to Company to pay, in whole or in part,
     the exercise price of the previous Option.  The exercise price of
     the new Option shall be equal to at least 100% of the Fair Market
   Value per share of the Stock on the date of the exercise of the
previous Option. Provided, however, the new Option cannot be
exercised by the Holder until the later of:  (1) the        
exercisability dates specified in the individual Option     
   Agreement; or (2) six (6) months after the date of grant.  As a
  further condition on the exercisability of the new Option, the
  shares of Stock received by the Holder upon exercise of his or
   her previous Option must be held by the Holder for at least six
   (6) months prior to any sale of such shares by the Holder.  Any
  sale of such shares by a Holder prior to the expiration of the
six (6) month holding period shall render the new Option    
 non-exercisable.  Nothing in this paragraph shall prevent the
     Committee from granting a Holder another new Option in the future
    when the previous new Option is exercised by the Holder with the
payment of previously owned shares of Stock.                

C.   Withholding.                                 

             1.    General.  The Committee may, in its discretion,
        require a Holder to pay to Company at the time of exercise
       of an Option (or portion thereof) the amount that Company
   deems necessary to satisfy its obligation to withhold
        Federal, state, or local income or other taxes incurred by
     reason of the exercise.  Upon the exercise of an Option
    requiring tax withholding, a Holder may make a written
          request to have shares of stock withheld by Company from the
       shares otherwise to be received.  The number of shares so
       withheld shall have an aggregate Fair Market Value on the
   date of exercise sufficient to satisfy the applicable
         withholding taxes.  The acceptance of any such request by a
      Holder shall be at the sole discretion of the Committee,
          including, if deemed necessary by the Committee, approval by
         the Securities and Exchange Commission and the satisfaction
     of any additional requirements necessary to obtain such
approval.                                         

           2.    Additional Sec. 16b Requirements.  Currently,
       with respect to Option holders subject to liability under
          Section 16b of the Act, such additional requirements include
          the following: (1) any previously owned shares of Stock used
          to satisfy the withholding obligation must have been held by
      the taxpayer for at least six (6) months, and any Option
   shares otherwise issuable hereunder to be withheld to
          satisfy such obligations may be so withheld only if both the
    exercise of the Option and the election to have shares
         withheld are made at least six (6) months after the date of
        grant; (2) the Option holder's election must be made:  (a)
       at least six (6) months less one day prior to the date on
        which the option exercise becomes taxable, or (b) within a
        10-day "window period" beginning on the third business day
    following the release of Company's annual or quarterly
        financial reports and ending on the twelfth day thereafter
      (but in no event later than the date the option exercise
         becomes taxable); (3) Company has been subject to the Act's
       reporting requirements for more than a year and has filed
         all reports and statements required to be filed pursuant to
 Section 13 of the Act; (4) Company regularly issues
 quarterly or annual summary statements of sales and
          earnings; (5) all members of the Committee administering the
      Plan with respect to Option holders subject to liability
 under Section 16b of the Act are "disinterested" in
       accordance with Rule 16b-3 promulgated under the Act; (6)
         the Committee will be empowered to consent to or disapprove
  an Option holder's withholding election; and (7) any
      withholding election will be required to be irrevocable.

Sec. 6:4. Terms, Time of Exercise, and Transferability of   
Options.                                                                        

         L.   Decrease in Term of Option.  In addition to such other
     terms and conditions as may be included in a particular Agreement
granting an Option, an Option shall be exercisable during a 
     Holder's lifetime only by him or her or by his or her guardian or
     legal representative.  An Option shall not be transferrable other
than by will or the laws of descent and distribution.  Each 
Option shall also be subject to the following terms and     
   conditions (except to the extent a Holder's Agreement otherwise
provides):                                                  

        1.    Termination of Employment or Directorship.

                     a.  Voluntary Termination.  If a Holder ceases to
           be employed by at least one of the employers in the
        group of employers consisting of Company and its
            Affiliates because the Holder voluntarily terminates
              his or her employment with such group of employers and
        the Holder does not remain or thereupon become a
             director of Company or one or more of its Affiliates,
              or if a Holder ceases to be a director of at least one
        of the corporations in the group of corporations
               consisting of Company and its Affiliates and the Holder
          does not remain or thereupon become an employee of
             Company or one or more of its Affiliates, the portion
       (if any) of an Option that remains unexercised,
            including that portion (if any) that pursuant to the
               Agreement is not yet exercisable, as of the date of the
             Holder's termination of employment or ceasing to be a
             director, whichever occurs later, shall terminate and
               cease to be exercisable as of such date (or ninety [90]
            days prior thereto if the Holder elected to exercise
             his or her Option in anticipation of such termination
       [to be determined in the sole discretion of the
Committee]).                            

