<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
TEAM, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
TEAM, INC.
1019 SOUTH HOOD STREET
ALVIN, TEXAS 77511
(713) 331-6154
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 31, 1996
To the Shareholders of Team, Inc.:
The 1996 Annual Meeting of Shareholders of Team, Inc. (the "Company") will
be held on Thursday, October 31, 1996 at 3:00 p.m. Houston time, at the
Company's manufacturing facility, Teco Manufacturing, Inc., 3795 F.M. 528 East,
Alvin, Texas 77511 for the following purposes:
1. To elect two persons to serve as Class I Directors for a term of
three years on the Company's Board of Directors consisting of three classes
of directors with staggered terms;
2. To consider and vote on a proposal to approve the appointment of
Deloitte & Touche as the independent certified public accountants to audit
the Company's accounts for the fiscal year ending May 31, 1997; and
3. To transact such other business as may properly come before the
meeting and all adjournments thereof.
The Board of Directors has fixed the close of business on September 12,
1996 as the record date for determination of shareholders who are entitled to
notice of and to vote either in person or by proxy at the Annual Meeting of
Shareholders and any adjournment thereof.
All shareholders are cordially invited to attend the meeting in person.
Even if you plan to attend the meeting, YOU ARE REQUESTED TO SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY AS SOON AS POSSIBLE.
By Order of the Board of Directors
William A. Ryan
Chairman of the Board of Directors,
President and Chief Executive
Officer
September 25, 1996
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD PROMPTLY.
<PAGE> 3
TEAM, INC.
1019 SOUTH HOOD STREET
ALVIN, TEXAS 77511
(713) 331-6154
PROXY STATEMENT
GENERAL
This Proxy Statement and the accompanying proxy card are furnished in
connection with the solicitation of proxies by the Board of Directors of Team,
Inc., a Texas corporation (the "Company"), to be voted at the 1996 Annual
Meeting of Shareholders (the "1996 Annual Meeting"), and at any adjournment
thereof, to be held at the time and place and for the purposes set forth in the
accompanying Notice. This Proxy Statement and enclosed form of proxy are being
mailed to shareholders beginning on or about September 25, 1996.
The Company will bear costs of soliciting proxies in the accompanying form.
In addition to the solicitation made hereby, proxies may also be solicited by
telephone, telegram or personal interview by officers and employees of the
Company. The Company will reimburse brokers or other persons holding stock in
their names or in the names of their nominees for their reasonable expenses in
forwarding proxy material to beneficial owners of stock.
All duly executed proxies received prior to the 1996 Annual Meeting will be
voted in accordance with the choices specified thereon, unless revoked as
described below. As to any matter for which no choice has been specified in a
proxy, the shares represented thereby will be voted by the persons named in the
proxy: (1) FOR the election of the two nominees listed herein as Class I
Directors for a term of three years; (2) FOR the proposal to approve the
appointment of Deloitte & Touche LLP as independent certified public accountants
of the Company for the fiscal year ending May 31, 1997; and (3) in the
discretion of such person in connection with any other business that may
properly come before the meeting. Shareholders may revoke their proxy at any
time prior to the exercise thereof by written notice to Mr. George W. Harrison
of the Company at the above address of the Company, by the execution and
delivery of a later dated proxy or by attendance at the meeting and voting their
shares in person. Proxy cards that are not signed or that are not returned are
treated as not voted for any purposes.
VOTING SECURITIES
As of the close of business on September 12, 1996, the record date for
determining shareholders entitled to vote at the 1996 Annual Meeting, the
Company had outstanding and entitled to vote 5,159,842 shares of common stock.
Each share of common stock is entitled to one vote with respect to each matter
to be acted upon at the meeting. The holders of a majority of the total shares
of common stock of the Company issued and outstanding as of September 12, 1996,
whether present in person or represented by proxy, will constitute a quorum for
the transaction of business at the meeting. Abstentions, or with respect to the
election of directors withholds, are counted for purposes of determining the
presence or absence of a quorum for the transaction of business while broker
non-votes are not so counted. Additionally, abstentions and/or withholds are
counted in tabulations of the votes cast on proposals presented to shareholders
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved.
PROPOSAL ONE -- ELECTION OF DIRECTORS
GENERAL
The Company's Restated Articles of Incorporation and Bylaws provide that
the Company's Board of Directors will consist of not less than six nor more than
nine persons, the exact number to be fixed from time-to-time by the Board of
Directors. The Board of Directors has fixed the number of directors constituting
the Board of Directors at six, divided into three classes with staggered
three-year terms.
<PAGE> 4
The Board of Directors has nominated two Class I Directors to be elected to
serve a three-year term expiring on the date of the Annual Meeting of
Shareholders of the Company to be held in 1999, and to hold office until their
successors are duly elected and qualified. Messrs. William A. Ryan and John L.
Farrell, Jr. have been nominated by the Board of Directors to stand for
reelection as Class I Directors for a three-year term.
Directors are elected by a plurality of votes cast at the Annual Meeting.
