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Item 3.03 | Material Modifications to Rights of Security Holders |
In connection with the previously announced one-for-ten reverse stock split (the “Reverse Stock Split”) of shares of common stock, par value $0.30 per share (the “Common Stock”), of Team, Inc. (the “Company”), the Company has filed a Certificate of Amendment (the “Certificate of Amendment”) to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split. The Certificate of Amendment, effective as of 5:00 p.m., Eastern Time, on December 21, 2022 (the “Effective Time”), converted every ten shares of the issued and outstanding Common Stock into one share of Common Stock of the Company. The Reverse Stock Split also effected a proportionate reduction in the Company’s authorized shares of Common Stock from 120,000,000 shares to 12,000,000 shares, and reduced the number of shares of Common Stock outstanding from 43,429,089 shares to 4,342,909 shares. The Common Stock began trading on a reverse split-adjusted basis on the New York Stock Exchange (the “NYSE”) at the opening of trading on December 22, 2022 (the “Effective Date”). The Common Stock will continue trading on the NYSE under the symbol “TISI” with a new CUSIP number (878155 308).
Proportionate adjustments were made to the number of shares of Common Stock issuable upon exercise or conversion of the Company’s outstanding warrants, equity awards and convertible securities, as well as the applicable exercise prices. Specifically, as a result of the Reverse Stock Split, on the Effective Date, pursuant to and in accordance with Section 4.04(b) of that certain indenture (the “Indenture”), dated as of July 31, 2017, between the Company and Truist Bank (formerly known as Branch Banking and Trust Company), as trustee and conversion agent, pertaining to the Company’s 5.00% Convertible Senior Notes due 2023 (the “Notes”), the Conversion Rate (as defined in the Indenture) of the Notes was reduced from 46.0829 shares of Common Stock per $1,000 principal amount of Notes to 4.6083 shares of Common Stock per $1,000 principal amount of Notes. In addition, as a result of the Reverse Stock Split, the aggregate number of shares of Common Stock issuable pursuant to equity and equity-based awards outstanding under each of the Team, Inc. 2006 Stock Incentive Plan and the Team, Inc. 2016 Equity Incentive Plan was adjusted to reflect the Reverse Stock Split.
Pursuant to the Certificate of Amendment, any fraction of a share of Common Stock that would otherwise have resulted from the Reverse Stock Split will be settled by cash payment, without interest, in an amount equal to the proceeds attributable to the sale of such fractional interest following the aggregation and sale by Computershare Trust Company, N.A. (“Computershare”), the Company’s transfer agent, of all fractional shares otherwise issuable. The Reverse Stock Split affected all record holders of the Common Stock uniformly and did not affect any record holder’s percentage ownership interest in the Company, except for de minimis changes as a result of the elimination of fractional shares. Holders of Common Stock who hold in “street name” in their brokerage accounts do not have to take any action as a result of the Reverse Stock Split. Their accounts will be automatically adjusted to reflect the number of shares owned. Stockholders of record will be receiving information from Computershare regarding their stock ownership following the Reverse Stock Split and cash in lieu of fractional share payments, if applicable.
In addition, at the Effective Time, pursuant to and in accordance with that certain Section 382 Rights Agreement, dated as of February 2, 2022 (as may be amended from time to time, the “Rights Agreement”), between the Company and Computershare, as rights agent and transfer agent, the number of one one-thousandths of a Preferred Share (as defined in the Rights Agreement) purchasable upon exercise of each Right (as defined in the Rights Agreement) was increased from 1 to 10.000.
The foregoing description of the Certificate of Amendment is a summary and is qualified in its entirety by the terms of the Amendment, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference.