<PAGE> 1
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 Section 240.14a-11(c) or Section 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] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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.
200 HERMANN DRIVE
ALVIN, TEXAS 77511
(281) 331-6154
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 5, 2000
To the Shareholders of Team, Inc.:
The 2000 Annual Meeting of Shareholders of Team, Inc. (the "Company") will
be held on Thursday, October 5, 2000 at 3:00 p.m. Central Standard Time, at the
Company's offices, 200 Hermann Drive, Alvin, Texas 77511 for the following
purposes:
1. To elect two persons to serve as Class II 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, LLP as the independent certified public accountants to
audit the Company's accounts for the fiscal year ending May 31, 2001.
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 August 18, 2000
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 2000 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
/s/ PHILIP J. HAWK
Philip J. Hawk
Chairman of the Board of Directors
and Chief Executive Officer
September 1, 2000
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD PROMPTLY.
<PAGE> 3
TEAM, INC.
200 HERMANN DRIVE
ALVIN, TEXAS 77511
(281) 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 2000 Annual
Meeting of Shareholders (the "2000 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 is being
mailed to shareholders beginning on or about September 1, 2000.
The Company will bear the 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 2000 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 II
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, 2001; 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. Ted W. Owen 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 August 18, 2000, the record date for
determining shareholders entitled to vote at the 2000 Annual Meeting, the
Company had 8,138,904 shares of common stock, $0.30 par value per share ("Common
Stock"), outstanding and entitled to vote. 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 August 18, 2000, 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.
<PAGE> 4
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.
The Board of Directors has nominated two Class II 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 2003, and to hold office until their
successors are duly elected and qualified. Messrs. Jack M. Johnson, Jr. and E.
Theodore Laborde have been nominated by the Board of Directors to stand for
re-election as Class II 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 2000 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 any 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 August 18, 2000 concerning the
nominees for election at the 2000 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. E. Theodore Laborde............................... 62 Director 1991
Mr. Jack M. Johnson, Jr. ............................. 62 Director 1992
</TABLE>
Mr. Laborde served in various capacities with J&H Marsh & McLennan, Inc.,
an insurance brokerage firm, in New Orleans for 35 years until his retirement in
1997. From 1982 until his retirement, Mr. Laborde acted as Managing Director of
the New Orleans operation. J&H Marsh & McLennan, Inc. is a subsidiary of Marsh &
McLennan Companies. Mr. Laborde is a director of Gulf Coast Bank & Trust Co. in
New Orleans, Louisiana and is involved in various privately held family
businesses.
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. Mr. Johnson is also a director of Security State Bank
in Anahuac, Texas and a director of Allstar Systems in Houston, Texas.
2
<PAGE> 5
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>
PRESENT POSITION DIRECTOR EXPIRATION OF
NAME AGE WITH THE COMPANY SINCE PRESENT TERM
---- --- ---------------- -------- -------------
<S> <C> <C> <C> <C>
Philip J. Hawk.................. 46 Chairman of the Board and 1998 2002
Chief Executive Officer
George W. Harrison.............. 72 Director 1995 2001
Sidney B. Williams.............. 66 Director 1973 2001
Louis A. Waters................. 62 Director 1998 2002
</TABLE>
Mr. Hawk was appointed Chairman of the Board and Chief Executive Officer of
the Company in November 1998. From 1993 to 1998, Mr. Hawk held the position of
President and Chief Executive Officer of EEOT Energy Partners, L.P., an energy
marketing and service company. Mr. Hawk is also a director of Highland Insurance
Group, Inc., a New York Stock Exchange listed company.
Mr. Harrison served as Senior Vice President of the Company from 1987 until
his retirement in 1997. During his tenure with the Company, Mr. Harrison was
involved in most aspects of the Company including operations, engineering,
manufacturing, marketing and research and development.
Mr. Williams is the 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.
