UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No. )
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
[
]
Preliminary Proxy
Statement
[]
Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X]
Definitive Proxy
Statement
[
]
Definitive
Additional Materials
[
]
Soliciting Material
Pursuant to §240.14a-12
ENGlobal Corporation
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
[
]
Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1)
Title of each class
of securities to which transaction applies:
_______________________________________________________________________
(2)
Aggregate number of
securities to which transaction applies:
_______________________________________________________________________
(3)
Per unit price or
other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
_______________________________________________________________________
(4)
Proposed maximum
aggregate value of transaction:
_______________________________________________________________________
[
]
Fee paid previously
with preliminary materials.
[
]
Check box if any
part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
(1)
Amount Previously
Paid:
________________________________________________________________________
(2)
Form, Schedule or
Registration Statement No.:
________________________________________________________________________
________________________________________________________________________
654 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060-5914
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
April 27, 2020
Dear
Shareholder:
I am
pleased to invite you to the Annual Meeting of Shareholders of
ENGlobal Corporation (“ENGlobal”). The meeting will be
held at our headquarters located at 654 N. Sam Houston Parkway E.,
Suite 400, Houston, Texas 77060, on Thursday, June 11, 2020 at
10:00 a.m., local time, to:
●
Elect five
directors to the Board of Directors of ENGlobal;
●
Adopt the amended
and restated ENGlobal Corporation 2009 Equity Incentive Plan for a
limited term;
●
Ratify the
appointment of Moss Adams LLP as the independent auditors of
ENGlobal for fiscal year 2020; and
●
Transact such other
business as may properly come before the meeting or any adjournment
thereof.
We are
furnishing proxy materials to our shareholders over the Internet.
You may read, print and download our proxy statement and annual
report at http://www.proxyvote.com. On or about April 27, 2020, we
will mail our shareholders a notice containing instructions on how
to access our proxy materials and vote online. The notice also
provides instructions on how you can request proxy materials be
sent to you by mail or email and how you can enroll to receive
proxy materials by mail or email for future meetings.
Only
shareholders of record at the close of business on April 22, 2020
are entitled to notice of, and to vote at, the meeting and any
adjournment or postponement thereof. Each share entitles the holder
to one vote. You can vote via the Internet at
http://www.proxyvote.com, or by casting a ballot at the meeting.
You may also vote by telephone by following the instructions found
on the Internet site. If you request to receive proxy materials by
mail or email, you may
vote by any of the above methods or by mailing a completed proxy
card. For specific voting information, see “General
Information” beginning on page 1 of the enclosed proxy
statement. Please submit a proxy
card or voting instructions in advance of the meeting even if you
plan to attend the meeting. Submitting a proxy card or voting instructions
will not prevent you from attending the meeting in person, if you
so desire, but will help ENGlobal ensure a quorum and reduce the
expense of additional proxy solicitation.
Attendance is
limited to shareholders of ENGlobal, their proxy holders and our
guests. Shareholders holding stock in brokerage accounts must bring
a brokerage statement or other evidence of share ownership as of
April 22, 2020 in order to be admitted to the meeting.
We
intend to hold the meeting in person. However, we are sensitive to
concerns related to public health and travel that our shareholders
may have and are monitoring the protocols that federal, state and
local governments may recommend or require in light of the evolving
coronavirus (COVID-19) situation. As a result, we may impose
additional procedures or limitations on meeting attendees (beyond
those described herein) or may decide to hold the meeting in a
different location or solely by means of remote communication
(i.e., a virtual-only meeting). In the event we determine it is
necessary or appropriate to take additional steps regarding how we
conduct the meeting, we will announce this decision in advance, and
details will be posted on our website and filed with the Securities
and Exchange Commission.
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Sincerely,
William
A. Coskey, P.E.
Chairman of the
Board
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY
STATEMENT
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Time and Date
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10:00
a.m., local time, on Thursday, June 11, 2020
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Place
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654 N.
Sam Houston Parkway E., Suite 400Houston, Texas 77060
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Items of Business
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(1) To elect five
directors to the Board of Directors of ENGlobal;
(2) To adopt the
amended and restated ENGlobal Corporation 2009 Equity Incentive
Plan for a limited term;
(3) To ratify the
appointment of Moss Adams LLP as the independent auditors of
ENGlobal for fiscal year 2020; and
(4) To transact such
other business as may properly come before the meeting or any adjournment thereof.
Except
with respect to the procedural matters incident to the conduct of
the Annual Meeting, we are not aware of any other business to be
brought before the Annual Meeting.
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Adjournments and Postponements
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Any
action on the items of business described above may be considered
at the Annual Meeting at the time and on the date specified above
or at any time and date to which the Annual Meeting may be properly
adjourned or postponed.
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Record Date
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You are
entitled to notice of, and to vote at, the Annual Meeting only if
you were an ENGlobal shareholder as of the close of business on
April 22, 2020.
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Meeting Admission
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You are
entitled to attend the Annual Meeting only if you were an ENGlobal
shareholder as of the close of business on April 22, 2020, or hold
a valid proxy for the Annual Meeting. You should be prepared to
present photo identification for admittance. If you are not a
shareholder of record but hold shares through a broker or nominee
(i.e., in street name), you
should provide proof of beneficial ownership as of the record date,
such as your most recent account statement prior to April 22, 2020,
a copy of the voting instruction card provided by your bank or
brokerage firm, or other similar evidence of ownership. If you do
not provide photo identification or comply with the other
procedures outlined above upon request, you will not be admitted to
the Annual Meeting.
The
Annual Meeting will begin promptly at 10:00 a.m., local time.
Check-in will begin at 9:00 a.m., local time, and you should allow
ample time for the check-in procedures.
We
intend to hold the Annual Meeting in person. However, we are
sensitive to concerns related to public health and travel that our
shareholders may have and are monitoring the protocols that
federal, state and local governments may recommend or require in
light of the evolving coronavirus (COVID-19) situation. As a
result, we may impose additional procedures or limitations on
meeting attendees (beyond those described herein) or may decide to
hold the Annual Meeting in a different location or solely by means
of remote communication (i.e., a virtual-only meeting). In the
event we determine it is necessary or appropriate to take
additional steps regarding how we conduct the Annual Meeting, we
will announce this decision in advance, and details will be posted
on our website and filed with the Securities and Exchange
Commission.
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Voting
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Your
vote is very important. Whether or not you plan to attend the
Annual Meeting, we encourage you to read the accompanying proxy
statement and vote as soon as possible. This will not only ensure
the presence of a quorum at the Annual Meeting but also that your
shares are voted in accordance with your wishes. You will be able
to vote via the Internet, by telephone or by mailing a completed
proxy card as an alternative to voting in person at the meeting.
For detailed information regarding voting, please refer to the
section entitled “General
Information” on page 1 of this proxy statement and the
instructions on the proxy or voting instruction card.
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By
Order of the Board of Directors,
Mark A.
Hess
Chief
Financial Officer, Treasurer and Corporate Secretary
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2020 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
TABLE OF CONTENTS
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Page
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GENERAL
INFORMATION
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1
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SMALLER
REPORTING
COMPANY
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4
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CORPORATE
GOVERNANCE AND BOARD
MATTERS
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4
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Committees of the
Board of
Directors
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6
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Director
Nominations
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8
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Communications with
the
Board
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9
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PROPOSAL
ONE: ELECTION OF
DIRECTORS
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10
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Recommendation of
the
Board
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13
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PROPOSAL
TWO: ADOPT THE AMENDED AND RESTATED ENGLOBAL CORPORATION 2009
EQUITY INCENTIVE PLAN FOR A LIMITED TERM
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14
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Recommendation of
the
Board
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19
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PROPOSAL
THREE: RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS LLP FOR FISCAL
YEAR 2020
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20
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Recommendation of
the
Board
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20
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STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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21
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CERTAIN
RELATIONSHIPS AND RELATED
TRANSACTIONS
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23
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EXECUTIVE
OFFICERS
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23
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EXECUTIVE
COMPENSATION
TABLES
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25
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DIRECTOR
COMPENSATION
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28
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HEDGING
AND PLEDGING
PROHIBITIONS
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28
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SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
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28
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AUDIT
MATTERS
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29
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Principal Auditor
Fees
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31
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OTHER
MATTERS
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32
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SHAREHOLDER
PROPOSALS FOR
2021
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32
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SHAREHOLDERS
SHARING THE SAME
ADDRESS
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32
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ANNUAL
REPORT TO
SHAREHOLDERS
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33
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APPROVAL
OF THE BOARD OF
DIRECTORS
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33
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APPENDIX
A: AMENDED AND RESTATED ENGLOBAL CORPORATION 2009 EQUITY INCENTIVE
PLAN
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A-1
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You may receive a copy of our Annual Report on Form 10-K and other
information at no charge upon request directed to:
Mark A.
Hess
Chief
Financial Officer, Treasurer and Corporate Secretary
654 N.
Sam Houston Parkway E., Suite 400
Houston,
Texas 77060-5914
Telephone
281-878-1000
GENERAL INFORMATION
We are
providing these proxy materials to you in connection with the
solicitation of proxies by the Board of Directors (the
“Board”) of ENGlobal Corporation
(“ENGlobal”) for the 2020 Annual Meeting of
Shareholders (the “Meeting”) and for any adjournment or
postponement of the Meeting. In this proxy statement, we refer to
ENGlobal as the “Company,” “we,”
“our,” or “us.”
We are
making these proxy materials available to you on the Internet. On
or about April 27, 2020, we will mail a notice to our shareholders
containing instructions on how to access the proxy materials at
http://www.proxyvote.com and vote online. In addition, shareholders
may request proxy materials to be sent to them by mail or
email.
What is the location of the 2020 Annual Meeting?
The
Meeting will be held at our headquarters located at 654 N. Sam
Houston Parkway E., Suite 400, Houston, Texas 77060, on Thursday,
June 11, 2020 at 10:00 a.m., local time or at such other time and
place to which the Meeting may be adjourned or postponed. We intend
to hold the Meeting in person. However, we are sensitive to
concerns related to public health and travel that our stockholders
may have and are monitoring the protocols that federal, state and
local governments may recommend or require in light of the evolving
coronavirus (COVID-19) situation. As a result, we may impose
additional procedures or limitations on meeting attendees (beyond
those described herein) or may decide to hold the Meeting in a
different location or solely by means of remote communication
(i.e., a virtual-only meeting). In the event we determine it is
necessary or appropriate to take additional steps regarding how we
conduct the Meeting, we will announce this decision in advance, and
details will be posted on our website and filed with the Securities
and Exchange Commission.
Who is soliciting my proxy?
We are
making these proxy materials available to you in connection with
our solicitation of proxies for use at the Meeting. Specified
directors, officers, and employees of ENGlobal may also solicit
proxies on our behalf, without additional compensation, by email,
mail, telephone, fax, or in person.
Who is paying for this solicitation?
ENGlobal will pay
for the solicitation of proxies, including the cost of preparing
and assembling these proxy materials, making these proxy materials
available on the Internet, mailing notices to our shareholders, and
mailing these proxy materials to our shareholders upon request. We
have retained and paid a fee to Issuer Direct Corp. to assist us in
making our proxy materials available on the Internet and tabulating
our proxies, but we pay no separate compensation solely for the
solicitation of proxies.
What is the purpose of the Meeting?
At the
Meeting, shareholders will be asked to (1) elect directors, (2)
adopt the amended and restated ENGlobal Corporation 2009 Equity
Incentive Plan for a limited term (as described herein) and (3)
ratify the appointment of Moss Adams LLP for fiscal year
2020.
Who is entitled to vote at the Meeting?
Only
shareholders of record at the close of business on April 22, 2020,
the record date for the Meeting, are entitled to receive notice of
and to vote at the Meeting. If you were a shareholder of record on
that date, you are entitled to vote all of the shares you held on
that date at the Meeting, or any postponements or adjournments of
the Meeting.
If your
shares are registered directly in your name, you are the holder of
record of these shares, and we will send the notice containing
instructions on how to access the proxy materials and vote online
directly to you. If you hold your shares in a brokerage account or
through a bank or other holder of record, you hold the shares in
“street name,” and your broker, bank or other holder of
record will send voting instructions to you.
How many votes do I have?
You
have one vote at the Meeting, or any postponements or adjournments
of the Meeting, for each share of our common stock you owned as of
the record date. Shareholders do not have cumulative voting
rights.
How do I vote?
You may
submit a proxy or voting instructions over the Internet at
http://www.proxyvote.com by following the instructions provided in
the notice mailed to you or by voting in person at the Meeting. You
may also submit a proxy or voting instructions by telephone by
following the instructions found on the website,
http://www.proxyvote.com. If you request proxy materials by mail or
email, you may submit a proxy or voting instructions by any of the
above methods or by completing and mailing a proxy
card.
If you
hold your shares in street name, you have the right to direct your
broker, bank or other holder of record how to vote by following the
instructions sent to you by the holder of record. If you desire to
vote in person at the Meeting, as a holder in street name, you must
provide a legal proxy from your bank, broker or other holder of
record.
May I revoke my proxy or change my voting
instructions?
Yes,
you may revoke your proxy or change your voting instructions by
(a) voting in person at the Meeting, (b) casting a vote over
the Internet or by telephone at a later date, or (c) sending a
written notice of revocation to our Corporate Secretary by mail to
ENGlobal Corporation, 654 N. Sam Houston Parkway E., Suite 400,
Houston, Texas 77060-5914 or by facsimile at (281) 878-1010;
provided, that, with regard to (b) and (c), the Company receives
such change prior to the Meeting. If you request proxy materials by
mail or email, you may also change your proxy by mailing a proxy
card with a later date, provided that the Company receives the
later dated proxy card prior to the Meeting. If you submit a new
proxy, only your later dated proxy (whether cast by Internet,
telephone, mail or in person) will be counted.
What are the Board’s recommendations?
The
Board’s recommendations are set forth together with the
description of each item in this proxy statement. The Board
recommends a vote FOR the election of
five directors to our Board to serve until the next annual meeting
of shareholders, FOR the adoption of
the amended and restated ENGlobal Corporation 2009 Equity Incentive
Plan for a limited term (as described herein) and FOR the ratification
of the appointment of Moss Adams LLP as the independent auditors of
ENGlobal for fiscal year 2020.
If any
other matter properly comes before the Meeting, with regard to any
proxies submitted by shareholders, William A. Coskey, P.E. and Mark
A. Hess, the persons appointed on the proxy card, will vote as
recommended by the Board or, if no recommendation is given, in
their own discretion.
How many votes must be present to hold the Meeting?
We will
have a quorum and will be able to conduct the business of the
Meeting if the holders of a majority of shares of our common stock
outstanding and entitled to vote are represented in person or by
proxy at the Meeting. As of the record date, 27,413,626 shares of
our common stock, representing the same number of votes, were
outstanding. Thus, the presence in person or by proxy of the record
holders of at least 13,706,814 shares of our common stock will be
required to establish a quorum. Shareholders of record who are
present at the Meeting in person or by proxy and who abstain from
voting, including brokers holding customers’ shares of record
who cause abstentions to be recorded at the Meeting, will be
included in the number of shareholders present at the Meeting for
purposes of determining whether a quorum is present.
What vote is required to approve each item?
The
election of directors is decided by a plurality of the votes cast.
For this purpose, “plurality” means that the
individuals receiving the largest number of affirmative votes,
whether or not they receive a majority of the votes, are elected as
directors, up to the maximum number of directors to be chosen at
the election. A properly executed proxy marked “WITHHOLD
AUTHORITY” with respect to the election of one or more
directors will not be voted with regard to the director or
directors indicated, although it will be counted for purposes of
determining whether there is a quorum.
With
regard to each other item voted on at the Meeting, the affirmative
vote of the holders of a majority of the votes cast in person or by
proxy and entitled to vote on the item will be required for
approval. A properly executed proxy marked “ABSTAIN”
with respect to any such matter will not be voted, although it will
be counted for purposes of determining whether there is a quorum.
Accordingly, an abstention will have the effect of a negative
vote.
For
shares held in “street name” through a broker or other
nominee, the broker or nominee may not be permitted to exercise
voting discretion with respect to some of the matters to be acted
upon. Under the rules that govern brokers who are voting with
respect to shares that are held in street name, brokers have the
discretion to vote such shares on routine matters, but not on
non-routine matters. The election of directors and the adoption of,
or amendments to, equity compensation plans are not considered
routine matters. Thus, if shareholders do not give their broker or
nominee specific instructions, their shares may not be voted on
those matters and will not be counted in determining the number of
shares necessary for approval. Shares represented by such
“broker non-votes” will, however, be counted in
determining whether there is a quorum.
What if I do not mark a voting choice for some of the matters
listed on my proxy card?
If you
request proxy materials by mail or email and send a proxy card
without specifying a vote or an abstention, your shares will be
voted “FOR”: (1) the director nominees listed on the
proxy card and in this proxy statement, (2) the adoption the
amended and restated ENGlobal Corporation 2009 Equity Incentive
Plan for a limited term (as described herein) and (3) the
ratification of the appointment of Moss Adams LLP as the
independent auditors of ENGlobal for fiscal year 2020.
Could other matters be decided at the Meeting?
We do
not know of any matters that will be considered at the Meeting
other than the items set forth in this proxy statement. If other
matters are properly raised at the Meeting, your proxy authorizes
the proxy holders to vote as they think best, unless authority to
do so is withheld by you in your proxy.
What happens if the Meeting is postponed or adjourned?
Pursuant to Nevada
law, the Meeting may be adjourned by the chairman of the Meeting to
reconvene at the same or some other place. If the adjournment is
for more than 60 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, notice of the adjournment
shall be given to each shareholder of record entitled to vote at
the Meeting. If the adjournment is for less than 60 days, no
additional notice will be delivered.
