Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures. Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), are controls and procedures that are designed to ensure that the information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is appropriately accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation included consideration of the various processes carried out under the direction of our disclosure committee in an effort to ensure that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified by the SEC. This evaluation also considered the work completed related to our compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Based on this evaluation, our CEO and CFO have concluded that, as of December 31, 2023, our disclosure controls and procedures were effective.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate over time.
We have used the framework set forth in the report entitled Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013) to evaluate the effectiveness of our internal control over financial reporting. As a result of this evaluation, Management has concluded that our internal control over financial reporting was effective as of December 31, 2023.
Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting during the fourth quarter of our fiscal year ended December 31, 2023.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
ITEM 9B. OTHER INFORMATION
Amendment No. 1 to A&R Term Loan Credit Agreement
On March 6, 2024, the Company, along with the guarantors party thereto, the lenders party thereto and Cantor Fitzgerald Securities, as agent, entered into Amendment No. 1, Limited Waiver and Consent to Amended and Restated Term Loan Credit Agreement (“Term Loan Amendment No. 1”) to the A&R Term Loan Credit Agreement. Term Loan Amendment No. 1 amended the A&R Term Loan Credit Agreement to, among other things (i) modify the definition of “EBITDA” to permit certain additional addbacks, (ii) increase the amount of purchase money indebtedness and capital lease obligations permitted thereunder, (iii) permit a sale and leaseback transaction closed concurrently with Term Loan Amendment No. 1 (the “Sale Leaseback Transaction”) and (iv) waive any mandatory prepayment requirement in connection with such sale leaseback transaction.
The foregoing summary of Term Loan Amendment No. 1 does not purport to be complete and is subject to, and qualified in its entirety by, the full and complete text of Term Loan Amendment No. 1, a copy of which is attached hereto as Exhibit 10.20 and is incorporated by reference herein.
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Amendment No. 4 to 2022 ABL Credit Agreement
On March 6, 2024, the Company, along with the guarantors party thereto, the lenders party thereto and Eclipse Business Capital LLC, as agent, entered into Amendment No. 4, Limited Waiver and Consent to Credit Agreement (“ABL Amendment No. 4”) to the ABL Credit Agreement. ABL Amendment No. 4 amended the ABL Credit Agreement to, among other things (i) modify the definition of “EBITDA” to permit certain additional addbacks, (ii) increase the amount of purchase money indebtedness and capital lease obligations permitted thereunder, (iii) permit the Sale Leaseback Transaction closed concurrently with ABL Amendment No. 4 and (iv) waive any mandatory prepayment requirement in connection with such sale leaseback transaction.
The foregoing summary of ABL Amendment No. 4 does not purport to be complete and is subject to, and qualified in its entirety by, the full text of ABL Amendment No. 4, a copy of which is attached hereto as Exhibit 10.21 and is incorporated by reference herein.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
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PART III
The information for the following items of Part III has been omitted from this Annual Report on Form 10-K since we will file, not later than 120 days following the close of our fiscal year ended December 31, 2023, our Definitive Proxy Statement. The information required by Part III will be included in that proxy statement and such information is hereby incorporated by reference, with the exception of the information under the headings “Compensation Committee Report” and “Audit Committee Report.”
Code of Business Conduct and Ethics
We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code of business conduct and ethics is available on the Corporate Governance section of our website, which is located at www.teaminc.com. If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K filed with the SEC. The inclusion of our website address in this Annual Report on Form 10-K does not include or incorporate by reference the information on our website into this Annual Report.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1) Consolidated Financial Statements filed as part of this report are listed in the Financial Table of Contents included in this report and incorporated by reference in this report in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Consolidated Financial Statements and Supplementary Data.”
2) All schedules for which provision is made in the applicable accounting regulations of the SEC are listed in this report in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data.”
3) See exhibits listed under Part (b) below.
(b) Exhibits
Exhibit
Number
Description
3.1 Amended and Restated Certificate of Incorporation of Team, Inc. (filed as Exhibit 3.1 to Team, Inc.'s Current Report on Form 8-K (File No. 001-08604) filed on December 2, 2011, incorporated by reference herein).
3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Team, Inc., dated October 24, 2013 .
3.3 Certificate of Amendment to Amended and Restated Certificate of Incorporation of Team, Inc., dated November 28, 2022 (filed as Exhibit 3.3 to Team, Inc.’s Quarterly Report on Form 10-Q /A (File No. 001-08604) filed on November 8, 2023, incorporated herein by reference).
3.4 Certificate of Amendment to Amended and Restated Certificate of Incorporation of Team, Inc. (filed as Exhibit 3.1 to Team, Inc.’s Report on Form 8-K (File No. 001-08604) filed on December 22, 2022, incorporated by reference herein).
3.5 Amended and Restated Bylaws of Team, Inc. (filed as Exhibit 3.3 to Team, Inc.’s Annual Report on Form 10-K for year ended December 31, 2017 (File No. 001-08604) , incorporated herein by reference).
