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EXHIBIT 10.2
TEAM, INC.
INCENTIVE STOCK OPTION AWARD AGREEMENT
THIS INCENTIVE STOCK OPTION AWARD AGREEMENT (the "Agreement") is made
effective as of November 2, 1998 between Team, Inc., a Texas corporation (the
"Company"), and XXXXXX X. XXXX (the "Option Holder").
1. GRANT OF OPTION. Subject to the terms and conditions of this
Agreement and the Team, Inc., 1998 Incentive Stock Option Plan (the "Plan"), a
copy of which is annexed to and made a part of this Agreement, the Company with
the unanimous authorization and approval of the members of its Board of
Directors hereby grants to the Option Holder effective as of the date hereof
(the "Grant Date") an option (the "Option") to purchase 105,666 shares of the
common stock of the Company, $0.30 par value ("Common Stock") at a price of
$3.75 per share (the "Option Price") which was the per share Fair Market Value
(as defined by the Plan) of the Common Stock as of the Grant Date. This
Agreement and the purchase of the shares of Common Stock hereunder is intended
and should be interpreted to qualify as an Incentive Stock Option as that term
is used in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any provisions of this Agreement are hereby amended in their
entirety to any extent necessary to permit all Common Stock purchased hereunder
to qualify for treatment as such under Section 422 of the Code.
In the event that the Option Holder is or becomes a longer term
employee, an extension of the option expiration period provided in Section 5
below has been provided from three months to six months following termination of
employment. However, if the Option Holder is not totally and permanently
disabled (as defined in Section 422(c)(6) of the Code) and if the option is
exercised after three months, such exercise will no longer be qualifying for
purposes of Section 421(a) of the Code and the option so exercised shall be
treated as a nonqualified option instead of an incentive stock option.
Notwithstanding anything to the contrary contained herein, the number of Shares
of Common Stock for which the Option is granted pursuant to Section 1 of this
Agreement shall automatically be decreased by the number, if any, of Additional
SNO Shares (as that term is defined in the Employment Agreement) by which the
SNO Option (as that term is defined in the Employment Agreement) is
automatically increased pursuant to Section 5.b. of the Employment Agreement and
Section 1 of the Standard Restricted Stock Option Award Agreement dated as of
November 2, 1998 between Hawk and the Company.
2. OPTION PERIOD. The Option granted herein may be exercised by the
Option Holder in whole or in part, subject to the limitation that said Option
shall be exercisable in increments ratably
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Incentive Stock Option
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as set forth in Exhibit A hereto (the "Vesting Schedule") determined by the
continuous employment of the Option Holder with the Company from the Grant Date
to the date of exercise. Notwithstanding anything in this Agreement to the
contrary, the Vesting Schedule is subject to Section 5 herein and the Committee,
in its sole discretion, may waive the Vesting Schedule and, upon written notice
to the Option Holder, accelerate the earliest date or dates in which any of the
Options granted hereunder are exercisable.
3. METHOD FOR EXERCISING THE OPTION. The vested portion of the Option
may be exercised in whole or in part only by delivery in person or through
certified or registered mail to the Company at its principal office in Alvin,
Texas (attention: Corporate Secretary) of written notice specifying the Option
that is being exercised and the number of shares of Common Stock with respect to
which the Option is being exercised. The notice must be accompanied by payment
of the Option Price for the portion of the Option being exercised. Payment of
this portion of the Option Price for the Common Stock shall be made in full by
any of the following methods or any combination of the following methods:
a. In cash or by certified or cashier's check payable to
Team, Inc.;
b. The delivery to the Company of certificates representing
the number of shares of Common Stock then owned by the Option Holder, the
Designated Value (defined below) of which equals the Option Price of the Common
Stock purchased pursuant to the Option, properly endorsed for transfer to the
Company. (For purposes of this Agreement, the Designated Value of any shares of
Common Stock delivered in payment of the Option Price upon exercise of the
Option shall be the Designated Value as of the exercise date, and the exercise
date shall be the day of delivery of the certificates for the Common Stock used
as payment of the Option Price); or
c. The delivery to the Company of a properly executed notice
of exercise together with irrevocable instructions to a broker to deliver
promptly to the Company, in payment of the Option Price, the amount of the cash
proceeds of the sale of shares of Common Stock or a loan from the broker to the
Option Holder sufficient, in each case, to pay the Option Price, and in a form
satisfactory to the Corporate Secretary.
Upon such notice to the Corporate Secretary and payment in
full of the amount of the Option Price being exercised, the exercise of the
Option shall be deemed to be effective, and a properly executed certificate or
certificates representing the Common Stock so purchased shall be issued by the
Company and delivered to the Option Holder or the agent designated by the Option
Holder.
For purposes of this Agreement, the "Designated Value" of the shares of
Common Stock on a given date shall be determined in the same manner that fair
market value is determined pursuant to Section 2(j) of the Plan.
4. ADJUSTMENTS. In the event of an adjustment (as defined in Section 7
of the Plan), the Committee or the Board of Directors of the Company (as the
case may be), in its discretion, shall act to effect one or more of the
alternatives set forth in Section 7 of the Plan.
