As filed with the Securities and Exchange Commission on March 1, 2016

Registration No. 333-                

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Team, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   74-1765729

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

13131 Dairy Ashford, Suite 600

Sugar Land, Texas 77478

(Address, including zip code, of principal executive offices)

 

 

Furmanite Corporation 1994 Stock Incentive Plan, as amended

(Full title of the plan)

 

 

André C. Bouchard

Executive Vice President, Administration, Chief Legal Officer & Secretary

Team, Inc.

13131 Dairy Ashford, Suite 600

Sugar Land, Texas 77478

(281) 331-6154

(Name, address and telephone number of agent for service)

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   ¨    Accelerated filer   x
Non-accelerated filer   ¨   (Do not check if a smaller reporting company)    Smaller reporting company   ¨

 

 

CALCULATION OF REGISTRATION FEE:

 

 

Title of securities

to be registered

 

Amount to be

registered (1)

 

Proposed maximum

offering price

per unit

 

Proposed maximum

aggregate
offering price

 

Amount of

registration fee

Common Stock, $0.30 par value, to be issued pursuant to assumed stock options

  132,546 (2)   $33.19 (3)   $4,399,201.74 (5)   $443.00 (5)

Common Stock, $0.30 par value, to be issued pursuant to assumed restricted stock units and performance stock units

  78,977 (4)   $24.67 (5)   $1,948,362.59 (5)   $196.20 (5)

TOTAL

  N/A   N/A   N/A   $639.20

 

 

(1) Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (“Securities Act”), this registration statement shall also cover any additional shares of the Registrant’s Common Stock that become issuable under the Furmanite Corporation 1994 Stock Incentive Plan, as amended, by reason of any stock dividend, stock split, recapitalization or any other similar transaction effected without the Registrant’s receipt of consideration that results in an increase in the number of the Registrant’s outstanding shares of Common Stock.
(2) Represents shares subject to issuance upon the exercise of stock options outstanding under the Furmanite Corporation 1994 Stock Incentive Plan, as amended, and assumed by the Registrant on February 29, 2016 pursuant to an Agreement and Plan of Merger by and among the Registrant, Furmanite Corporation and TFA, Inc., dated as of November 1, 2015 (the “Merger Agreement”).
(3) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(h) under the Securities Act on the basis of the weighted average exercise price of the outstanding options.
(4) Represents shares subject to issuance in connection with restricted stock units and performance stock units under the Furmanite Corporation 1994 Stock Incentive Plan, and assumed by the Registrant on February 29, 2016 pursuant to the Merger Agreement.
(5) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) and 457(h) of the Securities Act, on the basis of the average of the high and low prices for the Registrant’s common stock reported on the New York Stock Exchange on February 26, 2016 ($24.67 per share).

 

 

 

EXPLANATORY NOTE

Team, Inc. (“Team,” the “Company” or the Registrant”) hereby files this Registration Statement on Form S-8 (the “Registration Statement”) relating to shares of common stock, par value $0.30 per share, of Team (“Team Common Stock”) issuable pursuant to the terms of the Furmanite Corporation 1994 Stock Incentive Plan (the “1994 Plan).

On February 29, 2016, the Company and Furmanite Corporation, a Delaware corporation (“Furmanite”) completed the previously announced merger (the “Merger”) of TFA, Inc., a Delaware corporation and wholly owned subsidiary of the Company, with and into Furmanite, with Furmanite surviving the Merger as a wholly owned subsidiary of the Company, pursuant to the Agreement and Plan of Merger, dated as of November 1, 2015 (the “Merger Agreement”) by and among Team, TFA, Inc., and Furmanite. Furmanite’s common stock, without par value (the “Furmanite Common Stock”) is no longer publicly traded, and each share of Furmanite Common Stock outstanding at the time of the Merger was converted into the right to receive, subject to the terms and conditions of the Merger Agreement, merger consideration consisting of 0.215 shares of Team Common Stock and cash in lieu of fractional shares. Pursuant to the Merger Agreement, the 1994 Plan was assumed by Team at the effective time of the Merger.

Also, at the effective time of the Merger:

 

  •   stock options with respect to shares of Furmanite Common Stock were converted into stock options with respect to Team Common Stock in accordance with the formula set forth in the Merger Agreement, with the same terms and conditions as prior to the completion of the Merger; and

 

  •   each restricted stock unit and performance stock unit with respect to shares of Furmanite Common Stock that was not a specified award (as defined in the Merger Agreement) was converted into a restricted stock unit with respect to Team Common Stock, in accordance with the formula set forth in the Merger Agreement, with the same terms and conditions as prior to the completion of the Merger (except that performance vesting conditions no longer apply to performance stock units).

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

In accordance with Rule 428 under the Securities Act, and the instructional note to Part I of Form S-8, the information specified in Part I of Form S-8 has been omitted from the filing of this registration statement. The documents containing the information specified in Part I of Form S-8 will be sent to plan participants as specified by Rule 428(b)(1) of the Securities Act. Such documents and the documents incorporated by reference herein pursuant to Item 3 of Part II hereof, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act. Team shall maintain a file of such documents in accordance with the provisions of Rule 428(a)(2) of the Securities Act.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3. Incorporation of Documents by Reference.

The following documents have been filed by Registrant with the Securities and Exchange Commission (the “SEC”) and are incorporated into this Registration Statement by reference:

 

  •   Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015, filed with the SEC on August 7, 2015 (including portions of the Registrant’s Proxy Statement for its 2015 annual meeting of stockholders filed with the SEC on August 21, 2015 to the extent specifically incorporated by reference into such Form 10-K);

 

  •   Registrant’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2015, filed with the SEC on October 8, 2015 and Quarterly Report on Form 10-Q for the quarter ended November 30, 2015, filed with the SEC on January 11, 2016;

 

  •   Registrant’s Current Reports on Form 8-K filed with the SEC on July 6, 2015; July 7, 2015; July 9, 2015; August 10, 2015; September 1, 2015; September 28, 2015; October 19, 2015; November 2, 2015 (excluding matters in Item 7.01 and any information pertaining to such Item in Exhibits 99.1 and 99.2 therein, which are not incorporated by reference herein); November 4, 2015; November 10, 2015; December 28, 2015; and March 1, 2016;

 

  •   Registrant’s Current Report on Form 8-K/A filed with the SEC on September 21, 2015; and

 

  •   The description of Registrant’s Common Stock contained in its registration statements filed pursuant to Section 12 of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”) and any amendment or report filed for the purpose of updating such description.

In addition, all documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement, and prior to the filing of a post-effective amendment to this Registration Statement that indicates that all securities offered hereby have been sold or that deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

Unless expressly incorporated into this Registration Statement, a report (or portion thereof) “furnished” on Form 8-K shall not be incorporated by reference into this Registration Statement. To the extent that any proxy statement is

incorporated herein by reference, such incorporation shall not include any information contained in such proxy statement which is not, pursuant to the SEC’s rules, deemed to be “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act.

 

Item 5. Interest of Named Experts and Counsel

Not applicable.

 

Item 6. Indemnification of Directors and Officers.

Reference is made to the provisions of Delaware General Corporation Law (“DGCL”), Article V of the Amended and Restated Bylaws of Registrant (the “Bylaws”) and Article X of the Amended and Restated Certificate of Incorporation of Registrant.

Registrant is a Delaware corporation subject to the applicable indemnification provisions of the DGCL. Section 145 of the DGCL provides for the indemnification, under certain circumstances, of persons who are or were directors, officers, employees or agents of a corporation, or are or were serving at the request of a corporation in such a capacity with another business organization or entity, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in actions, suits or proceedings, whether civil, criminal, administrative, or investigative, brought or threatened against or involving such persons because of such person’s service in any such capacity. In the case of actions brought by or in the right of a corporation, Section 145 provides for indemnification of expenses (including attorneys’ fees) if the person seeking indemnification acted in good faith and in a manner that such person reasonably believed to be in or not opposed to the best interests of the corporation; provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged liable to the corporation unless, upon a determination by the Court of Chancery or the court in which such action or suit was brought, despite the adjudication of liability but in view of all the circumstances of the case, such person is reasonably and fairly entitled to indemnity for such expenses.