Unless contrary instructions are set forth in the proxies, the persons with full
power of attorney to act as proxies at the 1996 Annual Meeting will vote all
shares represented by such proxies for the election of the nominees named
therein as directors. Should any of the nominees become unable or unwilling to
accept nomination or election, it is intended that the persons acting under the
proxy will vote for the election, in the nominee's stead, of such other persons
as the Board of Directors of the Company may recommend. The management has no
reason to believe that either of the nominees will be unable or unwilling to
stand for election or to serve if elected.
NOMINEES
Set forth below is certain information as of September 12, 1996 concerning
the nominees for election as Class I Directors at the 1996 Annual Meeting,
including the business experience of each for at least the past five years:
<TABLE>
<CAPTION>
PRESENT POSITION DIRECTOR
NAME AGE WITH THE COMPANY SINCE
- ------------------------------ --- ----------------------------------------- --------
<S> <C> <C> <C>
Mr. William A. Ryan........... 69 Chairman of the Board of Directors, 1987
President
and Chief Executive Officer
Mr. John L. Farrell, Jr....... 67 Director 1991
</TABLE>
Mr. Ryan was elected Chairman of the Board of Directors, President and
Chief Executive Officer of the Company in August of 1995. Previously, Mr. Ryan
was President and Chief Operating Officer of Continental Materials Corporation
in Chicago, Illinois, from 1974 until his retirement in August 1995. Mr. Ryan
continues to serve as a Director of Continental Materials Corporation.
Continental Materials Corporation engages in the business of manufacturing
heating and cooling equipment and producing minerals and mineral products, and
its common stock is listed on the American Stock Exchange.
Mr. Farrell has been a principal in The Morgan Investment Group, a
consulting firm located in Tulsa, Oklahoma, since January 1988. The Morgan
Investment Group invests in and provides advisory services to privately-held
companies. Mr. Farrell has acted as the Chairman of the Executive Committee of
Diagnetics, Inc. since January, 1990, and Chief Financial Officer from June 1994
to the present date. Diagnetics, Inc. is a privately-held electronic
instrumentation and equipment manufacturer.
DIRECTORS CONTINUING IN OFFICE
Set forth below is certain information concerning the four directors
continuing in office until the expiration of their respective terms, including
the business experience of each for at least the past five years:
<TABLE>
<CAPTION>
EXPIRATION
PRESENT POSITION DIRECTOR OF
NAME AGE WITH THE COMPANY SINCE PRESENT TERM
------------------------- --- ----------------------------------- -------- ------------
<S> <C> <C> <C> <C>
Sidney B. Williams....... 63 Director 1973 1998
George W. Harrison....... 69 Director and Senior Vice President 1995 1998
Jack M. Johnson, Jr...... 58 Director 1992 1997
E. Theodore Laborde...... 58 Director 1991 1997
</TABLE>
Mr. Williams is a sole shareholder of a professional corporation which is a
partner in the law firm of Chamberlain, Hrdlicka, White, Williams & Martin in
Houston, Texas and has been a partner in that firm for more than the past five
years.
2
<PAGE> 5
Mr. Harrison joined the Company in 1974 as Vice President and assumed his
position as Senior Vice President in 1987. He was elected as director of the
Company in November 1995. Mr. Harrison is involved in most aspects of the
Company including, primarily, operations, engineering, marketing and the
research and development functions of the Company.
Mr. Johnson has been Managing General Partner of Wintermann & Company, a
general partnership that owns approximately 25,000 acres of real estate in Texas
which is used in farming, ranching and oil and gas exploration activities, for
more than the past five years. Mr. Johnson is also President of Winco
Agriproducts, an agricultural products company that primarily processes rice for
seed and commercial sale, and is on the Board of Directors of Houston National
Bank located in Houston, Texas with assets of approximately $100 million. Mr.
Johnson is also a Director of Security State Bank in Anahuac, Texas.
Mr. Laborde has served in various capacities with Marsh & McLennan, Inc.,
an insurance brokerage firm, in New Orleans, Louisiana, for approximately 32
years. Since 1982, Mr. Laborde has acted as Managing Director of the New Orleans
operation. Marsh & McLennan, Inc. is a subsidiary of Marsh & McLennan Companies.
Mr. Williams and Mr. Laborde are brothers-in-law.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held 10 regular meetings and four telephone
conference meetings during the fiscal year ended May 31, 1996. No director
attended fewer than 75% of the meetings held by the Board and the Committees on
which he served.
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee, but does not have a Nominating Committee. The Executive
Committee is composed of Messrs. Ryan and Williams. The Executive Committee is
responsible for assisting with the general management of the business and
affairs of the Company during intervals between meetings of the Board of
Directors. The Executive Committee met four times during fiscal 1996.
The Audit Committee is composed of Messrs. Laborde, Farrell and Harrison.
The Audit Committee is charged with the duties of recommending the appointment
of the independent certified public accountants; reviewing their fees; ensuring
that proper guidelines are established for the dissemination of financial
information to the Company's shareholders; meeting periodically with the
independent certified public accountants, the Board of Directors and certain
officers of the Company and its subsidiaries to ensure the adequacy of internal
controls and reporting; reviewing consolidated financial statements; and
performing any other duties or functions deemed appropriate by the Board. The
Audit Committee met three times during fiscal 1996.
