What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-14 compared with 2022-03-16 · 85 added, 84 removed, 240 unchanged (41% of the section changed)

3 unchanged sentences

Our stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “TISI”.

We are a global leading provider of integrated, digitally-enabled asset performance assurance and optimization solutions.

We are a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services.

We deploy conventional to highly specialized inspection, condition assessment, maintenance and repair services that result in greater safety, reliability and operational efficiency for our clients’ most critical assets.

We conduct operations in three segments:

Prior to the sale of our Quest Integrity segment (“Quest Integrity”) as discussed below, we conducted operations in three segments:

Inspection and Heat Treating (“IHT”), Mechanical Services (“MS”) and Quest Integrity.

Through the capabilities and resources in these three segments, we believe that we are uniquely qualified to provide integrated solutions involving:

We currently conduct operations in two segments.

Through the capabilities and resources in these two segments, we believe that we are uniquely qualified to provide integrated solutions involving:

inspection to assess condition;

2 unchanged sentences

In addition, we are capable of escalating with the client’s needs, as dictated by the severity of the damage found and the related operating conditions, from standard services to some of the most advanced services and integrated asset integrity and reliability management solutions available in the industry.

We also believe that we are unique in our ability to provide services in three distinct client demand profiles:

We also believe that we are unique in our ability to provide these services in three distinct client demand profiles:

(i) turnaround or project services, (ii) call-out services, and (iii) nested or run-and-maintain services.

On November 1, 2022, we completed the sale of all of the issued and outstanding equity interests of our wholly-owned subsidiary, TQ Acquisition Inc., a Texas corporation (“TQ Acquisition”), to Baker Hughes Holdings LLC (“Baker Hughes”) for an aggregate purchase price of approximately $279.0 million, after certain post-closing adjustments (the “Quest Integrity Transaction”), pursuant to that certain Equity Purchase Agreement by and between us and Baker Hughes, dated as of August 14, 2022 (the “Sale Agreement”).

TQ Acquisition and its subsidiaries constituted Quest Integrity, which provided integrity and reliability management solutions for the process, pipeline and power sectors.

The criteria for reporting Quest Integrity as a discontinued operation have been met and, as such, all periods presented in this Form 10-K have been recast to present Quest Integrity as a discontinued operation.

Unless otherwise specified, the financial information and discussion in this Form 10-K are based on our continuing operations (IHT and MS segments) and exclude any results of our discontinued operations (Quest Integrity).

Refer to Note 2 - Discontinued Operations for additional details.

IHT provides conventional and advanced non-destructive testing (“NDT”) services primarily for the process, pipeline and power sectors, pipeline integrity management services, and field heat treating services, as well as associated engineering and condition assessment services.

These services can be offered while facilities are running (on-stream), during facility turnarounds or during new construction or expansion activities.

IHT also provides advanced digital imaging including remote digital video imaging, laser scanning and laser profilometry-enabled reformer care services.

IHT also provides advanced digital imaging including remote digital video imaging.

MS provides solutions designed to serve clients’ unique needs during both the operational (onstream) and off-line states of their assets.

4 unchanged sentences

Asset shutdowns can be planned, such as a turnaround maintenance event, or unplanned, such as those due to component failure or equipment breakdowns.

Our specialty maintenance, turnaround and outage services are designed to minimize client downtime and are primarily delivered while assets are off-line and often through the use of cross-certified technicians, whose multi-craft capabilities deliver the production needed to achieve tight time schedules.

Table of Content

to achieve tight time schedules.

These critical services include on-site field machining;

2 unchanged sentences

and valve management solutions.

Quest Integrity provides integrity and reliability management solutions for the process, pipeline and power sectors.

These solutions encompass three broadly-defined disciplines:

Prior to its sale, Quest Integrity provided integrity and reliability management solutions for the process, pipeline and power sectors.

These solutions encompass two broadly-defined disciplines:

(1) highly specialized in-line inspection services for historically unpiggable process piping and pipelines using proprietary in-line inspection tools and analytical software;

and (2) advanced engineering and condition assessment services through a multi-disciplined engineering team and related lab support.

As referenced previously, Quest Integrity is now reported as discontinued operations.

We market our services to companies in a diverse array of heavy industries which include:

3 unchanged sentences

• Public Infrastructure (amusement parks, bridges, ports, construction and building, roads, dams and railways);

Table of Content

• Aerospace and Defense.

3 unchanged sentences

Heat treating services are generally associated with turnaround, project and new construction activities.