The Bylaws provide that any person who was or is made a party or who is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (a “proceeding”) by reason of the fact that such person is or was a director or an officer of Registrant, while serving as a director or officer of Registrant, or is or was serving at the request of Registrant as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by Registrant to the fullest extent authorized by the DGCL against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection with such proceeding, provided that, except under limited circumstances with respect to proceedings to enforce rights to indemnification, Registrant shall indemnify any such person in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized in the first instance by the Board of Directors of Registrant.

The Bylaws further provide that the right to indemnification as set forth in the Bylaws includes the right to be paid by Registrant the expenses (including attorneys’ fees) incurred in defending any such proceeding in advance of its final disposition (an “advancement of expenses”); provided, however, that if the DGCL requires an advancement of expenses incurred by such person his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to Registrant of an undertaking (hereinafter, an “undertaking”), by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified for such expenses under the Bylaws or otherwise.

The Bylaws further provide that Registrant may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of Registrant to the fullest extent of the provisions of Article V of the Bylaws with respect to the indemnification and advancement of expenses of directors and officers of Registrant.

The Amended and Restated Certificate of Incorporation of Registrant provides that no director shall be personally liable to Registrant or its stockholders for monetary damages in breach of fiduciary duty as a director other than liability (i) for any breach of the director’s duty of loyalty to Registrant or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for any payment of a dividend or approval of a stock repurchase that is illegal under Section 174 of the DGCL; or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director will automatically be deemed eliminated and limited to the fullest extent permitted by the DGCL as so amended.

Registrant has purchased and intends to maintain insurance on its behalf and on behalf of any person who is or was a director or officer against any loss arising from any claim asserted against him or her and incurred by him or her in that capacity, subject to certain exclusions and limits of the amount of coverage.

The above discussions of Section 145 of the DGCL and of Registrant’s Amended and Restated Certificate of Incorporation and Bylaws are not intended to be exhaustive and each is respectively qualified in its entity by reference to the applicable statute and Registrant’s Amended and Restated Certificate of Incorporation and Bylaws.

 

Item 7. Exemption From Registration Claimed.

Not Applicable.

 

Item 8. Exhibits.

 

  4.1    Amended and Restated Articles of Incorporation of Team, Inc. (filed as Exhibit 3.1 to Team, Inc.’s Current Report on Form 8-K filed on December 2, 2011).
  4.2    Amended and Restated Bylaws of Team, Inc. (filed as Exhibit 3.1 to Team, Inc.’s Quarterly Report on Form 10-Q filed on April 8, 2014).
  4.3    Certificate representing shares of common stock of Team, Inc. (filed as Exhibit 4(1) to Team, Inc.’s Registration Statement on Form S-1, File No. 2-68928).
  4.4    Furmanite Corporation 1994 Stock Incentive Plan, as amended.
  5.1    Opinion of Locke Lord LLP.
23.1    Consent of KPMG LLP, independent registered public accounting firm for Team, Inc.
23.2    Consent of BKD, LLP, independent public accountants for Qualspec Group, LLC.
23.3    Consent of Locke Lord LLP (included in the opinion of Locke Lord LLP filed as Exhibit 5.1 hereto).
24.1    Power of Attorney (included on the signature page hereto).

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Sugar Land, State of Texas, on March 1, 2016.

 

TEAM, INC.
By:  

/s/ Ted W. Owen

  Ted W. Owen
 

President and Chief Executive Officer

(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Greg L. Boane and Andre C. Bouchard, and each of them severally, as his true and lawful attorneys-in-fact, with power to act, with or without the other, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and anything appropriate or necessary to be done, as fully and for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

SIGNATURE

  

TITLE

 

DATE

/s/ Ted W. Owen

  

President and Chief Executive Officer and Director

(Principal Executive Officer)

  March 1, 2016
Ted W. Owen     

/s/ Jeffrey G. Davis

   Director   March 1, 2016
Jeffrey G. Davis     

/s/ Vincent D. Foster

   Director   March 1, 2016
Vincent D. Foster     

/s/ Philip J. Hawk

   Executive Chairman   March 1, 2016
Philip J. Hawk     

/s/ Sylvia J. Kerrigan

   Director   March 1, 2016
Sylvia J. Kerrigan     

/s/ Emmett J. Lescroart

   Director   March 1, 2016
Emmett J. Lescroart     

SIGNATURE

  

TITLE

 

DATE

/s/ Michael A. Lucas

   Director   March 1, 2016
Michael A. Lucas     

/s/ Louis A. Waters

   Director   March 1, 2016
Louis A. Waters     

/s/ Sidney B. Williams

   Director   March 1, 2016
Sidney B. Williams     

/s/ Greg L. Boane

  

Senior Vice President, Chief Financial Officer and Treasurer

(Principal Financial Officer and Principal Accounting Officer)

  March 1, 2016

INDEX TO EXHIBITS

 

  4.1    Amended and Restated Articles of Incorporation of Team, Inc. (filed as Exhibit 3.1 to Team, Inc.’s Current Report on Form 8-K filed on December 2, 2011).
  4.2    Amended and Restated Bylaws of Team, Inc. (filed as Exhibit 3.1 to Team, Inc.’s Quarterly Report on Form 10-Q filed on April 8, 2014).
  4.3    Certificate representing shares of common stock of Team, Inc. (filed as Exhibit 4(1) to Team, Inc.’s Registration Statement on Form S-1, File No. 2-68928).
  4.4    Furmanite Corporation 1994 Stock Incentive Plan, as amended.
  5.1    Opinion of Locke Lord LLP.
23.1    Consent of KPMG LLP, independent registered public accounting firm for Team, Inc.
23.2    Consent of BKD, LLP, independent public accountants for Qualspec Group, LLC.
23.3    Consent of Locke Lord LLP (included in the opinion of Locke Lord LLP filed as Exhibit 5.1 hereto).
24.1    Power of Attorney (included on the signature page hereto).

Exhibit 4.4

FURMANITE CORPORATION

1994 STOCK INCENTIVE PLAN

Amendment and Restatement

Effective May 9, 2013

TABLE OF CONTENTS

 

     Page  

ARTICLE I PLAN

     1   

1.1 Purpose

     1   

1.2 Term of Plan

     1   

ARTICLE II DEFINITIONS

     2   

2.1 Affiliate

     2   

2.2 Award

     2   

2.3 Board

     2   

2.4 Change of Control

     2   

2.5 Code

     3   

2.6 Committee

     3   

2.7 Company

     3   

2.8 Disability

     3   

2.9 Distribution Date

     4   

2.10 Dividend Equivalent

     4   

2.11 Employee Benefits Agreement

     4   

2.12 Employee

     4   

2.13 Exchange Act

     4   

2.14 Fair Market Value

     4   

2.15 Holder

     4   

2.16 Incentive Option

     4   

2.17 KSI Deferred Compensation Plans

     4   

2.18 Mature Shares

     5   

2.19 Minimum Statutory Tax Withholding Obligation

     5   

2.20 Net Shares

     5   

2.21 Non-Employee Director

     5   

2.22 Nonqualified Option

     5   

2.23 Option

     5   

2.24 Option Agreement

     5   

2.25 Permissible under Section 409A

     5   

2.26 Plan

     5   

2.27 Restricted Stock

     5   

2.28 Restricted Stock Agreement

     5   

2.29 Restricted Stock Award

     5   

2.30 Retirement

     5   

2.31 Restricted Stock Unit

     5   

2.32 Restricted Stock Unit Award

     6   

2.33 Section 409A

     6   

2.34 Stock

     6   

2.35 Substantial Risk of Forfeiture

     6   

2.36 Ten Percent Stockholder

     6   

ARTICLE III ELIGIBILITY

     7   

 

