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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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 ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-9950
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Team, Inc. Salary Deferral Plan and Trust
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Team, Inc.
200 Herman Dr.
Alvin, Texas 77511
(281) 331-6154
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TEAM, INC. SALARY DEFERRAL PLAN AND TRUST
Financial Statements on Form 11-K of the Securities and Exchange Commission
for the Years Ended December 31, 1998 and 1997, Supplemental Schedules for
the Year Ended December 31, 1998 and Independent Auditors' Report
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TEAM, INC. SALARY DEFERRAL PLAN AND TRUST
TABLE OF CONTENTS
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<TABLE>
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PAGE
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits, December 31, 1998 and 1997 3
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1998 4
Notes to Financial Statements for the Years Ended December 31, 1998 and 1997 5
SUPPLEMENTAL SCHEDULES:
Supplemental Schedule of Investments, December 31, 1998 9
Supplemental Schedule of 5% Reportable Transactions for the Year Ended
December 31, 1998 10
</TABLE>
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INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of
Team, Inc. Salary Deferral Plan and Trust
Houston, Texas
We have audited the accompanying statements of net assets available for benefits
of Team, Inc. Salary Deferral Plan and Trust (the "Plan") as of December 31,
1998 and 1997, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1998. 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the year
ended December 31, 1998 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of (1) investments as of December 31, 1998 and (2) 5% reportable transactions
for the year ended December 31, 1998 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. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the 1998 basic financial statements and, in our opinion,
are fairly stated in all material respects when considered in relation to the
basic financial statements taken as a whole.
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The supplemental schedule of investments that accompanies the Plan's financial
statements does not disclose the historical cost of certain plan assets held by
the Plan asset manager. Disclosure of this information is required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974.
Houston, Texas
June 5, 1999
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TEAM, INC. SALARY DEFERRAL PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1998 AND 1997
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<TABLE>
<CAPTION>
ASSETS 1998 1997
<S> <C> <C>
INVESTMENTS, At fair value:
Team, Inc., Common Stock Fund $ 783,203 $ 687,268
Kemper Securities, Inc. Mutual funds:
Money Market Fund 1,197,497 1,140,595
Total Return Fund 1,200,745 1,015,529
Growth Fund 2,569,726 2,081,977
U.S. Government Securities Fund 976,223 892,897
Blue Chip Fund 1,629,010 1,372,974
Diversified Income Fund 59,857 82,324
International Fund 196,084 131,105
Kemper-Dreman High Return Equity 168,543
Small Cap Equity 54,257
Loans to participants 806,407 517,494
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Total investments 9,641,552 7,922,163
CASH 8,620 7,314
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NET ASSETS AVAILABLE FOR BENEFITS $ 9,650,172 $ 7,929,477
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</TABLE>
See notes to financial statements.
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TEAM, INC. SALARY DEFERRAL PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
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ADDITIONS TO NET ASSETS AVAILABLE FOR BENEFITS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 378,163
Net appreciation in fair value of investments 491,418
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Total investment income 869,581
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Contributions:
Employee 1,009,347
Employer 245,457
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Total contributions 1,254,804
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Total additions 2,124,385
DISTRIBUTIONS AND BENEFITS PAID TO PARTICIPANTS 403,690
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NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 1,720,695
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 7,929,477
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End of year $ 9,650,172
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</TABLE>
See notes to financial statements.
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TEAM, INC. SALARY DEFERRAL PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
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1. DESCRIPTION OF THE PLAN
The following description of the Team, Inc. Salary Deferral Plan and Trust
(the "Plan") provides only general information. Participants should refer
to the plan agreement for a more complete description of the Plan's
provisions.
