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UNITED STATES
SECURITIES AND EXCHANGE COMMISION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the fiscal year end 12/31/1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQURIED)
For the transition period from _____________ to _____________ Commission file
number ____________
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
<PAGE>
TEAM FINANCIAL, INC.
EMPLOYEES' STOCK OWNERSHIP PLAN
Financial Statements and Schedules
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Plan Advisory Committee of the
Team Financial, Inc. Employees' Stock
Ownership Plan of Team Financial, Inc:
We have audited the accompanying statements of net assets available for plan
benefits of the Team Financial, Inc. Employees' Stock Ownership Plan as of
December 31, 1999 and 1998 and the related statements of changes in net assets
available for plan benefits for the years ended December 31, 1999, 1998, and
1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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 net assets available for plan benefits of the Team
Financial, Inc. Employees' Stock Ownership Plan as of December 31, 1999 and 1998
and the changes in net assets available for plan benefits for the years ended
December 31, 1999, 1998, and 1997, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG LLP
June 2, 2000
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TEAM FINANCIAL, INC.
EMPLOYEES' STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
Assets:
Cash $ 718,765 7,746
Investments, at fair value:
Common stocks:
Team Financial, Inc. 10,996,506 17,868,683
Other 672,007 --
U. S. government agency obligations 295,065 --
Interest and dividends receivable 68,613 --
-------------- --------------
Total assets 12,750,956 17,876,429
Liabilities - notes payable -- 1,000,000
-------------- --------------
Net assets available for plan benefits $ 12,750,956 16,876,429
============== ==============
</TABLE>
See accompanying notes to financial statements.
2
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TEAM FINANCIAL, INC.
EMPLOYEES' STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Plan Benefits
For the years ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
-------------- --------------- --------------
<S> <C> <C> <C>
Additions to net assets attributed to:
Appreciation (depreciation) in fair value of investments $ (2,943,050) (655,238) 2,736,004
Dividend income 269,730 364,021 388,394
Contributions from employer 300,244 542,574 622,701
Interest income 49,749 49 804
Transfers from other plan 1,245,161 -- --
-------------- --------------- --------------
Net additions (1,078,166) 251,406 3,747,903
-------------- --------------- --------------
Deductions from net assets attributed to:
Distributions to participants 3,007,172 1,422,022 357,403
Interest expense 25,245 96,356 123,126
Administrative expenses 14,890 -- --
-------------- --------------- --------------
Total deductions 3,047,307 1,518,378 480,529
-------------- --------------- --------------
Increase (decrease) in net assets
available for plan benefits (4,125,473) (1,266,972) 3,267,374
Net assets available for plan benefits:
Beginning of year 16,876,429 18,143,401 14,876,027
-------------- --------------- --------------
End of year $ 12,750,956 16,876,429 18,143,401
============== =============== ==============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
TEAM FINANCIAL, INC.
EMPLOYEES' STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Team Financial, Inc. Employees' Stock Ownership Plan (the Plan) has
been adopted by Team Financial, Inc. and its affiliates: TeamBank N.A.,
Iola Bank & Trust Company, Allen County Investment Services, Inc., The
First National Bank and Trust Company of Parsons, Kansas, and Community
Bank. The Plan is administered by the Company as Plan Administrator and
Trustee.
On June 21, 1999, Team Financial completed an initial public offering of
its common stock. As part of the initial public offering, the Plan sold
300,000 shares of Team Financial stock. Net proceeds of $3,139,000 were
used to repay debt and to reinvest in other common stock investments.
GENERAL
The Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). The following
description of the Plan provides only general information. Participants
should refer to the Plan Agreement for a more complete description of
the Plan's provisions.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on an accrual
basis in conformity with generally accepted accounting principles and
present net assets available for plan benefits and changes in those net
assets. Dividend income is accrued on the ex-dividend date. Purchases
and sales of investments are recorded on a trade-date basis. Realized
gains and losses from security transactions are reported on the average
cost method.
INCOME TAXES
The Plan has received a favorable determination letter from the Internal
Revenue Service indicating that it is qualified under Section 401(a) of
the Internal Revenue Code and, therefore, the related trust is exempt
from tax under Section 501(a) of the Internal Revenue Code. The Plan
Administrator has amended the Plan to conform to the Tax Reform Act of
1986 and has requested a determination letter from the Internal Revenue
Service. The Plan Administrator is not aware of any activity or
transactions that may adversely affect the qualified status of the Plan,
as amended.
