Document:

Exhibit

Exhibit 10.1

13131 Dairy Ashford, Suite 600         
Sugar Land, Texas 77478

January 15, 2018

 
Amerino Gatti
via Email

 

Dear Amerino:
I am delighted that you have agreed to join Team, Inc. (“Team” or the “Company”) as Chief Executive Officer of the Company.  All of us are pleased with your decision and excited about working with you in your new role.  The purpose of this letter is to confirm our mutual understanding of the specific details of Team’s employment offer to you.  The specific details of your position at Team are:
Start Date:  Your start date is January 24, 2018 (the “Effective Date”).
Position:  You will be appointed as Chief Executive Officer of the Company and a member of the Board of Directors of the Company (the “Board”) effective as of the Effective Date.    
Reporting Relationship:  You will report directly and only to the Board.
Duties:  You will have duties and responsibilities commensurate with the position of Chief Executive Officer.  You will devote substantially all of your business time to performing your duties and responsibilities with the Company.
Location:  Your work location will be Sugar Land, Texas, subject to reasonable travel in connection with the performance of your duties.
Outside Board Membership:  To the extent appropriate in light of your duties and responsibilities with the Company, you shall be permitted to serve as a member of the board of directors of one public or private for-profit corporation, upon prior approval by the Board.
Salary:  You will have an initial base salary (“Base Salary”) of $850,000, payable bi-weekly.    The Base Salary will be reviewed prior to, or promptly following, each anniversary of the Effective Date by the Committee for possible increase (but not decrease).
Annual Bonus:  During each year of your employment with the Company, you will have an annual cash bonus opportunity under the Company’s Annual Cash Incentive Plan (the “Annual Bonus”).  For 2018, the Annual Bonus payable to you shall not be pro-rated for a partial year.  

    

Your actual Annual Bonus payment each year will be determined based on the level of achievement of the financial and operational performance goals of both you and the Company established by the Committee, which shall be consistent with the performance goals applicable to annual bonuses payable to other senior executives of the Company in any such applicable year.  For the 2018 Annual Bonus and each subsequent year thereafter, the target Annual Bonus will be 100% of Base Salary and will scale to 200% of Base Salary as a maximum bonus (for clarity, for 2018, the maximum Annual Bonus would be $1,700,000), based upon achievement against performance goals as outlined above.  
Equity Compensation:  
Initial Award.  As soon as administratively practicable following the Effective Date, the Company will grant to you a one-time restricted stock unit award covering 350,000 shares of Company common stock (the “Initial Award”).  The Initial Award will vest upon achievement of the following stock price milestones prior to the fifth anniversary of the date of grant, subject to your continued employment with the Company through the date on which each applicable milestone is achieved:
		
	•
	20% upon achievement of a Company stock price of $20

		
	•
	20% upon achievement of a Company stock price of $25

		
	•
	20% upon achievement of a Company stock price of $30

		
	•
	20% upon achievement of a Company stock price of $35

		
	•
	20% upon achievement of a Company stock price of $40

provided, that any installment of the Initial Award for which the applicable stock price milestone is achieved prior to the first anniversary of the grant date shall vest on the first anniversary of the grant date, subject to the your continued employment through such anniversary date.  Any unvested portion of the Initial Award remaining outstanding will terminate automatically on the fifth anniversary of the grant date.  For purposes of measuring the achievement of the stock price milestones, the Company stock price will be measured based on a 20-day consecutive volume-weighted average stock price.  The stock price milestones will be adjusted to reflect any stock split, stock dividend, or other extraordinary event affecting the capitalization of the Company. Each portion of the Initial Award that becomes vested will be settled in shares of Company common stock, less applicable tax withholding, within 30 days following the applicable vesting date.  
In addition, in the event of a Change in Control (as defined in the Company’s 2016 Equity Incentive Plan) at a time when some portion of the Initial Award remains unvested, achievement of the relevant stock price milestones above shall be determined at the time of the Change in Control based upon the price per share received by public Company shareholders as consideration in such Change in Control (for clarity, without the necessity of the 20-day consecutive average stock price) or, if no consideration is paid to shareholders in connection with the Change in Control, then the volume-weighted average stock price during the 20-day period ending on, and including, the last trading day immediately preceding the Change in Control will 