                     b.  Termination for Cause.  If a Holder ceases to
           be employed by at least one of the employers in the
        group of employers consisting of Company and its
             Affiliate because any of such entities terminates the
              Holder's employment for cause, the portion (if any) of
          an Option that remains unexercised, including that
              portion (if any) that pursuant to the Agreement is not
    yet exercisable, at the time of the Holder's
               termination of employment, shall terminate and cease to
            be exercisable immediately upon such termination (or
               ninety [90] days prior thereto if the Holder elected to
          exercise his or her Option in anticipation of such
               termination [to be determined in the sole discretion of
               the Committee]).  A Holder's employment shall be deemed
            terminated "for cause" if terminated by the Board of
             Directors of Company (or the board of directors of an
            Affiliate) because of incompetence, insubordination,
          dishonesty, other acts detrimental to the interest
         of Company and/or its Affiliates, or any material
              breach by the Holder of any employment, nondisclosure,
             noncompetition, or other contract with Company and/or
               one of its Affiliates.  Whether "cause" exists shall be
         determined by such Board of Directors in its sole
         discretion and in good faith.  The exercise of an
               option in anticipation of a termination for cause shall
be null and void.                       

                c.   Termination Without Cause.  If a Holder
              ceases to be employed by at least one of the employers
               in the group of employers consisting of Company and its
       Affiliates because one or more of such entities
             terminates the employment of the Holder for otherwise
           than for "cause," and the Holder does not remain or
            thereupon become a director of Company and/or one or
               more of its Affiliates, the Holder shall have the right
          for thirty (30) days following such termination to
        exercise the Option with respect to that portion
       thereof that has become exercisable pursuant to
              Holder's Agreement as of the date of such termination,
              and thereafter the Option shall terminate and cease to
be exercisable.                         

               2.  Disability. If a Holder ceases to be employed by at
  least one of the employers in the group of employers
   consisting of Company and its Affiliates by reason of
      disability (as defined in Sec. 22(e)(3) of the Code) and
          does not remain or thereupon become a director of Company or
       one or more of its Affiliates, or if the Holder ceases by
        reason of such disability to be a director of at least one
         of the corporations in the group of corporations consisting
      of Company and its Affiliates, the Holder shall have the
         right for ninety (90) days after the date of termination of
          employment with, or cessation of directorship of, such group
    of employers by reason of disability, whichever occurs
       later, to exercise an Option to the extent such Option is
  exercisable on the date of his or her termination of
       employment, and thereafter the Option shall terminate and
cease to be exercisable.                          

             3.    Death.  If a Holder dies while in the employ of
          Company or an Affiliate, or dies while a director of Company
        or an Affiliate, his or her Option shall be exercisable by
         his or her legal representatives, legatees, or distributees
         for six (6) months following the date of the Holder's death
      to the extent such Option is exercisable on the Holder's
          date of death, and thereafter the Option shall terminate and
cease to be exercisable.                          

          M.   Term of Option.  Notwithstanding any other provision of
 this Plan, including the provisions of Subsection A above, no
   Incentive Stock Option may be exercised after the expiration of
ten (10) years from the date it was granted (or the period  
specified in Sec. 4.1, if applicable).  The Committee may   
    prescribe in any Agreement that the Option evidenced thereby may
be exercised in full or in part as to any number of shares  
    subject thereto at any time or from time to time during the term
    of the Option, or in such installments at such times during said
  term as the Committee may prescribe.  Except as provided above
    and unless otherwise provided in any Agreement, an Option may be
     exercised at any time or from time to time during the term of the
Option.  Such exercise may be as to any or all whole (but no
fractional) shares which have become purchasable under the  
Option.                                                     

       N.   Issuance of Stock Certificates.  Within a reasonable
time, or such time as may be permitted by law, after Company
   receives written notice that the Holder has elected to exercise
   all or a portion of an Option, such notice to be accompanied by
    payment in full of the aggregate exercise price of the number of
   shares purchased, Company shall issue and deliver a certificate
    representing the shares acquired as a result of the exercise and
  any other amounts payable in consequence of such exercise.  In
     the event that a Holder exercises both an Incentive Stock Option,
     or portion thereof, and a Nonstatutory Stock Option, or a portion
     thereof, separate Stock certificates shall be issued, one for the
     Stock subject to the Incentive Stock Option and one for the Stock
   subject to the Nonstatutory Stock Option.  The number of shares
     of Stock transferrable due to an exercise of an Option under this
     Plan shall not be increased due to the passage of time, except as
may be provided in an Agreement.                            