Mr. Waters is currently the Chairman of the Board of Tyler Technologies,
Inc. ("Tyler"), a New York Stock Exchange listed company. Tyler's principal
business is providing information management services to local governments. Mr.
Waters was elected to Tyler's Board of Directors in August 1997 and elected
Chairman of the Board in October 1997. In addition, Mr. Waters is one of the
founders and was the first Chairman of the Board of Browning-Ferris Industries,
Inc. ("BFI"). He served as Chairman and Chief Executive Officer from 1969
through 1980, Chairman of BFI's Executive Committee from 1980 through 1988, and
Chairman of the Finance Committee from 1988 to March 1997. Mr. Waters also
directed BFI's international activities, serving as Chairman and Chief Executive
Officer of BFI International, Inc. from 1991 to March 1997, when he retired from
full-time duty with BFI.
Mr. Williams and Mr. Laborde are brothers-in-law.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held four regular meetings during the fiscal year
ended May 31, 2000. No director attended fewer than 75% of the meetings held
during the period for which he served as a member of 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. Hawk, Williams and Waters. 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 five times during fiscal 2000.
The Audit Committee is composed of Messrs. Laborde, Harrison and Waters.
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
3
<PAGE> 6
other duties or functions deemed appropriate by the Board. The Audit Committee
met two times during fiscal 2000.
The Compensation Committee, composed of Messrs. Johnson and Williams,
reviews management performance and makes recommendations to the Board of
Directors concerning management compensation and other corporate benefits. The
Compensation Committee met three times during fiscal 2000 regarding specific
employee matters.
AUDIT COMMITTEE REPORT
The audit committee consists of three members of the Company's Board of
Directors. Each committee member is independent, as that term is defined in
Section 121 of the American Stock Exchange's ("AMEX") listing standards. In
January 2000, the Board of Directors adopted a written charter for the audit
committee, which is included as Appendix A to this proxy statement.
The audit committee has reviewed and discussed the audited financial
statements for the fiscal year ended May 31, 2000 with management and has
discussed with Deloitte & Touche, the independent auditors for the Company, the
matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards).
The audit committee has also received the written disclosures and the
letter from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees), and has discussed the auditors' independence
with Deloitte & Touche.
Based on the review and discussions referred to above, the audit committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 2000.
E. Theodore Laborde, Chairman
Louis A. Waters
George W. Harrison
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.
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 Company's stock option programs. Third, the
Committee
4
<PAGE> 7
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 plans. 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. 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 and 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. Subsequent to the end of fiscal 2000, each officer of the Company
received an increase in base salary and a bonus commensurate with levels of
responsibility and individual performance.
Additionally, all executive officers are eligible to receive stock options
and bonuses in the form of stock at the Committee's discretion. By increasing
senior management's equity position in the Company, the interests of the
shareholders and the executives will be more closely aligned. The following
stock options were granted in June 2000 under the 1998 Incentive Stock Option
Plan: Mr. Tholan, 13,000 shares; Mr. Owen, 8,000 shares; Mr. Kearns, 8,000
shares; and Mr. Ingram, 4,000 shares. All of the foregoing options have an
exercise price of $1.94 per share. Since the options were granted subsequent to
the end of fiscal 2000, they are not reflected in the option grants table above.
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.
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 fiscal 2000, the threshold was not met for any of
the executive
5
<PAGE> 8
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.
Jack M. Johnson, Jr., Chairman
Sidney B. Williams
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Williams served on the Committee and Board of Directors during fiscal
2000. Mr. Williams is also the 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
2000. Fees to the law firm did not exceed five percent (5%) of that law firm's
gross revenue for its last full fiscal year.
COMPENSATION OF DIRECTORS
All non-employee directors currently receive an annual fee of $20,000 of
which one-half ($10,000) is paid in cash on a quarterly basis. The remaining
$10,000 is paid in the form of Common Stock. The stock payments are made July 1
of each year with the number of shares calculated by dividing $10,000 by the
closing price per share on the preceding business day.