The Compensation Committee, composed of Messrs. Johnson, Farrell and
Williams, reviews management performance and makes recommendations to the Board
of Directors concerning management compensation and other corporate benefits.
The Compensation Committee met two times during fiscal 1996.
COMPENSATION OF DIRECTORS
All outside directors currently receive an annual fee of $10,000, payable
semi-annually, as well as $800 per month, plus reasonable travel expenses for
each Board meeting. Directors who are officers or employees of the Company do
not receive additional compensation for serving as directors. No fees are paid
for attendance at Committee meetings.
In December 1991, the Company adopted the Non-Employee Directors' Stock
Option Plan, as amended through March 28, 1996 (the "Non-Employee Director
Plan"), which authorizes options to purchase 220,000 shares of common stock for
directors of the Company who are not employees of the Company or any of its
affiliates. The purpose of the Non-Employee Director Plan is to attract and to
retain the services of experienced and knowledgeable independent individuals as
directors, to extend to them the opportunity to acquire a proprietary interest
in the Company so that they will apply their best efforts for the benefit of the
3
<PAGE> 6
Company, and to provide such individuals with an additional incentive to
continue in their position. Pursuant to the Non-Employee Director Plan, each
non-employee director receives automatic grants of options upon such director's
appointment, reappointment, election or reelection to the Board of Directors
equal to the product obtained by multiplying five thousand (5,000) by the number
of years, or any part of any year, that such director is appointed or elected to
serve on the Board of Directors. The exercise price of the options is equal to
the fair market value of the Company's common stock on the date of grant, and
the options expire ten years after the date of grant. In December 1995, the
Board of Directors repriced all outstanding options to $2.125 per share. Options
to purchase 5,000 shares vest on the date of grant and each anniversary
thereafter until all of the options granted are fully vested. Currently under
the Non-Employee Director Plan, two directors have been granted options to
purchase 30,000 shares at $2.125 per share, one director has been granted
options to purchase 25,000 shares at $2.125 per share, one director has been
granted options to purchase 40,000 shares at $2.125 per share, and one director
has been granted options to purchase 80,000 shares at $2.125 per share. None of
the Company's directors exercised their options under the Non-Employee Director
Plan during the preceding fiscal year.
CURRENT DIRECTORS AND EXECUTIVE AND OTHER OFFICERS
The following table sets forth information regarding the current directors
and executive and other officers of the Company:
<TABLE>
<CAPTION>
YEAR YEAR
ELECTED ELECTED
NAME OF AS AS
DIRECTOR OR OFFICER AGE DIRECTOR OFFICER POSITION WITH COMPANY
- --------------------------- --- -------- ------- -----------------------------
<S> <C> <C> <C> <C>
William A. Ryan(1)......... 69 1987 1995 Chairman of the Board of
Directors, President and
Chief Executive Officer
George W. Harrison(2)...... 69 1995 1974 Director and Senior Vice
President
Kenneth M. Tholan.......... 57 -- 1996 Vice President and General
Manager
Margie E. Rogers........... 53 -- 1996 Secretary and Treasurer
Sidney B. Williams(1)(3)... 63 1973 -- Director
E. Theodore Laborde(2)..... 58 1991 -- Director
John L. Farrell, Jr.(2)(3). 67 1991 -- Director
Jack M. Johnson, Jr.(3).... 58 1992 -- Director
</TABLE>
- ---------------
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
Mr. Tholan joined the Company in June 1996 as General Manager of the
Company and shortly thereafter was elected as Vice President. Previously, from
1993 to 1996, Mr. Tholan held the position of Vice President and General Manager
for Furmanite America, Inc. (a Kaneb company) with responsibility for the
Southwest Division, as well as engineering and manufacturing of on-site
mechanical services for the refinery, chemical and other related industries.
From 1989 to 1992, Mr. Tholan served as Vice President of Smith Diamond, a
division of Smith International Inc. He was responsible for the engineering,
manufacturing and sales of synthetic diamond bits and other related products to
the oil and gas industry.
Ms. Rogers joined the Company in 1989 as Corporate Controller and assumed
the position of Assistant Secretary in 1995. In 1996, she assumed the positions
of Secretary, Treasurer and Chief Accounting Officer of the Company.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10 percent
of a registered class of the Company's equity securities
4
<PAGE> 7
to file reports of ownership and changes of ownership with the Securities and
Exchange Commission. Officers, directors and greater than 10 percent
shareholders are required to furnish the Company with copies of all Section
16(a) reports they file.
Based solely on its review of the forms received by it, or written
representations from certain reporting persons that no Form 5 reports were
required for those persons, the Company believes that during the year ended May
31, 1996, all filing requirements applicable to the Company's officers,
directors and greater than 10 percent shareholders were satisfied.
EMPLOYMENT AND OTHER AGREEMENTS
Mr. Ryan is a party to an employment agreement with the Company. Mr. Ryan's
employment agreement terminates on August 31, 1997, unless terminated earlier
with or without cause by either Mr. Ryan or the Company. Pursuant to the terms
of such employment agreement, Mr. Ryan has agreed not to disclose any
confidential information regarding the Company without the prior written consent
of the Company. Further, Mr. Ryan has agreed not to compete with the Company for
a period of two years following his termination of employment. Pursuant to such
employment agreement, in the event Mr. Ryan is terminated without cause, he
would be entitled to severance payments for a specific length of time. See also
"Deferred Compensation Plan for Mr. Ryan."