        a)   Issuance in Compliance With Securities Laws.  Nothing
   herein or in any Option granted hereunder shall require Company
    to issue any shares upon exercise of any Option if such issuance
would, in the opinion of counsel for Company, constitute a  
violation of the Securities Act of 1933, as amended, or any 
similar or superseding statute or statutes, or any other    
applicable statute or regulation, as then in effect.        

          P.  Investment Legend. At the time of exercise of an Option,
 Company may, as a condition precedent to the exercise of such
     Option, require from the Holder of the Option (or in the event of
    his or her death, his or her legal representatives, legatees, or
  distributees) such written representations, if any, concerning
     his or her intentions with regard to the retention or disposition
    of the shares being acquired by exercise of such Option and such
 written covenants and agreements, if any, as to the manner of
     disposal of such shares as, in the opinion of counsel to Company,
  may be necessary to ensure that any disposition by such Holder
(or in the event of his or her death, his or her legal      
   representatives, legatees, or distributees), will not involve a
violation of the Securities Act of 1933, as amended, or any 
similar or superseding statute or statutes, or any other    
 applicable state or federal statute or regulation, as then in
    effect.  Certificates for shares of Stock, when issued, may have
the following legend, or statements of other applicable     
restrictions, endorsed thereon, and may not be immediately  
transferable:                                               

    The shares of Stock evidenced by this certificate have
  been issued to the registered owner in reliance upon
 written representations that these shares have been
      purchased for investment.  These shares may not be sold,
transferred, or assigned unless, in the opinion of
    Company and its legal counsel, such sale, transfer, or
       assignment will not be in violation of the Securities Act
      of 1933, as amended, applicable rules and regulations of
the Securities and Exchange Commission, and any   
applicable state securities laws.                 

     Sec. 6:5. Limitation on Aggregate Value of Shares That May Become
First Exercisable During Any Calendar Year Under an Incentive Stock   
Option.  With respect to any Incentive Stock Option granted under this
Plan, to the extent that the aggregate Fair Market Value of shares of 
Stock exceed $100,000, then such excess over $100,000 shall not be    
considered as subject to an Incentive Stock Option, but rather shall  
be considered as subject to a Nonstatutory Stock Option.  This rule   
shall be applied by taking shares of Stock subject to Incentive Stock 
Options that are purchasable for the first time in the calendar year  
into account in the order in which such Incentive Stock Options were  
granted.                                                              

 Sec. 6:6. Adjustments Upon Changes in Capitalization, Merger,
Etc.                                                                            

          A.  Method of Adjustment.  In the event of any change in the
     number of outstanding shares of Stock effected without receipt of
    consideration therefor by Company (other than as a result of the
    conversion of Company's Class B Common Stock into Class A Common
Stock) by reason of a stock dividend, or split, combination,
exchange of shares or other recapitalization, merger, or    
 otherwise, in which Company is the surviving corporation, the
     aggregate number and class of the reserved shares, the number and
class of shares subject to each outstanding Option, and the 
    exercise price of each outstanding Option shall be automatically
   adjusted to accurately and equitably reflect the effect thereon
     of such change (provided that any fractional share resulting from
  such adjustment may be eliminated).  In the event of a dispute
   concerning such adjustment, the decision of the Committee shall
  be conclusive.  The number of reserved shares or the number of
   shares subject to any outstanding Option shall be automatically
   reduced by any fraction included therein which results from any
adjustment made pursuant hereto.                            

