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EXHIBIT 99(a)
TEAM, INC. 1998 INCENTIVE STOCK OPTION PLAN
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TEAM, INC.
1998 INCENTIVE STOCK OPTION PLAN
The following Team, Inc. 1998 Incentive Stock Option Plan (the "Plan")
has been adopted by the Board of Directors of Team, Inc. effective beginning on
January 29, 1998 subject to approval by the shareholders of the Company no later
than twelve months following the adoption by the Board.
1. Purpose. The Plan is intended to advance the interests of Team, Inc.
(the "Company"), its shareholders, and its subsidiaries by encouraging and
enabling selected key employees of the Company upon whose judgment, initiative
and effort the Company is largely dependent for the successful conduct of its
business, to acquire and/or increase and retain a proprietary interest in the
Company by ownership of its stock.
2. Definitions.
(a) "Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Affiliates" means, except to the extent otherwise not
permitted under Section 424(f) of the Code, any one or more
corporations which are members of a "parent-subsidiary controlled
group" as such term is defined in Section 1563(a)(1) of the Code,
except that "at least 50 percent" shall be substituted for "at least 80
percent" each place it appears in Section 1563(a)(1) of the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means the Compensation Committee, or such
other committee as designated by the Board of Directors, vested with
authority for administration of the Plan by the Board pursuant to
Paragraph 3.
(f) "Common Stock" means the Company's $0.30 par value common
stock.
(g) "Date of Grant" means the date on which an Option is
granted under the Plan.
(h) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
(i) "Exercise Price" means the value per share of Common Stock
that is equal to one hundred percent (100%) of the Fair Market Value of
a share of Common Stock on the last date preceding the Date of Grant on
which sales of the Common
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Stock occurred on the American Stock Exchange or other primary market
or exchange on which the Common Stock traded.
(j) "Fair Market Value" means the closing price of the Common
Stock reported on the composite tape or other reporting medium (for
securities listed on the American Stock Exchange or other primary
market or exchange on which the Common Stock is traded) as of the
relevant date; provided, however, that if the Common Stock does not
trade on the relevant date, such price shall be determined based upon
the closing price of the Common Stock on the next preceding date on
which trades occurred; and provided further, however, that should the
primary market or exchange on which the Common Stock is traded adopt a
continuous twenty-four hour trading policy, "Fair Market Value" for
purposes of this Plan shall mean the price of the Common Stock on the
last trade prior to 4:30 p.m., New York time, on any relevant date.
(k) "Option" means an option granted under the Plan.
(l) "Optionee" means a person to whom an Option, which has not
expired, has been granted under the Plan.
(m) "Successor" means the legal representative of the estate
of a deceased Optionee or the person or persons who acquire the right
to exercise an Option by bequest or inheritance or by reason of the
death of any Optionee.
(n) "Term of Plan" means that period which commences January
29, 1998, and terminates on January 28, 2008, or such earlier date as
the Board hereafter determines.
(o) "Termination of Employment" of an Optionee means the
cessation of such Optionee's relationship as an employee of the Company
or Affiliate (for federal tax purposes).
3. Administration of Plan. The Plan shall be administered by the
Committee of two or more members. The Committee shall report all action taken by
it to the Board. Except when the Board determines otherwise, the Committee shall
consist of the members of the Compensation Committee of the Board of Directors.
All members of the Committee shall qualify as both "non-employee directors," as
defined in Rule 16b-3(b)(3) promulgated under the Act and "outside directors"
within the meaning of Section 162(m) of the Code. The Committee shall have full
and final authority in its discretion, subject to the provisions of the Plan, to
determine the key employees to whom and the time or times at which Options shall
be granted and the number of shares of Common Stock covered by each Option; to
construe and interpret the Plan; to determine and interpret the terms and
provisions of the respective option agreements, which need not be identical as
between Optionees, including, but without limitation, terms covering the payment
of the Option price; and to make all other determinations and take all other
actions deemed necessary or advisable for the proper administration of the Plan.
All such actions and determinations shall be conclusively binding for all
purposes and upon all persons.
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4. Common Stock Subject to Options. The aggregate number of shares of
the Company's Common Stock which may be issued upon the exercise of Options
granted under the Plan shall not exceed 500,000, subject to adjustment under the
provisions of Paragraph 7. The shares of Common Stock to be issued upon the
exercise of Options may be authorized but unissued shares, shares issued and
reacquired by the Company or shares bought on the market for the purposes of the
Plan. In the event any Option shall, for any reason, terminate or expire or be
surrendered without having been exercised in full, the shares subject to such
Option but not purchased thereunder shall again be available for Options to be
granted under the Plan.