Mr. Harrison entered into a consulting and salary continuation agreement
with the Company on December 24, 1990 which provides for the Company to retain
him as a consultant for a period of 10 years after termination of his
employment. Pursuant to such agreement, Mr. Harrison will receive an annual
consulting fee of $48,000.
Mr. Tholan also has an agreement with the Company that in the event he is
terminated prior to June 17, 1997, he will be entitled to receive severance pay
for a specific period of time.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth compensation information for the fiscal
years ended May 31, 1996, 1995 and 1994 for the Chief Executive Officer and the
other executive officers of the Company earning in excess of $100,000 during the
Company's 1996 fiscal year (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER
ANNUAL RESTRICTED ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND SALARY BONUS SATION AWARD(S) SARS PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)(1)
- ------------------------------------- ---- ------- ----- ------- ---------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William A. Ryan,(2).................. 1996 230,769(3) -- -- -- 60,000(4) -- --
Chairman of the Board of Directors,
President and Chief Executive
Officer
George W. Harrison,.................. 1996 126,202 -- -- -- 45,000(5) -- 1,893
Senior Vice President 1995 125,000 -- -- -- -- -- 1,875
1994 125,000 -- -- -- 15,000 -- 2,450
</TABLE>
- ---------------
(1) Reflective of contributions made by the Company to the Team, Inc. Salary
Deferral Plan and Trust under Section 401(K) of the Internal Revenue Code.
(2) Mr. Ryan was named an executive officer during fiscal 1996.
(3) Includes $125,000 deferred at the option of Mr. Ryan. See "Deferred
Compensation Plan for Mr. Ryan."
(4) Includes options to purchase 40,000 shares which were repriced in December
1995 and options to purchase 20,000 shares which were granted to Mr. Ryan in
December 1995.
(5) Includes options to purchase 30,000 shares which were repriced in December
1995 and options to purchase 15,000 shares which were granted to Mr.
Harrison in December 1995.
5
<PAGE> 8
DEFERRED COMPENSATION PLAN FOR MR. RYAN
Effective January 1, 1996, an agreement was entered into with Mr. Ryan by
which he is permitted, prior to the beginning of each calendar year, to elect to
defer a designated portion of his regular annual salary for income tax purposes.
The deferred salary is contributed by the Company into a trust held and managed
by a designated bank, until distributed to Mr. Ryan in the future. The amount of
such deferred salary in fiscal 1996 is included in the above Summary
Compensation Table. The trust is treated as a grantor trust for federal income
tax purposes. As a result, the agreement provides that the annual income tax on
the trust's taxable income shall be paid by the Company and not charged to the
trust. Therefore, the amount of income taxes paid by the Company for the trust
can be considered as additional compensation to Mr. Ryan. As the trust has not
yet completed its first tax year, no such tax payments were made during the last
fiscal year.
OPTION GRANTS IN FISCAL 1996
The following table sets forth additional information with respect to stock
options granted in 1996 to the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
PERCENTAGE AT ASSUMED RATES
OF TOTAL OF STOCK PRICE
NUMBER OF OPTIONS APPRECIATION FOR
SECURITIES GRANTED TO OPTION TERM
UNDERLYING EMPLOYEES EXERCISE EXPIRATION ------------------
NAME OPTIONS IN 1996 PRICE DATE 5% 10%
- ----------------------------- ---------- ---------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
William A. Ryan.............. 20,000 57% $2.125 12/14/05 $26,728 $67,734
25,000(1) 14% $2.125 12/15/01 $33,410 $84,668
15,000(1) 8% $2.125 12/02/03 $20,046 $50,801
George W. Harrison........... 15,000 43% $2.125 12/14/05 $20,046 $50,801
15,000(1) 8% $2.125 11/30/97 $20,046 $50,801
15,000(1)(2) 8% $2.125 11/30/99 $20,046 $50,801
</TABLE>
- ---------------
(1) These options replaced canceled options with the same terms as the canceled
options except for the decreased exercise price.
(2) Pursuant to the vesting schedule in Mr. Harrison's Option Agreement, all
options except for 3,750 shares are currently exercisable. Options for
these 3,750 shares become exercisable on February 2, 1997.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table provides certain information with respect to options
exercised during the fiscal year ended May 31, 1996 by each of the Named
Executive Officers:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT END OPTIONS AT END
ACQUIRED OF FISCAL 1996 OF FISCAL 1996
ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William A. Ryan............ -- -- 60,000 -- $22,500 --
George W. Harrison......... -- -- 41,250 3,750 $15,469 $ 1,406
</TABLE>
REPORT ON REPRICING OF OPTIONS
In order to have the Company's Option Program provide the appropriate
incentive to management and employee stock option holders, the Committee
recommended to the Board of Directors in December, 1995 that all outstanding
stock options be amended to reduce the exercise price to the fair market value
of Team's common stock. On December 14, 1995, the Board of Directors adopted
resolutions reducing the exercise price for all outstanding options to $2.125,
the closing price of the Company's common stock that day on the American Stock
Exchange.