-i-

TABLE OF CONTENTS

(continued)

 

ARTICLE IV GENERAL PROVISIONS RELATING TO AWARDS

     8   

4.1 Authority to Grant Awards

     8   

4.2 Dedicated Shares; Maximum Awards

     8   

4.3 Non-Transferability

     8   

4.4 Requirements of Law

     8   

4.5 Changes in the Company’s Capital Structure

     9   

4.6 Election Under Section 83(b) of the Code

     11   

ARTICLE V OPTIONS

     12   

5.1 Type of Option

     12   

5.2 Exercise Price

     12   

5.3 Duration of Options

     12   

5.4 Amount Exercisable

     14   

5.5 Exercise of Options

     14   

5.6 Substitution Options

     15   

5.7 No Rights as Stockholder

     15   

ARTICLE VI RESTRICTED STOCK AWARDS

     16   

6.1 Restricted Stock Awards

     16   

6.2 Holder’s Rights as Stockholder

     16   

ARTICLE VII RESTRICTED STOCK UNIT AWARDS

     17   

7.1 Authority to Grant Restricted Stock Unit Awards

     17   

7.2 Restricted Stock Unit Award

     17   

7.3 Restricted Stock Unit Award Agreement

     17   

7.4 Dividend Equivalents

     17   

7.5 Form of Payment Under Restricted Stock Unit Award

     17   

7.6 Time of Payment Under Restricted Stock Unit Award

     17   

7.7 No Rights as Stockholder

     17   

ARTICLE VIII ADMINISTRATION

     18   

ARTICLE IX AMENDMENT OR TERMINATION OF PLAN

     19   

ARTICLE X MISCELLANEOUS

     20   

10.1 No Establishment of a Trust Fund

     20   

10.2 No Employment or Affiliation Obligation

     20   

10.3 Forfeiture

     20   

10.4 Tax Withholding

     20   

10.5 Written Agreement

     21   

10.6 Indemnification of the Committee

     21   

10.7 Gender

     22   

10.8 Headings

     22   

10.9 Other Compensation Plans

     22   

 

-ii-

TABLE OF CONTENTS

(continued)

 

10.10 Other Options or Awards

     22   

10.11 Option Adjustments Pursuant to the Employee Benefits Agreement

     22   

10.12 Governing Law

     22   

10.13 Compliance with Section 409A

     22   

 

-iii-

ARTICLE I

PLAN

1.1 Purpose. The Plan is intended to advance the best interests of the Company and its stockholders by providing those persons who have substantial responsibility for the management and growth of the Company and its Affiliates with additional incentives and an opportunity to obtain or increase their proprietary interest in the Company, thereby encouraging them to continue in their employment or affiliation with the Company or any of its Affiliates.

1.2 Term of Plan. No Award shall be granted under the Plan after March 4, 2019. The Plan shall remain in effect until all Awards under the Plan have been satisfied or expired.

 

1

ARTICLE II

DEFINITIONS

The words and phrases defined in this Article shall have the meaning set out in these definitions throughout the Plan, unless the context in which any such word or phrase appears reasonably requires a broader, narrower or different meaning.

2.1 “Affiliate” means any parent corporation and any subsidiary corporation. The term “parent corporation” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the action or transaction, each of the corporations other than the Company owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. The term “subsidiary corporation” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the action or transaction, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

2.2 “Award” means any Incentive Option, Nonqualified Option, Restricted Stock Award or Restricted Stock Unit Award granted under the Plan.

2.3 “Board” means the board of directors of the Company.

2.4 “Change of Control” means the occurrence of any of the following after March 4, 2009:

(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Covered Person”) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of 20 percent or more of either (i) the then outstanding shares of Stock (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Section 2.4(a), the following acquisitions shall not constitute a Change in Control of the Company: (i) any acquisition by the Company, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of Section 2.4(c);

(b) individuals who, as of March 4, 2009, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to March 4, 2009, whose election, or nomination for election, by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors; or

 

2

(c) the consummation of (i) a reorganization, merger or consolidation or sale of the Company or (ii) a disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 80 percent of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be, (B) no Covered Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 80 percent or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; provided, however, that any individual becoming a director subsequent to March 4, 2009 whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors.

2.5 “Code” means the Internal Revenue Code of 1986, as amended.

2.6 “Committee” means a committee of at least two persons appointed by the Board.

2.7 “Company” means Furmanite Corporation, a Delaware corporation.

2.8 “Disability” means, as determined by the Committee in its discretion exercised in good faith, (a) in the case of an Award that is exempt from the application of the requirements of Section 409A a medically determinable mental or physical impairment which, in the opinion of a physician selected by the Committee, shall prevent the Holder from engaging in any substantial gainful activity and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months and which: (i) was not contracted,

 

3

suffered or incurred while the Holder was engaged in, or did not result from having engaged in, a felonious criminal enterprise; (ii) did not result from alcoholism or addiction to narcotics; (iii) did not result from an injury incurred while a member of the Armed Forces of the United States for which the Holder receives a military pension; and (iv) did not result from an intentionally self-inflicted injury and (b) in the case of an Award that is not exempt from the application of the requirements of Section 409A, a physical or mental condition of the Holder where (i) the Holder is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) the Holder is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, the Holder shall submit to an examination by such physician upon request by the Committee.

2.9 “Distribution Date” shall have the meaning specified in the Distribution Agreement by and between the Company, Kaneb Services LLC and Kaneb Pipeline Partners, L.P.

2.10 “ Dividend Equivalent ” means a payment equivalent in amount to dividends paid with respect to the Stock to the Company’s stockholders.

2.11 “Employee Benefits Agreement” means the Employee Benefits Agreement by and between the Company and Kaneb Services LLC, a Delaware limited liability company.

2.12 “Employee” means a person employed by the Company or any Affiliate as a common law employee.

2.13 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.14 “Fair Market Value” of the Stock as of any date means the closing price of the Stock on such date, or, if the Stock was not traded on such date, on the immediately preceding day that the Stock was so traded. However, if the Stock is not listed on a securities exchange, the Fair Market Value will be an amount determined by the Committee in a manner that complies with the requirements of Section 409A.

2.15 “Holder” means a person who has been granted an Award or any person who is entitled to receive Stock under an Award.

2.16 “Incentive Option” means an Option granted under the Plan which is designated as an “Incentive Option” and satisfies the requirements of section 422 of the Code.

2.17 “KSI Deferred Compensation Plans” means the Kaneb Services, Inc. 1996 Supplemental Deferred Compensation Plan, the Kaneb Services, Inc. Non-Employee Directors Deferred Stock Unit Plan, the Kaneb Services, Inc. Deferred Stock Unit Plan, and any other nonqualified deferred compensation plans that the Company may adopt in the future.

 

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2.18 “Mature Shares” means shares of Stock that the Holder has held for at least six months.

2.19 “ Minimum Statutory Tax Withholding Obligation” means, with respect to an Award, the amount the Company, an Affiliate or other subsidiary is required to withhold for federal, state, local and foreign taxes based upon the applicable minimum statutory withholding rates required by the relevant tax authorities.

2.20 “Net Shares” means the shares of Stock to be issued upon exercise of an Option reduced by the number of unencumbered, transferable Mature Shares that would be required to be tendered to the Company to satisfy the exercise price of the Option.

2.21 “Non-Employee Director” means any duly elected member of the Board who is not an Employee.