In December 1991, the Company adopted the Non-Employee Directors' Stock
Option Plan (the "Non-Employee Director Plan"). As amended through January 29,
1998, the Non-Employee Director Plan authorizes options to purchase 310,000
shares of Common Stock for directors of the Company who are not employees of the
Company. 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
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 an automatic grant 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. 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. During fiscal 2000, Mr. Waters was granted options to
purchase 15,000 shares with an exercise price of $2.625 per share, pursuant to
his election to the Board of Directors at the 1999 Annual Meeting of
Shareholders.
6
<PAGE> 9
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
AS AS
NAME OF DIRECTOR OR OFFICER AGE DIRECTOR OFFICER POSITION WITH COMPANY
--------------------------- --- -------- ------- ---------------------
<S> <C> <C> <C> <C>
Philip J. Hawk(1)................. 46 1998 1998 Chairman of the Board of
Directors and Chief Executive
Officer
Kenneth M. Tholan................. 61 -- 1996 President and Chief Operating
Officer
Ted W. Owen....................... 48 -- 1998 Vice President, Chief Financial
Officer, Secretary and
Treasurer
John P. Kearns.................... 44 -- 1996 Senior Vice President
Clark A. Ingram................... 44 -- 1996 Vice President
Sidney B. Williams(1)(3).......... 66 1973 -- Director
George W. Harrison(2)............. 72 1995 Director
E. Theodore Laborde(2)............ 62 1991 -- Director
Jack M. Johnson, Jr.(3)........... 62 1992 -- Director
Louis A. Waters(1)(2)............. 62 1998 -- 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 and shortly thereafter was
elected as Vice President. In 1997, he was named Executive Vice President and
Chief Operating Officer and in January 1998 was promoted to President of the
Company. From 1993 to 1996, Mr. Tholan held the position of Vice President and
General Manager for Furmanite America, Inc. (a wholly-owned subsidiary of Kaneb
Services, Inc.) with responsibility for the Southwest Division, as well as
engineering and manufacturing of onsite mechanical services for the refining,
chemical and other related industries.
Mr. Owen joined the Company in February 1998 and was elected Vice
President, Chief Financial Officer, Secretary and Treasurer in April of 1998.
From 1994 to 1997, Mr. Owen held the position of Business Practices Officer for
Alyeska Pipeline Service Co in Anchorage, Alaska.
Mr. Kearns joined the Company in 1980 as a design engineer and assumed the
position of Vice President of Engineering and Manufacturing in 1996. He was
promoted to Senior Vice President in 1998. Mr. Kearns has been involved with the
Company's engineering, manufacturing and research and development functions for
more than the last five years.
Mr. Ingram joined the Company in 1988 as Risk and Human Resource Manager
and assumed his position as Vice President of Human Resources in 1996. Mr.
Ingram has been involved with the Company's human resources, insurance and
employee benefits for more than the last five years.
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, directors and persons who beneficially own more than ten
percent (10%) of a registered class of the Company's equity securities to file
reports of ownership and changes of ownership with the Securities and Exchange
Commission. Officers, directors and greater than 10% beneficial owners are
required to furnish the Company with copies of all Section 16(a) reports they
file.
7
<PAGE> 10
Based solely on its review of the forms received by the Company, or written
representations from certain reporting persons that no Section 16(a) reports
were required for those persons, the Company believes that during the year ended
May 31, 2000, all filing requirements applicable to the Company's officers,
directors and greater than 10% beneficial owners were satisfied.