Who will count the votes?
We will
appoint an inspector of the election who will count the votes at
the Meeting.
What does it mean if I receive more than one proxy
card?
Your
shares are probably registered in more than one account. You should
vote each proxy card you receive. We encourage you to consolidate
all your accounts by registering them in the same name, social
security number and address. This can be accomplished by contacting
your stockbroker. Additionally, our transfer agent, Computershare
Trust Company, N.A., can assist you if you want to consolidate
multiple accounts registered in your name by contacting our
transfer agent at P.O. Box 30170, College Station, TX 77842-3170,
telephone: (781) 575-4238.
How do I get copies of the exhibits filed with ENGlobal’s
Annual Report on Form 10-K?
We are furnishing
our annual report to our shareholders over the Internet. You
may read, print and download our annual report at
http://www.proxyvote.com. You may request the annual report be sent
to you by mail or email by following the instructions on the Notice
of Internet Availability to be mailed to you on or about April 27,
2020. ENGlobal will provide to any shareholder as of the record
date, who so specifically requests in writing, copies of the
exhibits filed with our annual report for a reasonable fee.
Requests for such copies should be directed to Corporate Secretary,
ENGlobal Corporation, 654 N. Sam Houston Parkway E., Suite 400,
Houston, Texas 77060-5914. The Annual Report on Form 10-K may also
be read, downloaded and printed at www.englobal.com. In addition,
copies of all exhibits filed electronically by ENGlobal may be
reviewed and printed from the website of the Securities and
Exchange Commission (the “SEC”) at:
www.sec.gov.
Where can I find the voting results of the Meeting?
The
preliminary voting results will be announced at the Meeting. The
final results will be published in a current report on Form 8-K to
be filed within four business days after the Meeting.
Who
can help answer my questions?
If you
have any questions or if you need additional copies of this proxy
statement or the enclosed proxy card, you should contact Mark A.
Hess, Chief Financial Officer, Treasurer and Corporate Secretary,
at 654 N. Sam Houston Parkway E., Suite 400, Houston, Texas
77060-5914, telephone 281-878-1000.
SMALLER REPORTING COMPANY
The SEC
has adopted rules allowing smaller reporting companies to tailor
their disclosure to reduce costs. Because the Company qualifies as
a “smaller reporting company” under the SEC rules, the
Company has elected to prepare this proxy statement and other
annual and periodic reports as a “Smaller Reporting
Company” consistent with rules of the SEC. Under the scaled
disclosure obligations, the Company is not required to provide,
among other things, Compensation Discussion and Analysis and
certain other tabular and narrative disclosures relating to
executive compensation.
CORPORATE GOVERNANCE AND BOARD MATTERS
Board Size; Meetings of the Board
Our
Board currently has five members. During 2019, the Board met six
times and each director attended at least 75% of the meetings held
during the period for which he was a director. Our four independent
directors serve on three Board committees: Audit, Compensation, and
Nominating & Corporate Governance.
Executive Sessions
In
2019, the Board held multiple executive sessions of its
non-employee directors, David W. Gent, P.E., Randall B. Hale, David
C. Roussel, and Kevin M. Palma. Any non-employee director can
request that an executive session be scheduled.
Board Leadership Structure
The
Company is committed to strong, independent board leadership and
governance, including the flexibility to select and revise its
leadership structure on the basis of the best interests of the
Company and its shareholders at any given point in time. The Board
evaluates this structure in connection with the annual appointments
to the positions of Chairman of the Board (“Chairman”)
and Chief Executive Officer (“CEO”). We do not have a
written policy with respect to separation of the roles of Chairman
and CEO; however, the Board believes that it is currently in the
best interests of the Company and its shareholders to combine the
Chairman and CEO roles and to appoint a Lead Independent Director
annually. In this way, the Company’s shareholders have the
benefit of Board leadership by Mr. Coskey, an executive with
extensive day-to-day knowledge of the Company’s operations,
strategic plan execution and future needs, as well as a Lead
Independent Director who provides Board member
leadership.
Lead Independent Director
David
W. Gent has served as the Company’s lead independent director
since 2002, and was re-elected by the Board to this role in 2019.
The Lead Independent Director position responsibilities currently
include chairmanship of the Nominating & Corporate Governance
Committee; Chair of the Board meetings at which the Chairman is not
in attendance; liaison between the Chairman and the independent
directors, which includes facilitating communications and assisting
in the resolution of conflicts, if any, between the independent
directors and the Company’s management; providing counsel to
the Chairman and CEO, including provision of appropriate feedback
regarding effectiveness of Board meetings, and otherwise as needed
or requested; and such other responsibilities as the Board
delegates. In performing these responsibilities, the Lead
Independent Director is expected to consult with the chairpersons
of other Board committees as appropriate and solicit their
participation in order to avoid the appearance of diluting the
authority or responsibility of the Board committees and their
chairpersons.
Board and Committees’ Role in Risk Oversight
The
Board is responsible for oversight of us and our business,
including risk management. Together with the Board’s standing
committees, the Board is responsible for ensuring that material
risks are identified and managed appropriately. The Board and its
committees regularly review material strategic, operational,
financial, compensation and compliance risks with our senior
management. The Audit Committee has oversight responsibility for
financial risk (such as accounting, finance, internal controls and
tax strategy), and also oversees compliance with applicable laws
and regulations. The Compensation Committee and the Board each
discuss the relationship between our compensation policies and
corporate risk to assess whether these policies encourage excessive
risk-taking by executives and other employees. The Nominating &
Corporate Governance Committee oversees compliance with our
corporate governance principles. During its regular course of its
activities, our Audit Committee discusses our policies with respect
to risk assessment and risk management. Each of the
committees’ report to the Board regarding the areas of risk
they oversee.
Director Independence
The
Board has determined that no non-employee director has a
relationship which, in the opinion of the Board, would interfere
with the exercise of his independent judgment in carrying out the
responsibilities of a director, and that all directors, except Mr.
Coskey, meet the criteria for independence under NASDAQ rules. The
Board has also determined that the members of each of its
committees, including the Audit Committee and the Compensation
Committee, meet the criteria for membership applicable to each
committee under the NASDAQ listing standards and applicable SEC
rules and regulations.
Director Attendance at Annual Meetings
Although we do not
have a formal policy regarding attendance by members of the Board
at our annual meeting of shareholders, we encourage directors to
attend. Four of our directors attended the 2019 annual
meeting.
Committees of the Board of Directors
Committee Composition and Meetings
Each of
our directors attended at least 75% of the total meetings held by
all Board committees on which they served in 2019.
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Committee
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Members
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Audit
Committee
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Randall
B. Hale (Chairperson)
David
C. Roussel
Kevin
M. Palma
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Compensation
Committee
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David
C. Roussel (Chairperson)
Kevin
M. Palma
David
W. Gent
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Nominating
& Corporate Governance Committee
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David
W. Gent (Chairperson)
Randall
B. Hale
David
C. Roussel
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The
Audit, Compensation and Nominating & Corporate Governance
Committees held four, four and one meeting(s), respectively, in
2019.
Summary of Committee Responsibilities
All of
our committee charters are available under the “Investors
– Governance Highlights” section of our website at
www.englobal.com. The charters are reviewed annually.
Audit Committee
The
duties and responsibilities of the Audit Committee are to
oversee:
●
the quality and
integrity of our financial statements;
●
our compliance with
legal and regulatory requirements; and
●
our independent
auditors’ qualifications, independence and
performance.
In
addition, the Audit Committee annually reviews our disclosures
regarding deficiencies, if any, in the design or operation of our
internal controls.
The
Board has determined that Mr. Hale and Mr. Palma are qualified as
audit committee financial experts under the SEC’s rules and
regulations. In addition, the Board has determined that each member
of the Audit Committee has the requisite accounting and related
financial management expertise under NASDAQ rules.
Nominating & Corporate Governance Committee
The
duties and responsibilities of the Nominating & Corporate
Governance Committee are to:
●
assist the Board by
identifying individuals qualified to become Board members and
recommend to the Board director nominees for election at the annual
meetings of shareholders or for appointments to fill
vacancies;
●
recommend to the
Board director nominees for each Board committee and advise the
Board on the appropriate composition of the Board and its
committees;
●
make an annual
report to the Board on succession planning;
●
advise the Board
about and recommend to the Board appropriate corporate governance
practices and assist the Board in implementing those
practices; and
●
implement the
annual performance review process for the Board and its
committees.
In
addition, the Nominating & Corporate Governance Committee
reviews all relationships each director has with us in connection
with the nomination process and reports the results of its review
to the Board with appropriate recommendations, if any, for
approval.
Compensation Committee
The
duties and responsibilities of the Compensation Committee are
to:
●
review the
Company’s evaluation process, compensation, incentive
compensation and equity-based plans and recommend changes in such
plans to the Board as needed;
●
produce a report,
if required, for inclusion in our Proxy Statement for the annual
meeting of shareholders;
●
evaluate the
performance of our Chief Executive Officer and other
executives;
●
set the
compensation for our Chief Executive Officer and such other
executives as the Compensation Committee deems appropriate and
otherwise discharge the Board’s responsibilities relating to
compensation of our officers and directors;
●
delegate authority
to executive officers to establish compensation levels, incentive
compensation and equity-based plan awards, with oversight and
approval;
●
encourage stock
ownership by directors and executives, including through the use of
equity compensation programs;
●
review director
compensation levels and practices, and recommend, from time to
time, changes in such compensation levels and practices to the
Board; and
●
approve and review
reports of any compensation consultants hired by the Company, and
establish the independence of those consultants.
The
Compensation Committee establishes salaries, incentives and other
forms of compensation for executive officers. The Compensation
Committee currently delegates its authority to establish salaries
(other than the salary of the CEO) to the CEO, and does not
currently engage any compensation consultants to determine the
amount or form of executive and director compensation. From time to
time, the Compensation Committee has reviewed publicly available
data compiled by executive officers of the Company relating to
compensation paid to executive officers and directors in similar
size, publicly traded companies in the same geographic area in
which the Company is located. The Compensation Committee has also
solicited input from the CEO with respect to compensation for
executive officers other than the CEO.
Code of Business Conduct and Ethics
The
Company has adopted a Code of Business Conduct and Ethics that
applies to all of the Company’s directors, officers and
employees in accordance with NASDAQ rules. The purpose and role of
this code is to focus our officers, directors, and employees on
areas of ethical risk, provide guidance to help them recognize and
deal with ethical issues, provide mechanisms to report unethical or
unlawful conduct, and help enhance and formalize our culture of
integrity, honesty and accountability. We have posted this Code of
Business Conduct and Ethics on the “Investors –
Governance Highlights” section of our website at
www.englobal.com.
The
Company also has a Code of Ethics applicable to the Chief Executive
Officer and certain senior financial officers of the Company that
complies with Item 406 of Regulation S-K of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and with
applicable NASDAQ rules. We have posted this Code of Ethics on the
“Investors – Governance Highlights” section of
our website at www.englobal.com.
Director Nominations
Consideration of Director Nominees
Shareholder Nominees
The
Nominating & Corporate Governance Committee will carefully
consider all qualified director candidates, whether such candidates
are recommended by a shareholder or otherwise. Other than the
provisions contained in our bylaws set forth below, the Nominating
& Corporate Governance Committee has not established formal
procedures to be followed by shareholders submitting
recommendations for candidates for the Board. Our bylaws provide
that nominations for the election of directors may be made upon
timely notice given by any shareholder of record entitled to vote
for the election of directors. A timely notice must be made in
writing, contain the information required by our bylaws and be
received by the Secretary of the Company at the principal executive
offices of the Company, not later than the close of business on the
90th
calendar day, nor earlier than the close of business on the
120th
calendar day, immediately before the first anniversary of the
preceding year’s annual meeting. However, in the event that
the date of the upcoming annual meeting is advanced more than 30
calendar days before, or delayed more than 70 calendar days after,
such anniversary date, notice by the shareholder to be timely must
be delivered not later than the close of business on 10th calendar day
following the day on which public announcement of a meeting date is
first made by the Company.
Director Qualifications
The
Nominating & Corporate Governance Committee establishes
criteria for selecting new members of the Board. The Board as a
whole should reflect a range of skills, knowledge and experience in
areas of importance to the Company. Directors must be committed to
upholding the highest standards of personal and professional
integrity and to representing the interests of all shareholders,
not particular shareholder constituencies. The Nominating &
Corporate Governance Committee places no specific restrictions on
the number of terms directors may serve or other Boards on which a
director may sit, but directors must possess sufficient time and
energy to carry out their duties effectively. A majority of
directors must be “independent” under the NASDAQ rules,
and members of the Company’s audit committee must meet NASDAQ
financial literacy and sophistication requirements. In determining
whether a director is independent, the Board will broadly consider
all relevant facts and circumstances.
Identifying and Evaluating Nominees for Directors
The
Nominating & Corporate Governance Committee utilizes a variety
of methods for identifying and evaluating nominees for director.
The Nominating & Corporate Governance Committee regularly
assesses the appropriate size of the Board, and whether any
vacancies on the Board are expected due to retirement or otherwise.
If vacancies are anticipated, or otherwise arise, the Nominating
& Corporate Governance Committee will consider various
potential candidates for director. Candidates may come to the
attention of the Nominating & Corporate Governance Committee
through current Board members, shareholders or other persons. These
candidates will be evaluated at regular or special meetings of the
Nominating & Corporate Governance Committee, and may be
considered at any point during the year. As described above, the
Nominating & Corporate Governance Committee will consider
properly submitted shareholder nominations for candidates for the
Board based on the same criteria. Although not part of any formal
policy, our goal is a balanced and diverse Board, with members
whose skills, backgrounds and experiences are complimentary and,
together, cover the spectrum of areas that impact our business. As
part of this evaluation and to further our commitment to diversity,
the Nominating & Corporate Governance Committee assesses
whether the nominees, as a group, collectively represent a
diversity of views, backgrounds, and experiences that will enhance
the Board’s and our effectiveness.
Communications with the Board
Shareholders may
communicate with the Board, Board committees, non-employee
directors as a group, and individual directors by submitting their
communications in writing to ENGlobal Corporation, 654 N. Sam
Houston Parkway E., Suite 400, Houston, TX 77060-5914, Attention:
Corporate Secretary. Any communication must contain:
●
a
representation that the shareholder is a holder of record of our
capital stock;
●
the
name and address, as they appear on our books, of the shareholder
sending the communication; and
●
the
number of shares of our capital stock that are beneficially owned
by such shareholder.
ENGlobal’s
Corporate Secretary will distribute such communications to the
intended recipient upon receipt, unless the communication is unduly
hostile, threatening, illegal or similarly inappropriate, in which
case the Corporate Secretary has the authority to discard the
communication or to take appropriate legal action regarding the
communication.
PROPOSAL ONE:
ELECTION OF DIRECTORS
Nominees
At the
Meeting, you and the other shareholders will elect five individuals
to serve as directors until the next annual meeting of
shareholders, until their successors are duly elected or appointed
or until their earlier death, resignation, or removal. Each of the
nominees is currently a member of the Board. The Nominating &
Corporate Governance Committee, which consists solely of directors
that are independent within the meaning of the rules of the NASDAQ,
recommended the nomination of the five directors to the
Board.
The
individuals named as proxies will vote proxies received for the
election of all nominees, unless you direct them to withhold your
votes. If any nominee becomes unable to serve as a director before
the Meeting, an event that is not presently anticipated,
discretionary authority may be exercised by the persons named as
proxies to vote for substitute nominees proposed by the
Board.
There
are no arrangements or understandings between ENGlobal and any
person pursuant to which such person has been elected as
director.
The
nominees for director, each of whom has consented to serve, if
elected, are as follows:
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Name of Nominee:
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William A. Coskey, P.E.
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Position:
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Chairman of the Board, President and Chief Executive
Officer
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Director Since:
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1985
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Age:
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67
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Present positions and offices with the Company, principal
occupations and other directorships during the past five
years:
Mr.
Coskey founded ENGlobal in 1985 and has served in various
positions, including service as Chairman of the Board since June
2005 and as President and Chief Executive Officer since August
2012. From April 2007 until May 2010, he served as Chief Executive
Officer. Prior to that, he served as Chairman of the Board, Chief
Executive Officer and President from 1985 until 2001, Chief
Operating Officer from 2001 to 2003, and President from 2001 to
June 2005. Mr. Coskey, an honors graduate, received a Bachelor of
Science in Electrical Engineering from Texas A&M University in
1975 and is a Registered Professional Engineer. He served on the
Texas A&M University Electrical Engineering Department Advisory
Council from 1999 to 2014, and from 2006 until 2014, he served as
Chairman of the Council. Mr. Coskey received the 2014 Outstanding
Alumni Honor Award from the Texas A&M University College of
Engineering. In 2014, Mr. Coskey was also appointed to the Texas
A&M College of Engineering Advisory Council.
Qualifications for Consideration:
The
Board selected Mr. Coskey to serve as a director because it
believes that, as the founder of ENGlobal, he provides a unique
perspective to the Board. He was responsible for ENGlobal’s
initial public offering in 1994, listing on the American Stock
Exchange in 1998, and listing on the NASDAQ Stock Market in 2007.
In June 2009, he was awarded the Ernst & Young Entrepreneur of
The Year® in the Energy Services category for the Houston
& Gulf Coast Area. The Board believes Mr. Coskey’s
industry knowledge and business experiences give him invaluable
insights into the Company’s challenges, opportunities and
operations.