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be the measuring criteria hereunder.  Any portion of the Initial Award that is outstanding and unvested at the time of the Change in Control that does not become vested in accordance with the preceding sentence shall be automatically forfeited upon the occurrence of the Change in Control.
The foregoing is only a summary of the terms of the Initial Award, the full terms and conditions of which are set forth in the award agreement, the form of which is attached to this offer letter as Exhibit A.  
2018 Annual Award Opportunity.  You will have an aggregate 2018 long-term incentive opportunity of $1,050,000, consisting of (i) performance stock units with a grant date fair value of $650,000, which will be granted in the first quarter of 2018 in accordance with the Company’s ordinary course grant practice (subject to your employment on the grant date), with performance metrics measured over a 2-year performance period which will be payable to you (if earned) in 2020, and (ii) time-based restricted stock units with a grant date fair value of $400,000, which will be granted in the fourth quarter of 2018, or earlier, (subject to your employment on the grant date)  in accordance with the Company’s ordinary course grant practice, and will vest ratably over a 4-year period.  The terms and conditions applicable to such awards, including vesting requirements, will be consistent with the terms and conditions applicable to the 2018 annual equity awards granted to similarly-situated senior executives as determined by the Committee, except as provided below.  
It is expected that you will be granted a substantially similar grant date value of annual equity awards in each year following 2018 during which you continue employment with the Company as Chief Executive Officer; however, the actual grant date value of annual equity awards granted to you in each such year shall be determined by the Committee in its discretion.  
Solely with respect to annual time-based equity awards that have been granted to you during 2018 and 2019 (and, for purposes of clarity, not with respect to any annual performance-based equity awards that have been granted to you during 2018 and 2019, any annual equity awards granted to you from and after 2020, or the Initial Award (as defined above)) (the “2018 & 2019 Annual Time-Based Awards”), in the event that you experiences an Involuntary Separation from Service Without Cause or a Voluntary Separation from Service for Good Reason (as such terms are defined under the Company’s Corporate Executive Officer Compensation and Benefits Continuation Policy as in effect from time to time (the “Policy”)), then any 2018 & 2019 Annual Time-Based Awards that remain unvested at the time of such termination of employment will become immediately vested upon such termination and will be paid to you over the designated payment schedule, in consideration of you entering into the general release and non-compete agreement with the Company as provided in the Policy.

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Paid Time Off:  You be eligible for paid time off in accordance with the Company’s Flexible Time Off Program, as in effect from time to time. 
Severance Plan:  You will be eligible to participate in the Policy (which includes customary non-compete and release requirements), as in effect from time to time, a copy of which has been made available to you.  For purposes of your participation in the Policy, “Involuntary Separation from Service Without Cause” shall include your failure to devote substantially all of your business time to your duties and responsibilities with the Company, provided that you receive written notice from the Board reasonably identifying the facts and circumstances alleged to constitute such failure, and you have not cured such facts and circumstances within 30 days following receipt of such notice.
Employee Benefits:  During your employment with the Company, you will be eligible for employee benefits on the terms generally provided by the Company to its senior executives from time to time.
Indemnification:  You will be entitled to indemnification pursuant to the Company’s by-laws, and will be covered by the Company’s directors and officers insurance policy, as in effect from time to time, to the same extent as other senior executives and directors of the Company.
Legal Fees:  You shall be reimbursed for the reasonable, documented legal fees incurred by you in the review, negotiation and drafting of this Offer Letter (including the related term sheet) and any ancillary documents up to a maximum of $20,000.
Governing Law; Forum:  This offer letter shall be governed by and construed in accordance with the laws of the State of Texas, without reference to principles of conflict of laws.  You agree that any claim relating to, or arising under, this offer letter, or otherwise relating to your employment with the Company, shall be brought exclusively in the courts of Harris County, Texas.

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Miscellaneous:  You shall be subject to the Company’s policies as in effect from time to time, including with respect to recoupment of compensation.
As with all of our employees, you will be subject to our applicable employment and other policies as outlined in our employment handbook and elsewhere.  Your employment will be at-will, meaning that you or Team may terminate the employment relationship at any time, with or without cause, and with or without notice.

