1
EXHIBIT C
STOCK RESTRICTION AGREEMENT
THIS STOCK RESTRICTION AGREEMENT (the "Agreement"), is entered into on
April 9, 1999, by and between Team, Inc., a Texas corporation ("Team") and E.
Xxxxxxx Xxxxxx, and B. Xxx Xxxxxx, (collectively "Shareholders", with each being
referred to singularly as "Shareholder"). Team and the Shareholders are referred
to collectively herein as the "Parties."
INTRODUCTION
Pursuant to a Stock Purchase Agreement, of even date herewith ("Stock
Purchase Agreement"), Shareholders have acquired an aggregate of 595,000 shares
("Shares") of the common stock, $0.30 par value per share ("Common Stock"), of
Team. The Shareholders and Team have agreed that this Agreement shall be
executed as a condition precedent to the closing of the transactions
contemplated by the Stock Purchase Agreement, in order to promote the stability
of the management of Team, in recognition that such stability is necessary and
desirable for Team, and for the Shareholders as a result of their substantial
investment in Team represented by the Shares, to promote stable relationships
with customers, suppliers and lenders, to assist in recruiting key employees and
to avoid contributing to excessive volatility in the market price of Team Common
Stock. Capitalized terms not otherwise defined herein shall have the meaning
given to them in the Stock Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made and in consideration of the representations, warranties and
covenants herein contained, the Parties agree as follows:
I. Section. Definition of Subject Shares. "Subject Shares" means (i) from and
after the date hereof until the close of business on the first business day
after the date which is the second annual anniversary ("Second Anniversary") of
the date hereof, all of the Shares; (ii) from and after the Second Anniversary
until the close of business on the first business day after the date which is
the third annual anniversary ("Third Anniversary") of the date hereof, 300,000
of the Shares; and (iii) from and after the Third Anniversary until the close of
business on the first business day after the date which is the fourth annual
anniversary ("Fourth Anniversary") of the date hereof, 150,000 of the Shares.
From and after the Fourth Anniversary, this Agreement shall terminate and shall
be of no further force or effect. All references to Shares hereunder shall be
adjusted appropriately for any stock splits, stock dividends, or other similar
capital adjustments to, or recapitalizations on, or share exchanges with
(including by reason of merger, consolidation or other business combination
involving Team) the Common Stock.
2
I. Section. Legend, Stop Order, Etc..
A. The Shareholders and Team acknowledge and agree that the provisions of
Section 4 hereof constitute reasonable restrictions on transfer of the Subject
Shares within the meaning of Article 2.22 of the Texas Business Corporation Act,
as amended ("TBCA").
B. The Shareholders and Team agree that each certificate issued to Shareholders
representing Subject Shares shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A STOCK RESTRICTION AGREEMENT BETWEEN TEAM, INC., E.
XXXXXXX XXXXXX AND B. XXX XXXXXX, AND MAY NOT BE SOLD OR TRANSFERRED
EXCEPT IN ACCORDANCE WITH SUCH STOCK RESTRICTION AGREEMENT.
A. The Shareholders and Team acknowledge and agree that a counterpart of this
Agreement shall be deposited with Team at its principal office.
A. Each of the Shareholders consents to the entry of a stop transfer order with
the transfer agent or agents of Team securities against the transfer of the
Subject Shares except in compliance with the requirements of this Agreement, or
if Team is its own transfer agent with respect to any Subject Shares, to the
refusal by Team to transfer any such securities except in compliance with the
requirements of this Agreement.
I. Section. Right of First Refusal.
A. Transfers other than under a Tender Offer.
(a) In the event that a Shareholder desires to sell or otherwise
dispose of any Subject Shares, such Shareholder shall give notice (the "Transfer
Notice") to Team in writing of such intention, which shall specify the number of
Subject Shares proposed to be sold or otherwise disposed of. The Transfer Notice
shall be deemed to be Shareholder's offer to sell Team that portion of the
Subject Shares which such Shareholder wishes to sell or otherwise dispose of for
a price per share which is equal to the average closing price of Team Subject
Shares of Common Stock as reported by The Wall Street Journal for the ten
trading days immediately preceding the date of the Transfer Notice to Team.
(b) Team shall have the right, exercisable by written notice given by
Team within 3 business days after receipt of such Transfer Notice to purchase
(or to cause a corporation, entity, person or group designated by Team to
purchase) all, but not a part of, the Subject Shares specified in such Transfer
Notice for cash at the price described in this Section. If Team exercises its
right of first refusal hereunder, the closing of the purchase of the Subject
Shares with respect to which such right has been exercised shall take place
within 10 business days after the date of the written notice by Team. Upon
Stock Restriction Agreement/Page 2
3
exercise of its right of first refusal, Team shall be legally obligated to use
its best efforts to secure all approvals required in connection therewith and
shall be liable for damages to the selling party if any failure of Team to
perform its obligations hereunder shall result in the failure of such purchase
to occur.
(c) If Team does not exercise its right of first refusal hereunder
within the time specified for such exercise or if Team cannot or does not secure
any necessary approval to purchase the Subject Shares within the time period
established in Section 3.1(b), the party giving the Transfer Notice shall be
free following the expiration of such time for exercise to sell the Subject
Shares at any price.
