Document:

eng_ex104.htm

EXHIBIT 10.4
  
 ENGLOBAL CORPORATION
 INDEMNIFICATION AGREEMENT
  
 This Indemnification Agreement (this “Agreement”) is made as of May 19, 2021, by and between ENGlobal Corporation, a Nevada corporation (the “Company”), and _________ (“Indemnitee”).
  
 R E C I T A L S
  
 WHEREAS, the Company and Indemnitee recognize the increasing difficulty in obtaining directors’ and officers’ liability insurance, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance;
  
 WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting officers and directors to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited; and
  
 WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve as officers and directors of the Company and to indemnify its officers and directors so as to provide them with the maximum protection permitted by law.
  
 NOW, THEREFORE, in consideration for Indemnitee’s services as an officer or director of the Company, the Company and Indemnitee hereby agree as follows:
  
 1. Indemnification.
  
 (a) Third Party Proceedings. The Company shall indemnify Indemnitee if Indemnitee is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding or any alternative dispute resolution mechanism, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, or any subsidiary of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) actually and reasonably incurred by Indemnitee in connection with such action, suit or proceeding if Indemnitee is not liable pursuant to Nevada Revised Statutes (“NRS”) § 78.138, or if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that Indemnitee is liable pursuant to NRS § 78.138 or did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or that, with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.
  
 	 
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 (b) Proceedings By or in the Right of the Company. The Company shall indemnify Indemnitee if Indemnitee is or was a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company or any subsidiary of the Company to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, or any subsidiary of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including amounts paid in settlement and reasonable attorneys’ fees) actually and reasonably incurred by Indemnitee in connection with the defense or settlement of such action or suit if Indemnitee is not liable pursuant to NRS § 78.138 or Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, except that no indemnification shall be made for any claim, issue or matter as to which Indemnitee has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Company or for amounts paid in settlement to the Company, unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
  
 (c) Mandatory Payment of Expenses. To the extent that Indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1(a) and 1(b), or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against expenses (including reasonable attorneys’ fees) actually and reasonably incurred by Indemnitee in connection therewith.
  
 2.  Agreement to Serve. In consideration of the protection afforded by this Agreement, if Indemnitee is a director of the Company he agrees to serve at least for the 90 days after the effective date of this Agreement as a director and not to resign voluntarily during such period without the written consent of a majority of the Board of Directors. If Indemnitee is an officer of the Company not serving under an employment contract, he agrees to serve in such capacity at least for the 90 days after the effective date of this Agreement and not to resign voluntarily during such period without the written consent of a majority of the Board of Directors. Following the applicable period set forth above, Indemnitee agrees to continue to serve in such capacity at the will of the Company (or under separate agreement, if such agreement exists) so long as he is duly appointed or elected and qualified in accordance with the applicable provisions of the Bylaws of the Company or any subsidiary of the Company or until such time as he tenders his resignation in writing. Nothing contained in this Agreement is intended to create in Indemnitee any right to continued employment.
  
 3. Expenses; Indemnification Procedure.
  
 (a) Advancement of Expenses. The Company shall advance all expenses incurred by Indemnitee in connection with the investigation, defense, settlement or appeal of any civil or criminal action, suit or proceeding referenced in Section 1(a) or 1(b) (but not amounts actually paid in settlement of any such action, suit or proceeding). Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it is ultimately determined by a court of competent jurisdiction that Indemnitee is not entitled to be indemnified by the Company as authorized hereby.
   
 	 
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 (b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to his right to be indemnified under this Agreement, give the Company written notice as soon as practicable of any claim for which Indemnitee will or could seek indemnification under this Agreement. In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.
   
 (c) Procedure. Any indemnification and advances provided for in Section 1 and this Section 3 shall be made no later than 30 days after receipt of the written request of Indemnitee, provided that a determination is made within such 30-day period that, as to Indemnitee’s specific case, indemnification of Indemnitee is proper in the circumstances. Such determination shall be made: (a) by the Company’s stockholders; (b) by the Company’s Board of Directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding; (c) if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or (d) if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion. If a claim under this Agreement, under any statute, or under any provision of the Company’s Articles of Incorporation or Bylaws providing for indemnification, is not paid in full by the Company within 30 days after a written request for payment thereof has first been received by the Company, Indemnitee may, but need not, at any time thereafter bring an action against the Company to recover the unpaid amount of the claim and, subject to Sections 8 and 9(g) of this Agreement, Indemnitee shall also be entitled to be paid for the expenses (including reasonable attorneys’ fees) of bringing such action. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any action, suit or proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. However, Indemnitee shall be entitled to receive interim payments of expenses pursuant to Section 3(a) unless and until such defense may be finally adjudicated by court order or judgment from which no further right of appeal exists. It is the parties’ intention that if the Company contests Indemnitee’s right to indemnification, the question of Indemnitee’s right to indemnification shall be for a court of competent jurisdiction to decide, and neither the failure of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including it Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable standard of conduct.
  
