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                                                                    EXHIBIT 10.3

                                   TEAM, INC.


                     INCENTIVE STOCK OPTION AWARD AGREEMENT

         THIS INCENTIVE STOCK OPTION AWARD AGREEMENT (the "Agreement") is made
effective as of October 1, 2001 (the "Grant Date") between Team, Inc., a Texas
corporation (the "Company"), and PHILIP J. HAWK (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
                  as amended (the "Plan"), which is hereby incorporated by
                  reference and made a part of this Agreement, the Company with
                  the approval of the members of its Board of Directors hereby
                  grants to the Option Holder effective as of the Grant Date an
                  option (the "Option") to purchase 50,000 shares of the common
                  stock of the Company, $0.30 par value ("Common Stock") at a
                  price of $5.30 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.

         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 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:



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                  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.

         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



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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.

                  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.



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<PAGE>

         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.

                  (a) 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.

                  b. 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.

                  c. Waiver. Any provision contained in this Agreement may be
waived, either generally or in any particular instance, by the Company.

                  d. 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.

                  e. 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.

                  f. 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.



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                  g. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.

                  h. Committee. The Committee appointed under the Plan shall
have full discretion to administer the Plan.

         IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Grant Date.

                                        TEAM, INC.

                                        By: /s/ JACK M. JOHNSON, JR.
                                           -------------------------------------
                                                Jack M. Johnson, Jr.,
                                                Director and Chairman of the
                                                Compensation Committee


                                        OPTION HOLDER

                                        /s/ PHILIP J. HAWK
                                        ----------------------------------------
                                        Philip J.  Hawk




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                                    EXHIBIT A

                                Vesting Schedule

<Table>
<Caption>
     CONDITIONS TO VESTING                                  AMOUNT EXERCISABLE

<S>                                               <C>
Upon the continuous employment                     Cumulative number of the shares of
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:


1. January 1, 2003                                               18,867
2. January 1, 2004                                               37,734
3. January 1, 2005                                               50,000
</Table>



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