6
<PAGE> 9
The following table sets forth information regarding repricing of options
held by the Named Executive Officers in the fiscal year ended May 31, 1996 and
all repricings of options held by any executive officer during the last ten
completed fiscal years:
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET ORIGINAL
SECURITIES PRICE OF OPTION TERM
UNDERLYING STOCK AT EXERCISE PRICE NEW REMAINING AT
OPTIONS TIME OF AT TIME OF EXERCISE DATE OF
NAME DATE REPRICED REPRICING REPRICING PRICE REPRICING
- -------------------------- -------- ---------- --------- -------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
William A. Ryan........... 12/14/95 25,000 $ 2.125 $ 6.4375 $2.125 6 yrs, 0 mos
12/14/95 15,000 $ 2.125 $ 4.25 $2.125 7 yrs, 10 mos
George W. Harrison........ 12/14/95 15,000 $ 2.125 $ 6.375 $2.125 2 yrs, 0 mos
12/14/95 15,000 $ 2.125 $ 4.00 $2.125 3 yrs, 11 mos
Valerie L. Banner......... 12/14/95 15,000 $ 2.125 $ 6.375 $2.125 1 yr, 11 mos
12/14/95 10,000 $ 2.125 $ 4.00 $2.125 3 yrs, 11 mos
William B. Jacobs......... 12/14/95 7,500 $ 2.125 $ 3.00 $2.125 3 yrs, 11 mos
Margie E. Rogers.......... 12/14/95 3,000 $ 2.125 $ 6.375 $2.125 1 yr, 11 mos
12/14/95 1,000 $ 2.125 $ 4.00 $2.125 3 yrs, 11 mos
George W. Harrison........ 12/16/91 15,000 $ 6.375 $10.75 $6.375 5 yrs, 11 mos
H. Wesley Hall............ 12/16/91 5,000 $ 6.375 $10.75 $6.375 5 yrs, 11 mos
12/16/91 25,000 $ 6.375 $10.75 $6.375 5 yrs, 11 mos
William T. Bramblett...... 12/16/91 15,000 $ 6.375 $10.75 $6.375 5 yrs, 11 mos
Russell G. Donham......... 12/16/91 5,000 $ 6.375 $10.75 $6.375 5 yrs, 11 mos
Richard L. Bischoff....... 12/16/91 15,000 $ 6.375 $10.75 $6.375 5 yrs, 11 mos
Paul O'Neill.............. 12/16/91 7,500 $ 6.375 $10.75 $6.375 5 yrs, 11 mos
</TABLE>
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Jack M. Johnson, Jr. -- Chairman
John L. Farrell, Jr.
Sidney B. Williams
COMPENSATION COMMITTEE REPORT
Pursuant to rules adopted by the Securities and Exchange Commission, the
Compensation Committee of the Board of Directors (the "Committee"), which is
composed entirely of independent outside directors, has furnished the following
report on executive compensation:
The Committee's major responsibilities include, but are not limited to, the
following:
1. Reviewing the Company's major compensation and benefit practices,
policies and programs with respect to executive officers;
2. Reviewing executive officers' salaries and bonuses; and
3. Administering the Company's stock option plans.
Following review and approval by the Committee, all issues pertaining to
the compensation of, and the grant of options to, the executive officers are
submitted to the full Board of Directors for approval.
7
<PAGE> 10
COMPENSATION PHILOSOPHY
The Committee's compensation philosophy operates on several different
levels. First, the Committee must ensure that the compensation is competitive in
order to attract and retain highly qualified executives. In order to facilitate
the first objective, the Committee as a rule considers various compensation
surveys and proxy statements for companies in the industry of comparable size
and complexity to the Company. Second, in order to motivate its executives, the
Committee links executive pay levels to the performance of the Company through
the grant of options pursuant to the stock option program. Third, the Committee
endeavors to reward outstanding individual contributions to the Company and to
set compensation at levels that reflect each executive officer's individual
contribution towards the Company's goals through its bonus and stock option
programs. The Committee endeavors to support the Company's commitment to
providing superior shareholder value. The compensation and related programs are
designed to reward and motivate executives for the accomplishment of the
Company's commitment to its shareholders.
COMPENSATION PROGRAM COMPONENTS
To achieve its compensation goals, the compensation program consists of
four components -- base salary, bonuses, various employee benefits (including
medical and life insurance and 401(k) plan benefits generally available to the
employees of the Company) and the Company's stock option plan. The total program
is structured to deliver a significant percentage of pay through at-risk pay
programs which reward executives if the performance of the Company warrants.
Maximizing shareholder value is a basic principle underlying the Company's pay
programs.
Annually, the Committee seeks to review the base salary of each executive
officer to determine its fairness. In addition, the Committee retained the
services of an independent compensation consultant specializing in executive
compensation to assist the Committee in analyzing the Company's compensation and
benefit practices, policies and programs with respect to its executive officers.