2.22 “Nonqualified Option” means an Option granted under the Plan other than an Incentive Option.

2.23 “Option” means either an Incentive Option or a Nonqualified Option granted under the Plan to purchase shares of Stock.

2.24 “Option Agreement” means the written agreement which sets out the terms of an Option.

2.25 “Permissible under Section 409A” means with respect to a particular action (such as, the grant, payment, vesting, settlement or deferral of an amount or Award under the Plan) that such action shall not subject the compensation at issue to the additional tax or interest applicable under Section 409A.

2.26 “Plan” means the Furmanite Corporation 1994 Stock Incentive Plan, as set forth in this document and as it may be amended from time to time.

2.27 “Restricted Stock” means stock awarded or purchased under the Plan pursuant to a Restricted Stock Agreement.

2.28 “Restricted Stock Agreement” means the written agreement which sets out the terms of a Restricted Stock Award.

2.29 “Restricted Stock Award” means an Award of Restricted Stock.

2.30 “Retirement” means the termination of an Employee’s employment relationship with the Company and all Affiliates after attaining the age of 55.

2.31 “Restricted Stock Unit” means a restricted stock unit credited to a Holder’s ledger account maintained by the Company pursuant to Article VII.

 

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2.32 “Restricted Stock Unit Award” means an Award granted pursuant to Article VII.

2.33 “Section 409A” means section 409A of the Code and the regulations and other guidance promulgated by the United States Department of Treasury or the United States Internal Revenue Service under section 409A of the Code, or any successor statute.

2.34 “Stock” means the common stock of the Company, no par value, or, in the event that the outstanding shares of common stock are later changed into or exchanged for a different class of stock or securities of the Company or another corporation, that other stock or security. Shares of Stock when issued may be represented by a certificate or by book or electronic entry.

2.35 “Substantial Risk of Forfeiture” shall have the meaning ascribed to that term in Section 409A.

2.36 “Ten Percent Stockholder” means an individual who, at the time the Option is granted, owns stock possessing more than ten percent of the total combined voting power of all classes of stock or series of the Company or of any Affiliate. An individual shall be considered as owning the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors and lineal descendants; and stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust, shall be considered as being owned proportionately by or for its stockholders, partners or beneficiaries.

 

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ARTICLE III

ELIGIBILITY

The individuals who shall be eligible to receive Incentive Options shall be those key Employees of the Company or any of its Affiliates as the Committee shall determine from time to time. The individuals who shall be eligible to receive Awards other than Incentive Options shall be those persons, including Employees, consultants, advisors and directors, who have substantial responsibility for the management and growth of the Company or any of its Affiliates as the Committee shall determine from time to time. Further, shares of Stock may be issued under the Plan to participants and former participants in the KSI Deferred Compensation Plans in satisfaction of the Company’s obligations thereunder.

 

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ARTICLE IV

GENERAL PROVISIONS RELATING TO AWARDS

4.1 Authority to Grant Awards . The Committee may grant Awards to those key Employees of the Company or any of its Affiliates and other eligible persons as it shall from time to time determine, under the terms and conditions of the Plan. Subject only to any applicable limitations set out in the Plan, the number of shares of Stock to be covered by any Award to be granted to any person shall be as determined by the Committee.

4.2 Dedicated Shares; Maximum Awards. The aggregate number of shares of Stock with respect to which Awards may be granted under the Plan to current and former participants in the KSI Deferred Compensation Plans pursuant to the terms thereof is 8,100,000. Such shares of Stock may be issued from treasury shares or authorized but unissued shares. The maximum number of shares with respect to which Options which may be granted to any person under the Plan during any calendar year is 750,000 shares. If a Holder’s Option is cancelled, the cancelled Option continues to be counted against the maximum number of shares of Stock for which Options may be granted to the Holder under the Plan. The number of shares stated in this Section 4.2 shall be subject to adjustment in accordance with the provisions of Section 4.5. If any outstanding Award expires or terminates for any reason or any Award is surrendered, the shares of Stock allocable to the unexercised or unvested portion of that Award may again be subject to an Award under the Plan.

4.3 Non-Transferability. Incentive Options shall not be transferable by the Employee other than by will or under the laws of descent and distribution, and shall be exercisable, during the Employee’s lifetime, only by him. Except as specified in the applicable Award agreements or in domestic relations court orders, Awards other than Incentive Options shall not be transferable by the Holder other than by will or under the laws of descent and distribution, and shall be exercisable, during the Holder’s lifetime, only by him. In the discretion of the Committee, any attempt to transfer an Award other than under the terms of the Plan and the applicable Award agreement may terminate the Award.

4.4 Requirements of Law . The Company shall not be required to sell or issue any shares of Stock under any Award if issuing the shares of Stock would constitute or result in a violation by the Holder or the Company of any provision of any law, statute or regulation of any governmental authority. Specifically, in connection with any applicable statute or regulation relating to the registration of securities, upon exercise of any Award, the Company shall not be required to issue any shares of Stock unless the Committee has received evidence satisfactory to it to the effect that the Holder will not transfer the shares of Stock except in accordance with applicable law, including receipt of an opinion of counsel satisfactory to the Company to the effect that any proposed transfer complies with applicable law. The determination by the Committee on this matter shall be final, binding and conclusive. The Company may, but shall in no event be obligated to, register any shares of Stock covered by the Plan pursuant to applicable securities laws of any country or any political subdivision.

 

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In the event the shares of Stock issuable on exercise of an Option or any other Award are not registered, the Company may imprint on the certificate evidencing the shares of Stock any legend that counsel for the Company considers necessary or advisable to comply with applicable law; or should the shares of Stock be represented by book or electronic entry rather than a certificate, the Company may take such steps to restrict transfer of the shares of Stock as counsel for the Company considers necessary or advisable to comply with applicable law. The Company shall not be obligated to take any other affirmative action in order to cause the exercise of an Option or vesting under an Award, or the issuance of shares of Stock pursuant thereto, to comply with any law or regulation of any governmental authority.

4.5 Changes in the Company’s Capital Structure. (a) The existence of outstanding Awards shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or its rights, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its assets or business or any other corporate act or proceeding, whether of a similar character or otherwise.

(a) If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of Stock outstanding, without receiving compensation for it in money, services or property, then (i) the number, class or series and per share price of shares of Stock subject to outstanding Awards under this Plan shall be appropriately adjusted in such a manner as to entitle a Holder to receive upon exercise of an Award, for the same aggregate cash consideration, the equivalent total number and class or series of shares he would have received had he exercised his Award in full immediately prior to the event requiring the adjustment, and (ii) the number and class or series of shares of Stock then reserved to be issued under the Plan shall be adjusted by substituting for the total number and class or series of shares of Stock then reserved, that number and class or series of shares of Stock that would have been received by the owner of an equal number of outstanding shares of each class or series of Stock as the result of the event requiring the adjustment.