USE OF ESTIMATES
The Plan utilizes a number of estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results
could differ from those estimates.
5
<PAGE>
(2) MERGER
In December 1999, Team Financial acquired ComBankshares, Inc. and its
wholly owned subsidiary, Community Bank. In conjunction with the
acquisition, ComBankshares, Inc. Employee Stock Ownership Plan was
merged into the Plan. The total assets transferred to the Plan at fair
value were $1,245,161, consisting primarily of 3,465 shares of
ComBankshares common stock which was exchanged for 102,330 shares of
Team Financial common stock.
(3) INVESTMENT POLICY AND CONTRIBUTIONS
Contributions to fund the Plan are determined by Team Financial's Board
of Directors. Contributions may be made in cash, common stock, or other
investments as determined by the Board of Directors. Team Financial may
make a contribution up to 15% of the compensation paid to participating
employees during the Plan year. Pursuant to certain limitations set
forth in the Internal Revenue Code, Team Financial may contribute
additional amounts of up to 10% of the total compensation of all
participants to apply to a principal repayment on the borrowings
incurred for the purpose of acquiring common stock, and/or an amount
without limitation if it is to be applied to the repayment of interest
on borrowings incurred for the purpose of acquiring common stock.
The Plan does not permit contributions by participants.
(4) PROVISIONS OF THE PLAN
All employees are eligible to become participants of the Plan on the
January 1 or July 1 following the later of six months of employment or
age nineteen.
With limited exceptions, an employee must complete 1,000 hours of
service during the Plan year and must be employed by the employer on the
last day of the Plan year to be entitled to an allocation of Team
Financial contributions. Contributions are allocated based upon vesting
percentages as shown below:
<TABLE>
<CAPTION>
PERCENT
YEARS OF OF VESTED
SERVICE INTEREST
----------------------- -------------
<S> <C>
Less than 3 years - %
3 years 20
4 years 40
5 years 60
6 years 80
7 years or more 100
=============
</TABLE>
6
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Participants are eligible for benefit distributions following death,
disability, retirement, or other termination of employment. When a
participant's employment is terminated because of retirement, permanent
disability, or death, then, unless the participant elects otherwise, the
distributions of the participant's account must commence not later that
one year after the close of the Plan year in which the event occurs.
When a participant's employment is terminated for any other reason, the
form of the distribution depends on the balance in the participant's
account. If the vested balance is less than $5,000, the Plan will
distribute that amount, in a lump sum, in the Plan year following the
Plan year in which the participant terminates. If the vested account
balance exceeds $5,000, then, unless the participant elects otherwise,
the Plan will generally commence distributions of such amount in the
Plan year following the date of termination. Distributions may be in a
lump sum or installments. Generally, the portion of a participant's
account invested in Team Financial common stock will be distributed in
the form of Team Financial common stock, and the remaining portion of
the participant's account will be distributed at the participant's
election, either in the form of Team Financial common stock or cash.
Additionally, vested benefits may be paid to a participant if the
participant reaches age sixty or if the participant reaches age
fifty-five and has participated in the Plan for at least ten years.
Forfeitures are allocated to the account of each participant in the same
manner as Company contributions.
(5) INVESTMENTS
The Plan's investments are stated at fair value. Prior to the initial
public offering of Company common stock, fair value was determined based
upon results of an independent appraisal. Subsequent to the initial
public offering, fair value is determined by quoted market prices.
The following presents the investment that represented 5% or more of the
Plan's net assets:
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
Team Financial, Inc. common stock $ 10,996,506 17,868,683
=============== ===============
</TABLE>
The investment in Team Financial common stock represents approximately
30% and 53% of the outstanding common stock of Team Financial at
December 31, 1999 and 1998, respectively.