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Name of Nominee:
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David W. Gent, P.E.
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Position:
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Lead Independent Director
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Director Since:
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1994
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Age:
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67
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Present positions and offices with the Company, principal
occupations and other directorships during the past five
years:
Mr.
Gent has served as a director of ENGlobal since June 1994, is
Chairman of the Nominating & Corporate Governance Committee and
is a member of the Compensation Committee. Mr. Gent has served as
the Company’s Lead Independent Director since 2002. Since
2011, Mr. Gent has served as the Chairman of SofTest Designs
Corporation, an automation and test systems company that he founded
in 1980. From 1991 through 2011, Mr. Gent held various positions
for Bray International, Inc., an industrial flow control
manufacturer. From 2005 to 2011, Mr. Gent served as Executive Vice
President of Bray International and was responsible for overseeing
worldwide engineering, information services, and training. Mr.
Gent, an honors graduate, received a Bachelor of Science in
Electrical Engineering from Texas A&M University in 1975 and a
Master of Business Administration from Houston Baptist University
in 1984. He is a Registered Professional Engineer. Mr. Gent serves
on the Texas A&M University Electrical and Computer Engineering
Department Advisory Council and he holds several patents in the
field of industrial flow controls.
Qualifications for Consideration:
The
Board selected Mr. Gent to serve as a director, and as Lead
Independent Director, because it believes he possesses valuable
engineering expertise, including extensive experience managing
multinational engineering, research and development, information
technology, and manufacturing operations, including domestic and
international operations obtained through start-ups and
acquisition. He provides the perspective of a leader with
experience in global operations and strategy who has faced and
effectively dealt with economic and governance issues.
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Name of Nominee:
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Randall B. Hale
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Position:
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Independent Director
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Director Since:
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2001
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Age:
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57
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Present positions and offices with the Company, principal
occupations and other directorships during the past five
years:
Mr. Hale has
served as a director of ENGlobal since December 2001, and is
Chairman of the Audit Committee and a member of the Nominating
& Corporate Governance Committee. Mr. Hale is the founder of
Rock Hill Capital Group, LLC, an investment management firm, and
serves as its Managing Director. Mr. Hale is responsible for
managing all aspects of the investment activities of the firm,
including capital raising, deal sourcing and investment management
of portfolio companies. Prior to founding Rock Hill, he served as
an Executive Vice President and a Director of Equus Capital
Management Corporation, investment advisor to several private
equity funds, from November 1992 to November 2002. Prior to joining
Equus, Mr. Hale served in an audit, consulting and advisory
capacity with a public accounting firm in Houston, Texas. In
September 2004, he co-founded ConGlobal Industries, Inc., a
provider of intermodal services to the shipping industry, and
served as its Executive Chairman until its sale in December 2013.
ConGlobal was formed in September 2004 to facilitate the merger of
Container-Care International, Inc., an intermodal services company,
with Global Intermodal Systems, Inc. Prior to the merger, Mr. Hale
served as the President and Chief Executive Officer of
Container-Care from February 2003 to September 2004. Mr. Hale
serves on several private company boards. He is the past President
and Director of the Houston Private Equity Association and is an
active member of the Association for Corporate Growth. Mr. Hale
received a Bachelor in Business Administration from Texas A&M
University in 1985 and is a certified public
accountant.
Qualifications for Consideration:
The
Board selected Mr. Hale to serve as a director because it believes
he possesses valuable financial expertise, including extensive
experience with capital markets transactions and investments in
both public and private companies. Mr. Hale’s CPA background
assists ENGlobal with financial and accounting issues and is
invaluable to our Board’s discussions of the Company’s
capital and liquidity needs. ENGlobal also benefits from Mr.
Hale’s entrepreneurial
experience and his service as a director and chairman on
several private company boards.
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Name of Nominee:
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David C. Roussel
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Position:
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Independent Director
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Director Since:
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2001
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Age:
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70
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Present positions and offices with the Company, principal
occupations and other directorships during the past five
years:
Mr.
Roussel has served as a Director of the Company since December
2001, and is Chairman of the Compensation Committee and a member of
the Audit and Nominating & Corporate Governance Committees. Mr.
Roussel served as President of Petrolog Automation, Inc., an oil
field service company providing well site automation and data
collection, from August 2016 until his retirement in October 2017.
He previously worked for Jefferies Energy Investment Banking, a
leading mergers and acquisitions advisor in the global oil and gas
industry, or its predecessor companies from 2003 until 2014 and
served as a Senior Vice President responsible for managing
acquisition and divestiture projects on behalf of clients.
Jefferies Energy Investment Banking is a division of Jefferies
& Company, Inc., a global investment bank and institutional
securities firm. Mr. Roussel received a Bachelor of Science degree
in Mechanical Engineering from Iowa State University in 1971 and
completed the Harvard Advanced Management Program in
1992.
Qualifications for Consideration:
The
Board selected Mr. Roussel to serve as a director because it
believes he possesses valuable engineering experience, including a
sound background in the energy industry, business operations and
business development practices. Mr. Roussel’s experience in
senior and general management roles helps the Board address the
challenges the Company faces with respect to development of its
growth strategy, mergers and acquisitions, and joint venture
formation. ENGlobal also benefits from Mr. Roussel’s
ability to address diverse matters that come before the
Board.
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Name of Nominee:
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Kevin M. Palma
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Position:
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Independent Director
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Director Since:
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2016
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Age:
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41
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Present positions and offices with the Company, principal
occupations and other directorships during the past five
years:
Mr.
Palma has served as a Director of the Company since June 2016, and
is a member of the Audit and Compensation Committees. Mr. Palma served as the Chief
Financial Officer of B-29 Investments, LP, an energy private equity
firm, from 2006 until he was promoted to Chief Operating Officer in
December 2018, and also served as the Chief Financial Officer of
B-29 Family Holdings, LLC, a family office, since its inception in
2014 until December 2018. In his role within the private equity
space, Mr. Palma focuses on investment strategy, investment
execution, and portfolio company management for both privately-held
and publicly-traded companies. Mr. Palma currently serves on
several private company boards, including Silver Creek Oil and Gas,
LLC, Caliber Completion Services, LLC, and Klear Bit Technologies,
LLC. His past experiences on private company boards include Crest
Pumping Technologies, LLC and TEC Holdings, LLC (which was recently
rebranded as AXIS Energy Services, LLC). Prior to his roles at
B-29, Mr. Palma was a member of the energy investment banking team
at Raymond James & Associates, focusing on capital market
raises and merger and acquisition activity. Mr. Palma is licensed
as a Certified Public Accountant in the State of Texas, and holds a
Master of Business Administration from the Harvard Business School
in addition to a Bachelor of Business Administration and a Master
of Public Administration from the University of
Texas.
Qualifications for Consideration:
The
Board selected Mr. Palma to serve as a director because his
experience in identifying strategic growth trends in the energy
industry, evaluating and completing numerous acquisitions, and
exhibiting an extensive knowledge of financial markets make him
well qualified to serve on ENGlobal’s board of
directors.
Vote Required
Directors are
elected by a plurality, and the five nominees who receive the most
“FOR” votes will be elected. Abstentions and broker
non-votes will not affect the outcome of the election.
Recommendation of the Board
The
Board recommends that shareholders vote FOR each of the
nominees to serve as a director.
PROPOSAL TWO:
ADOPT THE AMENDED AND RESTATED ENGLOBAL CORPORATION 2009 EQUITY
INCENTIVE PLAN FOR A LIMITED TERM
Background
In June
2009, the Company’s shareholders approved the 2009 Equity
Incentive Plan (the “Original Plan”) that initially
provided for the issuance of up to 480,000 shares of common stock.
The Board and the shareholders subsequently approved several
amendments to the Original Plan to ultimately increase the number
of shares available for issuance under the Original Plan to
2,580,000 shares. The Original Plan terminated due to the
expiration of its term on June 18, 2019 pursuant to Section 17
thereof (“Original Term”). At the end of the Original
Term, 560,109 shares were available for issuance pursuant to new
awards.
In
order to further and promote the interests of the Company, its
subsidiaries and its shareholders by enabling the Company and its
subsidiaries to attract, retain and motivate employees, directors
and consultants or those who will become employees, directors and
consultants of the Company and/or its subsidiaries, and to align
the interests of those individuals and the Company’s
shareholders, on April 15, 2020, the Board approved the amendment
and restatement of the Original Plan, as the Amended and Restated
ENGlobal Corporation 2009 Equity Incentive Plan (“Restated
Plan”), subject to shareholder approval, to amend and restate
the Original Plan as in effect on June 18, 2019 as the Restated
Plan with certain other changes as provided therein and to provide
a term for the Restated Plan from June 11, 2020 to the earlier of
June 11, 2021 or the date of the Company’s 2021 Annual
Meeting of the Shareholders. All awards previously granted under
the Original Plan shall remain subject to their award agreements
and the Original Plan and its Original Term. Awards granted under
the Restated Plan shall be subject to the Restated Plan and its
term. The following is a summary of the material provisions of the
Restated Plan. The number of shares that will be available for
issuance pursuant to new awards under the Restated Plan will be
560,109 shares (which was the number of shares available for
issuance pursuant to new awards under the Original Plan and not
subject to an outstanding award under the Original Plan at end of
the Original Term). In addition, any shares forfeited, cancelled or
otherwise not issued for any reason under the awards
pursuant to the Original Plan shall be available for awards under
the Restated Plan. As of March 31, 2020, there were 161,154
unvested shares of restricted stock outstanding under the Original
Plan.
The
Company is seeking shareholder approval of the Restated Plan in
order to allow the future issuance of equity to its employees,
consultants and directors. A copy of the Restated Plan is attached
to this proxy statement as Appendix A. The Company
believes equity awards encourage achievement of superior results by
providing participants with an opportunity to acquire a proprietary
interest in ENGlobal and additional incentive to work for its
continued success. If the Restated Plan is not adopted, we will
have no shares of common stock available to use as incentive to
attract, motivate, and retain employees, consultants and directors
who are critical to the success of the Company.
Summary Description of the Restated Plan
The
following summary of the principal terms of the Restated Plan is
qualified in its entirety by the full text of the Restated Plan,
attached to this proxy statement as Appendix A.
Purpose. The purpose
of the Restated Plan is to attract and retain key employees,
directors and consultants by providing them with additional
incentives, and to promote the success of the Company’s
business.
Administration. The
Board or one or more committees appointed by the Board will
administer the Restated Plan. For this purpose, the Board has
delegated general administrative authority for the Restated Plan to
the Compensation Committee. A committee may delegate some or all of
its authority with respect to the Restated Plan to another
committee of directors and may delegate certain limited award grant
authority to one or more officers of the Company. (The appropriate
acting body, be it the Board, a committee within its delegated
authority, or an officer within his or her delegated authority, is
referred to in this summary as the “Administrator.”)
The Administrator determines the number of shares that are subject
to awards and the terms and conditions of such awards, including
the price (if any) to be paid for the shares or the award. Along
with other authority granted to the Administrator under the
Restated Plan, the Administrator may (i) determine fair market
value, (ii) select recipients of awards, (iii) determine the number
of shares subject to awards, (iv) approve forms of award
agreements, (v) determine the terms and conditions of awards, (vi)
reduce the exercise price of outstanding awards without participant
consent to the fair market value, (vii) amend outstanding awards,
and (viii) allow participants to satisfy withholding tax
obligations through a reduction of shares.
Eligibility. Persons
eligible to receive awards under the Restated Plan include our
officers, employees, consultants and members of the Board. The
Administrator determines from time to time the participants to whom
awards will be granted. An award may be granted by the
Administrator to any eligible person to reward exceptional or
special services, contributions or achievements in the manner and
on such terms and conditions (including any restrictions on such
shares) as determined from time to time by the Administrator. The
number of shares so awarded shall be determined by the
Administrator and may be granted independently or in lieu of a cash
bonus. We currently have approximately 278 employees and four
non-employee directors.
Authorized Shares;
Individual Limits on Awards. The maximum number of shares of
common stock that may be issued pursuant to awards under the
Restated Plan will be 560,109 shares (which was the number of
shares available for issuance pursuant to new awards under the
Original Plan and not subject to an outstanding award under the
Original Plan at end of the Original Term). The amount of the
foregoing authorized shares may be issued as Incentive Stock
Options. In addition, any shares forfeited, cancelled or otherwise
not issued for any reason under the awards pursuant to the
Original Plan shall be available for awards under the Restated
Plan.
The
maximum number of shares subject to option treatment that may be
granted during any calendar year to any individual under the
Restated Plan is currently 50% of the maximum number of shares
authorized for grants under the Restated Plan, which will be
280,054 shares. The maximum number of shares subject to stock
appreciation rights that may be granted during any calendar year to
any individual under the Restated Plan is currently 50% of the
maximum number of shares authorized for grants under the Restated
Plan, which will be 280,054 shares.
In
addition, to the extent an award is designed to follow the
performance-based exception rules of Code Section 162(m) as
determined by the Administrator in its sole discretion, the maximum
number of shares that may be issued to an individual service
provider (other than with respect to stock options or stock
appreciation rights, which limits are described above) under the
Restated Plan for a calendar year is 500,000 shares, and the
maximum amount that may be paid in cash to an individual service
provider under the Restated Plan for a calendar year is
$5,000,000.
To the
extent that the Company settles an award for cash or a form other
than shares, the shares that would have been delivered had there
been no such cash or other settlement will not be counted against
the shares available for issuance under the Restated Plan. To the
extent that shares are delivered pursuant to the exercise of a
stock appreciation right or stock option, only the shares actually
issued shall be counted against the applicable share limits. Shares
that are subject to or underlie awards that expire or for any
reason are cancelled or terminated, are forfeited, fail to vest, or
for any other reason are not paid or delivered under the Restated
Plan will again be available for subsequent awards under the
Restated Plan. Additionally, shares that are exchanged by a
participant or withheld by the Company as full or partial payment
in connection with any award under the Restated Plan, as well as
any shares exchanged by a participant or withheld by the Company to
satisfy the tax withholding obligations related to any award under
the Restated Plan, will be available for subsequent awards under
the Restated Plan and are not counted against the applicable share
limits.
As is
customary in incentive plans of this nature, the number and kind of
shares available under the Restated Plan and the then outstanding
stock-based awards, as well as exercise or purchase prices,
performance targets under certain performance-based awards and
share limits, are subject to adjustment in the event of certain
reorganizations, mergers, combinations, consolidations,
recapitalizations, dividends, stock splits, a split-up or a
spin-off, repurchases or exchange, or other similar events, or
extraordinary dividends or distributions of property to the
shareholders.
Incentive Awards.
The Restated Plan authorizes stock options, stock appreciation
rights (“SARs”), restricted stock, restricted stock
units, performance shares and performance units, as well as other
awards (described in the Restated Plan) that are responsive to
changing developments in management compensation. The Restated Plan
retains the flexibility to offer competitive incentives and to
tailor benefits to specific needs and circumstances. Any award may
be paid or settled in cash. An option or SAR will expire, or other
award will vest in accordance with the schedule set forth in the
applicable award agreement.
Stock Option. A stock option is the
right to purchase shares of common stock at a future date at a
specified price per share generally equal to, but no less than, the
fair market value of a share on the date of grant. An option may
either be an Incentive Stock Option (“ISO”) or a
non-statutory stock option (“NSO”). ISO benefits are
taxed differently from NSOs, as described under “Federal
Income Tax Treatment of Awards under the Restated Plan,”
below. ISOs also are subject to more restrictive terms and are
limited in amount by the Internal Revenue Code of 1986, as amended
(the “Code”), and the Restated Plan. Full payment for
shares purchased on the exercise of any option must be made at the
time of such exercise in a manner approved by the
Administrator.
SARs. A SAR is the right to receive
payment of an amount equal to the excess of the fair market value
of a share of common stock on the date of exercise of the SAR over
the base price of the SAR. The base price will be established by
the Administrator at the time of grant of the SAR but will not be
less than the fair market value of a share on the date of grant.
SARs may be granted in connection with other awards or
independently.
Restricted Stock. A restricted stock
award is typically for a fixed number of shares of common stock
subject to restrictions. The Administrator specifies the price, if
any, the participant must pay for such shares and the restrictions
(which may include, for example, continued service and/or
performance standards) imposed on such shares.
Restricted Stock Units. A restricted
stock unit is similar to a SAR except that it entitles the
recipient to receive an amount equal to the fair market value of a
share of common stock.
Performance-Based Awards.
Performance-based awards may be designed to comply with the
requirements of the performance-based exception under Section
162(m) of the Code as determined by the Administrator in its sole
discretion and may be based on the performance of the Company
and/or one or more of our subsidiaries, divisions, segments, or
units, or individual goals; provided that the performance-based
exception for performance awards granted after November 2, 2017 was
eliminated by the 2017 Tax Cuts and Jobs Act. However, even though
such performance-based exception is eliminated, the award may be
awarded in accordance with such rules. In addition, other
performance awards that do not comply with the Code Section 162(m)
performance-based exception rules may be awarded. The business
criteria from which performance goals will be established are
listed in the Restated Plan under the term “Performance
Goals” and include one or more of the following:
implementation of a strategic plan, stock price, earnings per
share, total stockholder return, operating margin, stock price as a
multiple of cash flow, return on equity, return on assets, return
on investments, operating income, net operating income, pre-tax
income, cash flow, revenue, expenses, earnings before interest, tax
and depreciation, economic value added, corporate overhead costs,
stockholder equity, and corporate acquisitions. Performance goals
may be adjusted to reflect certain changes, including
reorganizations, liquidations and capitalization and accounting
changes, to the extent permitted by Section 162(m) of the Code.
