Team, Inc. Adopts Stockholder Rights Plan Designed To Protect The Availability Of Its Net Operating Losses
- Preserving long-term stockholder value by adopting a rights plan intended to protect tax assets by reducing the likelihood of an ownership change (1)
- Rights plan in effect immediately; will be submitted for stockholder ratification at 2022 annual meeting
- If ratified by stockholders, rights plan intended to remain in effect until
February 2, 2025
Team, Inc. ("TEAM" or the "Company") (NYSE: TISI) announced today that its Board of Directors adopted a stockholder rights plan designed to protect the availability of Team's net operating loss carryforwards ("NOLs") and other tax attributes under the Internal Revenue Code ("Section 382 Rights Plan").
The Section 382 Rights Plan is similar to those adopted by numerous other public companies with significant NOLs. The Section 382 Rights Plan is not designed to prevent any action that the Board determines to be in the best interest of TEAM and its stockholders, and will help to ensure that the Board of Directors remains in the best position to discharge its fiduciary duties.
Under the Section 382 Rights Plan, the rights will initially trade with TEAM's common stock and will generally become exercisable only if a person (or any persons acting as a group) acquires 4.9% or more of TEAM's outstanding common stock, including any coordinated acquisition of securities by any Persons who have a formal or informal understanding with respect to such acquisition (to the extent ownership of such securities would be attributed to such Persons under Section 382 of the Code and the Treasury Regulations promulgated thereunder). If the rights become exercisable, all holders of rights (other than any triggering person) will be entitled to acquire shares of common stock at a 50% discount or TEAM may exchange each right held by such holders for one share of common stock. Under the Section 382 Rights Plan, any person which currently owns 4.9% or more of TEAM's common stock may continue to own its shares of common stock but may not acquire any additional shares without triggering the Section 382 Rights Plan. TEAM's Board of Directors has the discretion to exempt any person or group from the provisions of the Section 382 Rights Plan.
TEAM intends to submit the Plan to a vote of its stockholders at its 2022 annual meeting. The Section 382 Rights Plan will expire on the day following the certification of the voting results for TEAM's 2022 annual meeting of stockholders, unless TEAM's stockholders ratify the Section 382 Rights Plan at or prior to such meeting, in which case the Section 382 Rights Plan will continue in effect until
Additional information about the Section 382 Rights Plan will be available on a Form 8-K to be filed by TEAM with the
(1) As defined by the Internal Revenue Code.
Certain forward-looking information contained herein is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995. We have made reasonable efforts to ensure that the information, assumptions and beliefs upon which this forward-looking information is based are current, reasonable and complete. However, such forward-looking statements involve estimates, assumptions, judgments and uncertainties. There are known and unknown factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking information. Although it is not possible to identify all of these factors, they include, among others, the duration and magnitude of the COVID-19 pandemic and related economic effects, the Company's liquidity and ability to obtain additional financing, the Company's ability to continue as a going concern, and such known factors as are detailed in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission, and in other reports filed by the Company with the Securities and Exchange Commission from time to time. Accordingly, there can be no assurance that the forward-looking information contained herein, including projected cost savings, will occur or that objectives will be achieved. We assume no obligation to publicly update or revise any forward-looking statements made today or any other forward-looking statements made by the Company, whether as a result of new information, future events or otherwise, except as may be required by law.
Vice President, Corporate Development and Investor Relations