GENERAL - The Plan is a defined contribution plan covering all eligible
employees. Employees become eligible to participate in the Plan upon
completion of three months of service. Prior to October 1, 1997 employees
had to complete one year of service to be eligible. Employee contributions
can be invested on a percentage allocation basis in any increment of 5% in
the following funds:
Company Stock Fund - invests in Team, Inc. common stock
Kemper Mutual Funds - as follows:
Money Market Fund - invests in money market portfolios, certificates
of deposit, treasury bills and commercial paper
Total Return Fund - invests in fixed income and equity securities
Growth Fund - invests in common stock of established companies
U.S. Government Securities Fund - invests in obligations issued or
guaranteed by the U.S. government or its agencies
Blue Chip Fund - invests in common stocks of well-capitalized,
established companies that have the potential for growth
Diversified Income Fund - invests in fixed income and equity
securities
International Fund - invests in fixed income and equity securities
Kemper-Dreman High Return Equity Fund - invests in common stocks of
perceived under valued, large U.S. companies
Small Cap Equity Fund - invests in common stocks of small U.S.
companies
The Plan also has a Loan Fund. Participants may borrow from the Loan Fund
up to the lesser of i) one half the vested value of their account or ii)
$50,000. All mutual funds are administered by Kemper Securities, Inc. (the
"Asset Manager").
The Board of Directors of Team, Inc. (the "Company") approved the Plan and
provided for the Plan to begin October 1, 1984. The agreement provided
for, among other things, the qualification of the Plan under Section
401(k) of the Internal Revenue Code, as amended.
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CONTRIBUTIONS - Each participant may elect to have allocated to his or her
account any whole percentage, not exceeding 16%, of that employee's
compensation. For each plan year, the Company may contribute to the Plan a
sum determined by the Board of Directors.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution, his or her portion of the Company's
contribution, and an allocation of the Plan's earnings.
VESTING - Previously, each participant's interest in the amount credited
to his or her account attributable to employee contributions and employer
matching contributions was immediately 100% vested and was not forfeitable
for any reason. The Sixth Amendment to the Plan (the "Sixth Amendment"),
dated October 10, 1991, allows participants who had completed at least
three years of service as of November 30, 1991 to be 100% vested in
employer contributions. Participants who had not completed three years of
service as of November 30, 1991 will become vested in the employer
contributions as determined by the following schedule:
<TABLE>
<CAPTION>
PERCENTAGE OF
EMPLOYER CONTRIBUTION
YEARS OF SERVICE THAT BECOMES VESTED
<S> <C>
Less than one year 0
One year 20
Two years 40
Three years 60
Four years 80
Five years or more 100
</TABLE>
After becoming vested, employer contributions are not forfeitable for any
reason.
Forfeitures of unvested employer contributions will be used to reduce
current and future employer contributions, in accordance with the Sixth
Amendment.
PAYMENT OF BENEFITS - Participants who terminate employment, retire, die
or become totally disabled are entitled to the balance in their accounts.
Benefits are payable either in a lump sum amount or in monthly, quarterly,
semiannual or annual installments over a period not exceeding ten years.
Distributions payable to terminated participants amounted to $306,747 and
$245,619 at December 31, 1998 and 1997, respectively.
ADMINISTRATION OF THE PLAN - The Plan is administered by an Administrative
Committe appointed by the Board of Directors of the Company (the
"Committe"). The Committe consists of Kenneth Tholan, President; Ted
Owen, Vice President and Chief Financial Officer; and Clark Ingram, Vice
President of Human Resources. No compensation is paid by the Plan to the
Committe.
All costs of plan administration are absorbed by the Company.
TERMINATION OF THE PLAN - The Company may terminate the Plan at any time.
In the event of termination of the Plan, the assets held by the Asset
Manager under the Plan will be valued and each participant will be
entitled to distributions for the balance of his or her account.
2. SUMMARY OF ACCOUNTING POLICIES
The financial statements are presented on the accrual basis of accounting.
Plan investments are presented at their fair value determined by quoted
market prices.
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3. FEDERAL INCOME TAXES
The Plan obtained its latest determination letter on January 16, 1996, in
which the Internal Revenue Service stated that the Plan was in compliance
with the applicable requirements of the Internal Revenue Code. The plan
administrator and the Plan's tax counsel believe that the Plan is designed
and being operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, they believe that the Plan is qualified
and the related trust is tax-exempt as of the financial statement date.