Performance-based awards may be stock-based (payable either in
stock only or in cash or stock) or may be cash-only awards (in
either case, subject to the limits described under the heading
“Authorized Shares; Individual Limits on Awards”
above). Before any performance-based award is paid, the
Administrator must certify that the performance goals have been
satisfied. The Administrator has discretion to determine the
performance goals and restrictions or other limitations of the
individual awards and reserves discretion to reduce payments below
maximum award limits.
The
Administrator may grant stock unit awards and permit deferred
payment of awards, and may determine the form and timing of
payment, vesting, and other terms applicable to stock units or
deferrals.
Acceleration of Awards;
Possible Early Termination of Awards. Upon a change in
control of the Company, outstanding awards under the Restated Plan
will be assumed or substituted. However, if the successor
corporation does not assume or substitute the outstanding awards,
then vesting of these awards will fully accelerate, and in the case
of options or stock appreciation rights, will become immediately
exercisable. For this purpose, a change in control is defined to
include certain changes in the majority of the Board, the sale of
all or substantially all of the Company’s assets, and the
consummation of certain mergers or consolidations.
Transfer
Restrictions. Subject to certain exceptions, awards under
the Restated Plan are not transferable by the recipient other than
by will or the laws of descent and distribution and are generally
exercisable, during the recipient’s lifetime, only by him or
her.
Termination of or Changes
to the Restated Plan. The Board may amend or terminate the
Restated Plan at any time and in any manner; provided, however,
that under NASDAQ rules and the Code, shareholder approval
generally is required in connection with any material amendment to
the Restated Plan. Unless required by applicable law or listing
agency rule, shareholder approval for any amendment will not be
required. Unless previously terminated by the Board, the Restated
Plan will terminate on the earlier of June 11, 2021 or the date of
the Company’s 2021 Annual Meeting of the Shareholders.
Generally speaking, outstanding awards may be amended, subject,
however, to the consent of the holder if the amendment materially
and adversely affects the holder.
Federal Income Tax Treatment of Awards under the Restated
Plan
Federal
income tax consequences (subject to change) relating to awards
under the Restated Plan are summarized in the following discussion.
This summary is not intended to be exhaustive and, among other
considerations, does not describe the deferred compensation
provisions of Section 409A of the Code to the extent an award is
subject to and does not satisfy those rules, nor does it describe
state, local, or international tax consequences.
For
NSOs, the Company is generally entitled to deduct (and the optionee
recognizes taxable income in) an amount equal to the difference
between the option exercise price and the fair market value of the
shares at the time of exercise. For ISOs, the Company is generally
not entitled to a deduction nor does the participant recognize
income at the time of exercise. The current federal income tax
consequences of other awards authorized under the Restated Plan
generally follow certain basic patterns: SARs are taxed and
deductible in substantially the same manner as NSOs;
nontransferable restricted stock subject to a substantial risk of
forfeiture results in income recognition equal to the excess of the
fair market value over the price paid (if any) only at the time the
restrictions lapse (unless the recipient elects to accelerate
recognition as of the date of grant); bonuses and performance share
awards are generally subject to tax at the time of payment;
cash-based awards are generally subject to tax at the time of
payment; and compensation otherwise effectively deferred is taxed
when paid. The Company will generally have a corresponding
deduction at the time the participant recognizes income. However,
as for those awards subject to ISO treatment, the Company would
generally have no corresponding compensation
deduction.
If an
award is accelerated under the Restated Plan in connection with a
change in control (as this term is used under the Code), the
Company may not be permitted to deduct the portion of the
compensation attributable to the acceleration (“parachute
payments”) if it exceeds certain threshold limits under the
Code (and certain related excise taxes may be triggered) under Code
Sections 280G and 4999. Furthermore, because the performance-based
exception under Code Section 162(m) has been eliminated by the 2017
Tax Cuts and Jobs Act, the aggregate compensation in excess of
$1,000,000 attributable to awards under the Restated Plan will not
be permitted to be deducted by the Company in certain
circumstances.
Inapplicability of
ERISA. Based upon current law and published interpretations,
ENGlobal does not believe the Restated Plan is subject to any of
the provisions of the Employee Retirement Income Security Act of
1974, as amended.
Plan Benefits
The
grant of awards under the Restated Plan to employees, consultants
and non-employee directors, including the executive officers named
in the Summary Compensation Table, is subject to the discretion of
the Administrator. As discussed in greater detail in the
“Director Compensation” section of this proxy
statement, the equity grant component of director compensation is
currently suspended and will be reviewed for reinstatement on a
quarterly basis. Accordingly, future awards to employees,
consultants and non-employee directors are not
determinable.
Securities Authorized For Issuance Under Equity Compensation
Plans
The
following table sets forth certain information concerning the
Original Plan as of December 28, 2019.
|
|
Number of
Securities to be Issued Upon Exercise of Outstanding Options,
Warrants and Rights
|
Weighted-Average
Exercise Price of Outstanding
Options,
Warrants and Rights
|
Number of
Securities Remaining Available for Future Issuance Under Equity
Compensation Plan
|
|
Equity compensation
plans approved by security holders (1)
|
—
|
—
|
—
|
|
|
|
|
|
|
Equity compensation
plan not approved by security holders
|
—
|
—
|
—
|
|
Total
|
—
|
—
|
—
|
(1)
Does not include 191,404 shares of restricted common stock
outstanding at December 28, 2019. The Original Plan terminated due
to the expiration of its term on June 18, 2019 pursuant to Section
17 thereof.
Vote Required
The
approval of the adoption of the Restated Plan requires the
affirmative vote of the holders of a majority of the shares
represented at the Meeting, in person or by proxy, and entitled to
vote. For the approval of the adoption of the Restated Plan you may
vote “FOR” or “AGAINST” or abstain from
voting. If you hold your shares in your own name and abstain from
voting on this matter, your abstention will have the effect of a
vote “AGAINST” this proposal. Because brokers do not
have discretionary authority to vote on this proposal, broker
non-votes will not affect the outcome of the vote on this
proposal.
Recommendation of the Board
The
Board recommends that shareholders vote FOR the adoption of
the Restated Plan.
PROPOSAL THREE:
THE RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS LLP
AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
OF
ENGLOBAL FOR FISCAL YEAR 2020
The
Audit Committee has appointed Moss Adams LLP, an independent
registered public accounting firm, as the Company’s
independent registered public accounting firm to examine the
consolidated financial statements of ENGlobal for the fiscal year
ended December 26, 2020, and to perform other appropriate audit and
advisory services and is requesting ratification of such
appointment by the shareholders.
In the
event that the shareholders do not ratify the appointment of Moss
Adams LLP, the adverse vote will be considered as a direction to
the Audit Committee to select another independent registered public
accounting firm for the next fiscal year. However, because of the
difficulty and expense of making any substitution of independent
registered public accounting firms after the beginning of the
current fiscal year, it is contemplated that the appointment for
the fiscal year ended December 26, 2020, will be permitted to
stand, unless the Audit Committee finds other reasons for making a
change. It is understood that even if the selection of Moss Adams
LLP is ratified, the Audit Committee, in its discretion, may direct
the appointment of a new independent registered public accounting
firm at any time during the year if the Audit Committee feels that
such a change would be in the best interests of ENGlobal and its
shareholders.
Representatives of
Moss Adams LLP are expected to be present at the Meeting, will have
an opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions.
Vote Required
The
ratification of the appointment of Moss Adams LLP for the year
ending December 26, 2020, requires the affirmative vote of the
holders of a majority of the shares represented at the Meeting, in
person or by proxy, and entitled to vote. For the ratification of
our independent registered public accountants, you may vote
“FOR” or “AGAINST” or abstain from voting.
If you hold your shares in your own name and abstain from voting on
this matter, your abstention will have the effect of a vote
“AGAINST” this proposal. Because brokers generally have
discretionary authority to vote on the ratification of our
independent registered public accountants, broker non-votes are
generally not expected to result from the vote on this
proposal.
Recommendation of the Board
The
Board recommends that shareholders vote FOR the ratification of the
appointment of Moss Adams LLP as the independent registered public
accounting firm of ENGlobal for fiscal year 2020.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Directors and Executive Officers
The
following table shows the number of shares of our common stock
beneficially owned as of April 22, 2020, by each director or
director nominee, the executive officers named in the
“Summary Compensation Table” and all directors and
executive officers as a group. None of these shares are pledged as
security.
|
Name of
Beneficial Owner
|
|
Amount and
Nature of Beneficial Ownership(1)
|
|
Percent of
Class(2)
|
|
|
|
|
|
|
|
Mr.
Coskey
|
|
8,840,697
|
(3)
|
32.25%
|
|
Mr.
Hale
|
|
343,346
|
(4)
|
1.25%
|
|
Mr.
Gent
|
|
331,346
|
(5)
|
1.21%
|
|
Mr.
Roussel
|
|
291,346
|
(6)
|
1.06%
|
|
Mr.
Palma
|
|
44,891
|
(7)
|
*
|
|
Mr.
Hess
|
|
325,731
|
(8)
|
1.19%
|
|
Mr.
Williams
|
|
152,456
|
(9)
|
*
|
|
|
|
|
|
|
|
All
directors and executive officers as a group (9
persons)
|
|
10,426,013
|
(10)
|
38.11%
|
*
Represents less than 1% of the shares of common stock
outstanding.
(1)
Beneficial
ownership of common stock has been determined for this purpose in
accordance with Rule 13d-3 under the Exchange Act, under which a
person is deemed to be the beneficial owner of securities if such
person has or shares voting power or investment power with respect
to such securities, has the right to acquire beneficial ownership
within 60 days, or acquires such securities with the purpose or
effect of changing or influencing the control of
ENGlobal.
(2)
Based on 27,413,626
shares issued and outstanding on April 22, 2020.
(3)
Includes 8,840,597
shares of common stock held in the name of Alliance 2000, Ltd.,
whose general partner is jointly owned by Mr. Coskey and his
spouse. Mr. Coskey has shared power to vote and dispose of such
shares.
(4)
Includes 32,051
unvested shares of restricted stock which were granted to Mr. Hale
in June 2017 and which will vest at a time yet to be
determined.
(5)
Includes 32,051
unvested shares of restricted stock which were granted to Mr. Gent
in June 2017 and which will vest at a time yet to be
determined.
(6)
Include 32,051
unvested shares of restricted stock which were granted to Mr.
Roussel in June 2017 and which will vest at a time yet to be
determined.
(7)
41,041 shares of
common stock are held in a Beneficiary IRA and 3,850 shares of
common stock are held in a Rollover IRA. Mr. Palma does not
beneficially own any of the 1,565,514 shares of common stock held
by B-29 Family Holdings, LLC.
(8)
Includes 20,000
shares of restricted stock which were granted to Mr. Hess on August
10, 2017 that will vest in two equal installments on August 10,
2020 and August 10, 2021.
(9)
Includes 15,000
shares of restricted stock which were granted to Mr. Williams on
August 10, 2017 that will vest in two equal installments on August
10, 2020 and August 10, 2021.
(10)
Includes 65,000
shares of unvested restricted stock granted to our executive
officers and 96,153 shares of unvested restricted stock granted to
our directors.
Principal Shareholders
Except
as set forth below, the following table sets forth information as
of April 22, 2020, about persons whom we know to be the beneficial
owners of more than 5% of our issued and outstanding common stock
based solely on our review of the statement of beneficial ownership
filed by these persons/entities with the SEC as of the date of such
filing:
|
Name and
Address
of Beneficial
Owner
|
|
Amount and
Nature of Beneficial Ownership(1)
|
|
Percent of
Class(1),(2)
|
|
|
|
|
|
|
|
Alliance
2000, Ltd.
c/o 654
N. Sam Houston Pkwy. E.
Suite
400
Houston, TX
77060-5914
|
|
8,840,697(3)
|
|
32.25%
|
|
B-29
Family Holdings, LLC
P.O.
Box 170
Gainesville, TX
76241-0170.
|
|
1,565,514(4)
|
|
5.71%
|
|
NGP
Energy Technology Partners II, L.P.
NGP ETP
II, L.L.C.
Energy
Technology Partners, L.L.C.
Philip
J. Deutch
c/o
1700 K Street NW, Suite 750Washington, D.C. 20006
|
|
1,530,128(5)
|
|
5.58%
|
|
NorthPointe
Capital, LLC
c/o 101
W. Big Beaver, Suite 745
Troy,
MI 48084
|
|
1,550,716(6)
|
|
5.66%
|
(1)
Beneficial
ownership of common stock has been determined for this purpose in
accordance with Rule 13d-3 under the Exchange Act, under which a
person is deemed to be the beneficial owner of securities if such
person has or shares voting power or investment power with respect
to such securities, has the right to acquire beneficial ownership
within 60 days, or acquires such securities with the purpose or
effect of changing or influencing the control of
ENGlobal.
(2)
Based on 27,413,626
shares issued and outstanding on April 22. 2020.
(3)
Alliance 2000, Ltd.
(“Alliance”) is a Texas limited partnership whose
general partner is jointly owned by Mr. Coskey and his
spouse.
(4)
The foregoing
information is based upon information contained in a Schedule 13G/A
filed by B-29 Family Holdings, LLC with the SEC on February 14,
2020. B-29 Family Holdings, LLC has the sole power to vote or
direct the vote of 1,565,514 shares and the sole power to dispose
or direct the disposition of 1,565,514 shares.
(5)
The foregoing
information is based solely upon information contained in a
Schedule 13G/A filed by NGP Energy Technology Partners II, L.P.
(“NGP Energy Tech”), NGP ETP II, L.L.C. (“NGP
GP”), Energy Technology Partners, L.L.C. (“ETP”),
and Mr. Philip J. Deutch with the SEC on February 13, 2020. NGP GP
is the general partner of NGP Energy Tech. ETP is the sole manager
of NGP GP and Mr. Deutch is the sole member and manager of ETP. NGP
Energy Tech will have sole voting and dispositive power with
respect to the shares beneficially owned by NGP Energy Tech. By
virtue of the relationships between and among the reporting persons
described in the Schedule 13G/A, NGP GP, ETP and Mr. Deutch
disclaim beneficial ownership of the reported securities except to
the extent of their pecuniary interest therein.
(6)
The foregoing
information is based solely upon information contained in a
Schedule 13G/A filed by NorthPointe Capital, LLC
(“NorthPointe”) with the SEC on February 11, 2014.
NorthPointe has the sole power to vote or direct the vote of
285,388 shares and sole power to dispose or direct the disposition
of 1,550,716 shares.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The
Board has adopted a policy requiring that all transactions between
the Company and its officers, directors, principal shareholders and
their respective affiliates be on terms no less favorable to the
Company than could be obtained from unrelated third parties and
that any such transactions be approved by a majority of the
disinterested members of the Board. Pursuant to such policy, the
Company’s Audit Committee is responsible for the review and
assessment of all related party transactions.
EXECUTIVE OFFICERS
Our
executive officers serve at the pleasure of our Board of Directors
and are subject to annual appointment by the Board at the first
meeting following the annual meeting of shareholders. Set forth
below is a brief description of the business experience of each of
our executive officers, except Mr. Coskey, whose biography is
listed above.
|
Executive Officer:
|
Mark A. Hess
|
|
Position:
|
Chief Financial Officer, Corporate Secretary and
Treasurer
|
|
Age:
|
61
|
Present positions and offices with the Company, principal
occupations during the past five years:
Mr.
Hess has served as Chief Financial Officer and Treasurer of
ENGlobal Corporation since September 2012 and served as interim
Chief Financial Officer from June 2012 to September 2012. Mr. Hess
previously served as the Company’s Corporate Controller from
July 2011 until June 2012. Mr. Hess assumed the Corporate Secretary
responsibilities in December 2017. Prior to joining ENGlobal, Mr.
Hess served as Vice President and Chief Accounting Officer of
Geokinetics, Inc., a publically-traded seismic data service
company, from April 2008 to April 2010. From November 2004 to April
2008, he served as Director of Finance for CGGVeritas, a
publically-traded seismic data service company. In total he has
over 35 years of experience in various accounting, merger and
acquisition, and finance roles primarily in public companies. Mr.
Hess is a licensed CPA in the state of Texas, holds a Bachelor of
Business Administration in Accounting from the University of
Houston and is an active member of Financial Executives
International.
|
Executive Officer:
|
R. Bruce Williams
|
|
Position:
|
Senior Vice President
|
|
Age:
|
67
|
Present positions and offices with the Company, principal
occupations during the past five years:
Mr.
Williams is currently serving as a Senior Vice President for
ENGlobal’s Engineering and Construction segment. Mr. Williams
served as the Chief Operating Officer from December 2013 through
March 2017 and the President of ENGlobal Government Services, Inc.
from September 2012 through March 2017. He served as Senior Vice
President, Midwest/Southwest Operations of ENGlobal’s
Engineering and Construction segment from September 2012 to
September 2013. He initially joined ENGlobal in 2004, and from
November 2010 until September 2012, he served in various roles at
ENGlobal, including General Manager of the Tulsa Office, Vice
President of Midwest and Southwest Operations, Senior Project
Manager of Engineering/ Projects, and acting General Manager of
ENGlobal Government Services, Inc. Prior to joining ENGlobal, Mr.
Williams served as Vice President – Engineering for U.S.
Transcarbon LLC, a petroleum coke gasification project developer,
from April 2008 until October 2010. In total, he has over 35 years
of domestic and international experience in engineering and project
management, including several project management positions of
increasing responsibility in the U.S., Middle East, Papua New
Guinea, Asia, Mexico and Brazil. Mr. Williams has an undergraduate
degree in Chemistry from the University of Northern Iowa, with post
graduate studies in Environmental Management from the University of
Houston and MBA studies at Incarnate Word University.
|
Executive Officer:
|
Michael Patton
|
|
Position:
|
Senior Vice President
|
|
Age:
|
67
|
Present positions and offices with the Company, principal
occupations during the past five years:
Mr.