3.6 Certificate of Designations of Series A Preferred Stock of Team, Inc., as filed with the Secretary of State of the State of Delaware on February 2, 2022 (filed as Exhibit 3.1 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on February 2, 2022, incorporated by reference herein).
4.1 Description of Securities Registered under Section 12 of Exchange Act.
4.2 Certificate representing shares of common stock of Company (filed as Exhibit 4(1) to Team, Inc.’s Registration Statement on Form S-1, (File No. 2-68928), incorporated by reference herein).
4.3 Form of Second Amended & Restated Warrant No. 1, dated December 8, 2021, between the Company and APSC Holdco II, L.P. (filed as Exhibit 4.1 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on December 10, 2021, incorporated by reference herein).
4.4 Form of Common Stock Purchase Warrant No. 2, dated December 8, 2021, between the Company and Corre Opportunities Qualified Master Fund, LP (filed as Exhibit 4.2 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on December 10, 2021, incorporated by reference herein).
4.5 Form of Common Stock Purchase Warrant No. 3, dated December 8, 2021, between the Company and Corre Horizon Fund, LP (filed as Exhibit 4.3 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on December 10, 2021, incorporated by reference herein).
4.6 Form of Common Stock Purchase Warrant No. 4, dated December 8, 2021, between the Company and Corre Horizon II Fund, LP (filed as Exhibit 4.4 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on December 10, 2021, incorporated herein by reference).
4.7 Section 382 Rights Agreement, dated as of February 2, 2022, between Team, Inc. and Computershare Trust Company, N.A., as rights agent (filed as Exhibit 4.1 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on February 2, 2022, incorporated by reference herein).
4.8 Second Amended and Restated Registration Rights Agreement, dated February 11, 2022, by and between the Company, APSC Holdco II, L.P, Corre Opportunities Qualified Master Fund, LP, Corre Horizon Fund, LP and Corre Horizon II Fund, LP. (filed as Exhibit 4.1 to Team, Inc.’s Current Report on Form 8-K filed (File No. 001-08604) on February 15, 2022, incorporated by reference herein).
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Exhibit
Number
Description
4.9 Team, Inc. Waiver of Anti-Dilution Adjustments and Cash Transaction Exercise, dated February 11, 2022, by and between the Company and APSC Holdco II, L.P. (filed as Exhibit 4.2 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on February 15, 2022, incorporated by reference herein) .
4.10 Team, Inc. Waiver of Anti-Dilution Adjustments and Cash Transaction Exercise, dated February 11, 2022, by and between the Company, Corre Opportunities Qualified Master Fund, LP, Corre Horizon Fund, LP and Corre Horizon II Fund, LP. (filed as Exhibit 4.3 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on February 15, 2022, incorporated by reference herein) .
10.1 Amended and Restated Term Loan Credit Agreement, dated June 16, 2023, by and among Team, Inc., as Borrower, the lenders party thereto, the guarantors party thereto and Cantor Fitzgerald Securities, as Agent (filed as Exhibit 10.1 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on June 20, 2023, incorporated by reference herein) .
10.2 Board Rights Agreement, dated as of June 16, 2023, by and among Team, Inc., Corre Partners Management, LLC, Corre Opportunities Qualified Master Fund, LP, Corre Horizon Fund, LP and Corre Horizon Fund II, LP. (filed as Exhibit 10.3 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on June 20, 2023, incorporated by reference herein) .
10.3 Credit Agreement, dated as of February 11, 2022, among Team, Inc., as Borrower, the lenders from time to time party thereto, and Eclipse Business Capital, LLC, as Agent (filed as Exhibit 10.1 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on February 15, 2022, incorporated by reference herein) .
10.4 Amendment No. 1 to Credit Agreement, dated as of May 6, 2022, among Team, Inc., as Borrower, the lenders from time to time party thereto, the guarantors party thereto and Eclipse Business Capital, LLC, as agent (filed as Exhibit 10.1 to the Current Report on Form 10-Q (File No. 001-08604) filed by Team, Inc. on August 15, 2022, incorporated by reference herein).
10.5 Amendment No. 2 to Credit Agreement, dated as of November 1, 2022, among Team, Inc., as Borrower, the lenders from time to time party thereto, the guarantors party thereto and Eclipse Business Capital, LLC, as Agent (filed as Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-08604) filed by Team, Inc. on November 07, 2022, incorporated by reference herein).
10.6 Amendment No. 3 to Credit Agreement, dated as of June 16, 2023, among Team, Inc., as Borrower, the lenders from time to time party thereto, the guarantors party thereto and Eclipse Business Capital LLC, as Agent (filed as Exhibit 10.2 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on June 20, 2023, incorporated by reference herein) .
10.7 Subscription Agreement, dated February 11, 2022, by and between the Company, Corre Opportunities Qualified Master Fund, LP, Corre Horizon Fund, LP and Corre Horizon II Fund, LP (filed as Exhibit 10.4 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on February 15, 2022, incorporated by reference herein) .