A participant is not subject to federal income tax on the employer's
contribution or on the income accruing to his or her account until such
amount is paid to the participant.
4. RELATED PARTY TRANSACTIONS
During the year ended December 31, 1998, the Plan purchased 31,232 shares
of Team, Inc. common stock at a cost of $123,979 and sold 12,285 shares of
Team, Inc. common stock for $51,970 (cost $12,413).
5. FUND INFORMATION
Contributions, distributions and investment income by fund are as follows
for the year ended December 31, 1998:
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Employee contributions:
Team, Inc., Common Stock Fund $ 77,350
Money Market Fund 120,270
Total Return Fund 131,287
Growth Fund 289,564
U.S. Government Securities Fund 87,286
Blue Chip Fund 201,819
Diversified Income Fund 23,302
International Fund 41,991
Kemper-Dreman High Return Equity Fund 22,041
Small Cap Equity Fund 14,437
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Total $ 1,009,347
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Employer contributions:
Team Inc., Common Stock Fund $ 22,494
Money Market Fund 30,201
Total Return Fund 31,596
Growth Fund 69,380
U.S. Government Securities Fund 23,713
Blue Chip Fund 48,162
Diversified Income Fund 4,829
International Fund 9,135
Kemper-Dreman High Return Equity Fund 4,167
Small Cap Equity Fund 1,780
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Total $ 245,457
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</TABLE>
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<TABLE>
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Distributions and benefits paid to participants:
Team Inc., Common Stock Fund $ 8,812
Money Market Fund 104,607
Total Return Fund 51,764
Growth Fund 118,371
U.S. Government Securities Fund 34,078
Blue Chip Fund 78,075
Diversified Income Fund 991
International Fund 4,963
Kemper-Dreman High Return Equity Fund 1,696
Small Cap Equity Fund 333
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Total $ 403,690
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Investment income:
Team Inc., Common Stock Fund $ 26,150
Money Market Fund 57,444
Total Return Fund 161,033
Growth Fund 296,764
U.S. Government Securities Fund 67,519
Blue Chip Fund 197,221
Diversified Income Fund 3,197
International Fund 8,963
Loan Fund 54,906
Kemper-Dreman High Return Equity Fund 8,328
Small Cap Equity Fund (11,944)
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Total $ 869,581
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</TABLE>
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ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
TEAM, INC. SALARY DEFERRAL PLAN AND TRUST
SUPPLEMENTAL SCHEDULE OF INVESTMENTS,
DECEMBER 31, 1998
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<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
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INVESTMENTS, At fair value:
Team, Inc. Common Stock Fund* 216,056 $ 783,203
Kemper Mutual Funds*:
Money Market Fund 1,197,498 1,197,497
Total Return Fund 112,219 1,200,745
Growth Fund 172,581 2,569,726
U.S. Government Securities Fund 111,061 976,223
Blue Chip Fund 89,852 1,629,010
Strategic Income Fund 10,410 59,857
International Fund 17,307 196,084
Kemper-Dreman High Return Equity Fund 4,922 168,543
Small Cap Equity Fund 2,933 54,257
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Total Kemper Mutual Funds 8,835,145
Loans to participants (with interest rates ranging from 6% to 11%) 806,407
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TOTAL $ 9,641,552
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</TABLE>
* Party-in-interest
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ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
TEAM, INC. SALARY DEFERRAL PLAN AND TRUST
SUPPLEMENTAL SCHEDULE OF 5% REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
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<TABLE>
<CAPTION>
NUMBER NUMBER
OF PURCHASE OF SALES REALIZED
DESCRIPTION PURCHASES PRICE SALES PRICE GAIN (LOSS)
Company Stock Fund
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Team, Inc. Common Stock Fund* 29 $123,979 8 $51,970 $39,557
</TABLE>
* Party-in-interest
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