         B.   Termination of Option.  The following provisions shall
apply unless a Holder's Agreement provides otherwise.  A    
dissolution or liquidation of Company; a sale of all or     
substantially all of the assets of Company where it is      
   contemplated that within a reasonable period of time thereafter
Company will either be liquidated or converted into a       
nonoperating company or an extraordinary dividend will be   
  declared resulting in a partial liquidation of Company (but in
all cases only with respect to those employees whom it is   
anticipated will lose their employment with Company and its 
Affiliates as a result of such sale of assets); a merger or 
     consolidation (other than a merger effecting a reincorporation of
   Company in another state or any other merger or a consolidation
    in which the shareholders of the surviving corporation and their
   proportionate interests therein immediately after the merger or
    consolidation are substantially identical to the shareholders of
 Company and their proportionate interests therein immediately
     prior to the merger or consolidation) in which Company is not the
surviving corporation (or survives only as a subsidiary of  
     another corporation in a transaction in which the shareholders of
   the parent of Company and their proportionate interests therein
     immediately after the transaction are not substantially identical
    to the shareholders of Company and their proportionate interests
   therein immediately prior to the transaction) shall cause every
 Option then outstanding to terminate, but the Holders of each
     such then outstanding Option shall, in any event, have the right,
immediately prior to such dissolution, liquidation, sale of 
   assets, merger, consolidation, or transaction, to exercise each
 such Option, to the extent not theretofore exercised, without
     regard to the determination as to the periods and installments of
     exercisability made pursuant to a Holder's Agreement if (and only
if) such Options have not at that time expired or been      
terminated.                                                 

   Sec. 6:7. Rights as a Shareholder. A Holder shall have no right
as a shareholder with respect to any shares covered by his or her     
Option until a certificate representing such shares is issued to him  
or her.  No adjustment shall be made for dividends (ordinary or       
extraordinary, whether in cash or other property) or distributions or 
other rights for which the record date is prior to the date such      
certificate is issued (except as provided in Sec. 6.6. hereof).       

Sec. 6:8. Modification, Extension, and Renewal of Options.  
Subject to the terms and conditions of and within the limitations of  
the Plan, the Committee may modify, extend, or renew outstanding      
Options granted under the Plan, or accept the surrender of Options    
outstanding hereunder (to the extent not theretofore exercised) and   
authorize the granting of new Options hereunder in substitution       
therefor (to the extent not theretofore exercised).  The Committee may
not, however, without the consent of the Holder, modify any           
outstanding Incentive Stock Options so as to specify a lower exercise 
price or accept the surrender of outstanding Incentive Stock Options  
and authorize the granting of new Options in substitution therefor    
specifying a lower option price.  In addition, no modification of an  
Option granted hereunder may, without the consent of the Holder, alter
or impair any rights or obligations under any Option theretofore      
granted hereunder to such Holder under the Plan, except as may be     
necessary with respect to Incentive Stock Options to satisfy the      
requirements of Sec. 422 of the Code.                                 

Sec. 6:9. Furnish Information.  Each Holder shall furnish to
Company all information requested by Company to enable it to comply   
with any reporting or other requirements imposed upon Company by or   
under any applicable statute or regulation.                           

  Sec. 6:10.  Obligation to Exercise; Termination of Employment.
The granting of an Option hereunder shall impose no obligation upon   
the Holder to exercise the same or any part thereof.  In the event of 
a Holder's termination of employment with Company or an Affiliate, the
unexercised portion of an Option granted hereunder shall terminate in 
accordance with Sec. 6.4 hereof.                                      

Sec. 6:11.  Agreement Provisions.  The Agreements authorized
under the Plan shall contain such provisions in addition to those     
required by the Plan (including, without limitation, restrictions or  
the removal of restrictions upon the exercise of the Option and the   
retention or transfer of shares thereby acquired) as the Committee    
deems advisable.  Each Agreement shall identify the Option evidenced  
thereby as an Incentive Stock Option or Nonstatutory Stock Option, as 
the case may be, and no Agreement shall cover both an Incentive Stock 
Option and Nonstatutory Stock Option.  Except as provided by          
Subsection B of Sec. 6.6, each Agreement relating to an Incentive     
Stock Option granted hereunder shall contain such limitations and     
restrictions upon the exercise of the Incentive Stock Option to which 
it relates as are necessary for the Incentive Stock Option to which   
such Agreement relates to constitute an incentive stock option, as    
defined in Sec. 422 of the Code.                                      

Article VII   
Duration of Plan    

No Incentive Stock Options may be granted hereunder after the date    
that is ten (10) years from the earlier of:  (i) the date this Plan is          
adopted by the Board of Directors; or (ii) the date this Plan is approved       
by Company's shareholders.  In addition, with respect to shares of Stock        
not currently covered by an outstanding Option, this Plan may be terminated     
at any time by the Board of Directors.                                          