EMPLOYMENT AND OTHER AGREEMENTS
Mr. Hawk is a party to an employment agreement with the Company in which he
is to serve as the Company's Chief Executive Officer until the earlier of (i)
January 31, 2002, (ii) his voluntary resignation or (iii) his termination with
or without cause by the Company. Mr. Hawk has agreed not to compete with the
Company during the term of the agreement and for a period of two years following
termination of the agreement. Also, Mr. Hawk has agreed not to disclose any
confidential information regarding the Company without the prior written consent
of the Company.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth compensation information for the fiscal
years ended May 31, 2000, 1999 and 1998 for the Chief Executive Officer and the
other executive officers of the Company earning in excess of $100,000 during the
Company's 2000 fiscal year (the "Named Executive Officers"):
COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-----------------------
ANNUAL COMPENSATION RESTRICTED # OF
YEAR -------------------- STOCK SECURITIES ALL OTHER
ENDING SALARY BONUS AWARDS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION MAY 31 ($) ($) ($)(1) OPTIONS ($)(2)
--------------------------- ------ --------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Phillip J. Hawk(3).............. 2000 233,169 15,000 -- --
Chairman of the Board and 1999 121,154 -- -- 350,000
Chief Executive Officer 1998 -- -- --
Kenneth M. Tholan............... 2000 158,169 8,975 -- 60,000 20,625
President and Chief Operating 1999 150,000 31,875 20,250 --
Officer 1998 131,077 20,000 -- --
Ted W. Owen(4).................. 2000 133,169 7,300 -- 20,000
Vice President, Chief
Financial 1999 125,000 5,000 10,125 --
Officer, Secretary and
Treasurer 1998 31,250 -- --
John P. Kearns.................. 2000 99,111 4,550 -- 25,000
Senior Vice President 1999 91,954 13,685 10,125 --
1998 78,118 10,000 -- -- 4,125
</TABLE>
---------------
(1) Represents the number of restricted shares awarded multiplied by the market
price of Team Common Stock on the date of grant. As of May 31, 1999, the
total number and value of restricted shares granted to Mr. Tholan was 6,000
shares ($20,250) and to Messrs. Owen and Kearns was 3,000 shares ($10,125).
The values given do not reflect the fact that the shares are restricted. The
executives are entitled to the same cash dividends on the restricted shares
as holders of regular Common Stock, but cannot sell the shares during the
restricted period. The restricted shares become vested in increments of
one-third ( 1/3)) each July 30 of the years 1999, 2000 and 2001.
(2) Represents the net realized value of options exercised in the years
indicated. Mr. Tholan exercised options to acquire 15,000 shares in fiscal
2000 and Mr. Kearns exercised options to acquire 1,000 shares in fiscal
1998.
(3) Mr. Hawk was named Chairman of the Board of Directors and Chief Executive
Officer effective November 2, 1998.
(4) Mr. Owen joined the Company in February 1998.
8
<PAGE> 11
OPTION GRANTS IN FISCAL 2000
The following table sets forth additional information with respect to stock
options granted in fiscal 2000 to the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENTAGE OF ANNUAL RATES OF STOCK
NUMBER OF TOTAL OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION TERM(1)
UNDERLYING EMPLOYEES IN EXERCISE EXPIRATION ---------------------
NAME OPTIONS FISCAL 2000 PRICE DATE 5% 10%
---- ---------- ------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Philip J. Hawk........ -- -- -- -- --
Kenneth M. Tholan..... 60,000 26.5% $3.50 6/8/09 $132,000 $334,800
Ted W. Owen........... 20,000 8.8% $3.50 6/8/09 $ 44,000 $111,600
John P. Kearns........ 25,000 11.1% $3.50 6/8/09 $ 55,000 $139,500
</TABLE>
---------------
(1) Potential realizable value is based on the assumption that the Common Stock
price appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the option term. The stock prices at the end
of the option term for the options granted in fiscal year 2000 are $5.70 and
$9.07, assuming 5% and 10% appreciation rates, respectively. The amounts of
hypothetical appreciation reflect required calculations at rates set by the
Securities and Exchange Commission and, therefore, are not intended to
represent either historical appreciation or anticipated future appreciation
in the price of Common Stock.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table provides certain information with respect to options
exercised during fiscal 2000 by each of the Named Executive Officers:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES VALUE END OF FISCAL 2000 END OF FISCAL 2000(1)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip J. Hawk......... -- -- 67,463 282,537 -- --
Kenneth M. Tholan...... 15,000 20,625 33,750 51,250 -- --
Ted W. Owen............ -- -- 16,250 18,750 -- --
John P. Kearns......... -- -- 17,500 22,500 -- --
</TABLE>
---------------
(1) The value of unexercised in-the-money options is the difference between (i)
the closing price of the Company's Common Stock on the last trading day of
fiscal 2000 ($2.438) and (ii) the exercise price of the in-the-money
options, multiplied by the number of underlying shares subject to the
options.