IHT also offers advanced digital imaging services enabled by specialized local and wide area laser scanning and video equipment and land-based and aerial robotics platforms in the form of drones.

A description of these core IHT services is as follows:

27 unchanged sentences

In castings and forgings, there may be cracks or leaks in new products or fatigue cracks in in-service components.

Table of Content

Positive Material Identification .

12 unchanged sentences

Our ECT uses electromagnetic induction to detect flaws in conductive materials, displaying the presence of very small cracks, pits, dents and general thinning.

Table of Content

Long-Range Guided Ultrasonics .

24 unchanged sentences

Standard, accurate and timely documentation and reporting along with quality reviews with our PI services are necessary to support our clients’ regulation compliance.

Robotics and Inspection Services.

Utilizing a combination of proprietary and advanced third party equipment, including video, laser scanning, robotic crawlers and aerial drones, to remotely capture digital images in difficult or dangerous to access locations in and around energy industry infrastructure.

We often deliver such services as part of an integrated solution where ADI may complement or further inform other inspection and condition assessment techniques.

Heat Treating Services.

1 unchanged sentence

Electric resistance heating is the transfer of high energy power sources through attached heaters to the plant component to preheat weld joints, to remove contaminants and moisture prior to welding, for post-weld heat treatments and to relieve metal thermal stresses induced by the welding process.

Specialty heat treating processes are performed using gas-fired combustion on large pressure vessels for stress relieving to bake specialty paint coatings and controlled drying of abrasion and temperature resistant refractories.

Special high frequency heating, commonly called induction heating, is used for expanding metal parts for assembly or disassembly, expanding large bolting for industrial turbines and stress relieving projects which are cost prohibitive for electric resistance or gas-fired combustion.

Specialty heat treating processes are performed using gas-fired combustion on large pressure vessels for stress

Table of Content

relieving to bake specialty paint coatings and controlled drying of abrasion and temperature resistant refractories.

Mechanical Services Segment:

28 unchanged sentences

Hot Tapping Services .

Our hot tapping services consist of a full range of hot tapping and Line-stop TM services.

Our hot tapping services consist of a full range of hot tapping and Line-stopTM services.

Hot tapping services involve utilizing specialized equipment to machine a hole in a pressurized piping system so that a new branch pipe can be connected onto the existing pipe, or pipeline, without interrupting operations.

Line-stop TM services involve inserting a mechanical isolation device, through the tapped area, to stop the process flow, permitting the line to be isolated and depressurized downstream, so that maintenance work can be performed on the pipeline, piping system, or other client asset.

The Hi-stop TM is a proprietary service solution that allows stopping of process flows under typically more extreme pressures and temperatures where standard industry equipment is unable to operate.

Our patent pending SmartStop TM double block and bleed technology allows a dual-stop Line-stop TM head to be inserted through a single tap, with the ability to bleed between the seals, ensuring the integrity of the isolation.

Line-stopTM services involve inserting a mechanical isolation device, through the tapped area, to stop the process flow, permitting the line to be isolated and depressurized downstream, so that maintenance work can be performed on the pipeline, piping system, or other client asset.

The Hi-stopTM is a proprietary service solution that allows stopping of process flows under typically more extreme pressures and temperatures where standard industry equipment is unable to operate.

Our patent pending SmartStopTM double block and bleed technology allows a dual-stop Line-stopTM head to be inserted through a single tap, with the ability to bleed between the seals, ensuring the integrity of the isolation.

In some cases, we may use line freezing processes by injecting liquid nitrogen into specialized equipment with external chambers around the pipe to stop the process flow.

Inflatable stops are used in low-pressure applications where a pipe is out of round or inside surface conditions of the pipe prevent a standard line stop.

In support of our hot tapping and other repair solutions, we supply specialty and in-service welding solutions, certified in accordance with American Society of Mechanical Engineers (“ASME”) codes, and are authorized by National Board of Boiler and Pressure Vessel Inspectors (the “NBBI”) for the repair of nuclear components, boilers, and other pressure containing components.

Table of Content

and Pressure Vessel Inspectors (the “NBBI”) for the repair of nuclear components, boilers, and other pressure containing components.

Valve Insertion Services.

We offer professional installation services for our patented InsertValve TM .

We offer professional installation services for our patented InsertValveTM.

The valve can be installed onstream, eliminating the need for line shut downs during planned or emergency valve tie-ins.

Designed for a wide range of line sizes and types, the InsertValve TM wedge gate sits on the valve body, not the pipe bottom.