During its annual consideration of the base salaries of the executive officers,
the Committee considers the level of responsibility, experience and performance
of each executive officer. The Committee also takes into account the competitive
conditions of the marketplace, the Company's profitability as well as the cost
of living index. When reviewing competitive conditions of the marketplace, the
Committee considers the Company's pay levels with those of companies of similar
size and complexity. As the Company believes there is no survey data relating to
the Company's service industries, the Company studies compensation surveys for
companies of a similar size and complexity and various other data and
information brought to its attention, including proxy statements, of companies
in the Company's service industry. Based on such information, the Committee
endeavors to ensure that the pay levels fall in the median range of the amounts
paid by the comparable companies. In certain circumstances, bonuses may be
awarded to those executive officers who have made outstanding individual
contributions during the current fiscal year.
Additionally, all executive officers are eligible to receive stock options,
at the Committee's discretion, giving them the right to purchase shares of the
Company's stock at a specified price in the future. By increasing senior
management's equity position in the Company, the interests of the shareholders
and the executives will be more closely aligned. To that end, Messrs. Ryan and
Harrison were granted options to purchase 20,000 and 15,000 shares, respectively
in December 1995 for the price of $2.125 per share.
Subsequent to year end, the Company increased Mr. Harrison's salary to
$145,000 annually. Mr. Harrison had not received a salary increase since June of
1991. In addition, Mr. Harrison entered into a consulting and salary
continuation agreement with the Company on December 24, 1990 which provides for
the Company to retain him as a consultant for a period of 10 years after
termination of his employment. Pursuant to such agreement, Mr. Harrison will
receive an annual consulting fee of $48,000.
In order to ensure Ms. Rogers of a more competitive salary with her peers,
the Company granted her a $7,500 increase in salary during the 1996 fiscal year
as well as a $5,000 bonus which was paid to Ms. Rogers subsequent to year end.
Additionally, as an inducement for Mr. Tholan to join the Company, Mr. Tholan
was granted options to purchase 15,000 shares of the Company, which options vest
over time. The Committee continues to consider its pay levels to be fair and
competitive.
8
<PAGE> 11
PERFORMANCE MEASURES
When evaluating annual executive compensation, the Committee considers the
Company's earnings, adjusted for certain unusual or nonrecurring items, return
on net investment and cash flows. These factors are compared to the Company's
prior year's performance, its annual business plan and the performance of other
companies which operate in the same industry segments as the Company. These
performance measures assist the Committee in ensuring that the interests of its
shareholders, as well as its executives, are represented in a fair and equitable
manner.
No specific fixed weighting or formula is applied to such performance
measures. Rather, the Committee exercises its judgment in evaluating financial
and non-financial factors and in determining appropriate compensation.
FISCAL 1996 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Ryan is a party to an employment agreement with the Company. Mr. Ryan's
employment agreement terminates August 31, 1997. Pursuant to the terms of such
employment agreement, Mr. Ryan will receive an annual salary of $300,000 for the
current year. Further, Mr. Ryan is guaranteed a bonus equal to 20% of his salary
during each fiscal year during the term of the employment agreement that the
Company's after tax earnings equal or exceed $1,000,000. The employment
agreement requires ninety (90) days' prior written notice in the event Mr. Ryan
is terminated without cause. In such event Mr. Ryan would be entitled to three
months' severance pay. Pursuant to the terms of the employment agreement, Mr.
Ryan has agreed not to disclose any confidential information regarding the
Company without the prior written consent of the Company and, under certain
circumstances, not to compete with the Company for a period of two years
following his termination of employment.
During fiscal 1996, Mr. Ryan was granted options to purchase 20,000 shares
of Company stock. Please see also "Deferred Compensation Plan for Mr. Ryan."
OTHER
The Omnibus Budget Reconciliation Act of 1993 (the "Act") restricts the
ability of a publicly-held corporation to deduct compensation in excess of
$1,000,000 paid to its Chief Executive Officer and the four most highly
compensated officers. During the 1996 fiscal year, the threshold was not met for
any of the executive officers. However, the Committee continually reviews all
aspects of the Act in order to determine future compliance issues regarding
same.
This Compensation Committee Report was for the most part prepared by
management at the direction of the Committee, and approved by the Committee.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Jack M. Johnson, Jr. -- Chairman
John L. Farrell, Jr.
Sidney B. Williams
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Williams served on the Committee and Board of Directors during fiscal
1996. Mr. Williams is also a sole shareholder of a professional corporation
which is a partner in the law firm of Chamberlain, Hrdlicka, White, Williams and
Martin in Houston, Texas which rendered services to the Company during fiscal
1996. Fees to the law firm did not exceed five percent of that law firm's gross
revenue for its last full fiscal year. In addition, each of the members of the
Committee has been granted options under the Company's Non-Employee Director
Plan.
9
<PAGE> 12
COMPARISON OF TOTAL SHAREHOLDER RETURN
The following graph compares the Company's cumulative total stockholder
return on its common stock for a five-year period (May 31, 1991 to May 31,
1996), with the cumulative total return of the American Stock Exchange Market
Value Index ("ASEMVI"), and a peer group of companies selected by the Company.