Article VIII    
Amendment of Plan     

The Board of Directors may, insofar as permitted by law, with respect 
to any shares at the time are not subject to Options, suspend or                
discontinue the Plan or revise or amend it in any respect whatsoever;           
provided, however, that, without the approval of the holders of a majority      
of the outstanding shares of voting stock of all classes of Company, no         
such revision or amendment shall:  (a) change the number of shares of the       
Stock subject to the Plan, (b) change the designation of the class of           
employees eligible to receive Options, (c) decrease the price at which          
Incentive Stock Options may be granted, (d) remove the administration of        
the Plan from the Committee, or (e) without the consent of the affected         
Holder, cause the Incentive Stock Options granted hereunder and outstanding     
at such time that satisfied the requirements of Sec. 422 of the Code to no      
longer satisfy such requirements.                                               

Article IX    
General   

     Sec. 9:1. Application of Funds.  The proceeds received by Company
from the sale of shares pursuant to Options shall be used for general 
corporate purposes.                                                   

Sec. 9:2. Right of Company and Affiliates to Terminate      
Employment.  Nothing contained in the Plan, or in any Agreement, shall
confer upon any Holder the right to continue in the employ of Company 
or any Affiliate, or interfere in any way with the rights of Company  
or any Affiliate to terminate his or her employment at any time.      

  Sec. 9:3. No Liability for Good Faith Determinations.  Neither
the members of the Board of Directors nor any member of the Committee 
shall be liable for any act, omission, or determination taken or made 
in good faith with respect to the Plan or any Option granted under it,
and members of the Board of Directors and the Committee shall be      
entitled to indemnification and reimbursement by Company in respect of
any claim, loss, damage, or expense (including attorneys' fees, the   
costs of settling any suit, provided such settlement is approved by   
independent legal counsel selected by Company, and amounts paid in    
satisfaction of a judgment, except a judgment based on a finding of   
bad faith) arising therefrom to the full extent permitted by law and  
under any directors and officers liability or similar insurance       
coverage that may from time to time be in effect.                     

     Sec. 9:4. Information Confidential.  As partial consideration for
the granting of each Option hereunder, the Holder shall agree with    
Company that he or she will keep confidential all information and     
knowledge that he or she has relating to the manner and amount of his 
or her participation in the Plan; provided, however, that such        
information may be disclosed as required by law and may be given in   
confidence to the Holder's spouse, tax, and financial advisors, or to 
a financial institution to the extent that such information is        
necessary to secure a loan.  In the event any breach of this promise  
comes to the attention of the Committee, it shall take into           
consideration such breach, in determining whether to recommend the    
grant of any future Option to such Holder, as a factor militating     
against the advisability of granting any such future Option to such   
individual.                                                           

  Sec. 9:5. Other Benefits.  Participation in the Plan shall not
preclude the Holder from eligibility in any other stock option plan of
Company or any Affiliate or any old age benefit, insurance, pension,  
profit sharing retirement, bonus, or other extra compensation plans   
which Company or any Affiliate has adopted, or may, at any time, adopt
for the benefit of its employees.                                     

     Sec. 9:6. Execution of Receipts and Releases. Any payment of cash
or any issuance or transfer of shares of Stock to the Holder, or to   
his or her legal representative, heir, legatee, or distributee, in    
accordance with the provisions hereof, shall, to the extent thereof,  
be in full satisfaction of all claims of such persons hereunder.  The 
Committee may require any Holder, legal representative, heir, legatee,
or distributee, as a condition precedent to such payment, issuance, or
transfer, to execute a release and receipt therefor in such form as it
shall determine.                                                      

   Sec. 9:7. No Guarantee of Interests.  Neither the Committee nor
Company guarantees the Stock of Company from loss or depreciation.    

Sec. 9:8. Payment of Expenses.  All expenses incident to the
administration, termination, or protection of the Plan, including, but
not limited to, legal and accounting fees, shall be paid by Company or
its Affiliates.                                                       

    Sec. 9:9. Company Records.  Records of Company or its Affiliates
regarding the Holder's period of employment, termination of employment
and the reason therefor, leaves of absence, re-employment, and other  
matters shall be conclusive for all purposes hereunder, unless        
determined by the Committee to be incorrect.                          

    Sec. 9:10.  Information.  Company and its Affiliates shall, upon
request or as may be specifically required hereunder, furnish or cause
to be furnished, all of the information or documentation which is     
necessary or required by the Committee to perform its duties and      
functions under the Plan.                                             

Sec. 9:11.      No Liability of Company.  Company assumes no
obligation or responsibility to the Holder or his or her personal     
representatives, heirs, legatees, or distributees for any act of, or  
failure to act on the part of, the Committee.                         