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5. EXPIRATION AND TERMINATION OF THE OPTION. The Option shall expire at
5:00 p.m. Houston, Texas time on the tenth annual anniversary of the Grant Date
or prior to such time as follows (the period from the Grant Date to the date of
the expiration of the Option is defined as the "Option Period"):
a. Upon termination of the employment of the Option Holder for
any reason other than death, the Options exercisable as of the date of
termination may be exercised by Option Holder within three months after the date
of the termination of employment of the Option Holder. If, as of the date of
termination of employment, the Option Holder has completed at least five full
years of continuous service with the Company, the three month period provided
for in the preceding sentence shall be increased to six months. The
determination of whether the Option Holder has completed such period of service
shall be made by the Committee.
b. Upon termination of the employment of the Option Holder by
reason of the death of the Option Holder, all the shares under the Option
without regard to whether exercisable as of the date of the Option Holder's
death, may be exercised by the personal representative of the deceased Option
Holder, within 12 months of the date of the Option Holder's death.
6. TRANSFERABILITY. The Option may not be transferred except by will or
pursuant to the laws of descent and distribution, and it shall be exercisable
during the Option Holder's life only by him, and after his death, only by those
entitled to do so under his will or the applicable laws of descent and
distribution.
7. COMPLIANCE WITH SECURITIES LAWS. Upon the acquisition of any shares
of Common Stock pursuant to the exercise of the Option herein granted, the
Option Holder or any person acting under Section 5(b) will enter into such
written representations, warranties and agreements as the Company may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
8. LEGENDS ON CERTIFICATES. The Certificates representing the shares of
Common Stock purchased by exercise of an Option will be stamped or otherwise
imprinted with legends in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer and the stock
transfer records of the Company will reflect stock-transfer instructions with
respect to such shares.
9. WITHHOLDING.
a. Arrangement for Withholding. The Option Holder hereby
agrees to make appropriate arrangements with the Company to provide for the
amount of additional tax withholding under Sections 3102 and 3402 of the
Internal Revenue Code and applicable state income tax laws, if any, resulting
from the exercise of the Option. If such arrangements are not made, the Company
may refuse to issue any Common Stock to the Option Holder.
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b. Withholding Election. The Option Holder may elect to pay
all such amounts of tax withholding, or any part thereof, by electing to
transfer to the Company, or to have the Company withhold from shares otherwise
issuable to the Option Holder, shares of Common Stock having a value equal to
the amount required to be withheld or such lesser amount as may be elected by
the Option Holder provided that all such elections shall be subject to the
approval or disapproval of the Committee. The value of shares of Common Stock to
be withheld shall be based on the Designated Value of the Common Stock on the
date that the amount of tax to be withheld is to be determined.
10. ACKNOWLEDGMENT OF OPTION HOLDER. The Option Holder acknowledges
having received and read a copy of the Plan and this Agreement and agrees to
comply with all laws, rules and regulations applicable to the grant and exercise
of the Option and the sale or other disposition of the Common Stock.
11. MISCELLANEOUS.
a. Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be given by first class registered
or certified mail, postage prepaid, or by personal delivery to the appropriate
party, addressed:
i. If to the Company, to the Company at its
principal place of business at Alvin, Texas (Attention: Corporate Secretary) or
at such other address as may have been furnished to the Option Holder in writing
by the Company; or
ii. If to the Option Holder, to the Option Holder at
his address on file with the Company, or at such other address as may have been
furnished to the Company by the Option Holder.
Any such notice shall be deemed to have been given as of the fourth day after
deposit in the United States Postal Service, postage prepaid, properly addressed
as set forth above, in the case of mailed notice, or as of the date delivered in
the case of personal delivery.
b. Amendment. The Board of Directors may make any adjustment
in the Option Price, the number of shares of Common Stock subject to, or the
terms of the Option by amendment or by substitution of an outstanding Option.
Such amendment or substitution may result in terms and conditions (including
Option Price, the number of shares of Common Stock covered, Vesting Schedule or
Option Period) that differ from the terms and conditions of this Option. The
Board of Directors may not, however, adversely affect the rights of the Option
Holder without the consent of the Option Holder. If such action is effective by
amendment, the effective date of such amendment will be the date of the original
grant of this Option. Except as provided herein, this Agreement may not be
amended or otherwise modified unless evidenced in writing and signed by the
Company and the Option Holder.
c. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.
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d. Waiver. Any provision contained in this Agreement may be
waived, either generally or in any particular instance, by the Company.
e. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company and the Option Holder and their respective
heirs, executors, administrators, legal representatives, successors and assigns.
f. Rights to Employment. Nothing contained in this Agreement
shall be construed as giving the Option Holder any right to be retained in the
employ of the Company and this Agreement is limited solely to governing the
rights and obligations of the Option Holder with respect to the Common Stock and
the Option.
g. Gender and Number. Except when otherwise indicated by the
context, the masculine gender shall also include the feminine gender, and the
definition of any term herein in the singular shall also include the plural.
h. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
i. Committee. The Committee appointed under the Plan shall
have full discretion to administer the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date(s) set forth below.
TEAM, INC.
By: /s/ XXXXXX X. XXXXXXXX
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Name: Xxxxxx X. Xxxxxxxx
Title: Director and Member of Executive Committee
OPTION HOLDER
/s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx
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EXHIBIT A
Vesting Schedule
CONDITIONS TO VESTING AMOUNT EXERCISABLE
Upon the continuous employment CUMULATIVE PROPORTION OF THE
by Option Holder through the COMMON STOCK AS TO ALL OR PART OF
applicable date indicated below: WHICH THE OPTION CAN BE EXERCISED
AFTER SATISFACTION OF THE RESPECTIVE
-------------------------------- CONDITIONS TO VESTING:
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1. NOVEMBER 2, 1999 25%
2. NOVEMBER 2, 2000 50%
3. NOVEMBER 2, 2001 75%
4. JANUARY 30, 2002 100%
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Incentive Stock Option
Award Agreement - Team, Inc.