9
<PAGE> 12
COMPARISON OF TOTAL SHAREHOLDER RETURN
The following graph compares the Company's cumulative total shareholder
return on its Common Stock for a five-year period (May 31, 1995 to May 31,
2000), 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, 1995 and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN*
[GRAPH]
<TABLE>
<CAPTION>
TEAM, INC. ASEMVI PEER GROUP
---------- ------ ----------
<S> <C> <C> <C>
1995 100.00 100.00 100.00
1996 142.86 124.76 181.21
1997 107.14 122.22 213.76
1998 282.14 154.55 282.54
1999 192.86 174.84 180.87
2000 128.57 205.07 185.30
</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 industrial
and/or leak repair services. 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 C.H. Heist Corp.,
Industrial Holdings, Inc., Kaneb Services, Inc., Matrix Service Company 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 August 18,2000 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 stock options owned by such person
that are currently exercisable or exercisable within 60 days of August 18, 2000.
Unless otherwise indicated, the address of each person named below is the
address of the Company at 200 Hermann Drive, Alvin, Texas 77511.
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING
NUMBER OF SHARES COMMON
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) STOCK
------------------------------------ --------------------- -------------
<S> <C> <C>
Philip J. Hawk........................................... 132,463(2) 1.5%
Kenneth M. Tholan........................................ 69,750(3) *
Ted W. Owen.............................................. 24,250(4) *
John P. Kearns........................................... 26,750(5) *
Sidney B. Williams....................................... 150,735(6) 1.7%
1200 Smith Street, Suite 1400
Houston, Texas 77002
E. Theodore Laborde...................................... 60,715(7) *
601 Poydras Street, Suite 1815
New Orleans, Louisiana 70130
Jack M. Johnson, Jr. .................................... 58,829(8) *
P.O. Box 337
Eagle Lake, Texas 77434
George W. Harrison....................................... 201,892(9) 2.3%
2119 Sieber Drive
Houston, Texas 77017
Louis A. Waters.......................................... 1,224,829(10) 14.0%
520 Post Oak Blvd., Suite 850
Houston, Texas 77027
All directors and executive and other officers as a group
(10 persons)........................................... 1,977,225(11)(12) 22.2%
Houston Post Oak Partners, Ltd. ......................... 1,200,000 13.5%
520 Post Oak Blvd., Suite 850
Houston, Texas 77027
Armstrong International, Inc. ........................... 691,000(13) 7.8%
2081 East Ocean Blvd., 4th Floor
Stuart, Florida 34996-3376
E. Patrick Manuel........................................ 535,500(14) 5.8%
1206 Hwy. 190 West
Eunice, Louisiana 70535
</TABLE>
---------------
* Less than 1% of outstanding Common Stock.
(1) The information as to beneficial ownership of Common Stock has been
furnished, respectively, by the persons and entities listed, except as
indicated below. Each individual or entity has sole power to vote and
dispose of all shares listed opposite his or its name except as indicated
below.
11
<PAGE> 14
(2) Includes 67,463 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000.
(3) Includes 48,750 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000.
(4) Includes 21,250 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000.
(5) Includes 23,750 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000.
(6) 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 95,000 shares, which may be acquired pursuant to the
exercise of stock options currently exercisable or exercisable within 60
days of August 18, 2000.