Patton rejoined ENGlobal Corporation as Senior Vice President in
April 2016. Mr. Patton was also at ENGlobal from 1998 through 2010,
when he held many positions, including Senior Vice President of
Business Development, President of ENGlobal Government Services,
Inc., Senior Vice President and General Manager of ENGlobal’s
Tulsa Office. In 2014 and 2015, Mr. Patton served as Senior Vice
President and General Manager of the Gulf Coast Regional offices
for Saulsberry Industries and as their Senior Vice President of
Strategic Planning. Prior to joining Saulsberry Industries, Mr.
Patton served as Senior Vice President and General Manager of the
Oil, Gas, and Chemical Division of CDI from 2011 through 2013. Mr.
Patton graduated from the University of Oklahoma in 1975 with a
Bachelor of Science in Electrical Engineering. Mr. Patton has been
a Registered Professional Engineer since 1980. He has held several
positions within technical societies, including most recently the
Rice Global Forum.
|
Executive Officer:
|
John Kratzert
|
|
Position:
|
Senior Vice President
|
|
Age:
|
57
|
Present positions and offices with the Company, principal
occupations during the past five years:
John
Kratzert currently serves as Senior Vice President for ENGlobal
Government Services, and in this role is responsible for all of the
Company’s government related design, integration, fabrication
and field support operations. Mr. Kratzert joined ENGlobal as a
Program Manager and then General Manager of ENGlobal Government
Services in November of 2012. Prior to joining ENGlobal, Mr.
Kratzert served as the Technical Director for Physical and
Electronic Security Programs (BAE Systems), Principle Systems
Engineer (SAIC) and Division Manager (MANDEX). Mr. Kratzert is a
retired Marine Corps Officer and has over 33 years of experience
leading domestic and international organizations. Mr. Kratzert
holds a Bachelor of Science degree in Biology from The Citadel,
Military College of South Carolina and a Master of Science degree
in Management from Troy University.
EXECUTIVE
COMPENSATION TABLES
Summary Compensation Table
The
following table sets forth information regarding compensation
earned during the last two fiscal years by our Chief Executive
Officer, Chief Financial Officer, and Senior Vice President (the
“named executive officers”).
Name and
Principal Position
|
|
|
|
|
|
Non-Equity Incentive Plan Compensation(2)
|
All Other Compensation(3)
($)
|
|
|
Mr. Coskey ~ President
&
|
|
2019
|
49,442
|
-
|
-
|
-
|
-
|
49,422
|
|
Chief Executive
Officer
|
|
2018
|
49,442
|
-
|
-
|
-
|
-
|
49,422
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Hess ~ Chief Financial
Officer,
|
|
2019
|
246,126
|
-
|
-
|
-
|
-
|
246,126
|
|
Secretary &
Treasurer
|
|
2018
|
216,299
|
-
|
-
|
-
|
4,159
|
220,458
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Williams
~
|
|
2019
|
236,912
|
-
|
-
|
-
|
-
|
236,912
|
|
Senior Vice
President
|
|
2018
|
236,912
|
-
|
-
|
-
|
3,098
|
240,010
|
(1)
This column shows
the grant date fair value of equity awards computed in accordance
with stock-based compensation accounting rules (FASB ASC Topic
718). Values for awards subject to performance conditions are
computed based upon the probable outcome of the performance
condition as of the grant date. For a description of certain
assumptions made in the valuation of stock awards, see Note 9 to
the Company’s audited consolidated financial statements,
included in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 28, 2019, as filed with the SEC on March
27, 2020.
(2)
The Non-Equity
Incentive Plan includes amounts awarded pursuant to the
Company’s Short Term Incentive Plan. Metrics are set annually
and are generally contingent on the Company reaching certain levels
of Net Operating Income.
(3)
All Other
Compensation includes 401(k) matching contributions. Does not
include perquisites or personal benefits if the aggregate amount
less than $10,000. Does not include medical, dental, life, short
and long term disability or paid time off benefits which were
available to all employees.
Outstanding Equity Awards at Fiscal Year End 2019
The
following table sets forth information as of December 28, 2019
regarding outstanding equity awards held by the named executive
officers. On December 27, 2019, the closing price on NASDAQ for the
Company’s common stock was $0.99 per share.
|
|
|
|
Name
|
Number
of
Shares
That
Have
Not
Vested(1)
|
Market Value
of
Shares of
Stock
That Have
Not
Vested
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares That
Have
Not
Vested
|
Equity Incentive
Plan
Awards: Market
Value
of Unearned
Shares
That Have Not
Vested
|
|
Mr. Coskey
|
|
--
|
--
|
--
|
|
Mr. Hess(1)
|
30,125
|
$29,824
|
--
|
--
|
|
Mr. Williams(2)
|
21,750
|
$21,533
|
--
|
--
|
(1)
Includes 10,125
shares that were granted under the 2009 Equity Incentive Plan (the
“Plan”) on March 1, 2016, which vested on March 1,
2020. Includes 20,000 shares that were granted under the Plan on
August 10, 2017, which will vest 10,000 shares on August 10, 2020
and 10,000 shares on August 10, 2021.
(2)
Includes 6,750
shares that were granted under the Plan on March 1, 2016, which
vested on March 1, 2020. Includes 15,000 shares that were granted
under the Plan on August 10, 2017, which will vest 7,500 shares on
August 10, 2020 and 7,500 shares on August 10, 2021
Employment Agreements; Termination and Change-in-Control
Arrangements
As of
December 28, 2019, Messrs. Coskey and Hess were each a party to a
written employment agreement (the “Employment
Agreements”) with ENGlobal. The Employment Agreements provide
for an annual base salary, subject to discretionary increases by
the Board, and other compensation in the form of cash bonuses,
incentive compensation, stock options, stock appreciation rights,
and restricted stock awards. Additionally, the executives receive
health, life, and other insurance benefits in accordance with the
terms of the Company’s benefit plans, and the Company
provides management level support services and reimbursement for
specified business expenses.
The
Employment Agreements provide for severance payments and benefits
in the case of termination of employment. If employment ends
because of death, the Company will pay any accrued but unpaid
salary, additional compensation, and other benefits earned up to
that date. In the case of a physical or mental disability that
prevents the executive from performing his services under the
Employment Agreement for a period of six months in the case of Mr.
Coskey, and three months, in the case of Mr. Hess, the Company may
terminate the executive’s employment. If the Company
terminates an executive’s employment in such cases of
disability, the Employment Agreements provide that the Company will
continue to pay the executive his full salary and benefits for the
six months following the date of termination (the “Initial
Severance Period”). At the Company’s option, severance
payments consisting of 50% of the monthly amount of the base salary
for Mr. Coskey, and in the case of Mr. Hess, 100% of the monthly
amount of his base salary, and full benefits may be extended for an
additional six-month period following the Initial Severance
Period.
If the
Company terminates an executive’s employment for
“cause,” as defined in the Employment Agreements, the
Company will pay any accrued but unpaid salary, additional
compensation, and other benefits earned up to the effective date of
termination. If the Company terminates an executive’s
employment without “cause,” the Employment Agreement
provides that the Company will continue to pay the executive his
full salary and benefits for the Initial Severance Period. At the
Company’s option, severance payments consisting of 50% of the
monthly amount of the base salary for Mr. Coskey, and in the case
of Mr. Hess, 100% of the monthly amount of his base salary, and
full benefits may be extended for an additional six-month period
following the Initial Severance Period.
The
Employment Agreements include a covenant not to compete following
termination of employment for a period of up to one year, as well
as confidentiality provisions that are customary in nature and
scope, for such agreements.
The
terms of the Employment Agreements were set through the course of
arms-length negotiations with the executives. As part of these
negotiations, the Compensation Committee analyzed the terms of the
same or similar arrangements for comparable executives employed by
some of the companies in our peer group. The Compensation Committee
used this approach in setting the amounts payable and the
triggering events under the Employment Agreements. The Employment
Agreements’ termination of employment provisions were entered
into in order to address competitive concerns by providing the
executives with a fixed amount of compensation that would offset
the potential risk of foregoing other opportunities. At the time of
entering into the Employment Agreements, the Compensation Committee
considered ENGlobal’s aggregate potential obligations in the
context of retaining the executives and their expected
compensation.
Executive Perquisites
Our use
of perquisites as a component of compensation is limited and
largely based on historical practices and policies of our Company.
These perquisites and other benefits are provided to assure
competitiveness and provide an additional retention incentive for
these executives. Our Compensation Committee endeavors to adhere to
a high level of propriety in managing executive benefits and
perquisites. We do not own a plane and do not provide any personal
aircraft use for executives.
Other Compensation
From
time to time, we make available to employees and executives certain
other fringe benefits. We may provide club memberships, tickets to
sporting or cultural events, tickets to community events, etc. To
the extent that such items are taxable to the individual, they are
considered to be part of the individual’s compensation
package.
Review of and Conclusion Regarding All Components of Executive
Compensation
Based
on our performance during the past several years, and in light of
our executives’ efforts in directing the Company, the
Compensation Committee and the Board have determined that the
compensation paid to Mr. Coskey, as well as compensation paid to
our other named executive officers, serves the best interests of
our shareholders and continues to emphasize programs that the
Compensation Committee and the Board believe positively affect
shareholder value.
DIRECTOR COMPENSATION
The
principal objectives of our director compensation programs are to:
(i) compensate for time spent on the Company’s behalf, and
(ii) align the compensation programs with long-term value to the
Company’s shareholders. We attempt to accomplish these
objectives in an economical manner through a combination of
reasonable director retainer fees and equity incentive grants to
the directors.
Retainer Fees
Historically, our
non-employee directors received a cash retainer as compensation for
their service to the Company, and our Chairman of the Audit
Committee also received an additional cash retainer as compensation
for such service. Our non-employee directors are also eligible for
reimbursement of travel and other miscellaneous expenses associated
with attendance at Board and Committee meetings. However, due to
the losses that the Company has incurred during 2016 and 2017, the
Compensation Committee recommended and the Board approved that cash
retainer fees be suspended effective October 1, 2017 and reviewed
for reinstatement on a quarterly basis. At this time, cash retainer
fees have not been reinstated.
Restricted Stock Grants
Under
the Plan, non-employee directors are eligible to receive equity
grants. Our non-employee directors typically receive the equity
grants in June concurrent with the annual shareholder’s
meeting. On June 15, 2017, in recognition of the services provided
by its Board for the 2017-2018 service term, our non-employee
directors, Messrs. Gent, Hale and Roussel, each received 42,735
restricted shares of the Company’s common stock, valued at
$50,000 based on the fair market value of the shares on the date of
grant, or $1.17 per share. One quarter of the shares vested on
September 30, 2017. Due to the losses that the Company incurred in
2016 and 2017, the Compensation Committee recommended and the Board
approved the suspension of the vesting provisions of these
restricted shares to be extended indefinitely; therefore, the
remaining future vestings are not determined at this time and will
be revisited on a quarterly basis for reinstatement.
The
Company did not issue restricted shares to its non-employee
directors in June 2018 or June 2019. The equity grant component of
director compensation will be reviewed for reinstatement on a
quarterly basis. Any unvested shares will be forfeited as of the
date the non-employee director ceases to qualify as an independent
director.
Mr.
Palma does not receive any compensation from the Company for his
service as a director, but is eligible for reimbursement of travel
and other miscellaneous expenses associated with attendance at
Board and Committee meetings.
HEDGING AND PLEDGING PROHIBITIONS
Our
Insider Trading Policy, which applies to all directors, officers
and employees of the Company, prohibits hedging or monetization
transactions or similar arrangements with respect to ENGlobal
stock, purchases of ENGlobal stock on margin or engaging in short
sales, or purchases or sales of puts, calls or other derivative
securities with respect to ENGlobal stock. In addition, officers
and directors of the Company are prohibited from encumbering any
portion of their ENGlobal securities or using ENGlobal securities
as collateral for any purpose, unless any such transaction is
approved in advance by the Chairman and Chief Executive Officer and
the Lead Independent Director.
AUDIT MATTERS
Report of the Audit Committee
The information contained in this Report of the Audit Committee
shall not be deemed to be “soliciting material” or to
be “filed” or incorporated by reference in future
filings with the SEC, or to be subject to the liabilities of
Section 18 of the Exchange Act, except to the extent that we
specifically incorporate it by reference into a document filed
under the Securities Act of 1933, as amended, or the Exchange
Act.
In
accordance with its written charter, the Audit Committee assists
the Board in, among other matters, oversight of our financial
reporting process, including the effectiveness of our internal
accounting and financial controls and procedures, and controls over
our accounting, auditing, and financial reporting practices. A copy
of the Audit Committee Charter is available on the “Investors
– Governance Highlights” section of our website at
www.englobal.com.
The
Board has determined that all three members of the Audit Committee
are “independent” based upon the standards adopted by
the Board, which incorporate the independence requirements under
applicable laws, rules and regulations.
Management is
responsible for the financial reporting process, the preparation of
consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America, and
our system of internal controls and procedures designed to ensure
compliance with accounting standards and applicable laws and
regulations. Our independent registered public accounting firm is
responsible for auditing the financial statements. The Audit
Committee’s responsibility is to monitor and review these
processes and procedures. The members of the Audit Committee are
not professionally engaged in the practice of accounting or
auditing and we are not professionals in those fields. The Audit
Committee relies, without independent verification, on the
information provided to us and on the representations made by
management that the financial statements have been prepared with
integrity and objectivity and on the representations of management
and the opinion of the independent registered public accounting
firm that such financial statements have been prepared in
conformity with accounting principles generally accepted in the
United States of America.
During
fiscal year 2019, the Audit Committee held four meetings. The Audit
Committee’s meetings were conducted so as to encourage
communication among the members of the Audit Committee, management,
and our independent registered public accounting firm, Moss Adams
LLP. Among other things, the Audit Committee discussed with our
internal and independent auditors the overall scope and plans for
ENGlobal’s audits. The Audit Committee met separately with
the independent registered public accounting firm, with and without
management, to discuss the results of their examinations and their
observations and recommendations regarding our internal controls.
The Audit Committee also discussed with our independent registered
public accounting firm all matters required to be discussed by the
applicable requirements of the Public Company Accounting Oversight
Board and the SEC.
The
Audit Committee reviewed and discussed our audited consolidated
financial statements as of and for the year ended December 28,
2019, with management and our independent registered public
accounting firm. Management’s discussions with the Audit
Committee included a review of critical accounting
policies.
The
Audit Committee obtained from the independent auditors a formal
written statement describing all relationships between us and our
registered public accounting firm that might bear on the
independence of the independent registered public accounting firm
consistent with the applicable requirements of the Public Company
Accounting Oversight Board regarding the independent registered
public accounting firm communications with audit committees
concerning independence The Audit Committee discussed with the
independent registered public accounting firm any relationships
that may have an impact on the auditors’ objectivity and
independence and satisfied itself as to the auditors’
independence. The Audit Committee has reviewed and approved the
amount of fees paid to Moss Adams LLP for audit and non-audit
services. The Audit Committee concluded that the provision of
services by Moss Adams LLP is compatible with the maintenance of
Moss Adams LLP’s independence.
At four
of its meetings during 2019, the Audit Committee met with members
of senior management and the independent registered public
accounting firm to review the certifications provided by the Chief
Executive Officer and Chief Financial Officer under the
Sarbanes-Oxley Act of 2002, the rules and regulations of the SEC
and the overall certification process. At these meetings, Company
officers reviewed each of the Sarbanes-Oxley certification
requirements concerning internal control over financial reporting
and any fraud, whether or not material, involving management or
other employees with a significant role in internal control over
financial reporting.
Based
on the above-mentioned review and discussions with management, and
the independent registered public accounting firm, and subject to
the limitations on our role and responsibilities described above
and in the Audit Committee Charter, the Audit Committee recommended
to the Board of Directors that ENGlobal’s audited
consolidated financial statements be included in its Annual Report
on Form 10-K for the fiscal year ended December 28, 2019, for
filing with the SEC.
Audit
Committee of the Board of Directors,
Randall
B. Hale, Chairman
David
C. Roussel
Kevin
M. Palma
March 27, 2020
Principal Auditor Fees
Moss
Adams LLP was appointed as the Company’s independent auditors
on November 16, 2017 and has audited the Company’s 2019 and
2018 consolidated financial statements. During 2019 and 2018, Moss
Adams LLP did not audit the Company’s internal control over
financial reporting because the Company is a “smaller
reporting company” as defined under the rules of the Exchange
Act. The Audit Committee has determined that the audit-related
services provided by Moss Adams LLP are compatible with maintaining
its independence in the conduct of its auditing functions pursuant
to the auditor independence rules of the SEC. No non-audit services
were provided by Moss Adams LLP in 2019 and 2018.