10.8 Board Rights Agreement, dated as of November 1, 2022, by and between Team, Inc. and Atlantic Park Strategic Capital Fund L.P. (filed as Exhibit 10.4 to the Current Report on Form 8-K (File No. 001-08604) filed by Team, Inc. on November 7, 2022, incorporated by reference herein).
10.9 Substitute Insurance Reimbursement Facility Agreement, dated as of September 29, 2022 by and between 1970 Group, Inc. and Team, Inc. (filed as Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-08604) filed by Team, Inc. on October 5, 2022, and incorporated by reference herein).
10.10 First Amendment to Substitute Insurance Reimbursement Facility Agreement dated as of August 29, 2023 by and between 1970 Group, Inc. and Team, Inc.
10.11† Furmanite Corporation 1994 Stock Incentive Plan, Amendment and Restatement effective May 9, 2013 (filed as Exhibit 4.4 to Team, Inc.’s Registration Statement on Form S-8, File No. 333-209871, filed on March 1, 2016, incorporated by reference herein).
10.12† Team, Inc. 2018 Equity Incentive Plan (filed as Exhibit 4.5 to Team, Inc.’s Current Report on Form S-8, (File No. 333-225727), filed on June 19, 2018, incorporated by reference herein).
10.13† Amendment to Team, Inc. 2018 Equity Incentive Plan (filed as Appendix A of Team, Inc.’s Definitive Proxy Statement on Schedule 14A (File No. 001-08604) filed on April 11, 2019, incorporated by reference herein).
10.14† Form of Restricted Stock Unit Award Agreement for the Stock Units awarded under the Team, Inc. 2018 Equity Incentive Plan (filed as Exhibit 10.11 to Team, Inc.’s Annual Report on Form 10-K (File No. 001-08604) filed on March 19, 2019, incorporated by reference herein).
10.15† Compensation Letter by and between Team, Inc. and Keith D. Tucker.
10.16† Form of Executive Restricted Stock Unit Award Agreement under the Team, Inc. 2018 Equity Incentive Plan.
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Exhibit
Number
Description
10.17† Form of Performance Unit Award Agreement under the Team, Inc. 2018 Equity Incentive Plan.
10.18† Form of Indemnification Agreement (filed as Exhibit 10.2 to Team, Inc.’s Current Report on Form 8-K (File No. 001-08604) filed on February 9, 2018, incorporated by reference herein).
10.19† Team, Inc. Corporate Executive Officer Compensation and Benefits Continuation Policy (filed as Exhibit 4.2 to Team, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 (File No. 001-08604) filed on May 11, 2022, incorporated by reference herein).
10.20*
Amendment No. 1 to Amended and Restated Term Loan Credit Agreement , dated as of March 6 , 2024, by and among Team, Inc., as Borrower, the lenders party thereto, the guarantors party thereto and Cantor Fitzgerald Securities , as Ag ent.
10.21*
A mendment No. 4 to Credit Agreement, dated as of March 6 , 2024, among Team, Inc. , as Borrower, the lenders from time to time party t hereto , the guarantors party thereto and Eclipse Business Capital LLC. as Agent.
21 Subsidiaries of Team, Inc.
23.1 Consent of Independent Registered Public Accounting Firm-KPMG LLP.
31.1 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1 Team, Inc. Compensation Recovery Policy.
101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
† Management contract or compensation plan or arrangement.
*Certain schedules and similar attachments have been omitted in reliance on Item 601(a)(5) of Regulation S-K. Team, Inc. will provide, on a supplemental basis, a copy of any omitted schedule or attachment to the SEC or its staff upon request.
Note: Unless otherwise indicated, documents incorporated by reference are located under SEC file number 001-08604.
ITEM 16. FORM 10-K SUMMARY
NONE
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized March 7, 2024.
T EAM , I NC .
/S/ KEITH D. TUCKER
Keith D. Tucker
Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated.
/S/ KEITH D. TUCKER
Chief Executive Officer (Principal Executive Officer) March 7, 2024
(Keith D. Tucker)
/ S / NELSON M. HAIGHT
Chief Financial Officer (Principal Financial Officer) March 7, 2024
(Nelson M. Haight)
/ S/ M ATTHEW E . A COSTA
Vice President and Chief Accounting Officer (Principal Accounting Officer) March 7, 2024
(Matthew E. Acosta)
/ S / J. M ICHAEL A NDERSON
Director March 7, 2024
(J. Michael Anderson)
/ S / M ICHAEL J. C ALIEL
Director, Executive Chairman March 7, 2024
(Michael J. Caliel)
/ S / J EFFERY G. D AVIS
Director March 7, 2024
(Jeffery G. Davis)
/ S / A NTHONY R. H ORTON
Director March 7, 2024
(Anthony R. Horton)
/ S / E VAN S. L EDERMAN
Director March 7, 2024
(Evan. S. Lederman)
/ S / T ED S TENGER
Director March 7, 2024
(Ted Stenger)
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