The "Peer Group" is described in more detail below. The graph assumes that the
value of the investment in the Company's common stock and each index was $100 at
May 31, 1991 and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) TEAM INC ASEMVI PEER GROUP
<S> <C> <C> <C>
1991 100 100 100
1992 78 106 88
1993 58 118 72
1994 50 118 58
1995 21 132 41
1996 30 164 48
</TABLE>
ASSUMES INITIAL INVESTMENT OF $100
* TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
NOTE: TOTAL RETURNS BASED ON MARKET CAPITALIZATION
The peer group is composed of five companies which provide environmental
emissions monitoring, consulting and/or leak repair services. Certain of the
members of the peer group became reporting companies pursuant to Section 15(d)
of the Securities Exchange Act of 1934 during the preceding five fiscal years
(as noted below). The returns of each company have been weighted according to
their respective market capitalization for purposes of arriving at a peer group
average. The members of the peer group are Air and Water Technologies
Corporation, Dames & Moore, Inc. (began reporting in March 1992), International
Testing Services, Inc. (began reporting in August 1991), Kaneb Services, Inc.
and Versar, Inc.
The foregoing graph is based on historical data and is not necessarily
indicative of future performance.
10
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock (the only class of voting securities of
the Company) as of September 12, 1996 of (a) each person known by the Company to
be the beneficial owner of more than 5% of the outstanding Common Stock, (b)
each director or nominee for director of the Company, (c) the Named Executive
Officers and (d) all executive and other officers and directors of the Company
as a group. The information shown assumes the exercise by each person (or all
directors and officers as a group) of the vested stock options owned by such
person and the exercise by no other person (or group) of stock options. Unless
otherwise indicated, the address of each person named below is the address of
the Company at 1019 S. Hood St., Alvin, Texas 77511.
<TABLE>
<CAPTION>
NUMBER OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OWNED(1) PERCENTAGE
------------------------------------------------------ --------------- ----------
<S> <C> <C>
William A. Ryan....................................... 75,500(2) 1.4%
Sidney B. Williams.................................... 111,906(3) 2.1%
1400 Citicorp Center
1200 Smith Street
Houston, Texas 77002
John L. Farrell, Jr................................... 35,000(4) 0.7%
c/o The Morgan Investment Group
5410 S. 94th, E. Ave.
Tulsa, Oklahoma 74145
E. Theodore Laborde................................... 31,886(5) 0.6%
601 Poydras Street, Suite 1850
New Orleans, Louisiana 70130
Jack M. Johnson, Jr................................... 30,000(6) 0.6%
127 N. McCarty
Eagle Lake, Texas 77434
George W. Harrison.................................... 163,584(7)(11) 3.1%
Kenneth M. Tholan..................................... 3,750(8) 0.1%
Margie E. Rogers...................................... 16,513(9)(11) 0.3%
All directors and executive and other officers
as a group (8 persons).............................. 468,139(10)(11) 8.6%
Brinson Partners, Inc................................. 497,600(12) 9.6%
209 South LaSalle
Chicago, Illinois 60604-1295
Dimensional Fund Advisors Inc......................... 328,700(13) 6.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
- ---------------
(1) The information as to beneficial ownership of common stock has been
furnished, respectively, by the persons and entities listed. Each
individual or entity has sole power to vote and dispose of all shares
listed opposite his or its name except as indicated below.
(2) Includes 10,500 shares owned by Joan Ryan, Mr. Ryan's wife, and 60,000
shares which may be acquired pursuant to the exercise of stock options by
Mr. Ryan.
(3) Includes 2,685 shares owned by Nancy Williams, Mr. William's wife, and
1,000 shares held as custodian under the Uniform Gift to Minors Act for Mr.
William's nephews. Mr. Williams disclaims any economic interest in these
shares. Also includes 70,000 shares which may be acquired pursuant to the
exercise of stock options by Mr. Williams.
(Footnotes continued on following page)
11
<PAGE> 14
(4) Includes 30,000 shares which may be acquired pursuant to the exercise of
stock options by Mr. Farrell.
(5) Includes 1,886 shares owned by Mr. Laborde and his wife, Mary Laborde, as
joint tenants. Also includes 30,000 shares which may be acquired pursuant
to the exercise of stock options by Mr. Laborde.
(6) Includes 25,000 shares which may be acquired pursuant to the exercise of
stock options by Mr. Johnson.
(7) Includes 41,250 shares which may be acquired pursuant to the exercise of
stock options by Mr. Harrison.
(8) Includes 3,750 shares which may be acquired pursuant to the exercise of
stock options by Mr. Tholan.
(9) Includes 1,000 shares owned by Robert Rogers, Ms. Roger's husband. Includes
3,750 shares which may be acquired pursuant to the exercise of stock
options by Ms. Rogers.
(10) Includes 263,750 shares which may be acquired pursuant to the exercise of
stock options.