This unique feature

Table of Content

prevents the seat from coming into contact with the cut pipe edges to significantly extend valve life.

Designed for a wide range of line sizes and types, the InsertValveTM wedge gate sits on the valve body, not the pipe bottom.

This unique feature prevents the seat from coming into contact with the cut pipe edges to significantly extend valve life.

We believe its ability to be introduced and, if ever needed, repaired, while the asset to which it is applied to is in service, makes it truly unique in the market.

7 unchanged sentences

With capabilities including flange management and bolt load analysis;

controlled tightening methods of torqueing and tensioning;

controlled tightening methods of torquing and tensioning;

bolt load validation;

proprietary equipment such as Flange Safe TM , that we engineered and manufactured to provide the industry’s safest option for under pressure/temperature single stud replacement, we ensure the integrity of critical industrial infrastructure.

proprietary equipment such as Flange SafeTM, that we engineered and manufactured to provide the industry’s safest option for under pressure/temperature single stud replacement, we ensure the integrity of critical industrial infrastructure.

Vapor Barrier Plug and Weld Testing Services.

11 unchanged sentences

We also represent selected valve manufacturers and distribute their products where complementary to our clients’ valve supply and management needs.

Quest Integrity Segment:

Quest Integrity offers integrity and reliability management solutions in the form of advanced quantitative inspection, engineering and condition assessment services and products.

Quest Integrity’s advanced quantitative inspection services utilize proprietary NDT and NDE instrumentation and technology to provide in-line inspections to critical infrastructure in the downstream, midstream, upstream and power industries.

Additionally, Quest Integrity offers engineering assessment services enabled by proprietary software and other analytical tools, and complemented by lab testing resources.

Furnace Tube Inspection System-Enabled Services.

Furnace Tube Inspection System (“FTIS TM ”) in-line inspection service provides an untethered 360-degree 100% coverage ultrasonic inspection of the internal and external surfaces of serpentine coils of fired heaters, which are found in refineries and other process plant environments.

FTIS TM allows us to detect and quantify internal/external pipe/tube wall loss, deformation and fouling and thereby identify weak points in such heaters in order to provide clients with timely, actionable information to better manage their infrastructure.

InVista TM -Enabled Services.

Our proprietary InVista TM in-line inspection service provides an untethered 360-degree 100% coverage ultrasonic inspection of the internal and external surfaces of pipelines and process piping that are considered “unpiggable” or too challenging to inspect by traditional in-line inspection methods, due to a number of factors.

InVista TM allows us to detect and quantify pipe/tube internal/external wall loss, deformation, pitting and fouling in such pipelines and process piping.

Our standard InVista TM deliverable also provides a fitness-for-service assessment on the pipe and displays the information in a highly intuitive format, providing an integrated inspection plus condition assessment solution for clients.

Table of Content

Pipeline Integrity Management Services .

We offer turn-key Pipeline Integrity Management services, including project management, integrity engineering and integrity management development services, in-line inspection support such as cleaning and launching/receiving, pig tracking and materials equipment selection and procurement.

We offer these resources on an integrated basis with our InVista TM in-line inspection services and engineering assessment capabilities, or individually as applicable.

Advanced Engineering and Condition Assessment Services .

Employing a multi-disciplined engineering team, supported by proprietary software, other analytical tools and complementary lab testing capability, we offer a variety of advanced engineering assessment services to clients in the process, power, pipeline, petrochemical and alternative energy industries including fitness-for-service, computational mechanics, failure analysis, risk-based asset management and materials consulting.

Marketing, Clients and Competition

2 unchanged sentences

The capacity and capability scope of our discrete and integrated services also allows us to benefit from the procurement trends of many of our clients who are seeking to reduce the number of contractors and vendors in their facilities, as well as to outsource more of such services.

No single client accounted for 10% or more of consolidated revenues during the years ended December 31, 2021, 2020 or 2019.

No single client accounted for 10% or more of consolidated revenues during the years ended December 31, 2022 and 2021, respectively.

Generally, clients are billed on a time and materials basis, although some work may be performed pursuant to a fixed-price bid.

4 unchanged sentences

While many contracts cover specific plants or locations, we also enter into multiple-site regional or national contracts which cover multiple plants or locations.

Table of Content

In general, competition stems from a large number of other outside service contractors.

15 unchanged sentences

From time to time, during the operation of our environmental consulting and engineering services, the assets of which were sold in 1996, we handled small quantities of certain hazardous wastes or other substances generated by our clients.

Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (the “Superfund Act”), the EPA is authorized to take administrative and judicial action to either cause parties who are responsible under the Superfund Act for cleaning up any unauthorized release of hazardous substances to do so, or to clean up such hazardous substances and to seek

Table of Content

reimbursement of the costs thereof from the responsible parties, who are jointly and severally liable for such costs under the Superfund Act.

The EPA may also bring suit for treble damages from responsible parties who unreasonably refuse to voluntarily participate in such a clean-up or funding thereof.

4 unchanged sentences

Human Capital

At December 31, 2021, we had approximately 5,200 employees, with approximately 4,100 employed in the United States and 1,100 internationally.

As of December 31, 2022, we had approximately 5,200 employees, with approximately 3,900 employed in the United States and 1,300 internationally.

Human capital management, combined with our core values and talent management initiatives, is a key driver of our employee retention program.

We invest in our talent by providing our employees with targeted training, mentoring and career development opportunities, all of which enable us to hire and retain talented, high-performing employees.

Through our safety first culture and our diversity and inclusion initiatives, we seek to retain employees through our employee engagement efforts and our competitive compensation and benefits packages.

We work to prioritize our safety first culture and our diversity and inclusion initiatives, and we seek to retain employees through our employee engagement efforts and our competitive compensation and benefits packages.

Business ethics and core values

Our core values anchor every aspect of our business in a set of commonly-held beliefs and commitments.

They represent what we stand for, what values our employees embody, and what our services and products contribute to the market.

They represent what we stand for, the values our employees embody, and what our services and products contribute to the market.

These statements are deeply ingrained in our culture, guiding employee behavior and company decisions and actions.

1 unchanged sentence

• Integrity – Uncompromising standards of integrity and ethical conduct;

Table of Content

• Service Leadership – Leading service quality, professionalism and responsiveness;

3 unchanged sentences

Diversity and inclusion

A diverse and engaged workforce is critical to our success, and we work hard to create an environment where our employees feel valued, engaged and inspired to do their best work.

We are proud that a diverse group of people from all backgrounds, religions, nationalities, gender identity, sexual orientations and races make up our team.

We believe that a diverse and engaged workforce is critical to our success, and we work hard to create an environment where our employees feel valued, engaged and inspired to do their best work.

We are proud that a diverse group of people from a variety of backgrounds, religions, nationalities, gender identity, sexual orientations and races make up our team.

It continues to be our goal to knock down barriers and eliminate bias wherever it exists through strategic employee-engaged initiatives.

While we continue to focus on maintaining or improving the gender diversity among our executive leadership and corporate populations, we are also committed to improving our gender diversity amongst our technician population, which comprises more than 75% of our overall global workforce.

Executive Leadership General & Administrative Global Workforce 1

In particular, while we continue to focus on maintaining or improving the gender diversity among our corporate leadership and general and administrative populations, we are also committed to improving our gender diversity among our technician population, which comprises more than 75% of our overall global workforce.

Corporate Leadership General & Administrative Global Workforce 1

Female 8% 58% 12%

2 unchanged sentences

1 Global workforce includes technicians.

As part of our university recruiting efforts, we have developed diversity focused strategies through collaboration with the career centers at the universities where we recruit.

We recruit diverse candidate populations through collaborations with the Society of Women Engineers (SWE), Society of Hispanic Engineering’s (SHPE) and National Society of Black Engineers (NSBE) programs, as well as recruiting at Historically Black Colleges and Universities such as Prairie View A&M University.

Table of Content

We have developed diversity focused strategies through collaboration with the career centers at the universities where we recruit.

We recruit diverse candidate populations through collaborations with the Society of Women Engineers (“SWE”), Society of Hispanic Engineering’s (“SHPE”) and National Society of Black Engineers (“NSBE”) programs, as well as recruiting at Historically Black Colleges and Universities.

Health, safety and training

4 unchanged sentences

The rules are posted internally, communicated throughout our organization through our safety bulletins, and are printed in multiple languages.

In assessing safety performance, we measure our annual total recordable incident rate (“TRIR”), which is defined as the number of recordable injuries per 200,000 working hours.

This metric is also used by others in our industry, which allows for a more objective comparison of our performance.

In 2021, our TRIR was 0.39.

Our vehicle safety performance system (VSPS) has helped improve our motor vehicle accident rate by 20% since the prior year.

The VSPS is monitored centrally where parameters such as speed, seat belt, hard breaking, and engine diagnostics can be monitored by the driver’s supervisor such that they can manage unsafe driving before an accident occurs.