 (d) Notice to Insurers. If, at the time of the receipt of a notice of a claim pursuant to Section 3(b), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies. 
   
 	 
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 (e) Selection of Counsel. In the event the Company shall be obligated under Section 3(a) to advance the expenses of any proceeding against Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of such proceeding, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld), upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same proceeding, provided that (i) Indemnitee shall have the right to employ his counsel in any such proceeding at Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not, in fact, have employed counsel to assume the defense of such proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.
  
 4. Additional Indemnification Rights; Nonexclusivity.
  
 (a) Scope. Notwithstanding any other provision of this Agreement, the Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by the NRS, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Articles of Incorporation, the Company’s Bylaws or by statute. In the event of any change, after the date of this Agreement, in any applicable law, statute, or rule which expands the right of a Nevada corporation to indemnify a member of its board of directors or an officer, such changes shall be, ipso facto, within the purview of Indemnitee’s rights and Company’s obligations, under this Agreement. In the event of any change in any applicable law, statute or rule which narrows the right of a Nevada corporation to indemnify a member of its board of directors or an officer, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement shall have no effect on this Agreement or the parties’ rights and obligations hereunder.
   
 (b) Nonexclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s Articles of Incorporation, its Bylaws, any agreement, any vote of stockholders or disinterested directors, the NRS, or otherwise, for either an action in Indemnitee’s official capacity or action in another capacity while holding such office. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he may have ceased to serve in such capacity at the time of any action, suit or other covered proceeding.
  
 5. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the expenses, judgments, fines or penalties actually and reasonably incurred by him in the investigation, defense, appeal or settlement of any civil or criminal action, suit or proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses, judgments, fines or penalties to which Indemnitee is entitled.
  
 6. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that in certain instances, federal law or applicable public policy may prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.
  
 	 
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 7. Officer and Director Liability Insurance. The Company shall, from time to time, make the good faith determination whether or not it is practicable for the Company to obtain a policy greater in value than the Company’s current Director and Officer Liability Insurance Policy with Great American Insurance Company, Policy # DOL5593151 (the “Current D&O Policy”), or to maintain the Current D&O Policy providing the officers and directors of the Company with coverage for losses from wrongful acts, or to ensure the Company’s performance of its indemnification obligations under this Agreement. Among other considerations, the Company will weigh the costs of obtaining or maintaining such insurance coverage against the protection afforded by such coverage. In all policies of director and officer liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is an officer. Notwithstanding the foregoing, the Company shall have no obligation to maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Company. The Company agrees to provide Indemnitee with a copy of the Current D&O Policy, and to notify Indemnitee, or to cause the insurance company to notify Indemnitee, of cancellation of or changes to the Current D&O Policy.
  
 8. Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:
  
 (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, except with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or any other statute or law or otherwise as required under § 78.7502 of the NRS, but such indemnification or advancement of expenses may be provided by the Company in specific cases if the Board of Directors has approved the initiation or bringing of such suit; or
  
 (b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous; or 
   
 (c) No Duplicative Payments. To indemnify Indemnitee for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the extent that Indemnitee has otherwise actually received payment (under any insurance policy, provision of the Company’s certificate of incorporation, bylaws, or otherwise) of the amounts otherwise payable hereunder; or
  
 (d) Claims Under Section 16(b). To indemnify Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.
  
 	 
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 9.  Miscellaneous.
  
 (a) Choice of Law. This Agreement and all disputes related hereto, whether in contract or tort, in law or in equity, or otherwise, shall be governed by and its provisions construed in accordance with the laws of the State of Nevada, as applied to contracts between Nevada residents entered into and to be performed entirely within Nevada without regard to the conflict of law principles thereof.
  
 (b) Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Nevada for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in the state courts of the State of Nevada.
  
 (c) Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing and signed by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.
  
 (d) Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.
  
 (e) Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns, and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.
  
 (f) Severability. If and to the extent that any provision of this Agreement is held by final judgment of a court of competent jurisdiction to be invalid, illegal or unenforceable, then to such extent the invalid, illegal or unenforceable provision shall be severed from the remainder of this Agreement, and the remainder of this Agreement shall be enforced. In addition, the invalid, illegal or unenforceable provision shall be deemed to be automatically modified, and, as so modified, to be included in this Agreement, such modification being made to the minimum extent necessary to render the provision valid, legal and enforceable. Notwithstanding the foregoing, however, if the severed or modified provision concerns all or a portion of the essential consideration to be delivered under this Agreement by one party to the other, the remaining provisions of this Agreement shall also be modified to the extent necessary to equitably adjust the parties’ respective rights and obligations hereunder.
  