A. Transfers under a Tender Offer. In the event that any person shall make a
tender or exchange offer ("Tender Offer") for more than 20% of the outstanding
Common Stock of Team prior to the termination of this Agreement, Shareholder
shall not tender any Subject Shares pursuant to such Tender Offer unless it
gives notice to Team no later than six days prior to the last day when
securities may be tendered in order to be accepted under such offer or to
qualify for any proration applicable to such offer (the "Tender Date") that it
intends to tender a specified number of Subject Shares pursuant to such offer.
For purposes hereof a Tender Offer to purchase Subject Shares of Common Stock
shall be deemed to be an offer at the price specified therein, without regard to
any provisions thereof with respect to proration or conditions to the offeror's
obligation to purchase. If notice is given, Team shall have the right,
exercisable by giving notice to Shareholder at least two days prior to the
Tender Date, to purchase or cause its designee to purchase the number of Subject
Shares specified in Shareholder's notice for cash. If Team exercises such right
by giving such notice, the closing of the purchase of the Subject Shares shall
take place not later than one day prior to the Tender Date. If Team does not
exercise such right by giving such notice, then Shareholder shall be free to
accept the Tender Offer with respect to which such notice of exercise was given.
Shareholder shall have the right to withdraw such notice (whether or not Team
shall have theretofore given notice of withdrawal) to Team at any time up to the
earlier of the closing of any purchase from Shareholder or its designee or the
Tender Date. At any time on or before the day prior to the Tender Date, Team
shall have the right to withdraw its notice to Shareholder and decline to
purchase the Subject Shares, in which event Shareholder shall be free to tender
its Common Stock pursuant to such offer. The purchase price to be paid by Team
or its designee pursuant to this Section shall be (i) if such Tender Offer is
consummated, the purchase price that Shareholder would have received if it had
tendered its Subject Shares and such Subject Shares had been purchased in such
Tender Offer, including any increase in the price paid by the tender offeror
after exercise by Team of its right of first refusal hereunder, or (ii) if such
Tender Offer is not consummated, the highest price offered pursuant thereto.
A. Other Provisions. In the event that Team elects to exercise its rights of
first refusal under this Section, Team may specify in its notice of intention
to exercise such right another person as its designee to purchase the Subject
Shares to which such notice relates. If Team shall designate another person as
the purchaser pursuant to this Section, this giving of notice of acceptance of
the right of first refusal by Team shall constitute a legally binding obligation
of Team to complete such purchase if such person
Stock Restriction Agreement/Page 3
4
shall fail to do so; provided, however, that Team shall have its rights to
withdrawal provided for in Section 3.2.
I. Section. Miscellaneous Provisions.
A. The Parties acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, this being in addition to any
other remedy to which they may be entitled at law or equity.
A. No Party shall issue any press release or make any public announcement
relating to the subject matter of this Agreement prior to the Closing without
the prior written approval of Team and Shareholders; provided, however, that any
Party may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities.
A. This Agreement shall not confer any rights or remedies upon any Person other
than the Parties and their respective successors and permitted assigns.
A. This Agreement (including the documents referred to herein) constitutes the
entire agreement among the Parties and supersedes any prior understandings,
agreements, or representations by or among the Parties, written or oral, to the
extent they have related in any way to the subject matter hereof.
A. This Agreement shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of his or its rights, interests, or
obligations hereunder without the prior written approval of the Buyer and the
Seller.
A. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together will constitute one and
the same instrument.
A. The Section headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or interpretation of this
Agreement.
A. All notices, requests, demands, claims, and other communications hereunder
will be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly given if (and then two business days after) it is
sent by registered or certified mail, return receipt requested, postage prepaid,
and addressed to the intended recipient as set forth below.
Stock Restriction Agreement/Page 4
5
If to the Shareholders: Copy to:
X. Xxxxxxx Xxxxxx Xxxxxx & Xxxxx
0000 Xxx 000 Xxxx 000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000 Xxxxxxxxx, Xxxxxxxxx 00000
X.X. Xxx 00000
X. Xxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
000 Xxxxxxx Xxx, Xxx 000 Attn: Xx. Xxxxx X. Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000 Facsimile: (000) 000-0000
If to Team: Copy to:
Team, Inc. Chamberlain, Hrdlicka, White,
000 Xxxxxxx Xxxxx Xxxxxxxx & Xxxxxx
Xxxxx, Xxxxx 00000 0000 Xxxxx Xxxxxx, Xxxxx 0000
P.O. Box 123 Houston, Texas 77002-4310
Xxxxx, Xxxxx 00000-0000 Attn: Xx. Xxxxxx X. Xxxxxxxx
Attn: Xxxxxx X. Xxxx, Facsimile: (000) 000-0000
Chairman and CEO
Facsimile: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
A. This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Texas without giving effect to any choice or
conflict of law provision or rule (whether of the State of Texas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas.
A. No amendment of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by Team and Shareholders. No waiver by any
Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
Stock Restriction Agreement/Page 5
6
A. Any term or provision of this Agreement that is invalid or unenforceable in
any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
A. Each of the Parties will bear its own costs and expenses (including legal
fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.
A. The Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word "including" shall mean including
without limitation.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
date first above written.
TEAM:
TEAM, INC.
By:
Xxxxxx X. Xxxx, Chairman and CEO
SHAREHOLDERS:
X. Xxxxxxx Xxxxxx
X. Xxx Xxxxxx
Stock Restriction Agreement/Page 6