(11) Includes shares allocated to the employee through his participation in the
Company's Employee Stock Ownership Plan and the Salary Deferral Plan and
Trust. According to the latest statements for said plans, the shares are
allocated as follows:
<TABLE>
<CAPTION>
ALL EXECUTIVE AND
OTHER OFFICERS AS A
MR. HARRISON MS. ROGERS GROUP
------------ ---------- -------------------
<S> <C> <C> <C>
Employee Stock Ownership Plan....... 977 175 1,152
Salary Deferral Plan and Trust...... 17,841 2,274 20,115
</TABLE>
- ---------------
(12) The Company has relied upon information contained in an Amendment No. 5 to
Schedule 13G furnished to the Company by Brinson Partners, Inc. According
to the amended Schedule 13G, the shares are owned directly in part by
Brinson Partners, Inc., a Delaware corporation, and in part by Brinson
Trust Company, an Illinois corporation, which is a wholly-owned subsidiary
of Brinson Partners, Inc. Brinson Partners, Inc. is wholly-owned by Brinson
Holdings, Inc., a Delaware corporation, which is wholly-owned by SBC
Holding (USA), Inc., a Delaware corporation, which is wholly-owned by Swiss
Bank Corporation, a Swiss banking corporation.
(13) The Company has relied upon information contained in Amendment No. 3 to
Schedule 13G filed with the SEC on February 20, 1996. Dimensional Fund
Advisors, Inc. ("Dimensional"), a registered investment advisor, is deemed
to have beneficial ownership of 328,700 shares of TEAM, INC stock as of
December 31, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
Fund Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
The Company does not know of any arrangement that may at a subsequent date
result in a change of control of the Company.
PROPOSAL TWO -- APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Audit Committee has recommended and the Board of Directors
has approved and now recommends the appointment of Deloitte & Touche LLP as
independent certified public accountants to audit the Company's accounts for the
fiscal year ended May 31, 1997. The firm has audited the Company's accounts
since 1974. Approval of the appointment will require the affirmative vote of a
majority of the shares represented and voted at the meeting.
A representative of Deloitte & Touche LLP will attend the 1996 Annual
Meeting with the opportunity to make a statement if such representative desires
to do so and to respond to appropriate questions presented at the meeting.
12
<PAGE> 15
OTHER BUSINESS
Management does not intend to bring any business before the meeting other
than the matters referred to in the accompanying notice and at this date has not
been informed of any matters that may be presented to the meeting by others. If,
however, any other matters properly come before the meeting, it is intended that
the persons named in the accompanying proxy will vote, pursuant to the proxy, in
accordance with their best judgment on such matters.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the Company's Annual
Meeting of Shareholders in 1997 must be received by the Company no later than
May 28, 1997 in order to be eligible for inclusion in the Company's Proxy
Statement and form of proxy used in connection with such meeting.
By Order of the Board of Directors
William A. Ryan
Chairman of the Board of Directors,
President and Chief Executive
Officer
September 25, 1996
13
<PAGE> 16
THIS MAP SHOWING THE LOCATION OF TECO MANUFACTURING, INC. IS PROVIDED FOR
THE CONVENIENCE OF SHAREHOLDERS ATTENDING THE 1996 ANNUAL MEETING. COMPLIMENTARY
PARKING WILL BE PROVIDED. TOURS OF THE FACILITY WILL BEGIN AT 2:00 P.M. IN CASE
OF ANY DIFFICULTY, PLEASE TELEPHONE THE COMPANY AT (713) 331-6154.
TEAM, INC.
ANNUAL MEETING
(3795 F.M. 528 EAST)
[MAP]
<PAGE> 17
TEAM, INC.
P The undersigned hereby appoints George W. Harrison and Margie E. Rogers,
and either or both of them, with full power of substitution in each, as
R proxy or proxies of the undersigned to represent and vote all of the
shares of common stock of Team, Inc. ("Company"), which the undersigned is
O entitled to vote at the 1996 Annual Meeting of Shareholders of the Company
to be held on Thursday, October 31, 1996, at 3:00 p.m. Houston time, at
X TECO Manufacturing, Inc., 3795 FM 528 East, Alvin, Texas 77511, and at any
adjournments thereof, as follows:
Y
Election of Directors, Nominees:
William A. Ryan
John L. Farrell, Jr.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY. PLEASE SIGN, DATE AND RETURN THIS PROXY AS SOON AS POSSIBLE IN
THE ENCLOSED ENVELOPE. THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO CHOICE
IS SPECIFIED FOR A PROPOSAL, THIS PROXY WILL BE VOTED "FOR" THE PROPOSAL.
Any proxies previously given by the undersigned are hereby revoked.
Receipt of Notice of the above Annual Meeting of Shareholders and of the
related Proxy Statement is hereby acknowledged.
-----------------
| SEE REVERSE |
| SIDE |
-----------------
<PAGE> 18
[X] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
WITHHOLD
1. Election of FOR AUTHORITY
two Class [ ] [ ]
I members
of the Board
of Directors:
2. Proposal to approve the FOR AGAINST ABSTAIN
appointment of Deloitte & [ ] [ ] [ ]
Touche as the independent
certified public accountants
of the Company.
3. In their discretion on such other matters as may properly come before the
meeting and any adjournments thereof.
For, except vote withheld from the following nominee(s):
________________________________________________________
SIGNATURE(S)___________________________________ DATE:_____________________, 1996
SIGNATURE(S)___________________________________ DATE:_____________________, 1996
NOTE: (When signing as attorney, executor, administrator, trustee, guardian,
corporate officer or other agent, please give full title.)