Accelerated by our response to the COVID-19 pandemic, we have several online training and distance learning classes to our curriculum to help meet the needs of a rapidly changing workplace environment.

In 2022 we enhanced our 12 Life Saving Rules by establishing our 5 Hand Safety Rules.

These rules are specific to those high hazard tasks where the opportunity for hand injury is most prevalent.

These rules remind our work force about hand placement, proper guarding, and when to get assistance.

In 2022 we achieved the second-best safety performance in the Company’s history.

We have several online training and distance learning classes as part of our curriculum to help meet the needs of a rapidly changing workplace environment.

These are administered and tracked globally though our Learning Management System.

We prepared and led several topics to support employees during COVID-19 including a session on helping parents cope with the pandemic while working remotely, helping managers to lead remote workers and supporting employees as they safely moved to working remotely where necessary.

We also launched STAMP, TEAM’s Stress and Anxiety Management Program that included several tools and resources to help employees effectively manage stress and prevent depression and other mental illnesses.

This program included several sessions focused on mindfulness and we coordinated this program with our Employee Assistance Program that offered mental health and depression resources for our employees and their families.

We also offer STAMP, TEAM’s “Stress and Anxiety Management Program” that includes several tools and resources to help employees effectively manage stress and prevent depression and other mental illnesses.

This program serves as TEAM’s Mental Health and Wellness Program where we offer monthly sessions covering various mental health topics such as mindfulness, Post Traumatic Stress Disorder and resiliency.

We coordinate this program with our Employee Assistance Program that offers mental health and depression benefits for our employees and their families.

This program has received much praise and support from our employees, their families and our clients.

We recognize the importance of providing training to continually support career growth and development.

Our talent management and professional development programs including our CREW Engineering and Business rotational and Technician Apprentice programs empower and inspire our team members to personalize their career journeys by building critical job skills, gaining hands-on experience, providing ongoing access to world class training, assigning relevant career mentors and paving the way toward career paths that provide long-term advancement within our organization.

In 2019, our professional development efforts were expanded to include our Leadership Journey Program that takes participating employees through a highly interactive training and development program.

Participants in the leadership program receive a behavioral DISC (Dominance, Influence, Steadiness, Conscientiousness) assessment and work together in teams as they gain self-awareness of their behavioral style.

Participants interact throughout the three day training session while learning about and increasing their leadership skills.

During the Leadership Journey Program, our subject matter experts lead unique training sessions to share information and knowledge on safety, quality and financial acumen applicable to our business.

As we navigated through the impact of the COVID-19 pandemic, we proactively introduced more flexibility in our work environment by offering eligible employees the ability to work remotely or on-site, flexible working schedules, and restricting in person meetings.

All of these measures were driven by the safety and health of our employees, their family members, clients and other contractors at the forefront.

Our talent management and professional development programs are designed to empower and inspire our team members to personalize their career journeys by building critical job skills, gaining hands-on experience, providing ongoing access to world class training, assigning relevant career mentors and paving the way toward career paths that provide long-term advancement within our organization.

Since the widespread public health crises, epidemics and pandemics , we’ve proactively introduced more flexibility in our work environment by offering eligible employees the ability to work remotely or on-site, flexible working schedules.

We expect to continue offering such flexibility to eligible employees moving forward.

Employee engagement

Periodically, our employees participate in our engagement survey which provides us with valuable insight as we seek to improve our overall employee engagement and satisfaction.

Acting upon employee feedback generated from the engagement survey, we continually review our regional health benefits, communication strategy and training efforts.

Acting upon employee feedback generated from the engagement

Table of Content

survey, we review our regional health benefits, communication strategy and training efforts on an ongoing basis.

We believe the significant response rate to our survey is indicative of the intensity of our employee’s connection to our organization, marked by a committed effort to achieve goals in environments that support productivity and maintain personal well-being.

Wages and benefits

Across the globe, we provide our employees with competitive wages, salaries and benefits based upon employee skills, experience and job levels.

Across the globe, we strive to provide our employees with competitive wages, salaries and benefits based upon employee skills, experience and job levels.

Additionally, we provide employees with a comprehensive set of benefits, including health and welfare benefits, wellness benefits, employee assistance plans, defined contribution and defined benefit retirement benefits, paid time off, educational support and a variety of other ancillary employee benefits.

Environmental, social and governance

We are committed to conducting our business in a manner that protects the environment and the health and safety of our employees and the public including supporting career growth opportunities to our diverse team of employees;

and actively contributing to the local communities.