The
following table shows the fees paid or accrued by ENGlobal for the
audit and other services provided by Moss Adams LLP for fiscal
years 2019 and 2018.
|
|
|
|
|
Audit
Fees
|
172,000
|
168,250
|
|
Audit-Related
Fees
|
--
|
--
|
|
Tax
Fees
|
--
|
--
|
|
All Other
Fees
|
--
|
--
|
|
Total
|
172,000
|
168,250
|
As
defined by the SEC, (i) “audit fees” are fees for
professional services rendered by the Company’s independent
registered public accounting firm for the audit of the
Company’s annual financial statements and review of financial
statements included in the Company’s Quarterly Reports on
Form 10-Q, or for services that are normally provided by the
accountant in connection with statutory and regulatory filings or
engagements for those fiscal years; (ii) “audit-related
fees” are fees for assurance and related services by the
Company’s independent registered public accounting firm that
are reasonably related to the performance of the audit or review of
the Company’s financial statements and are not reported under
“audit fees”; (iii) “tax fees” are fees for
professional services rendered by the Company’s independent
registered public accounting firm for tax compliance, tax advice,
and tax planning; and (iv) “all other fees” are fees
for products and services provided by the Company’s
independent registered public accounting firm, other than the
services reported under “audit fees,”
“audit-related fees,” and “tax
fees.”
Pre-Approval Policy
Under
applicable SEC rules, except for the ability to designate a portion
of this responsibility as described below, the full Audit Committee
is required to pre-approve the audit and non-audit services
performed by the independent registered public accounting firm in
order to ensure that they do not impair the auditors’
independence from ENGlobal. The Audit Committee may delegate
pre-approval authority to a member of the Audit Committee, and if
it does, the decisions of that member must be presented to the full
Audit Committee at its next scheduled meeting. The SEC’s
rules specify the types of non-audit services that an independent
auditor may not provide to its audit client and establish the Audit
Committee’s responsibility for administration of the
engagement of the independent registered public accounting
firm.
Consistent with the
SEC’s rules, the Audit Committee Charter requires that the
Audit Committee review and pre-approve all audit services and
permitted non-audit services provided by the independent registered
public accounting firm to ENGlobal or any of its subsidiaries,
except that the Audit Committee Chairman has the right to approve
up to $25,000 of services in any year. During 2019, all fees were
pre-approved by the Audit Committee.
OTHER MATTERS
To the
best of the knowledge, information and belief of the directors,
there are no other matters which are to be acted upon at the
Meeting. If such matters arise, the form of proxy provides that
discretionary authority is conferred on the designated persons in
the enclosed form of proxy to vote with respect to such
matters.
The
Company has received no notice of any other items to be submitted
for consideration at the Meeting and, except for reports of
operations and activities by management, which are for
informational purposes only and require no approval or disapproval,
and consideration of the minutes of the preceding annual meeting
for approval, which may involve technical corrections to the text
where actions taken were incorrectly recorded, but which require no
action of approval or disapproval of the subject matter, management
does not know of or contemplate any other business that will be
presented for action by the shareholders at the Meeting. If any
further business is properly presented at the Meeting, the persons
named as proxies will act in their discretion on behalf of the
shareholders they represent.
SHAREHOLDER PROPOSALS FOR 2021
Under
Rule 14a-8 of the Exchange Act, shareholder proposals must be
received by the Company no later than December 28, 2020 to be
considered for inclusion in the Company’s proxy statement
relating to the 2021 Annual Meeting of Shareholders or, if the
Company changes the date of the 2021 Annual Meeting by more than 30
days from the date of the 2020 Annual Meeting, then shareholder
proposals must be received by the Company a reasonable time before
the Company begins to print and send its proxy materials for the
2021 Annual Meeting of Shareholders.
In
addition, pursuant to our bylaws, shareholder proposals to be
presented at the 2021 Annual Meeting of Shareholders of the Company
(whether or not to be included in the Company’s proxy
statement) must be made upon timely notice. A timely notice must be
made in writing, contain the information required by our bylaws and
be received by the Secretary of the Company at the principal
executive offices of the Company not earlier than the close of
business on the 120th calendar day, nor
later than the close of business on the 90th calendar day,
immediately before the first anniversary of the 2020 Annual Meeting
of Shareholders. However, in the event that the date of the 2021
Annual Meeting is advanced more than 30 calendar days before, or
delayed more than 70 calendar days after, such anniversary date,
notice by the shareholder to be timely must be delivered not later
than the close of business on the 10th calendar day
following the day on which public announcement of a meeting date is
first made by the Company. For information regarding the nomination
of director candidates, please see “Consideration of Director
Nominees - Shareholder Nominees” on page 8 of this proxy
statement.
SHAREHOLDERS SHARING THE SAME ADDRESS
The SEC
has adopted rules that permit companies and intermediaries (e.g.,
brokers) to satisfy the delivery requirements for shareholder
meeting materials with respect to two or more shareholders sharing
the same address by delivering a single set of meeting materials
addressed to those shareholders. This process, which is commonly
referred to as “householding,” potentially means extra
convenience for shareholders and cost savings for
companies.
A
number of brokers with account holders who are ENGlobal
shareholders will be “householding” our proxy
materials. A single set of meeting materials will be delivered to
multiple shareholders sharing an address unless contrary
instructions have been received from the affected shareholders.
Once you have received notice from your broker that they will be
“householding” communications to your address,
“householding” will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you no
longer wish to participate in “householding” and would
prefer to receive a separate set of shareholder meeting materials,
please notify your broker or ENGlobal. Direct your written request
to Investor Relations at ENGlobal Corporation, 654 N. Sam Houston
Parkway E., Suite 400, Houston, TX 77060-5914, (281) 878-1000.
Shareholders who currently receive multiple copies of shareholder
meeting materials at their addresses and would like to request
“householding” of their communications should contact
their brokers.
ANNUAL REPORT TO SHAREHOLDERS
A copy
of ENGlobal’s Annual Report on Form 10-K, which includes our
consolidated financial statements, is being delivered to you with
this proxy statement. You may also read, print and download our
annual report at http://www.proxyvote.com. The annual report may
also be read, downloaded and printed at
www.englobal.com.
APPROVAL OF THE BOARD OF DIRECTORS
The
contents of this proxy statement have been approved by the Board of
Directors, and the Board of Directors has authorized the mailing of
this proxy statement to the shareholders of the
Company.
|
|
By
Order of the Board of Directors,
Mark A.
Hess
Chief
Financial Officer, Treasurer and Corporate Secretary
|
Houston,
Texas
April
27, 2020
APPENDIX A
AMENDED AND RESTATED ENGLOBAL CORPORATION
2009 EQUITY INCENTIVE PLAN
WHEREAS, the Board previously adopted
the ENGlobal Corporation 2009 Equity Incentive Plan, as amended
(the “Prior
Plan”); and
WHEREAS, subject to shareholder approval
at the Company’s 2020 Annual Meeting of Shareholders, the
Board approved, effective June 11, 2020, the amendment and
restatement of the Prior Plan as in effect on June 18, 2019 to
provide a new term from June 11, 2020 to the earlier of June 11,
2021 or the date of the Company’s 2021 Annual Meeting of
Shareholders and to provide other changes as provided
herein.
NOW, THEREFORE, the Company hereby
adopts the Amended and Restated ENGlobal Corporation 2009 Equity
Incentive Plan (the “Plan”) as follows:
1. Purpose
of the Plan. The purpose of
the Plan is to: (i) attract and retain the best available personnel
for positions of substantial responsibility, (ii) provide
additional incentive to Employees, Directors and Consultants, and
(iii) promote the success of the Company’s business. The Plan
permits the grant of Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock, Stock Appreciation Rights, Restricted
Stock Units, Performance Units, Performance Shares, and Other Stock
Based Awards.
2.
Definitions. As used in this
Plan, the following definitions shall apply:
(a)
“Administrator” means the Board or
any of its Committees that shall be administering the Plan, in
accordance with Section 4 of the Plan.
(b) “Applicable
Laws” means the requirements relating to the
administration of equity-based awards or equity compensation plans
under U.S. federal and state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system
on which the Common Stock is listed or quoted and the applicable
laws of any foreign country or jurisdiction where Awards are, or
shall be, granted under the Plan.
(c) “Award”
means, individually or collectively, a grant under the Plan of
Options, SARs, Restricted Stock, Restricted Stock Units,
Performance Units, Performance Shares or Other Stock Based
Awards.
(d) “Award
Agreement” means the written or electronic agreement
setting forth the terms and provisions applicable to each Award
granted under the Plan. The Award Agreement is subject to the terms
and conditions of the Plan.
(e) “Awarded
Stock” means the Common Stock subject to an
Award.
(f) “Board”
means the Board of Directors of the Company.
(g) “Change
in Control” means the occurrence of any of the
following events:
(i) Any
“person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the “beneficial
owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing
50% or more of the total voting power represented by the
Company’s then outstanding voting securities;
(ii) the
sale or disposition by the Company of all or substantially all of
the Company’s assets other than (A) the sale or disposition
of all or substantially all of the assets of the Company to a
person or persons who beneficially own, directly or indirectly, at
least 50% or more of the combined voting power of the outstanding
voting securities of the Company at the time of the sale or (B)
pursuant to a spin-off type transaction, directly or indirectly, of
such assets to the Company’s stockholders;
(iii) A
change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors
are Incumbent Directors. “Incumbent Directors” are directors
who either (A) are Directors as of the effective date of the Plan,
or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection
with an actual or threatened proxy contest relating to the election
of directors to the Company);
(iv) a
merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity
or its parent) at least 50% of the total voting power represented
by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or
consolidation; or
(h) “Code”
means the Internal Revenue Code of 1986, as amended, and the U.S.
Treasury regulations promulgated thereunder. Any reference to a
section of the Code shall be a reference to any successor or
amended section of the Code.
(i) “Committee”
means a committee of Directors or other individuals satisfying
Applicable Laws appointed by the Board in accordance with Section 4
of the Plan
(j) “Common
Stock” means the Common Stock of the Company, or in
the case of Performance Units, Restricted Stock Units, and certain
Other Stock Based Awards, the cash equivalent thereof, as
applicable.
(k) “Company”
means ENGlobal Corporation, a Nevada corporation, and any successor
to ENGlobal Corporation.
(l) “Consultant”
means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such
entity.
(m) “Director”
means a member of the Board.
(n) “Disability”
means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Administrator in its sole discretion
may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by
the Administrator from time to time.
(o) “Dividend
Equivalent” means a credit, made at the sole
discretion of the Administrator, to the account of a Participant in
an amount equal to the value of dividends paid on one Share for
each Share represented by an Award held by such Participant. Under
no circumstances shall the payment of a Dividend Equivalent be made
contingent on the exercise of an Option or Stock Appreciation
Right.
(p) “Employee”
means any person, including officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service
as a Director nor payment of a director’s fee by the Company
shall be sufficient to constitute “employment” by the
Company.
(q) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
(r) “Exchange
Program” means a program under which (i) outstanding
Awards are surrendered or cancelled in exchange for Awards of the
same type (which may have lower exercise prices and different
terms), Awards of a different type, and/or of cash, and/or (ii) the
exercise price of an outstanding Award is reduced. The terms and
conditions of any Exchange Program shall be determined by the
Administrator in its sole discretion.
(s) “Fair
Market Value” means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock
is listed on any established stock exchange or a national market
system, including without limitation the NASDAQ Global Select
Market, the NASDAQ Global Market (formerly the NASDAQ National
Market) or the NASDAQ Capital Market (formerly the NASDAQ SmallCap
Market) of the NASDAQ Stock Market, the Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the
day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
(ii) If
the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value
of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock for the day of
determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
(iii) In
the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the
Administrator.
(iv) Notwithstanding
the preceding, for federal, state, and local income tax reporting
purposes and for such other purposes as the Administrator deems
appropriate, the Fair Market Value shall be determined by the
Administrator in accordance with uniform and nondiscriminatory
standards adopted by it from time to time.
(t) “Incentive
Stock Option” means an Option intended to qualify and
receive favorable tax treatment as an incentive stock option within
the meaning of Section 422 of the Code, as designated in the
applicable Award Agreement.
(u) “Nonstatutory
Stock Option” means an Option that by its terms does
not qualify or is not intended to qualify as an Incentive Stock
Option.
(v) “Option”
means an option to purchase Common Stock granted pursuant to the
Plan.
(w) “Other
Stock Based Awards” means any other awards not
specifically described in the Plan that are valued in whole or in
part by reference to, or are otherwise based on, Shares and are
created by the Administrator pursuant to Section 12.
(x) “Outside
Director” means an “outside director”
within the meaning of Section 162(m) of the Code.
(y) “Parent”
means a “parent corporation” with respect to the
Company, whether now or hereafter existing, as defined in Section
424(e) of the Code.
(z) “Participant”
means a Service Provider who has been granted an Award under the
Plan.
(aa) “Performance
Goals” means goals which have been established by the
Committee in connection with an Award and are based on one or more
of the following criteria, as determined by the Committee in its
absolute and sole discretion: (i) implementation of a strategic
plan, (ii) stock price, (iii) earnings per share, (iv) total
stockholder return, (v) operating margin, (vi) stock price as a
multiple of cash flow, (vii) return on equity, (viii) return on
assets, (ix) return on investments, (x) operating income, (xi) net
operating income, (xii) pre-tax income, (xiii) cash flow, (xiv)
revenue, (xv) expenses, (xvi) earnings before interest, tax and
depreciation, (xvii) economic value added, (xviii) corporate
overhead costs, (xix) stockholder equity, and (xx) corporate
acquisitions.
(bb)
“Performance
Period” means the time period during which the
Performance Goals or performance objectives must be
met.
(cc) “Performance
Share” means Shares issued pursuant to a Performance
Share Award under Section 10 of the Plan.
(dd) “Performance
Unit” means, pursuant to Section 10 of the Plan, an
unfunded and unsecured promise to deliver Shares, cash or other
securities equal to the value set forth in the Award
Agreement.
(ee) “Period
of Restriction” means the period during which the
transfer of Shares of Restricted Stock are subject to restrictions
and therefore, the Shares are subject to a substantial risk of
forfeiture. Such restrictions may be based on the passage of time,
the achievement of Performance Goals or other target levels of
performance, or the occurrence of other events as determined by the
Administrator.
(ff) “Plan”
means this Amended and Restated ENGlobal Corporation 2009 Equity
Incentive Plan, effective June 11, 2020.
(gg) “Restricted
Stock” means Shares issued pursuant to a Restricted
Stock Award under Section 8 or issued pursuant to the early
exercise of an Option.
(hh) “Restricted
Stock Unit” means, pursuant to Sections 4 and 11 of
the Plan, an unfunded and unsecured promise to deliver Shares, cash
or other securities equal in value to the Fair Market Value of one
Share in the Company on the date of vesting or settlement, or as
otherwise set forth in the Award Agreement.
(ii) “Rule
16b-3” means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.
(jj) “Section
16(b)” means Section 16(b) of the Exchange
Act.
(kk) “Service
Provider” means an Employee, Director or
Consultant.
(ll) “Share”
means a share of Common Stock, as adjusted in accordance with
Section 15 of the Plan.
(mm) “Stock
Appreciation Right” or “SAR” means, pursuant to Section 9
of the Plan, an unfunded and unsecured promise to deliver Shares,
cash or other securities equal in value to the difference between
the Fair Market Value of a Share as of the date such SAR is
exercised/settled and the Fair Market Value of a Share as of the
date such SAR was granted, or as otherwise set forth in the Award
Agreement.
(nn) “Subsidiary”
means a “subsidiary corporation” with respect to the
Company, whether now or hereafter existing, as defined in Section
424(f) of the Code.
3. Stock
Subject to the Plan.
(a)
Stock Subject to the Plan.
Subject to the provisions of Section 15 of the Plan, the maximum
aggregate number of Shares that may be issued pursuant to all
Awards under the Plan is 2,580,000 Shares, which shall be reduced
by the awards vested and settled or outstanding under the Prior
Plan on June 18, 2019 (the “Termination Date”). In addition,
any awards under the Prior Plan that are forfeited, cancelled or
otherwise not issued under the Prior Plan shall be available for
Awards and issuance under this Plan. The amount of the foregoing
Shares that are not vested and settled or outstanding subject to
awards under the Prior Plan on the Termination Date is 560,109, and
the amount of such Shares available for issuance as Incentive Stock
Options shall be 560,109. All awards under the Prior Plan shall
remain subject to the Prior Plan and its term. Shares shall not be
deemed to have been issued pursuant to the Plan with respect to any
portion of an Award that is settled in cash. Upon payment in Shares
pursuant to the exercise of an Award, the number of Shares
available for issuance under the Plan shall be reduced only by the
number of Shares actually issued in such payment. If a Participant
pays the exercise price (or purchase price, if applicable) of an
Award through the tender of Shares, or if Shares are tendered or
withheld to satisfy any Company withholding obligations, the number
of Shares so tendered or withheld shall again be available for
issuance pursuant to future Awards under the Plan.
(b) Lapsed
Awards. If any outstanding Award expires or is terminated or
canceled without having been exercised or settled in full, or if
Shares acquired pursuant to an Award subject to forfeiture or
repurchase are forfeited or repurchased by the Company, the Shares
allocable to the terminated portion of the Award or the forfeited
or repurchased Shares shall again be available for grant under the
Plan.
(c) Share
Reserve. The Company, during the term of the Plan, shall at
all times reserve and keep available such number of Shares as shall
be sufficient to satisfy the requirements of the Plan.
4. Administration
of the Plan.
(a)
Procedure.
(i) Multiple Administrative Bodies.
Different Committees with respect to different groups of Service
Providers may administer the Plan.
(ii) Section
162(m). To the extent that the Administrator determines it
to be desirable and necessary to qualify Awards granted under this
Plan as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan shall be
administered by a Committee of two or more Outside
Directors.
(iii) Rule
16b-3. If a transaction is intended to be exempt under Rule
16b-3 of the Exchange Act, it shall be structured to satisfy the
requirements for exemption under Rule 16b-3.
(iv) Other
Administration. Other than as provided above, the Plan shall
be administered by (A) the Board or (B) a Committee constituted to
satisfy Applicable Laws.