5. Participants. Options may be granted under the Plan to any person
who is a key employee of the Company or Affiliate selected by the Committee for
participation in this Plan.
6. Option Agreements. Any Option granted under this Plan shall be
evidenced by an agreement ("Option Agreement"), which shall be approved as to
form and substance by the Committee. Each such Option Agreement shall be
executed by an officer of the Company and the applicable Optionee. All Options
and Option Agreements granted under the provisions of this Plan shall be subject
to the following limitations and conditions:
(a) Option Price. The Option price per share with respect to
each Option shall be the Exercise Price.
(b) Period of Option. The expiration date of each Option shall
be fixed by the Committee at the Date of Grant, subject to subsequent
extension from time to time by the Committee, but in no event shall the
expiration date be fixed on or extended to a date which is later than
ten years from the Date of Grant.
(c) Holding Period. No Common Stock issued pursuant to
exercise of an Option granted pursuant to this Plan may, unless the
Committee determines otherwise, be sold, transferred, assigned or
otherwise disposed of within six months following the Date of Grant of
the Option. However, for purposes of a qualifying disposition under
Section 422 of the Code, such Common Stock should not be disposed of
within two years following such Date of Grant or one year following the
issuance of such Common Stock.
(d) Shareholder Rights. Neither an Optionee nor his Successor
shall have any of the rights of a shareholder of the Company by reason
of holding an Option, and such shareholder rights will not exist until
the certificates evidencing the shares of Common Stock purchased under
the Option are properly delivered to such Optionee or his Successor.
(e) Exercise of Option. Each Option shall be exercisable from
time to time over a period commencing on the Date of Grant and ending
upon the expiration or termination of the Option; provided, however,
the Committee may, by the provisions of any Option Agreement, postpone
in whole or in part the vesting or exercisability of the Option and
limit the number of shares purchasable thereunder in any period or
periods of time during which the Option is exercisable. Payment of the
Exercise Price for shares of Stock purchased under this Plan shall be
made in full
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and in cash or by certified or cashier's check made payable to the
Company or a combination thereof. However, the Committee in its
discretion may allow payment for shares of Stock purchased under any
Option or limited part thereof to be made in whole or in part in Common
Stock which has been owned by the Optionee for any period prescribed by
the Committee prior to the exercise. In the event that Common Stock is
utilized in consideration for the purchase upon the exercise of an
Option, then such Common Stock shall be valued at the Fair Market Value
on the date of exercise. Exercise of an Option shall not be effective
until the Company has received written notice of exercise. Such notice
must specify the number of whole shares to be purchased and be
accompanied by payment in full of the aggregate Exercise Price for the
number of shares purchased. The Company shall not in any case be
required to sell, issue, or deliver a fractional share with respect to
any Option.
(f) Nontransferability of Option. No Option shall be
transferable or assignable by an Optionee, otherwise than by will or
the laws of descent and distribution. Each Option shall be exercisable,
during the Optionee's lifetime, only by such Optionee. No Option shall
be pledged or hypothecated in any way and no Option shall be subject to
execution, attachment, or similar process.
(g) Termination of Employment. Except as provided in
subparagraph (h) below, upon an Optionee's Termination of Employment
his Option privileges shall be limited to the shares which were
immediately purchasable by him at the date of such termination, and
such Option privileges shall be exercisable by such Optionee for three
months after the date of such termination, at which time such Option
shall expire. The Committee may, by the terms of the Option Agreement,
provide for a longer period of six months instead of the three months
provided in the preceding sentence for longer term employees. The
granting of an Option to an eligible person does not alter in any way
the Company's existing rights to terminate such person's employment at
any time for any reason, nor does it confer upon such person any rights
or privileges except as specifically provided for in the Plan.
(h) Death of Optionee. If an Optionee dies while in the employ
of the Company, such Optionee's Option to purchase the total number of
the shares covered by the applicable Option Agreement shall thereupon
become fully exercisable and shall remain exercisable by the Optionee's
Successor until the close of the business day on or immediately
preceding the first annual anniversary date of the Optionee's death, at
which time such Option shall expire.
(i) Additional Limitations for Incentive Stock Options.
Options to be granted under the Plan are intended to qualify as
"incentive stock options" as defined in Section 422 of the Code. No
Options shall be granted to any Participant who is not eligible to
receive incentive stock options as provided in Section 422 of the Code.
No Options shall be granted to any Participant if, immediately before
the grant of an Option, such Participant owns more than 10% of the
total combined voting power of all classes of stock of the Company or
its Affiliates (as determined in accordance with the stock attribution
rules contained in Section 424(d) of the Code). Provided, the preceding
sentence shall not apply if at the time the Option is granted, the
Option
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Price is increased to an amount equal to 110 percent of the Fair Market
Value and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted. The
aggregate Fair Market Value (determined as of the time the Option is
granted) of the Stock with respect to which Options are exercisable for
the first time by any Participant during any calendar year (under all
incentive stock option plans qualified under Section 422 of the Code
sponsored by the Company or any Affiliate) shall not exceed
$100,000.00.
7. Adjustments.
(a) In the event that the outstanding shares of Common Stock
of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company or of another corporation, by reason of a
recapitalization, reclassification, stock split-up, combination of
shares, or dividend or other distribution payable in capital stock,
appropriate adjustment shall be made by the Committee in the number and
kind of shares for the purchase of which Options may be granted under
the Plan. In addition, the Committee shall make appropriate adjustment
in the number and kind of shares as to which outstanding Options, or
portions thereof then unexercised, shall be exercisable, to the end
that the proportionate interest of the holder of the Option shall, to
the extent practicable, be maintained as before the occurrence of such
event. Such adjustment in outstanding Options shall be made without
change in the total price applicable to the unexercised portion of the
Option but with a corresponding adjustment in the Option price per
share.
(b) In the event that the Board shall adopt resolutions
recommending the dissolution or liquidation of the Company, any Option
granted under the Plan shall terminate as of a date to be fixed by the
Committee, provided that not less than thirty (30) days' written notice
of the date so fixed shall be given to each Optionee and each such
Optionee shall have the right during such period to exercise his Option
as to all or any part of the shares covered thereby, including shares
as to which such Option would not otherwise be exercisable by reason of
an insufficient lapse of time.
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly owned subsidiary of another
company after the effective date of the Reorganization, then
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion or exchange of the shares under outstanding
and unexercised stock options for securities of another
corporation, then the Committee shall take such action, and
the Options shall terminate, as provided in subparagraph (b)
of this Paragraph 7; or
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(ii) If there is a Reorganization Agreement and if
the Reorganization Agreement specifically provides for the
change, conversion, or exchange of the shares under
outstanding and unexercised stock options for securities of
another corporation, then the Committee shall adjust the
shares under such outstanding and unexercised stock options
(and shall adjust the shares remaining under the Plan which
are then available to be optioned under the Plan, if the
Reorganization Agreement makes specific provision therefor) in
a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change,
conversion, or exchange of such stock and such Options.
(d) The term "Reorganization" as used in subparagraph (c) of
this Paragraph 7 shall mean any statutory merger, statutory
consolidation, sale of all or substantially all of the assets of the
Company, or sale, pursuant to an agreement with the Company, of
securities of the Company pursuant to which the Company is or becomes a
wholly owned subsidiary of another company after the effective date of
the Reorganization. The provisions of Paragraph 7(c) above shall comply
with Section 424(a) of the Code except to the extent the Committee
determines otherwise.
(e) Adjustments and determinations under this Paragraph 7
shall be made by the Committee, whose decisions shall be final,
binding, and conclusive.
8. Restrictions on Issuing Shares. The exercise of each Option shall be
subject to the condition that if at any time the Company shall determine in its
discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange or under
any state or federal law, or that the consent or approval of any regulatory
body, is necessary or desirable as a condition of, or in connection with, such
exercise or the delivery or purchase of shares pursuant thereto, then in any
such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.
Without limiting the foregoing, the Company will not be obligated to sell any
Shares hereunder unless the Shares are at the time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. The Optionee shall make such investment
representations to the Company and shall consent to the imposition of such
legends on the stock certificates as are necessary, in the opinion of the
Company's counsel, to secure to the Company an appropriate exemption from
applicable securities laws.
9. Use of Proceeds. The proceeds received by the Company from the sale
of Common Stock pursuant to the exercise of Options granted under the Plan shall
be added to the Company's general funds and used for general corporate purposes.
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10. Amendment, Suspension, and Termination of Plan.
(a) The Board shall have complete discretionary authority and
power to amend, suspend or terminate the Plan at any time, subject to
the following provisions:
(b) An amendment increasing the number of shares of Common
Stock provided in Paragraph 4 above, may not be made without
shareholder approval.
(c) The Board may not, without the relevant Optionee's written
consent, modify the terms and conditions of an Option previously
granted under the Plan.
(d) No amendment, suspension or termination of the Plan shall,
without the relevant Optionee's written consent, alter, terminate or
impair any right or obligation under any Option previously granted
under the Plan.
(e) Unless previously terminated, the Plan shall terminate
with respect to the issuance of any new Options, and no more Options
may be granted after January 28, 2008. The Plan shall continue in
effect with respect to Options granted before termination of the Plan
until such Options have been settled, terminated, or forfeited.
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