During 1999, 1998, and 1997, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the year)
appreciated (depreciated) in value as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------------- ------------ ------------
<S> <C>
U. S. government agency obligations $ (4,935) - -
Common stock (2,938,115) (655,238) 2,736,004
-------------- ------------ ------------
$ (2,943,050) (655,238) 2,736,004
============== ============ ============
</TABLE>
7
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(6) NOTES PAYABLE TO BANK
As of December 31, 1998, the Plan had certain term loan agreements with
an unrelated bank on behalf of the Plan. The proceeds of those loans
were used to acquire shares of Team Financial common stock. The
borrowings bore interest at rates ranging from 5.6% to 6.75%, were
scheduled to mature in 2002 and 2004, and were secured by 134,560 shares
of Team Financial common stock.
(7) RECONCILIATION TO FORM 5500
At December 31, 1999, the Plan had dividends receivable of $61,092 from
Team Financial. This amount is presented herein as a component of net
assets in the accompanying financial statements, but is excluded from
the Form 5500.
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500 at December 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
Net assets available for benefits per
the financial statements $ 12,750,956
Dividends receivable (61,092)
--------------
Net assets available for benefits per
the Form 5500 $ 12,689,864
==============
</TABLE>
The following is a reconciliation of dividend income per the financial
statements to the Form 5500 for the year ended December 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
Dividend income per the financial
statements $ 269,730
Less dividends receivable at
December 31, 1999 (61,092)
--------------
Dividend income per the Form 5500 $ 208,638
==============
</TABLE>
8
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SCHEDULE 1
TEAM FINANCIAL, INC.
EMPLOYEES' STOCK OWNERSHIP PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
FAIR HISTORICAL
UNITS DESCRIPTION OF INVESTMENT VALUE COST
--------------- ------------------------------------------------------------------------------------ --------------
<S> <C> <C>
Common stock:
1,221,834 Team Financial, Inc.* $ 10,996,506 5,129,735
1,000 Abbot Laboratories 36,313 37,775
400 America Online, Inc. 30,350 28,639
500 Bristol Myers Squibb Company 32,094 37,192
800 Citigroup, Inc. 44,550 39,931
400 Clorox Company 20,150 16,614
500 Cisco Systems, Inc. 53,563 35,926
350 Dell Computer Corporation 17,850 14,736
200 EMC Corporation 21,850 14,344
500 Fannie Mae 31,219 33,976
500 Gillette Company 20,594 18,700
350 Intel Corporation 28,809 28,309
500 Coca-Cola Company 29,125 24,694
400 Lucent Technologies, Inc. 30,000 26,225
700 McDonalds Corporation 28,219 31,007
300 Microsoft Corporation 35,025 27,333
500 Pfizer, Inc. 16,219 19,169
500 SBC Communications, Inc. 24,375 25,131
800 AT&T Corporation 40,650 36,044
500 Walgreen Corporation 14,625 12,488
525 MCI WorldCom, Inc. 27,858 29,712
200 Warner Lambert Company 16,388 13,792
896 ExxonMobile Corporation 72,184 66,535
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Total common stock 11,668,513 5,748,007
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U. S. government agency obligations:
100,000 Federal Home Loan Mortgage Corp., 7.05% 97,875 100,000
100,000 Federal Home Loan Mortgage Corp., 7.32% 98,990 100,000
100,000 Federal Home Loan Mortgage Corp., 7.16% 98,200 100,000
--------------- --------------
Total U. S. government agency obligations 295,065 300,000
--------------- --------------
Total assets held for investment purposes $ 11,963,578 6,048,007
=============== ==============
</TABLE>
* Team Financial, Inc. is a party-in-interest to the Plan.
See accompanying independent auditors' report.
8
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SCHEDULE 2
TEAM FINANCIAL, INC.
EMPLOYEES' STOCK OWNERSHIP PLAN
Schedule of Reportable Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
CURRENT
EXPENSE VALUE OF
INCURRED ASSET ON
WITH COST TRANS-
DESCRIPTION PURCHASE SELLING TRANS- OF ACTION NET
OF ASSETS PRICE PRICE ACTIONS ASSET DATE GAIN
------------------------ --------------- -------------- ------------- -------------- --------------- -------------
<S> <C> <C> <C> <C>
Cash $ 15,412,560 14,701,541 - 30,114,101 30,114,101 -
Team Financial, Inc.
common stock 1,263,139 5,143,464 - 2,816,036 6,406,603 3,590,567
=============== ============== ============= ============== =============== =============
</TABLE>
See accompanying independent auditors' report.
9