Sincerely, 
	
					
	/s/ Louis A. Waters

	 

	Louis A. Waters 

	Chairman of the Board of Directors

	 
	 
	 
	 
	 

	Agreed and Acknowledged:

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Employee Signature
	/s/ Amerino Gatti

	 
	 
	 

	Date
	January 15, 2018
	 

	 
	Amerino Gatti
	 

	 
	 
	 
	 
	 

5Exhibit

Exhibit 10.2
Execution Version

Performance Unit Award Agreement
This Performance Unit Award Agreement (this “Agreement”) is made and entered into as of January 24, 2018 (the “Grant Date”) by and between Team, Inc., a Delaware corporation (the “Company”) and Amerino Gatti (the “Participant”).
WHEREAS, the Company has adopted the Team, Inc. 2016 Equity Incentive Plan (the “Plan”) pursuant to which Restricted Stock Units may be granted; and

WHEREAS, the Company has entered into an employment letter agreement with the Participant, dated January 15, 2018 which provides for the grant of a one-time award of Restricted Stock Units in connection with the Participant’s commencement of employment with the Company; and
WHEREAS, the Committee desires to grant such award of Restricted Stock Units pursuant to the Plan and on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1.    Grant of Performance Units.  Pursuant to Section 11 of the Plan, the Company hereby grants to the Participant an Award of 350,000 performance-based Restricted Stock Units (the “Award”), which shall become vested based on the Participant’s continued employment with the Company through the attainment of the Performance Criteria designated in Section 2 and Exhibit A.  Each performance-based Restricted Stock Unit (a “PSU”) subject to the Award represents the right to receive one Share, subject to the terms and conditions set forth in this Agreement and the Plan. 
2.    Performance Period.  The Award’s performance period (the “Performance Period”) is the period commencing on the Grant Date and ending on January 24, 2023.  Upon the expiration of the Performance Period, any PSUs that remain outstanding and unvested as of the last day of the Performance Period shall be automatically forfeited and neither the Company nor any Affiliate shall have any further obligations to the Participant under this Agreement.
3.    Vesting of PSUs. The PSUs are subject to forfeiture until they vest. Except as otherwise provided herein, twenty percent (20%) of the PSUs (an “Installment”) will vest and become non-forfeitable on the date on which each stock price milestone (each, a “Milestone”) described on Exhibit A is achieved (each such date, a “Vesting Date”), subject to the Participant’s continued employment with the Company and its Affiliates through such Vesting Date; provided, that any Installment for which the applicable Milestone is achieved prior to the first anniversary of the Grant Date shall vest on the first anniversary of the Grant Date, subject to the Participants continued employment through such anniversary date (in such event, such anniversary date shall be considered a “Vesting Date”).  If the Participant’s employment with the Company and its Affiliates terminates for any reason prior to the expiration of the Performance Periods, all unvested PSUs then outstanding shall be 

    

automatically forfeited and neither the Company nor any Affiliate shall have any further obligations to the Participant under this Agreement.
4.    Effect of a Change in Control. If there is a Change in Control during the Performance Period, all unvested PSUs outstanding immediately prior to the Change in Control for which the applicable Milestone is achieved as of the Change in Control shall become vested immediately and shall be paid no later than thirty (30) days following such Change in Control.  Any unvested PSUs outstanding on the date of the Change in Control that do not become vested in accordance with the preceding sentence shall be automatically forfeited upon the occurrence of the Change in Control.
5.    Settlement of PSUs. The Company shall cause the issuance and delivery of the Shares underlying vested PSUs as soon as practicable after the Vesting Date for such PSUs and in any event within thirty (30) days after such Vesting Date; provided, however, that such delivery shall be deemed effected for all purposes when a stock transfer agent shall have deposited such Shares according to the delivery instructions; and provided further that if any law, regulation or order of the Securities and Exchange Commission or other body having jurisdiction shall require the Company or the Participant to take any action in connection with the delivery of the Shares, then the date on which such delivery shall be deemed to have occurred shall be extended for the period necessary to take and complete such action, it being understood that the Company shall have no obligation to take and complete any such action.
6.    Transferability. Subject to any exceptions set forth in this Agreement or the Plan, the PSUs and the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant, except that the right to receive payment for vested PSUs shall be transferrable by will or the laws of descent and distribution, and upon any such transfer by will or the laws of descent and distribution, the transferee shall hold such right subject to all of the terms and conditions that were applicable to the Participant immediately prior to such transfer. 
7.    Rights as Shareholder.  The Participant shall not have any rights of a shareholder with respect to the Shares underlying the PSUs until such Shares are issued to the Participant in accordance with Section 5, including, but not limited to, voting rights and the right to receive or accrue dividends or dividend equivalents. 
8.    No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Participant any right to continue to provide services to the Company and its Affiliates, whether as an employee, consultant or otherwise. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Participant's employment at any time, with or without Cause. 
9.    Tax Liability and Withholding.
9.1    The Participant shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Participant pursuant to the Plan, the amount of any required withholding taxes in respect of the PSUs and to take all 