(7) Includes 1,886 shares owned by Mr. Laborde and his wife, Mary Laborde, as
joint tenants. Also includes 45,000 shares, which may be acquired pursuant
to the exercise of stock options currently exercisable or exercisable
within 60 days of August 18, 2000.
(8) Includes 40,000 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000.
(9) Includes 30,000 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000.
(10) Includes 15,000 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000. Also includes 1,200,000 shares owned by Houston Post Oak
Partners, Ltd., a Texas limited partnership of which Mr. Waters is the sole
general partner. See also "Certain Relationships and Related Transactions."
(11) Includes 402,463 shares, which may be acquired pursuant to the exercise of
stock options currently exercisable or exercisable within 60 days of August
18, 2000.
(12) Includes shares allocated to employees through participation in the
Company's Employee Stock Ownership Plan and the Salary Deferral Plan and
Trust. As of May 31, 2000, 6862 shares are allocated to officers in the
Salary Deferral Plan and Trust and 900 shares in the Employee Stock
Ownership Plan.
(13) The Company has relied upon information contained in Amendment No. 1 to
Schedule 13D filed with the SEC on August 4, 1997. According to the amended
Schedule 13D, 650,000 shares are owned by Armstrong International, Inc. and
41,000 shares are owned by Merrill H. Armstrong and Barbara I. Armstrong,
both of whom are officers of Armstrong International, Inc.
(14) The Company has relied upon information contained in Schedule 13D filed
with the SEC on October 20, 1999, as well as information contained in the
Company's stock records.
The Company does not know of any arrangement that may at a subsequent date
result in a change of control of the Company.
12
<PAGE> 15
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 ending May 31, 2001. 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 2000 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.
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 at 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 2001 must be received by the Company no later than
May 4, 2001 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
/s/ Philip J. Hawk
Philip J. Hawk
Chairman of the Board of Directors
and Chief Executive Officer
September 1, 2000
13
<PAGE> 16
APPENDIX A
TEAM, INC.
CHARTER
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
JANUARY 2000
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: The
financial reports and other financial information provided by Team to any
governmental body or the public; Team's systems of internal controls regarding
finance, accounting, legal compliance and ethics that management and the Board
have established; and Team's auditing, accounting and financial reporting
processes generally. Consistent with this function, the Audit Committee should
encourage continuous improvement of, and should foster adherence to, the
Corporation's policies, procedures and practices at all levels. The Audit
Committee's primary duties and responsibilities are to:
1. Serve as an independent and objective party to monitor Team's
financial reporting process and internal control system.
2. Review and appraise the audit efforts of Team's independent
accountants.
3. Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have a working familiarity with basic finance
and accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by Team or an outside organization.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least two times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or each of these groups believe should be discussed privately. In
addition, the Committee or at least its Chair should meet with the independent
accounts and management quarterly to review the Corporation's financials
consistent with IV.4. below.
A-1
<PAGE> 17
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
1. Review and update this Charter periodically, at least annually, as
conditions dictate.
2. Review the organization's annual financial statements and any reports or
other financial information submitted to any governmental body, or the public,
including any certification, report, opinion, or review rendered by the
independent accountants.
3. Review with financial management and the independent accountants the
10-Q prior to its filing or prior to the release of earnings. The Chair of the
Committee may represent the entire Committee for purposes of this review.
INDEPENDENT ACCOUNTANTS
4. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve the fees and
other compensation to be paid to the independent accountants. On an annual
basis, the Committee should review and discuss with the accountants all
significant relationships the accountants have with Team to determine the
accountants' independence.
5. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances warrant.
6. Periodically consult with the independent accountants out of the
presence of management about internal controls and the fullness and accuracy of
the organization's financial statements.
FINANCIAL REPORTING PROCESSES
7. In consultation with the independent accountants, review of the
integrity of the organization's financial reporting processes, both internal and
external.