(b) If while unexercised Awards remain outstanding under the Plan (i) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than an entity that was wholly-owned by the Company immediately prior to such merger, consolidation or other reorganization), (ii) the Company sells, leases or exchanges or agrees to sell, lease or exchange all or substantially all of its assets to any other person or entity (other than an entity wholly-owned by the Company), (iii) the Company is to be dissolved or (iv) the Company is a party to any other corporate transaction (as defined under section 424(a) of the Code and applicable Department of Treasury Regulations) that is not described in clauses (i), (ii) or (iii) of this sentence (each such event is referred to herein as a “Corporate Change”), then, except as otherwise provided in an Award agreement or as a result of the Board’s effectuation of one or more of the alternatives described below, there shall be no acceleration of the time at which any Award then outstanding may be exercised, and no later than ten days after the approval by the stockholders of the

 

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Company of such Corporate Change, the Board, acting in its sole and absolute discretion without the consent or approval of any Holder, shall act to effect one or more of the following alternatives, which may vary among individual Holders and which may vary among Awards held by any individual Holder:

(A) accelerate the time at which some or all of the Awards then outstanding may be exercised so that such Awards may be exercised in full for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Board, after which specified date all such Awards that remain unexercised and all rights of Holders thereunder shall terminate;

(B) require the mandatory surrender to the Company by all or selected Holders of some or all of the then outstanding Options held by such Holders (irrespective of whether such Options are then exercisable under the provisions of this Plan or the Option Agreements evidencing such Options) as of a date, before or after such Corporate Change, specified by the Board, in which event the Board shall thereupon cancel such Options and the Company shall pay to each such Holder an amount of cash per share equal to the excess, if any, of the per share price offered to stockholders of the Company in connection with such Corporate Change over the exercise prices under such Options for such shares;

(C) with respect to all or selected Holders, have some or all of their then outstanding Awards (whether vested or unvested) assumed or have a new Award substituted for some or all of their then outstanding Awards (whether vested or unvested) by an entity which is a party to the transaction resulting in such Corporate Change and which is then employing him, or a parent or subsidiary of such entity, provided that (1) such assumption or substitution is on a basis where the excess of the aggregate fair market value of the shares subject to the Award immediately after the assumption or substitution over the aggregate exercise price of such shares is equal to the excess of the aggregate fair market value of all shares subject to the Award immediately before such assumption or substitution over the aggregate exercise price of such shares, and (2) the assumed rights under such existing Award or the substituted rights under such new Award as the case may be will have the same terms and conditions as the rights under the existing Award assumed or substituted for, as the case may be;

(D) provide that the number and class or series of shares of Stock covered by an Award (whether vested or unvested) theretofore granted shall be adjusted so that such Award when exercised shall thereafter cover the number and class or series of shares of stock or other securities or property (including, without limitation, cash) to which the Holder would have been entitled pursuant to the terms of the agreement or plan relating to such Corporate Change if, immediately prior to such Corporate Change, the Holder had been the holder of record of the number of shares of Stock then covered by such Award; or

 

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(E) make such adjustments to Awards then outstanding as the Board deems appropriate to reflect such Corporate Change (provided, however, that the Board may determine in its sole and absolute discretion that no such adjustment is necessary).

In effecting one or more of alternatives (C), (D) or (E) above, and except as otherwise may be provided in an Award agreement, the Board, in its sole and absolute discretion and without the consent or approval of any Holder, may accelerate the time at which some or all Awards then outstanding may be exercised.

(c) In the event of changes in the outstanding Stock by reason of recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes in capitalization occurring after the date of the grant of any Award and not otherwise provided for by this Section 4.5, any outstanding Awards and any agreements evidencing such Awards shall be subject to adjustment by the Board in its sole and absolute discretion as to the number and price of shares of Stock or other consideration subject to such Awards. In the event of any such change in the outstanding Stock, the aggregate number of shares available under this Plan may be appropriately adjusted by the Board, whose determination shall be conclusive.

(d) After a merger of one or more corporations into the Company or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each Holder shall be entitled to have his Restricted Stock appropriately adjusted based on the manner the Stock was adjusted under the terms of the agreement of merger or consolidation.

(e) The issue by the Company of shares of Stock of any class or series, or securities convertible into shares of Stock of any class or series, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe for them, or upon conversion of shares or obligations of the Company convertible into shares or other securities, shall not affect, and no adjustment by reason of such issuance shall be made with respect to, the number, class or series, or price of shares of Stock then subject to outstanding Awards.

4.6 Election Under Section 83(b) of the Code . No Holder shall exercise the election permitted under section 83(b) of the Code with respect to any Award without the written approval of the Chief Financial Officer of the Company. Any Holder who makes an election under section 83(b) of the Code with respect to any Award without the written approval of the Chief Financial Officer of the Company may, in the discretion of the Committee, forfeit any or all Awards granted to him under the Plan.

 

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ARTICLE V

OPTIONS

5.1 Type of Option. The Committee shall specify in an Option Agreement whether a given Option is an Incentive Option or a Nonqualified Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value (determined as of the time an Incentive Option is granted) of the Stock with respect to which incentive stock options first become exercisable by an Employee during any calendar year (under the Plan and any other incentive stock option plan(s) of the Company or any Affiliate) exceeds $100,000, the Incentive Option shall be treated as a Nonqualified Option. In making this determination, incentive stock options shall be taken into account in the order in which they were granted.

5.2 Exercise Price. The price at which Stock may be purchased under an Option shall not be less than 100 percent of the Fair Market Value of the shares of Stock on the date the Option is granted. In the case of any Ten Percent Stockholder, the price at which shares of Stock may be purchased under an Incentive Option shall not be less than 110 percent of the Fair Market Value of the Stock on the date the Incentive Option is granted. An Option granted under the Plan may not be granted with any Dividend Equivalents rights.

5.3 Duration of Options. An Option shall not be exercisable after the earlier of (i) the term of the Option specified in the Option Agreement (which shall not exceed five years from the date the Option is granted in the case of an Incentive Option granted to a Ten Percent Stockholder, or ten years from the date the Option is granted in the case of any other Option), or (ii) the period of time specified herein that follows the Holder’s Retirement, Disability, death or other severance of the employment or affiliation relationship between the Holder and the Company and all Affiliates. Except as specified in Section 10.11, unless the Holder’s Option Agreement specifies otherwise, an Option shall not continue to vest after the severance of the employment or affiliation relationship between the Company and all Affiliates.

(a) General Term of Option. Unless the Option Agreement specifies a shorter term, an Option shall expire on the tenth anniversary of the date the Option is granted. Notwithstanding the foregoing, unless the Option Agreement specifies a shorter term, in the case of an Incentive Option granted to a Ten Percent Stockholder, the Option shall expire on the fifth anniversary of the date the Option is granted.

(b) Early Termination of Option Due to Severance of Employment or Affiliation Relationship (Other Than for Death, Disability or Retirement) . Except as may be otherwise expressly provided in an Option Agreement, (i) an Option that has been granted to a person other than a Non-Employee Director and that has been in effect for at least two years shall terminate on the earlier of the date of the expiration of the general term of the Option or 90 days after the date of the termination of the employment relationship between the Holder and the Company and all Affiliates for any reason other than the death, Disability or Retirement of the Holder, and (ii) an Option that has been granted to a person other than a Non-Employee Director and that has been in effect for less than two years shall terminate on the earlier of the date of the expiration of the general term of the Option or 30 days after the date of the termination of the employment

 

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relationship between the Holder and the Company and all Affiliates for any reason other than the death, Disability or Retirement of the Holder, during which period the Holder shall be entitled to exercise the Option in respect of the number of shares that the Holder would have been entitled to purchase had the Holder exercised the Option on the date of such termination of employment. Whether authorized leave of absence, or absence on military or government service, shall constitute a termination of the employment relationship between the Holder and the Company and all Affiliates shall be determined by the Committee at the time thereof.

Except as may be otherwise expressly provided in an Option Agreement, an Option that has been granted to a Non-Employee Director shall terminate on the earlier of the date of the expiration of the general term of the Option or 90 days after the Non-Employee Director is no longer a director of the Company for any reason other than the death or Disability of the Holder.

(c) Early Termination of Option Due to Death. Unless the Option Agreement specifies otherwise, in the event of the severance of the employment or affiliation relationship between the Holder and the Company and all Affiliates due to death before the date of expiration of the general term of the Option, the Holder’s Option shall terminate on the earlier of the date of expiration of the general term of the Option or 180 days after the Holder’s death.