(v) Delegation of Authority for Day-to-Day
Administration. Except to the extent prohibited by
Applicable Law, the Administrator may delegate to one or more
individuals the day-to-day administration of the Plan and any of
the functions assigned to it in this Plan. Such delegation may be
revoked at any time.
(b) Powers
of the Administrator. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties
delegated by the Board to the Committee, the Administrator shall
have the authority, in its discretion to:
(i) determine the Fair
Market Value;
(ii) select
the Service Providers to whom Awards may be granted under this
Plan;
(iii) determine
the number of Shares to be covered by each Award granted under this
Plan;
(iv) approve
forms of Award Agreements for use under the Plan;
(v) determine the terms
and conditions, not inconsistent with the terms of the Plan, of any
Award granted under this Plan, including but not limited to, the
exercise price, the time or times when Awards may be exercised
(which may be based on Performance Goals or other performance
criteria), any vesting acceleration or waiver of forfeiture or
repurchase restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each
case on such factors as the Administrator, in its sole discretion,
shall determine;
(vi) reduce,
with or without Participant consent, the exercise price of any
Award to the then current Fair Market Value (or a higher value) if
the Fair Market Value of the Common Stock covered by such Award
shall have declined since the date the Award was
granted;
(vii) institute
an Exchange Program;
(viii) construe
and interpret the terms of the Plan and Awards granted pursuant to
the Plan;
(ix) prescribe,
amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established
for the purpose of satisfying applicable foreign laws and/or
qualifying for preferred tax treatment under applicable foreign tax
laws;
(x) amend the terms of
any outstanding Award, including the discretionary authority to
extend the post-termination exercise period of Awards and
accelerate the satisfaction of any vesting criteria or waiver of
forfeiture or repurchase restrictions, provided that any amendment
that would adversely affect the Participant’s rights under an
outstanding Award shall not be made without the Participant’s
written consent. Notwithstanding the foregoing, an amendment shall
not be treated as adversely affecting the rights of the Participant
if the amendment causes an Incentive Stock Option to become a
Nonstatutory Stock Option or if the amendment is made to the
minimum extent necessary to avoid the adverse tax consequences of
Section 409A of the Code;
(xi) allow
Participants to satisfy withholding tax obligations by electing to
have the Company withhold from the Shares or cash to be issued upon
exercise or vesting of an Award that number of Shares or cash
having a Fair Market Value equal to the minimum amount required to
be withheld. The Fair Market Value of any Shares to be withheld
shall be determined on the date that the amount of tax to be
withheld is to be determined, and all elections by a Participant to
have Shares or cash withheld for this purpose shall be made in such
form and under such conditions as the Administrator may deem
necessary or advisable;
(xii) authorize
any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the
Administrator;
(xiii) allow
a Participant to defer the receipt of the payment of cash or the
delivery of Shares that would otherwise be due to the Participant
under an Award;
(xiv) determine
whether Awards shall be settled in Shares, cash or in a combination
Shares and cash;
(xv) determine
whether Awards shall be adjusted for Dividend
Equivalents;
(xvi) create
Other Stock Based Awards for issuance under the Plan;
(xvii) establish
a program whereby Service Providers designated by the Administrator
can reduce compensation otherwise payable in cash in exchange for
Awards under the Plan;
(xviii) impose
such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a
Participant or other subsequent transfers by the Participant of any
Shares issued as a result of or under an Award, including without
limitation, (A) restrictions under an insider trading policy, and
(B) restrictions as to the use of a specified brokerage firm for
such resales or other transfers;
(xix) establish
one or more programs under the Plan to permit selected Participants
the opportunity to elect to defer receipt of consideration upon
exercise of an Award, satisfaction of Performance Goals or other
performance criteria, or other event that absent the election,
would entitle the Participant to payment or receipt of Shares or
other consideration under an Award; and
(xx) make
all other determinations that the Administrator deems necessary or
advisable for administering the Plan.
The
express grant in the Plan of any specific power to the
Administrator shall not be construed as limiting any power or
authority of the Administrator. However, the Administrator may not
exercise any right or power reserved to the Board.
(c) Effect
of Administrator’s Decision. The Administrator’s
decisions, determinations, actions and interpretations shall be
final, conclusive and binding on all persons having an interest in
the Plan.
(d) Indemnification.
The Company shall defend and indemnify members of the Board,
officers and Employees of the Company or of a Parent or Subsidiary
whom authority to act for the Board, the Administrator or the
Company is delegated (“Indemnitees”) to the maximum
extent permitted by law against (i) all reasonable expenses,
including reasonable attorneys’ fees incurred in connection
with the defense of any claim, investigation, action, suit or
proceeding, or in connection with any appeal therein (collectively,
a “Claim”), to
which any of them is a party by reason of any action taken or
failure to act in connection with the Plan, or in connection with
any Award granted under the Plan; and (ii) all amounts required to
be paid by them in settlement the Claim (provided the settlement is
approved by the Company) or required to be paid by them in
satisfaction of a judgment in any Claim. However, no person shall
be entitled to indemnification to the extent he is determined in
such Claim to be liable for gross negligence, bad faith or
intentional misconduct. In addition, to be entitled to
indemnification, the Indemnitee must, within 30 days after written
notice of the Claim, offer the Company, in writing, the
opportunity, at the Company’s expense, to defend the Claim.
The right to indemnification shall be in addition to all other
rights of indemnification available to the Indemnitee.
5. Eligibility.
Nonstatutory Stock Options, Restricted Stock, Stock Appreciation
Rights, Performance Units, Performance Shares, Restricted Stock
Units and Other Stock Based Awards may be granted to Service
Providers. Incentive Stock Options may be granted only to
Employees.
6.
Limitations.
(a)
$100,000 Limitation for Incentive
Stock Options. Each Option shall be designated in the Award
Agreement as either an Incentive Stock Option or a Nonstatutory
Stock Option. However, notwithstanding such designation, to the
extent that the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under all
plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 6(a), Incentive Stock Options
shall be taken into account in the order in which they were
granted. The Fair Market Value of the Shares shall be determined as
of the time the Options with respect to such Shares is
granted.
(b) Special
Limits for Grants of Options and Stock Appreciation Rights.
Subject to Section 15 of the Plan, the following special limits
shall apply to Shares available for Awards under the
Plan:
(i) the maximum number
of Shares that may be subject to Options granted to any Service
Provider in any calendar year shall equal 50% Shares and contain an
exercise price equal to the Fair Market Value of the Common Stock
as of the date of grant; and
(ii) the
maximum number of Shares that may be subject to Stock Appreciation
Rights granted to any Service Provider in any calendar year shall
equal 50% Shares and contain an exercise price equal to the Fair
Market Value of the Common Stock as of the date of
grant.
With
respect to any Award (other than Options or Stock Appreciation
Rights which have the limitations as provided in Sections 6(a) and
(b) above), notwithstanding any provision contained in this Plan to
the contrary, the maximum aggregate number of Shares that may be
subject to Awards settled in Shares, including, without limitation,
Restricted Stock or Other Stock Based Awards, that may be granted
to any individual Service Provider under the Plan in a calendar
year is 500,000 Shares. If such an Award may also be settled in
cash rather than Shares pursuant to its terms, the number of shares
in Stock that could be issued for the cash amount shall be counted
toward the individual Share limit in the foregoing sentence
calculated as of the date of the grant. In the event an Award is to
be paid solely in cash pursuant to the terms, the maximum amount
that can be subject to Awards granted in calendar year to any
individual Service Provider shall be $5,000,000 calculated as of
the date of grant. The foregoing limitations in this Section 6(c)
shall be interpretedto comply with the performance-based
compensation exception under Section 162(m) of the Code and shall
only be applied to the extent required for an Award that is
intended, by the Committee in its sole discretion, to meet the
performance-based compensation exception under Section 162(m) of
the Code. In addition, the total Shares subject to the limitations
in this Section 6 shall be adjusted as otherwise provided in
Section 15 of the Plan and consistent with Code Sections 424, 409A
and 162(m), and the limitations in this Section 6 are subject to
the maximum number of Shares available for the Awards under Section
3(a) of the Plan.
7. Stock
Options.
(a)
Term of
Option. The term of each Option shall be stated in the Award
Agreement. In the case of an Incentive Stock Option, the term shall
be 10 years from the date of grant or such shorter term as may be
provided in the Award Agreement. Moreover, in the case of an
Incentive Stock Option granted to a Participant who, at the time
the Incentive Stock Option is granted, owns stock representing more
than 10% of the total combined voting power of all classes of stock
of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five years from the date of grant
or such shorter term as may be provided in the Award
Agreement.
(b) Option
Exercise Price and Consideration.
(i) Exercise Price. The per Share
exercise price for the Shares to be issued pursuant to exercise of
an Option shall be determined by the Administrator, subject to the
following:
(1) In the case of an
Incentive Stock Option
(A) granted to an
Employee who, at the time the Incentive Stock Option is granted,
owns stock representing more than 10% of the total combined voting
power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share on the date of
grant.
(B) granted to any
Employee other than an Employee described in paragraph (A)
immediately above, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of
grant.
(2) In the case of a
Nonstatutory Stock Option, the per Share exercise price shall be
determined by the Administrator, but shall not be less than Fair
Market Value for those subject to U.S. taxation. In the case of a
Nonstatutory Stock Option intended to qualify as
“performance-based compensation” within the meaning of
Section 162(m) of the Code, the per Share exercise price shall be
no less than 100% of the Fair Market Value per Share on the date of
grant.
(3) Notwithstanding the
foregoing, Incentive Stock Options may be granted with a per Share
exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a transaction described in, and in
a manner consistent with, Section 424(a) of the Code.
(ii) Waiting
Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied
before the Option may be exercised. The Administrator, in its sole
discretion, may accelerate the satisfaction of such conditions at
any time.
(c) Form
of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock
Option, the Administrator shall determine the acceptable form of
consideration at the time of grant. Such consideration, to the
extent permitted by Applicable Laws, may consist entirely
of:
(i) cash;
(ii) check;
(iii) promissory
note;
(iv) other
Shares which meet the conditions established by the Administrator
to avoid adverse accounting consequences (as determined by the
Administrator);
(v) consideration
received by the Company under a cashless exercise program
implemented by the Company in connection with the
Plan;
(vi) a
reduction in the amount of any Company liability to the
Participant, including any liability attributable to the
Participant’s participation in any Company-sponsored deferred
compensation program or arrangement;
(vii) any
combination of the foregoing methods of payment; or
(viii) any
other consideration and method of payment for the issuance of
Shares permitted by Applicable Laws.
(d) Exercise
of Option.
(i) Procedure for Exercise; Rights as a
Stockholder. Any Option granted under this Plan shall be
exercisable according to the terms of the Plan and at such times
and under such conditions as determined by the Administrator and
set forth in the Award Agreement. An Option shall be deemed
exercised when the Companyreceives: (x) written or electronic
notice of exercise (in accordance with the Award Agreement) from
the person entitled to exercise the Option, and (y) full payment
for the Shares with respect to which the Option is exercised
(including provision for anyapplicable tax withholding). Full
payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Award
Agreement and the Plan. Shares issued upon exercise of an Option
shall be issued in the name of theParticipant or, if requested by
the Participant, in the name of the Participant and his spouse.
Until the Shares are issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent
of the Company), no rightto vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Awarded
Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment shall be made for a dividend or
other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 15 of the Plan or
the applicable Award Agreement. Exercising an Option in any manner
shall decrease the number of Shares thereafter available for sale
under the Option, by the number of Shares as to which the Option is
exercised.
(ii) Termination
of Relationship as a Service Provider. If a Participant
ceases to be a Service Provider, other than upon the
Participant’s death or Disability, the Participant may
exercise his Option within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the
date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Award Agreement). In
the absence of a specified time in the Award Agreement, the Option
shall remain exercisable for 30 days following the
Participant’s termination after which the Option shall
terminate. Unless otherwise provided by the Administrator, if on
the date of termination the Participant is not vested as to his
entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If the Participant does not
exercise his Option as to all of the vested Shares within the time
specified by the Award Agreement, the Option shall terminate, and
the remaining Shares covered by the Option shall revert to the
Plan.
(iii) Disability
of Participant. If a Participant ceases to be a Service
Provider as a result of his Disability, the Participant may
exercise his Option, to the extent vested, within the time
specified in the Award Agreement (but in no event later than the
expiration of the term of the Option as set forth in the Award
Agreement). If no time for exercise of the Option on Disability is
specified in the Award Agreement, the Option shall remain
exercisable for 12 months following the Participant’s
termination for Disability. Unless otherwise provided by the
Administrator, on the date of termination for Disability, the
unvested portion of the Option shall revert to the Plan. If after
termination for Disability, the Participant does not exercise his
Option as to all of the vested Shares within the time specified by
the Award Agreement, the Option shall terminate and the remaining
Shares covered by such Option shall revert to the
Plan.
(iv) Death
of Participant. If a Participant dies while a Service
Provider, the Option, to the extent vested, may be exercised within
the time specified in the Award Agreement (but in no event may the
Option be exercised later than the expiration of the term of the
Option as set forth in the Award Agreement), by the beneficiary
designated by the Participant prior to his death; provided that
such designation must be acceptable to the Administrator. If no
beneficiary has been designated by the Participant, then the Option
may be exercised by the personal representative of the
Participant’s estate, or by the persons to whom the Option is
transferred pursuant to the Participant’s will or in
accordance with the laws of descent and distribution. If the Award
Agreement does not specify a time within which the Option must be
exercised following a Participant’s death, it shall be
exercisable for 12 months following his death. Unless otherwise
provided by the Administrator, if at the time of death, the
Participant is not vested as to his entire Option, the Shares
covered by the unvested portion of the Option shall immediately
revert to the Plan. If the Option is not exercised as to all of the
vested Shares within the time specified by the Administrator, the
Option shall terminate, and the remaining Shares covered by such
Option shall revert to the Plan.
8. Restricted
Stock.
(a)
Grant of Restricted Stock.
Subject to the terms and provisions of the Plan, the Administrator,
at any time and from time to time, may grant Shares of Restricted
Stock to Service Providers in such amounts as the Administrator, in
its sole discretion, shall determine.
(b) Restricted
Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of
Restriction, the number of Shares granted, and such other terms and
conditions as the Administrator, in its sole discretion, shall
determine. Unless the Administrator determines otherwise, Shares of
Restricted Stock shall be held by the Company as escrow agent until
the restrictions on the Shares have lapsed.
(c) Removal
of Restrictions. Except as otherwise provided in this
Section 8, Shares of Restricted Stock covered by each Award made
under the Plan shall be released from escrow as soon as practical
after the last day of the Period of Restriction. The Administrator,
in its sole discretion, may accelerate the time at which any
restrictions shall lapse or be removed.
(d) Voting
Rights. During the Period of Restriction, Service Providers
holding Shares of Restricted Stock may exercise full voting rights
with respect to those Shares, unless the Administrator determines
otherwise.
(e) Dividends
and Other Distributions. During the Period of Restriction,
Service Providers holding Shares of Restricted Stock shall be
entitled to receive all dividends and other distributions paid with
respect to such Shares unless otherwise provided in the Award
Agreement. If any dividends or distributions are paid in Shares,
the Shares shall be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.
(f) Return
of Restricted Stock to Company. On the date set forth in the
Award Agreement, the Restricted Stock for which restrictions have
not lapsed shall revert to the Company and again shall become
available for grant under the Plan.
9. Stock
Appreciation Rights.
(a)
Grant
of SARs. Subject to the terms and conditions of the Plan, a SAR may
be granted to Service Providers at any time and from time to time
as shall be determined by the Administrator, in its sole
discretion.
(b) Number
of Shares. The Administrator shall have complete discretion to
determine the number of SARs granted to any Service
Provider.
(c) Exercise
Price, Exercisability and Other Terms. The Administrator,
subject to the provisions of the Plan, shall have complete
discretion to determine the terms and conditions of SARs granted
under the Plan, including the sole discretion to accelerate
exercisability at any time.
(d) SAR
Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term, the
conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, shall
determine.
(e) Expiration
of SARs. An SAR granted under the Plan shall expire upon the
date determined by the Administrator, in its sole discretion, and
set forth in the Award Agreement. Notwithstanding the foregoing,
the rules of Sections 7(d)(ii), 7(d)(iii) and 7(d)(iv) also shall
apply to SARs.
(f) Payment
of SAR Amount. Upon exercise of an SAR, a Participant shall
be entitled to receive payment from the Company in an amount
determined by multiplying:
(i) The difference
between the Fair Market Value of a Share on the date of exercise
over the exercise price; times
(ii) The
number of Shares with respect to which the SAR is
exercised.
At the
sole discretion of the Administrator, the payment upon the exercise
of an SAR may be in cash, in Shares of equivalent value, or in some
combination thereof.
10. Performance
Units and Performance Shares.
(a) Grant of Performance Units and
Performance Shares. Subject to the terms and conditions of
the Plan, Performance Units and Performance Shares may be granted
to Service Providers at any time and from time to time, as shall be
determined by the Administrator, in its sole discretion. The
Administrator shall have complete discretion in determining the
number of Performance Units and Performance Shares granted to each
Participant.
(b) Value
of Performance Units and Performance Shares. Each
Performance Unit shall have an initial value established by the
Administrator on or before the date of grant. Each Performance
Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant.