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such other action as the Company deems necessary to satisfy all obligations for the payment of such withholding taxes. As a condition of the receipt of this Award, prior to the vesting of the PSUs, the Participant hereby agrees to make such arrangements as the Company may require in order to satisfy any federal, state, local or foreign withholding tax obligations that the Company, in its sole discretion, determines may arise in connection with the receipt of this grant or the issuance of Shares (the “Tax Obligations”). The Participant understands that the Company shall not be required to issue any Shares under the RSUs unless and until such Tax Obligations are satisfied. 
9.2    The Company intends, and the Participant hereby authorizes the Company, to satisfy the Tax Obligations by withholding from the Participant’s vested PSUs the number of Shares having an aggregate Fair Market Value on the applicable determination date equal to the amount of the Tax Obligations, with any fractional Shares rounded up to the nearest whole number of Shares. To the extent the Company determines that the number Shares withheld pursuant to this paragraph is insufficient to satisfy such Tax Obligations, the Participant hereby authorizes the Company to deduct from the Participant’s wages or other cash compensation the additional amounts necessary to fully satisfy the Tax Obligations. If the Company chooses not to deduct such amount from the Participant’s compensation, the Participant agrees to pay the Company, in cash or by check, the additional amount necessary to fully satisfy the Tax Obligations. The Participant hereby agrees to take any further actions and execute any additional documents as may be necessary to effectuate the provisions of this paragraph.
9.3    Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Participant's responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or settlement of the PSUs or the subsequent sale of any Shares, and (b) does not commit to structure the PSUs to reduce or eliminate the Participant's liability for Tax-Related Items.
10.    Compliance with Law. The issuance and transfer of Shares pursuant to the PSUs shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Shares may be listed. No Shares shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. 
11.    Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the General Counsel of the Company at the Company's principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the Participant at the Participant's address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

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12.    Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Texas without regard to conflict of law principles.
13.    Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review.  The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.
14.    PSUs Subject to Plan. This Agreement is subject to the Plan as approved by the Company's shareholders. The terms and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.  All capitalized terms used and not otherwise defined herein shall have the meanings given in the Plan.
15.    Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant's beneficiaries, executors, administrators and the person(s) to whom the Participant’s rights under the PSUs may be transferred by will or the laws of descent or distribution.
16.    Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
17.    Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion, subject to Section 23 of the Plan. The grant of the PSUs in this Agreement does not create any contractual right or other right to receive any PSUs or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. 
18.    Amendment. The Committee has the right to amend this Agreement, subject to the limitations set forth in the Plan, provided that any amendment that materially and adversely affects the Participant’s rights hereunder may be effectuated only in a writing signed by the Company and the Participant. 
19.    Section 409A. This Agreement is intended to comply with, or be exempt from, Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. 

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20.    No Impact on Other Benefits. The value of the Participant's PSUs is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
21.    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
22.    Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the PSUs subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be adverse tax consequences upon the vesting or settlement of the PSUs or disposition of the underlying Shares and that the Participant has been advised to consult a tax advisor prior to such vesting, settlement or disposition.
23.    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	
		
	 
	TEAM, INC.

	 
	By: ______________________________
Name: ____________________________
Title: _____________________________

	 
	 

	 
	PARTICIPANT
By: ______________________________
Printed Name: ______________________
Date Signed: _______________________

5

EXHIBIT A

Milestones

The Milestones are:
		
	•
	achievement of a Share Price of $20

		
	•
	achievement of a Share Price of $25

		
	•
	achievement of a Share Price of $30

		
	•
	achievement of a Share Price of $35

		
	•
	achievement of a Share Price of $40

For this purpose, “Share Price” means (a) the volume weighted average price of a Share on the New York Stock Exchange during any period of twenty (20) consecutive trading days occurring during the Performance Period, or (b) for purposes of paragraph 4 of this Agreement only, (i) the value of the consideration paid for each Share in the Change in Control transaction, with the value of any non-cash consideration determined by the Compensation Committee of the Board of Directors of the Company (the “Committee”) in its discretion, or (ii) if no consideration is paid in respect of Shares in connection with the Change in Control, the volume weighted average price of a Share on the New York Stock Exchange during the period of twenty (20) consecutive trading days ending on, and including, the last trading day immediately preceding the Change in Control.  
The Milestones will be appropriately adjusted by the Committee to reflect any stock split, stock dividend, or other extraordinary event affecting the capitalization of the Company.

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