(d) Early Termination of Option Due to Disability. With respect to an Option granted to a person other than a Non-Employee Director, unless the Option Agreement specifies otherwise, in the event of the severance of the employment relationship between the Holder and the Company and all Affiliates due to Disability before the date of the expiration of the general term of the Option, the Option shall terminate on the earlier of the expiration of the general term of the Option or 90 days after the termination of the employment relationship between the Holder and the Company and all Affiliates terminates due to Disability.

In the event his affiliation relationship is terminated as a result of Disability, a Holder who is a Non-Employee Director may exercise an Option for a period of 180 days after the Non-Employee Director is no longer a director of the Company or until the expiration of the Option period, if sooner, to the extent of the Stock with respect to which the Option could have been exercised by the Holder on the date the Non-Employee Director ceases being a director of the Company.

(e) Early Termination of Option Due to Retirement. Unless the Option Agreement specifies otherwise, if the Holder is an Employee and the employment relationship between the Holder and the Company and all Affiliates terminates by reason of Retirement, the Holder’s Option shall terminate on the earlier of the expiration of the general term of the Option or one day less than three months after the date of the Holder’s termination of employment due to Retirement.

After the death of the Holder, the Holder’s executors, administrators or any person or persons to whom the Holder’s Option may be transferred by will or by the laws of descent and distribution, shall have the right, at any time prior to the termination of the Option to exercise the Option, in respect to the number of shares that the Holder would have been entitled to exercise if the Holder exercised the Option prior to his death.

 

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5.4 Amount Exercisable. Each Option may be exercised at the time, in the manner and subject to the conditions the Committee specifies in the Option Agreement in its sole discretion. If specified in the Option Agreement, an Option will be exercisable in full upon the occurrence of a Change of Control.

5.5 Exercise of Options . Each Option shall be exercised by the delivery of written notice to the Company setting forth the number of shares of Stock with respect to which the Option is to be exercised, together with: (a) cash, a certified check, a bank draft or a postal or express money order payable to the order of the Company for an amount equal to the exercise price under the Option, (b) Mature Shares with a Fair Market Value on the date of exercise equal to the exercise price under the option, (c) an election to make a cashless exercise through a registered broker-dealer or (d) except as specified below, any other form of payment which is acceptable to the Committee, and specifying the address to which the certificates for the shares of Stock are to be mailed or the information necessary for the Company to effect an electronic transfer of the shares of Stock. If Mature Shares are used for payment by the Holder, the aggregate Fair Market Value of the shares of Stock tendered must be equal to or less than the aggregate exercise price of the shares of Stock being purchased upon exercise of the Option, and any difference must be paid pursuant to (a) above. As promptly as practicable after receipt of written notification and payment, the Company shall deliver the number of shares of Stock with respect to which the Option has been exercised, issued as designated by the Holder. Delivery of the shares of Stock shall be deemed effected for all purposes when the transfer agent of the Company shall have deposited the certificates in the United States mail, to the address specified by the Holder, or when the shares have been transferred electronically as designated by the Holder. In lieu of tendering the Mature Shares to the Company for the exercise price pursuant to (b) above, the Company may, in its sole discretion, accept documentation provided by the Holder that the Holder owns the Mature Shares necessary for exercise and would be able to deliver them to the Company if requested by the Company, in which case the Company will deliver only the Net Shares. The Company shall have sole discretion in determining that the shares are Mature Shares and that they are unencumbered, transferable, and acceptable by the Company for this purpose.

The delivery of certificates upon the exercise of Options is subject to the condition that the person exercising the Option provide the Company with the information the Company might reasonably request pertaining to exercise, sale or other disposition.

Electronic transfer of shares of Stock may be effected by the Company it is sole discretion, in lieu of issuance of physical share certificate(s).

The Company may permit a Holder to elect to pay the exercise price upon the exercise of an Option by authorizing a third-party broker to sell all or a portion of the shares of Stock acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the exercise price and any applicable tax withholding resulting from such exercise.

An Option may not be exercised for a fraction of a Common Share.

 

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5.6 Substitution Options. Options may be granted under the Plan from time to time in substitution for stock options held by employees of other corporations who are about to become employees of or affiliated with the Company or any Affiliate as the result of a merger or consolidation of the employing corporation with the Company or any Affiliate, or the acquisition by the Company or any Affiliate of the assets of the employing corporation, or the acquisition by the Company or any Affiliate of stock of the employing corporation as the result of which it becomes an Affiliate of the Company. The terms and conditions of the substitute Options granted may vary from the terms and conditions set out in the Plan to the extent the Committee, at the time of grant, may deem appropriate to conform, in whole or in part, to the provisions of the stock options in substitution for which they are granted.

5.7 No Rights as Stockholder. No Holder shall have any rights as a Stockholder with respect to Stock covered by his Option until the shares of Stock are delivered to him.

 

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ARTICLE VI

RESTRICTED STOCK AWARDS

6.1 Restricted Stock Awards. The Committee may make Awards of Restricted Stock to eligible persons selected by it. The amount of, the vesting, forfeiture and the transferability restrictions applicable to, any Restricted Stock Award shall be determined by the Committee in its sole discretion; provided, however, that the minimum vesting period for any Awards of Restricted Stock should normally be ratably over a period of three years and, in no event, less than one year. If the Committee imposes vesting, forfeiture or transferability restrictions on a Holder’s rights with respect to shares of Restricted Stock, the Committee may issue such instructions to the Company’s transfer agent in connection therewith as it deems appropriate. The Committee may also cause the certificate for shares issued pursuant to a Restricted Stock Award to be imprinted with any legend which counsel for the Company considers advisable with respect to the restrictions or, should the shares of Stock be represented by book or electronic entry rather than a certificate, the Company may take such steps to restrict transfer of the shares of Stock as counsel for the Company considers necessary or advisable to comply with applicable law. Each Restricted Stock Award shall be evidenced by a Restricted Stock Award Agreement that contains any vesting, forfeiture or transferability restrictions and other provisions that are not inconsistent with the Plan as the Committee may specify.

6.2 Holder’s Rights as Stockholder. Subject to the terms and conditions of the Plan, each Holder of Restricted Stock shall have all the rights of a shareholder with respect to the shares of Stock included in the Restricted Stock Award during any period in which such shares are subject to forfeiture and restrictions on transfer, including without limitation, the right to vote such shares, if unrestricted shares of the same class have the right to vote. Dividends paid with respect to shares of Restricted Stock in cash or property other than Stock in the Company or rights to acquire shares of Stock in the Company shall be paid to the Holder currently. Dividends paid in Stock in the Company or rights to acquire Stock in the Company shall be added to and become a part of the Restricted Stock. Unless the Holder’s Award Agreement specifies otherwise, any Restricted Stock Award, or portion of such award, in which the restriction has not lapsed as of the date of the severance of the employment or affiliation relationship between the Holder and the Company and all Affiliates, shall be forfeited.

 

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ARTICLE VII

RESTRICTED STOCK UNIT AWARDS

7.1 Authority to Grant Restricted Stock Unit Awards . Subject to the terms and provisions of the Plan, the Committee may make Awards of Restricted Stock Units to eligible persons selected by it. The amount of and the vesting, transferability and forfeiture restrictions applicable to any Restricted Stock Unit Award shall be determined by the Committee in its sole discretion; provided, however, that the minimum vesting period for any Restricted Stock Unit Award should be not less than one year. The Committee shall maintain a bookkeeping ledger account which reflects the number of Restricted Stock Units credited under the Plan for the benefit of a Holder.

7.2 Restricted Stock Unit Award . A Restricted Stock Unit Award shall be similar in nature to a Restricted Stock Award except that no shares of Stock are actually transferred to the Holder until a later date specified in the applicable Award agreement. Each Restricted Stock Unit shall have a value equal to the Fair Market Value of a share of Stock.