   Sec. 9:12.      Company Action.  Any action required of Company
shall be by resolution of its Board of Directors or by a person       
authorized to act by resolution of the Board of Directors.            

    Sec. 9:13.  Severability.  If any provision of this Plan is held
to be illegal or invalid for any reason, the illegality or invalidity 
shall not affect the remaining provisions hereof, but such provision  
shall be fully severable, and the Plan shall be construed and enforced
as if the illegal or invalid provision had never been included herein.

Sec. 9:14.      Notices.  Whenever any notice is required or
permitted hereunder, such notice must be in writing and personally    
delivered or sent by mail.  Any notice required or permitted to be    
delivered hereunder shall be deemed to be delivered on the date on    
which it is personally delivered, or, whether actually received or    
not, on the third business day after it is deposited in the United    
States mail, certified or registered, postage prepaid, addressed to   
the person who is to receive it at the address which such person has  
theretofore specified by written notice delivered in accordance       
herewith.  Company or a Holder may change, at any time and from time  
to time, by written notice to the other, the address which it, he, or 
she had theretofore specified for receiving notices.  Until changed in
accordance herewith, Company and each Holder shall specify as its,    
his, or her address for receiving notices the address set forth in the
Agreement pertaining to the shares to which such notice relates.      

    Sec. 9:15.      Waiver of Notice.  Any person entitled to notice
hereunder may waive such notice.                                      

   Sec. 9:16.      Successors.  The Plan shall be binding upon the
Holder, his or her heirs, legatees, and legal representatives, upon   
Company, its successors, and assigns, and upon the Committee, and its 
successors.                                                           

   Sec. 9:17.   Headings.  The titles and headings of Sections and
Subsections are included for convenience of reference only and are not
to be considered in construction of the provisions hereof.            

   Sec. 9:18.   Governing Law.  All questions arising with respect
to the provisions of the Plan shall be determined by application of   
the laws of the State of Texas except to the extent Texas law is      
preempted by federal law.  Questions arising with respect to the      
provisions of an Agreement that are matters of contract law shall be  
governed by the laws of the state specified in the Agreement, except  
to the extent Texas corporate law conflicts with the contract law of  
such state, in which event Texas corporate law shall govern. The      
obligation of Company to sell and deliver Stock hereunder is subject  
to applicable laws and to the approval of any governmental authority  
required in connection with the authorization, issuance, sale, or     
delivery of such Stock.                                               

     Sec. 9:19.   Word Usage.  Words used in the masculine shall apply
to the feminine where applicable, and wherever the context of this    
Plan dictates, the plural shall be read as the singular and the       
singular as the plural.                                               

Sec. 9:20.      Remedies.  Company may recover from a Holder
reasonable attorneys' fees incurred in connection with the enforcement
of the terms and provisions of the Plan and any Agreement whether by  
an action to enforce specific performance or for damages for its      
breach or otherwise.                                                  

Article X   
Approval of Directors   

The Plan shall take effect on the date it is adopted by the Board of  
Directors.                                                                      

IN WITNESS WHEREOF, Chase Packaging Corporation, acting by and through
its officers hereunto duly authorized has executed this instrument to be        
effective the July 10, 1996.                                                    

         CHASE PACKAGING CORPORATION

      By:     /s/ L. W. Lovell

                       L. W. Lovell, President

H:\DOCS3\T9140\001X\57147.1                                                     

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10SB12G’ Filing		Date		Other Filings
		7/10/06
		7/30/98
		7/1/98
		1/30/98
		7/31/97		8-K,  SC 13D
		7/30/97
		12/31/96		10KSB
Filed on:		10/24/96
		10/3/96
		7/31/96
		7/30/96
		7/26/96
		7/15/96
		7/10/96
		7/9/96
		6/30/96
		5/6/96
		4/1/96
		3/31/96
		2/7/96
		12/31/95
		7/26/95
		6/30/95
		2/27/95
		1/1/95
		12/31/94
		9/19/94
		7/25/94
		5/25/94
		4/25/94
		7/30/93
		6/27/93
				List all Filings

3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/31/23  Chase Packaging Corp.             10-K       12/31/22   46:2.5M                                   Discount Edgar/FA
 3/25/22  Chase Packaging Corp.             10-K       12/31/21   45:3.2M                                   Discount Edgar/FA
 3/17/21  Chase Packaging Corp.             10-K       12/31/20   44:3.6M                                   Discount Edgar/FA