(c) Performance
Objectives and Other Terms. The Administrator shall set
Performance Goals or other performance objectives in its sole
discretion which, depending on the extent to which they are met,
shall determine the number or value of Performance Units and
Performance Shares that shall be paid out to the Participant. Each
Award of Performance Units or Performance Shares shall be evidenced
by an Award Agreement that shall specify the Performance Period and
such other terms and conditions as the Administrator, in its sole
discretion, shall determine. The Administrator may set Performance
Goals or performance objectives based upon the achievement of
Company-wide, divisional, or individual goals (including solely
continued service), applicable federal or state securities laws, or
any other basis determined by the Administrator in its sole
discretion.
(d) Earning
of Performance Units and Performance Shares. After the
applicable Performance Period has ended, the holder of Performance
Units or Performance Shares shall be entitled to receive a payout
of the number of Performance Units or Performance Shares earned by
the Participant over the Performance Period, to be determined as a
function of the extent to which the corresponding Performance Goals
or performance objectives have been achieved. After the grant of
Performance Units or Performance Shares, the Administrator, in its
sole discretion, may reduce or waive any performance objectives for
the Performance Unit or Performance Share.
(e) Form
and Timing of Payment of Performance Units and Performance
Shares. Payment of earned Performance Units and Performance
Shares shall be made after the expiration of the applicable
Performance Period at the time determined by the Administrator. The
Administrator, in its sole discretion, may pay earned Performance
Units and Performance Shares in the form of cash, in Shares (which
have an aggregate Fair Market Value equal to the value of the
earned Performance Units or Performance Shares, as applicable, at
the close of the applicable Performance Period) or in a combination
of cash and Shares.
(f) Cancellation
of Performance Units or Performance Shares. On the date set
forth in the Award Agreement, all unearned or unvested Performance
Units and Performance Shares shall be forfeited to the Company, and
again shall be available for grant under the Plan.
11. Restricted
Stock Units. Restricted Stock
Units shall consist of a Restricted Stock, Performance Share or
Performance Unit Award that the Administrator, in its sole
discretion permits to be paid out in a lump sum, installments or on
a deferred basis, in accordance with rules and procedures
established by the Administrator
12.
Other Stock Based Awards. Other Stock
Based Awards may be granted either alone, in addition to, or in
tandem with, other Awards granted under the Plan and/or cash awards
made outside of the Plan. The Administrator shall have authority to
determine the Service Providers to whom and the time or times at
which Other Stock Based Awards shall be made, the amount of such
Other Stock Based Awards, and all other conditions of the Other
Stock Based Awards, including any dividend or voting
rights.
13.
Leaves
of Absence. Unless the
Administrator provides otherwise, vesting of Awards granted under
this Plan shall be suspended during any unpaid leave of absence and
shall resume on the date the Participant returns to work on a
regular schedule as determined by the Company;provided, however,
that no vesting credit shall be awarded for the time vesting has
been suspended during such leave of absence. A Service Provider
shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, or any
Subsidiary. For purposes of Incentive Stock Options, no leave of
absence may exceed 90 days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is
not guaranteed by statute or contract, then at the end of three
months following the expiration of the leave of absence, any
Incentive Stock Option held by the Participant shall cease to be
treated as an Incentive Stock Option and shall be treated for tax
purposes as a Nonstatutory Stock Option.
14.
Non-Transferability
of Awards. Unless
determined otherwise by the Administrator, an Award may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by shall or by the laws of descent or
distribution and may be exercised, during the lifetime of the
Participant, only by the Participant. If the Administrator makes an
Award transferable, such Award shall contain such additional terms
and conditions as the Administrator deems appropriate.
15. Adjustments;
Dissolution or Liquidation; Change in Control.
(a)
Adjustments. If the
Administrator determines, in its sole judgment, that as a result of
any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), or as a result of any
change in the corporate structure of the Company affecting the
Shares (including any recapitalization, stock split, reversestock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities
of the Company), an adjustment is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the
Administrator shall, in the manner it deems equitable, adjust the
number and class of Shares which may be delivered under the Plan,
the number, class and price of Shares subject to outstanding
Awards, the number and class of Shares issuable pursuant to
Options, and the numerical limits in Sections 3 and 6(b).
Notwithstanding the preceding, the number of Shares subject to any
Award always shall be a whole number.
(b) Dissolution
or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each
Participant as soon as practical prior to the effective date of the
proposed transaction. The Administrator, in its sole discretion,
may provide for a Participant to have the right to exercise his
Award, to the extent applicable, until 10 days prior to the
transaction as to all of the Awarded Stock covered thereby,
including Shares as to which the Award would not otherwise be
exercisable. In addition, the Administrator may provide that any
Company repurchase option or forfeiture rights applicable to any
Award shall lapse 100%, and that any Award vesting shall accelerate
100%, provided the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. To the extent it has
not been previously exercised or vested, an Award shall terminate
immediately prior to the consummation of such proposed
action.
(c) Change
in Control.
(i) Stock Options and SARs. In the
event of a Change in Control, each outstanding Option and SAR shall
be assumed or an equivalent option or SAR substituted by the
successor corporation or a Parent or Subsidiary of the successor
corporation. Unless determined otherwise by the Administrator, if
the successor corporation refuses to assume or substitute for the
Option or SAR, the Participant shall fully vest in and have the
right to exercise the Option or SAR as to all of the Awarded Stock,
including Shares as to which it would not otherwise be vested or
exercisable. If an Option or SAR is not assumed or substituted on
the Change in Control, the Administrator shall notify the
Participant in writing or electronically that the Option or SAR
shall be exercisable, to the extent vested, fora period of up to 15
days from the date of such notice, and the Option or SAR shall
terminate upon the expiration of such period. For the purposes of
this Section 15(c)(i), the Option or SAR shall be considered
assumed if, following the Change in Control,the option or SAR
confers the right to purchase or receive, for each Share of Awarded
Stock subject to the Option or SAR immediately prior to the Change
in Control, the consideration (whether securities, cash, or
property) received in the Change in Control by holders of Common
Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the
outstanding Shares). However, if the consideration received in the
Change in Control is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or SAR, for each share of
Awarded Stock subject to the Option or SAR, to be solely common
stock of the successor corporation or its Parent equal in Fair
Market Value to the per share consideration received by holders of
Common Stock in the Change in Control. Notwithstanding anything in
this Plan to the contrary, an Award that vests, is earned, or is
paid-out upon the satisfaction of one or more performance
objectives shall not be considered assumed if the Company or its
successor modifies any of the performance objectives without the
Participant’s consent; provided, however, a modification to
performance objectives only to reflect the successor
corporation’s post-Change in Control corporate structure
shall not be deemed to invalidate an otherwise valid Award
assumption.
(ii) Restricted
Stock, Performance Shares, Performance Units, Restricted Stock
Units and Other Stock Based Awards. In the event of a Change
in Control, each outstanding Award of Restricted Stock, Performance
Share, Performance Unit, Other Stock Based Award and Restricted
Stock Unit shall be assumed or an equivalent Restricted Stock,
Performance Share, Performance Unit, Other Stock Based Award and
Restricted Stock Unit award substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation.
Unless determined otherwise by the Administrator, if the successor
corporation refuses to assume or substitute for the Award, the
Participant shall fully vest in the Award, including as to Shares
or Units that would not otherwise be vested, all applicable
restrictions shall lapse, and all performance objectives and other
vesting criteria shall be deemed achieved at targeted levels. For
the purposes of this Section 15(c)(ii), an Award of Restricted
Stock, Performance Shares, Performance Units, Other Stock Based
Awards and Restricted Stock Units shall be considered assumed if,
following the Change in Control, the award confers the right to
purchase or receive, for each Share subject to the Award
immediately prior to the Change in Control (and if a Restricted
Stock Unit or Performance Unit, for each Share as determined based
on the then current value of the unit), the consideration (whether
stock, cash, or other securities or property) received in the
Change in Control by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares). However, if the
consideration received in the Change in Control is not solely
common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation,
provide that the consideration to be received for each Share (and
if a Restricted StockUnit or Performance Unit, for each Share as
determined based on the then current value of the unit) be solely
common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by
holders of Common Stock in the Change in Control. Notwithstanding
anything in this Plan to the contrary, an Award that vests, is
earned, or is paid-out upon the satisfaction of one or more
performance objectives shall not be considered assumed if the
Company or its successor modifies any of the performance objectives
without the Participant’s consent; provided, however, a
modification to the performance objectives only to reflect the
successor corporation’s post-Change in Control corporate
structure shall not be deemed to invalidate an otherwise valid
Award assumption.
(iii) Outside
Director Awards. Notwithstanding any provision of Sections
15(c)(i) or 15(c)(ii) to the contrary, with respect to Awards
granted to an Outside Director that are assumed or substituted for,
if on the date of or following the assumption or substitution, the
Participant’s status as a Director or a director of the
successor corporation, as applicable, is terminated other than upon
a voluntary resignation by the Participant, then the Participant
shall fully vest in and have the right to exercise his Options and
Stock Appreciation Rights as to all of the Award, including Shares
as to which such Awards would not otherwise be vested or
exercisable, and all restrictions on Restricted Stock and
Restricted Stock Units, as applicable, shall lapse, and, with
respect to Performance Shares, Performance Units, and Other Stock
Based Awards, all performance goals and other vesting criteria
shall be deemed achieved at target levels and all other terms and
conditions met.
16. Date
of Grant. The date of
grant of an Award shall be, for all purposes, the date on which the
Administrator makes the determination granting such Award, or a
later date as is determined by the Administrator. Notice of the
determination shall be provided to each Participant within a
reasonable time after the date of such grant.
17.
Stockholder Approval and Term of Plan. The Plan became
effective on June 11, 2020 and thereafter shall continue in effect
for a term of the earlier of June 11, 2021 or the date of the
Company’s 2021 Annual Meeting of Shareholders unless
terminated under Section 18 of the Plan.
18.
Amendment and Termination of the Plan.
(a)
Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Stockholder
Approval. The Company shall obtain stockholder approval of
any Plan amendment to the extent necessary to comply with
Applicable Laws.
(c) Effect
of Amendment or Termination. No amendment, alteration,
suspension, or termination of the Plan shall materially or
adversely impair the rights of any Participant, unless otherwise
mutually agreed upon by the Participant and the Administrator,
which agreement must be in writing and signed by the Participant
and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it
under this Plan with respect to Awards granted under the Plan prior
to the date of termination.
19. Conditions
Upon Issuance of Shares.
(a)
Legal Compliance.
Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of the Award and the issuance and delivery of
such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to
such compliance.
(b) Investment
Representations. As a condition to the exercise or receipt
of an Award, the Company may require the person exercising or
receiving the Award to represent and warrant at the time of any
such exercise or receipt that the Shares are being purchased only
for investment and without any present intention to sell or
distribute the Shares if, in the opinion of counsel for the
Company, such a representation is required.
(c) Taxes.
No Shares shall be delivered under the Plan to any Participant or
other person until the Participant or other person has made
arrangements acceptable to the Administrator for the satisfaction
of any non-U.S., U.S.-federal, U.S.-state, or local income and
employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares. Upon
exercise or vesting of an Award, the Company shall withhold or
collect from the Participant an amount sufficient to satisfy such
tax obligations, including, but not limited to, by surrender of the
whole number of Shares covered by the Award sufficient to satisfy
the minimum applicable tax withholding obligations incident to the
exercise or vesting of an Award.
20. Severability.
Notwithstanding any contrary provision of the Plan or an Award to
the contrary, if any one or more of the provisions (or any part
thereof) of this Plan or the Awards shall be held invalid, illegal,
or unenforceable in any respect, such provision shall be modified
so as to make it valid, legal, and enforceable, and the validity,
legality, and enforceability of the remaining provisions (or any
part thereof) of the Plan or Award, as applicable, shall not in any
way be affected or impaired thereby.
21.
Inability to Obtain Authority. The inability of
the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
22.
No Rights to Awards. No eligible
Service Provider or other person shall have any claim to be granted
any Award pursuant to the Plan, and neither the Company nor the
Administrator shall be obligated to treat Participants or any other
person uniformly.
23.
No Stockholder Rights. Except as
otherwise provided in an Award Agreement, a Participant shall have
none of the rights of a stockholder with respect to Shares covered
by an Award until the Participant becomes the record owner of the
Shares.
24.
Fractional Shares. No fractional
Shares shall be issued and the Administrator shall determine, in
its sole discretion, whether cash shall be given in lieu of
fractional Shares or whether such fractional Shares shall be
eliminated by rounding up or down as appropriate.
25.
Governing Law. The Plan, all
Award Agreements, and all related matters, shall be governed by the
laws of the State of Texas, without regard to choice of law
principles that direct the application of the laws of another
state. However, the Nevada Revised Corporate Statutes shall govern
any matter relating to the operation of Nevada
corporations.
26.
No Effect on Terms of Employment or Consulting
Relationship. The Plan shall
not confer upon any Participant any right as a Service Provider,
nor shall it interfere in any way with his right or the right of
the Company or a Parent or Subsidiary to terminate the
Participant’s service at any time, with or without cause, and
with or without notice.
27.
Unfunded Obligation. Participants
shall have the status of general unsecured creditors of the
Company. Any amounts payable to Participants pursuant to the Plan
shall be unfunded and unsecured obligations for all purposes,
including, without limitation, Title I of the Employee Retirement
Income Security Act of 1974, as amended. Neither the Company nor
any Parent or Subsidiary shall be required to segregate any monies
from its general funds, or to create any trusts, or establish any
special accounts with respect to such obligations. The Company
shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill
its payment obligations under this Plan. Any investments or the
creation or maintenance of any trust for any Participant account
shall not create or constitute a trust or fiduciary relationship
between the Administrator, the Company or any Parent or Subsidiary
and Participant, or otherwise create any vested or beneficial
interest in any Participant or the Participant’s creditors in
any assets of the Company or Parent or Subsidiary. The Participants
shall have no claim against the Company or any Parent or Subsidiary
for any changes in the value of any assets that may be invested or
reinvested by the company with respect to the Plan.
28. Section
409A. It is the
intention of the Company that no Award shall be “deferred
compensation” subject to Section 409A of the Code, unless and
to the extent that the Administrator specifically determines
otherwise, and the Plan and the terms and conditions of all Awards
shall be interpreted accordingly. The following rules shall apply
to Awards intended to be subject to Section 409A of the Code
(“409A Awards”):
(a)
Any
distribution of a 409A Award following a separation from service
that would be subject to Section 409A(a)(2)(A)(i) of the Code as a
distribution following a separation from service of a
“specified employee” (as defined under Section
409A(a)(2)(B)(i) of the Code) shall occur no earlier than the
expiration of the six-month period following such separation from
service.
(b) In
the case of a 409A Award providing for distribution or settlement
upon vesting or lapse of a risk of forfeiture, if the time of such
distribution or settlement is not otherwise specified in the Plan
or Award Agreement or other governing document, the distribution or
settlement shall be made no later than March 15 of the calendar
year following the calendar year in which such 409A Award vested or
the risk of forfeiture lapsed.
(c) In
the case of any distribution of any other 409A Award, if the timing
of such distribution is not otherwise specified in the Plan or
Award Agreement or other governing document, the distribution shall
be made not later than the end of the calendar year during which
the settlement of the 409A Award is specified to
occur.
29. Construction.
Headings in this Plan are included for convenience and shall not be
considered in the interpretation of the Plan. References to
sections are to Sections of this Plan unless otherwise indicated.
Pronouns shall be construed to include the masculine, feminine,
neutral, singular or plural as the identity of the antecedent may
require. This Plan shall be construed according to its fair meaning
and shall not be strictly construed against the
Company.
* * * *
*
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ENGlobal Corporation
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – THURSDAY, JUNE 11, 2020 AT 10:00
AM
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CONTROL ID:
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REQUEST ID:
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The
undersigned stockholder of ENGlobal Corporation hereby appoints
William A. Coskey, P.E. and Mark A. Hess, or either of them, as
proxies, each with full powers of substitution, to represent and to
vote as proxy, as designated, all shares of common stock of
ENGlobal Coproration. held of record by the undersigned on April
22, 2020, at the Annual Meeting of Stockholders (the “Annual
Meeting”) to be held on Thursday, June 11, 2020 at 10:00
a.m., local time, at the headquarters located at 654 N. Sam Houston
Parkway E., Suite 400, Houston, Texas 77060. The undersigned hereby
revokes all prior proxies.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete the reverse portion of this Proxy Card
and Fax to 202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/ENG
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OF
ENGlobal Corporation
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE: ☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal
1
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FOR
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WITHHOLD
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Election
of Directors
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William
A. Coskey, P.E.
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☐
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David
W. Gent, P.E.
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☐
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CONTROL ID:
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Randall
B. Hale
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☐
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REQUEST ID:
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David
C. Roussel
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Kevin
M. Palma
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Proposal
2
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FOR
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AGAINST
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ABSTAIN
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Adopt
the Amended and Restated ENGlobal Corporation 2009 Equity Incentive
Plan for a limited term.
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Proposal
3
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FOR
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AGAINST
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ABSTAIN
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Ratify
the appointment of Moss Adams LLP as the independent auditor of
ENGlobal for fiscal year 2020.
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☐
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☐
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Proposal
4
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FOR
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AGAINST
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ABSTAIN
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To
transact such other business as mat properly come before the annual
meeting or any adjustment thereof.
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☐
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☐
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☐
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MARK
“X” HERE IF YOU PLAN TO ATTEND THE MEETING:
☐
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MARK HERE FOR ADDRESS CHANGE ☐ New Address (if applicable):
____________________________
____________________________
____________________________
IMPORTANT: Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized
person.
Dated:
________________________, 2020
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(Print Name of
Stockholder and/or Joint Tenant)
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(Signature of
Stockholder)
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(Second Signature
if held jointly)
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