7.3 Restricted Stock Unit Award Agreement . Each Restricted Stock Unit Award shall be evidenced by an Award agreement that contains any Substantial Risk of Forfeiture, vesting, transferability and forfeiture restrictions, form and time of payment provisions and other provisions not inconsistent with the Plan as the Committee may specify. Unless the Holder’s Award Agreement specifies otherwise, any Restricted Stock Unit Award, or portion of such award, in which the restriction has not lapsed as of the date of the severance of the employment or affiliation relationship between the Holder and the Company and all Affiliates, shall be forfeited.

7.4 Dividend Equivalents . An Award agreement for a Restricted Stock Unit Award may specify that the Holder shall be entitled to the payment of Dividend Equivalents under the Award.

7.5 Form of Payment Under Restricted Stock Unit Award . Payment under a Restricted Stock Unit Award shall be made in shares of Stock.

7.6 Time of Payment Under Restricted Stock Unit Award . A Holder’s payment under a Restricted Stock Unit Award shall be made at such time as is specified in the applicable Award agreement. The Award agreement shall specify that the payment will be made (a) by a date that is no later than the date that is two and one-half (2 1/2) months after the end of the calendar year in which the Restricted Stock Unit Award payment is no longer subject to a Substantial Risk of Forfeiture or (b) at a time that is Permissible under Section 409A.

7.7 No Rights as Stockholder . A recipient of a Restricted Stock Unit Award shall have no rights of a stockholder with respect to the Holder’s Restricted Stock Units until the shares of Stock are delivered to him. A Holder shall have no voting rights with respect to any Restricted Stock Unit Awards.

 

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ARTICLE VIII

ADMINISTRATION

The Plan shall be administered by the Committee. All questions of interpretation and application of the Plan and Awards shall be subject to the determination of the Committee. A majority of the members of the Committee shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by a majority of the members shall be as effective as if it had been made by a majority vote at a meeting properly called and held. The Plan shall be administered in such a manner as to permit the Options which are designated to be Incentive Options to qualify as Incentive Options. In carrying out its authority under the Plan, the Committee shall have full and final authority and discretion, including but not limited to the following rights, powers and authorities, to:

(a) determine the persons to whom and the time or times at which Awards will be made;

(b) determine the number of shares and the exercise price of Stock covered in each Award, subject to the terms of the Plan;

(c) determine the terms, provisions and conditions of each Award, which need not be identical;

(d) accelerate the time at which any outstanding Option may be exercised, or Restricted Stock Award or Restricted Stock Unit Award will vest; provided, however, that the Committee determines that such acceleration of vesting is in the best interests of the Company and its shareholders and, in the case of a Restricted Stock Unit Award, is Permissible under Section 409A;

(e) define the effect, if any, on an Award of the death, disability, retirement or termination of employment or affiliation relationship between the Holder and the Company and Affiliates;

(f) prescribe, amend and rescind rules and regulations relating to administration of the Plan; and

(g) make all other determinations and take all other actions deemed necessary, appropriate or advisable for the proper administration of the Plan.

The actions of the Committee in exercising all of the rights, powers, and authorities set out in this Article and all other Articles of the Plan, when performed in good faith and in its sole judgment, shall be final, conclusive and binding on all parties.

 

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ARTICLE IX

AMENDMENT OR TERMINATION OF PLAN

The Board may amend, terminate or suspend the Plan at any time, in its sole and absolute discretion; provided , however, that to the extent required to maintain the status of any Option under the Code, no amendment that would change the aggregate number of shares of Stock which may be issued under Options, or change the class of Employees eligible to receive Options shall be made without the approval of the Company’s stockholders. Subject to the preceding sentence, the Board shall have the power to make any changes in the Plan and in the regulations and administrative provisions under it or in any outstanding Incentive Option as in the opinion of counsel for the Company may be necessary or appropriate from time to time to enable any Incentive Option granted under the Plan to continue to qualify as an incentive stock option or such other stock option as may be defined under the Code so as to receive preferential federal income tax treatment.

 

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ARTICLE X

MISCELLANEOUS

10.1 No Establishment of a Trust Fund. No property shall be set aside nor shall a trust fund of any kind be established to secure the rights of any Holder under the Plan. All Holders shall at all times rely solely upon the general credit of the Company for the payment of any benefit which becomes payable under the Plan.

10.2 No Employment or Affiliation Obligation. The granting of any Option or Award shall not constitute an employment contract, express or implied, nor impose upon the Company or any Affiliate any obligation to employ or continue to employ, or utilize the services of, any Holder. The right of the Company or any Affiliate to terminate the employment of any person shall not be diminished or affected by reason of the fact that an Option or Award has been granted to him.

10.3 Forfeiture. Notwithstanding any other provisions of the Plan, if the Committee finds by a majority vote after full consideration of the facts that the Holder, before or after termination of his employment or affiliation relationship with the Company or an Affiliate for any reason committed or engaged in willful misconduct, gross negligence, a breach of fiduciary duty, fraud, embezzlement, theft, a felony, a crime involving moral turpitude or proven dishonesty in the course of his employment by the Company or an Affiliate, which conduct damaged the Company or Affiliate, the Holder shall forfeit all outstanding Options and all outstanding Awards, and all exercised Options if the Company has not yet delivered Stock to the Holder with respect thereto.

The decision of the Committee as to the cause of the Holder’s discharge, the damage done to the Company or an Affiliate shall be final. No decision of the Committee, however, shall affect the finality of the discharge of the Holder by the Company or an Affiliate in any manner.

10.4 Tax Withholding. The Company or any Affiliate or subsidiary shall be entitled to deduct from other compensation payable to each Holder any sums required by federal, state, local or foreign tax law to be withheld with respect to the grant, vesting or exercise of an Award or lapse of restrictions on an Award or payment under an Award. In the alternative, the Company may require the Holder (or other person validly exercising or holding the Award) to pay such sums for taxes directly to the Company or any Affiliate or subsidiary in cash or by check within ten days after the date of grant, vesting, exercise or lapse of restrictions or payment. In the discretion of the Company, and with the consent of the Holder, the Company may reduce the number of shares of Stock issued to the Holder upon his exercise of an Option to satisfy the tax withholding obligations of the Company or an Affiliate; provided that the Fair Market Value of the shares held back shall not exceed the Company’s or the Affiliate’s minimum statutory withholding tax obligations. The Company may, in its discretion, permit a Holder to satisfy any Minimum Statutory Tax Withholding Obligation arising upon the vesting of or payment under an Award by delivering to the Holder a reduced number of shares of Stock in the manner specified herein. If permitted by the Company and acceptable to the Holder, at the time of vesting of shares or payment under the Award, the Company shall (a) calculate the amount of the Company’s or an Affiliate’s or a subsidiary’s Minimum Statutory Tax Withholding Obligation on the assumption that all such shares of Stock vested or to be paid under the Award are made available for delivery, (b) reduce

 

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the number of such shares of Stock made available for delivery so that the Fair Market Value of the shares of Stock withheld on the vesting or payment date approximates the Company’s or an Affiliate’s or a subsidiary’s Minimum Statutory Tax Withholding Obligation and (c) in lieu of the withheld shares of Stock, remit cash to the United States Treasury or other applicable governmental authorities, on behalf of the Holder, in the amount of the Minimum Statutory Tax Withholding Obligation. The Company shall withhold only whole shares of Stock to satisfy its Minimum Statutory Tax Withholding Obligation. Where the Fair Market Value of the withheld shares of Stock does not equal the amount of the Minimum Statutory Tax Withholding Obligation, the Company shall withhold shares of Stock with a Fair Market Value less than the amount of the Minimum Statutory Tax Withholding Obligation and the Holder must satisfy the remaining minimum withholding obligation in some other manner permitted under this Section 10.4. The withheld shares of Stock not made available for delivery by the Company shall be retained as treasury shares or will be cancelled and the Holder’s right, title and interest in such shares of Stock shall terminate. The Company shall have no obligation upon payment, vesting or exercise of any Award or lapse of restrictions on an Award until the Company or an Affiliate or subsidiary has received payment sufficient to cover all tax withholding amounts due with respect to that payment, vesting, exercise or lapse of restrictions. Neither the Company nor any Affiliate or subsidiary shall be obligated to advise a Holder of the existence of the tax or the amount which it will be required to withhold.