We will work with the government, industry, and public in support of laws, regulations,

Table of Content

standards and other programs that safeguard the community, workplace and the environment.

General ESG approach

We strive to promote and support business practices that are environmentally sustainable, socially conscious, and aligned with strong corporate governance practices.

Our highest priority is the safety of our employees, clients, community and other contractors.

We are committed to conducting our business in a manner that protects the environment and the health and safety of our employees, our clients, our suppliers and contractors and the general public, including supporting career growth opportunities for our diverse team of employees and actively contributing to the local communities in which we operate.

We strive to be an industry leader in the fields of health, safety and environmental management and work with government organizations and industry organizations in support of laws, regulations, standards and other programs that safeguard the community, workplace and the environment.

To meet this commitment, we maintain management systems designed to ensure compliance with all applicable laws, regulations and internal requirements, as well as to facilitate the continuous improvement of our processes, products, and personnel.

Our highest priority is the safety of our employees, clients, and other contractors.

We also intend to set an example of leadership in the field of health, safety and environmental management, and will promote resource conservation, the reduction of waste and pollution prevention.

Many of our services, including our inspection, emissions monitoring and leak repair services, are crucial in assisting our clients to identify, assess and reduce their carbon emissions and fluid leaks.

We provide inspection, maintenance and repair services and support our clients’ energy transition efforts into lower carbon and renewable energy sources, such as liquefied natural gas, hydropower and wind.

We work closely with our clients across the world to assist them in meeting their environmental sustainability goals.

We sponsor and support numerous charitable organizations and our employees donate their time to serving the needs of their communities.

These contributions help to support the work of nonprofit organizations of all sizes, working in areas such as health support services and well-being.

Our Corporate Governance and Nominating Committee has responsibility for maintaining oversight over the development of appropriate environmental, social and corporate governance principles, policies and practices for Team, including our public reporting on corporate responsibility and sustainability.

Our Company management is responsible for the day-to-day operation of ESG matters.

Our Executive Vice President, Administration, Chief Legal Officer & Secretary, who reports directly to our CEO, has general oversight responsibility with respect to matters of sustainability and social responsibility and is the co-executive sponsor of our ESG Council, along with our Chief Digital & Information Officer of the Company.

Under its charter, the ESG Council, which is a management committee formed to assist our Chief Legal Officer & Secretary in oversight responsibilities, is responsible for recommending our ESG objectives, monitoring the implementation and performance of our ESG objectives, overseeing the progress made against our social and environmental goals and reporting on our ESG performance.

The Corporate Governance and Nominating Committee receives regular reports from our Executive Vice President, Administration, and Chief Legal Officer & Secretary regarding the considerations and actions taken by the Company with respect to ESG.

Existing Board Rights

On November 1, 2022, we entered into the Board Rights Agreement (the “Board Rights Agreement”) with Atlantic Park Strategic Capital Fund, L.P.

(“APSC”), pursuant to which APSC, acting as investor representative on behalf of itself and its affiliates that beneficially own our common stock (such affiliates, together with APSC, the “Investors”), may, subject to common stock ownership thresholds and other terms provided in the Board Rights Agreement, designate an individual to serve as a non-voting observer at all meetings of our Board of Directors (the “Board”) and nominate an individual designated by APSC to serve on the Board (the “Investor Director”).

The right to nominate the Investor Director is subject to certain qualification requirements and the discretion of our Corporate Governance and Nominating Committee under limited circumstances.

The Investors’ rights under the Board Rights Agreement are a continuation of existing rights under the Term Loan Credit Agreement and that certain commitment letter (the “Commitment Letter”), dated as of November 9, 2021, by and among us, Corre Partners Management, LLC and APSC in the event obligations under the Term Loan Credit Agreement cease to be outstanding.

The Investors are not permitted to designate, in the aggregate, more than one non-voting board observer and more than one Investor Director under the Board Rights Agreement, the Term Loan Credit Agreement and the Commitment

Table of Content

Letter, provided that the Board Rights Agreement does not otherwise limit or impair any rights under the Commitment Letter and the Term Loan Credit Agreement.

In the event of the resignation, death or removal (for cause or otherwise) of the Investor Director from the Board, APSC, acting on behalf of the Investors, will have the right, but not the obligation, to designate a successor Investor Director to the Board to fill the resulting vacancy on the Board (and any applicable committee thereof), subject to certain qualification requirements specified in the Board Rights Agreement.

Available Information

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business