8. Consider the independent accountants' judgments about the quality and
appropriateness of Team's accounting principles as applied in its financial
reporting.
9. Consider and approve, if appropriate, major changes to Team's auditing
and accounting principles and practices as suggested by the independent
accountants or management.
PROCESS IMPROVEMENT
10. Establish regular and separate systems of reporting to the Audit
Committee by each of management, the independent accountants and the internal
auditors regarding any significant judgments made in management's preparation of
the financial statements and the view of each as to appropriateness of such
judgments.
11. Following completion of the annual audit, review separately with each
of management, the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions on the
scope of work or access to required information.
12. Review any significant disagreement among management and the
independent accountants in connection with the preparation of the financial
statements.
13. Review of the independent accountants and management the extent to
which changes or improvements in financial or accounting practices, as approved
by the Audit Committee, have been implemented. (This review should be conducted
at an appropriate time subsequent to implementation of changes or improvements,
as decided by the Committee.)
A-2
<PAGE> 18
ETHICAL AND LEGAL COMPLIANCE
14. Review, with the organization's counsel, legal compliance matters
including corporate securities trading policies.
15. Review, with the organization's counsel, any legal matter that could
have a significant impact on the organization's financial statements.
16. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the Board deems
necessary or appropriate.
A-3
<PAGE> 19
THIS MAP IS PROVIDED FOR THE CONVENIENCE OF SHAREHOLDERS ATTENDING THE 2000
ANNUAL MEETING. COMPLIMENTARY PARKING WILL BE PROVIDED. IN CASE OF ANY
DIFFICULTY, PLEASE TELEPHONE THE COMPANY AT (281) 331-6154.
TEAM, INC.
ANNUAL MEETING
(200 HERMANN DRIVE)
[MAP]
<PAGE> 20
TEAM, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
<TABLE>
<CAPTION>
For Withheld For All
All All Except
<S> <C> <C> <C> <C>
1. Election of Directors. [ ] [ ] [ ] _____________________
Nominees: 01) E. Theodore Laborde, 02) Jack M. Johnson, Jr. Nominee Exception
</TABLE>
For all except nominees crossed out.
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
2. Appointment of Independent Certified Public Accountants for the [ ] [ ] [ ]
fiscal year ended May 31, 2001.
Deloitte & Touche LLC
</TABLE>
3. In their discretion, upon any other business which may
properly come before said meeting.
Please sign your name exactly as it appears
below. Joint owners must each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
it appears hereon. If held by a corporation,
please sign in full corporate name by the
president or other authorized officer. If held
by a partnership, please sign in the partnership's
name by an authorized partner or officer.
DATED _______________________________________, 2000
___________________________________________________
Signature
___________________________________________________
Signature, if held jointly, or office or title held
[ ] Check if change of address.
-------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
PLEASE VOTE, SIGN, DATE AND RETURN
THIS PROXY FORM PROMPTLY USING
THE ENCLOSED ENVELOPE.
<PAGE> 21
TEAM, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 5, 2000
The Undersigned hereby appoints Kenneth M. Tholan and Ted W. Owen, with or
without the other, proxies, with full power of substitution, to vote all shares
of common stock that the undersigned is entitled to vote at the Annual Meeting
of the Shareholders of Team, Inc. (the "Company") to be held on Thursday,
October 5, 2000, at 3:00 p.m. local time at the Company's corporate offices,
200 Hermann Drive, Alvin, Texas 77211, and at all adjournments thereof as
follows on reverse side:
This Proxy will be voted as you specified on reverse side. If no
specification is made, the Proxy will be voted FOR the nominees listed in
Item 1, FOR Item 2, and IN THE DISCRETION OF THE PROXIES for such other
business as may properly come before the meeting. Receipt of the Notice of
Annual Meeting of Shareholders and the Proxy Statement dated September 1, 2000
is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE TEAM, INC. BOARD OF DIRECTORS.
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD
USING THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