10.5 Written Agreement. Each Award shall be embodied in a written agreement which shall be subject to the terms and conditions of the Plan and shall be signed by the Holder and by a member of the Committee on behalf of the Committee and the Company or an executive officer of the Company, other than the Holder, on behalf of the Company. The agreement may contain any other provisions that the Committee in its discretion shall deem advisable which are not inconsistent with the terms of the Plan.

10.6 Indemnification of the Committee. The Company shall indemnify each present and future member of the Committee against, and each member of the Committee shall be entitled without further act on his part to indemnity from the Company for, all expenses (including attorney’s fees, the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his being or having been a member of the Committee, whether or not he continues to be a member of the Committee at the time of incurring the expenses, including, without limitation, matters as to which he shall be finally adjudged in any action, suit or proceeding to have been found to have been negligent in the performance of his duty as a member of the Committee. However, this indemnity shall not include any expenses incurred by any member of the Committee in respect of matters as to which he shall be finally adjudged in any action, suit or proceeding to have been guilty of gross negligence or willful misconduct in the performance of his duty as a member of the Committee. In addition, no right of indemnification under the Plan shall be available to or enforceable by any member of the Committee unless, within 60 days after institution of any action, suit or proceeding, he shall have offered the Company, in writing, the opportunity to handle and defend same at its own expense. This right of indemnification shall inure to the benefit of the heirs, executors or administrators of each member of the Committee and shall be in addition to all other rights to which a member of the Committee may be entitled as a matter of law, contract or otherwise.

 

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10.7 Gender. If the context requires, words of one gender when used in the Plan shall include the other and words used in the singular or plural shall include the other.

10.8 Headings. Headings of Articles and Sections are included for convenience of reference only and do not constitute part of the Plan and shall not be used in construing the terms of the Plan.

10.9 Other Compensation Plans. The adoption of the Plan shall not affect any other stock option, incentive or other compensation or benefit plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of incentive compensation arrangements for Employees.

10.10 Other Options or Awards. The grant of an Award shall not confer upon the Holder the right to receive any future or other Awards under the Plan, whether or not Awards may be granted to similarly situated Holders, or the right to receive future Awards upon the same terms or conditions as previously granted.

10.11 Option Adjustments Pursuant to the Employee Benefits Agreement . Notwithstanding any other provision of the Plan or an Option Agreement, the exercise price applicable to each outstanding Option, to the extent that the Option has not expired or been exercised as of the Distribution Date, shall be reduced in accordance with the formula specified in paragraph (b) of Section 3.1 of the Employee Benefits Agreement. Notwithstanding any other provisions of the Plan or Option Agreement, the term of each outstanding Option, to the extent that the Option has not expired or been exercised as of the Distribution Date, shall be adjusted in the manner specified in paragraph (e) of Section 3.1 of the Employee Benefits Agreement.

10.12 Governing Law . The provisions of the Plan shall be construed, administered and governed under the laws of the State of Texas.

10.13 Compliance With Section 409A . Awards shall be designed, granted and administered in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A. The Plan and each Award Agreement under the Plan that is intended to comply the requirements of Section 409A shall be construed and interpreted in accordance with such intent. If the Committee determines that an Award, Award agreement, payment, distribution, deferral election, transaction, or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken or implemented, cause a Holder to become subject to additional taxes under Section 409A, then unless the Committee specifically provides otherwise, such Award, Award agreement, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Holder. The exercisability of an Option shall not be extended to the extent that such extension would subject the Holder to additional taxes under Section 409A. Notwithstanding any other provision of the Plan, if Holder is a “specified employee” (within the meaning of Section 409A), and the Company determines that a payment or vesting under an Award is not Permissible under Section 409A, then no payment shall be made or vesting shall occur under the Award due to a “separation from service” (within the meaning of Section 409A of the Code) for any reason before the date that is six (6) months after the date on which the Holder incurs such separation from service.

 

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Exhibit 5.1

 

LOGO   

100 Congress, Suite 300

Austin, TX 78701

Telephone: 512-305-4700

Fax: 512-305-4800

www.lockelord.com

March 1, 2016

Team, Inc.

13131 Dairy Ashford, Suite 600

Sugar Land, Texas 77478

Ladies and Gentlemen:

We have acted as counsel to Team, Inc., a Delaware corporation (the “Company”), in connection with the registration, pursuant to a Registration Statement on Form S-8 being filed with the Securities and Exchange Commission (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration of an aggregate 211,523 shares of Common Stock of the Company, $0.30 par value per share (the “Common Stock”) that may be issued under the Furmanite Corporation 1994 Stock Incentive Plan (the “1994 Plan”). Certain outstanding awards under 1994 Plan have been assumed by the Company subject to appropriate adjustments pursuant to the terms of the Agreement and Plan of Merger dated November 1, 2015 by and among the Company, TFA, Inc., a wholly owned subsidiary of the Company and Furmanite Corporation (“Furmanite”) under which TFA, Inc. was merged with and into Furmanite with Furmanite surviving as a wholly owned subsidiary of the Company.

As the basis for the opinion hereinafter expressed, we examined instruments, documents, and records which we deemed relevant and necessary for the basis of our opinion hereinafter expressed. In such examination, we have assumed the following: (a) the authenticity of original documents and the genuineness of all signatures, (b) the conformity to the originals of all documents submitted to us as copies; and (c) the truth, accuracy, and completeness of the information, representations, and warranties contained in the records, documents, instruments, and certificates we have reviewed.

Based on the foregoing and on such legal considerations as we deem relevant, we are of the opinion that the shares of Common Stock to be issued by the Company pursuant to the converted awards under 1994 Plan after the filing of this Registration Statement are validly authorized shares of Common Stock and, when issued pursuant to the provisions of 1994 Plan, will be legally issued, fully paid and nonassessable.

The foregoing opinion is limited to the General Corporation Law of the State of Delaware. We express no opinion herein as to any other laws, statutes, regulations or ordinances. This opinion is given as of the date hereof and we assume no obligation to update or supplement such opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes that may hereafter occur.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act and the rules and regulations thereunder.

This opinion is rendered on the date hereof, and we disclaim any duty to advise you regarding any changes in the matters addressed herein.

 

Very truly yours,

/s/ Locke Lord LLP

Locke Lord LLP

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Team, Inc. and Subsidiaries:

We consent to the use of our reports dated August 7, 2015, with respect to the consolidated balance sheets of Team, Inc. and subsidiaries as of May 31, 2015 and 2014 and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended May 31, 2015, and the effectiveness of internal control over financial reporting as of May 31, 2015, which reports appear in the May 31, 2015 annual report on Form 10-K of Team Inc., incorporated herein by reference.

 

/s/ KPMG LLP
Houston, Texas
February 29, 2016

Exhibit 23.2

Consent of Independent Public Accountants

We consent to the incorporation by reference in this registration statement on Form S-8 of Team, Inc., of our report dated March 27, 2015, relating to our audit of the consolidated financial statements of QualSpec Group, LLC as of December 31, 2014 and 2013, and for each of the years then ended, and our report dated March 25, 2014, relating to our audit of the consolidated financial statements of QualSpec Group, LLC as of December 31, 2013 and 2012, and for each of the years then ended which report appearing in the Current Report on Form 8-K/A of Team, Inc.

/s/ BKD, LLP

San Antonio, Texas

March 1, 2016