 (g) Attorneys’ Fees. In the event that any action is instituted by Indemnitee under this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled to be paid all court costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee with respect to such action, unless as a part of such action, the court of competent jurisdiction determines that each of the material assertions made by Indemnitee as a basis for such action were not made in good faith or were frivolous. In the event of an action instituted by or in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all court costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee in defense of such action (including with respect to Indemnitee’s counterclaims and cross-claims made in such action), unless as a part of such action the court determines that each of Indemnitee’s material defenses to such action were made in bad faith or were frivolous.
  
 	 
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 (h) Notice. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be delivered personally by hand or by courier, mailed by United States first-class mail, postage prepaid, sent by facsimile or sent by electronic mail directed to the party to be notified at the address, facsimile number or electronic mail address indicated for such person on the signature page hereof, or at such other address, facsimile number or electronic mail address as such party may designate by 10 days’ advance written notice to the other party hereto. All such notices and other communications shall be deemed given upon personal delivery, on the date of mailing, upon confirmation of facsimile transfer or when directed to the electronic mail address set forth on the signature page hereof.
  
 (i) Construction. Whenever used in this Agreement, the singular number will include the plural, and the plural number will include the singular, and pronouns in the masculine, feminine, or neuter gender will include each other gender. Headings are used for convenience only, and are not to be given substantive effect. All references to section numbers and exhibits in this Agreement are references to sections and exhibits in this Agreement, unless otherwise specifically indicated. All exhibits and schedules are incorporated in this Agreement as if set forth herein in full. Recitals are part of this Agreement and shall be considered in its interpretation.
  
 (j) Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.
  
 (k) Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights. 
  
 (l) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.
  
 	 
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 EXECUTED as of the date first above written.
  
 	  
	  ENGLOBAL CORPORATION
	  

	  
	  
	  
	  

	  
	 By:
	  
	  

	  
	  
	 Mark A. Hess
	  

	  
	  
	 Chief Executive Officer
	  

	  
	  
	  
	  

	  
	  
	 Address:
	  

	  
	  
	 654 N. Sam Houston Parkway E., Ste. 400
 Houston, Texas 77060
	  

   
  
 	 AGREED TO AND ACCEPTED:
	  

	  
	  

	 “Indemnitee”
	  

	  
	  

	  
	  

  
 	 
	8eng_ex1043.htm

EXHIBIT 10.43
  
 ENGLOBAL CORPORATION 
 2021 LONG TERM INCENTIVE PLAN 
 NOTICE OF RESTRICTED STOCK AWARD FOR DIRECTORS
  
 You have been granted a right to acquire restricted Stock of the Company (the “Restricted Stock Award”), subject to the terms and conditions of this Notice of Restricted Stock Award for Directors (the “Notice”), the ENGlobal Corporation 2021 Long Term Incentive Plan (the “Plan”), and the attached Restricted Stock Award Agreement (the “Award Agreement”). Unless otherwise defined in this Notice or the Award Agreement, all terms used in this Notice that are defined in the Plan shall have the meaning as defined in the Plan.
  
 	 Name and Address of Participant:
  
	  

	 Total Number of Shares of Restricted Stock Granted (the “Shares”):
  
	  
  

	 Purchase Price Per Share:
  
	  
  

	 Fair Market Value Per Share:
  
	  
  

	 “Date of Grant”:
  
	  
  

	 Vesting Schedule:
  
	 Subject to the Participant’s continuous Service and other limitations set forth in this Notice, the Award Agreement and the Plan, the Shares shall vest ________. In accordance with Section 4 of the Award Agreement, all Shares that are unvested as of the date the Participant ceases Service as a Director shall immediately and automatically be forfeited and returned to the Company.
  
 In the event of a Change in Control, the Shares shall automatically become fully vested immediately prior to the specified effective date of such Change of Control, subject to the Participant’s continued Service as a Director from the Date of Grant through the date immediately prior to the specified effective date of a Change in Control.

  
 	 
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 By your signature and the signature of the Company’s representative, you and the Company agree that the Shares granted are governed by the terms and conditions of this Notice, the Award Agreement, and the Plan, all of which are attached to and made a part of this document.
  
 	  
	 ENGLOBAL CORPORATION
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	 By:
	  
	  

	  
	  
	 Mark A. Hess 
	  

	  
	  
	 Chief Executive Officer
	  

	  
	  
	  
	  

	  
	 Dated:
	  
	  

   
 PARTICIPANT ACKNOWLEDGMENT
  
 The Participant acknowledges receipt of a copy of the Award Agreement and the Plan, and represents that he or she is familiar with the provisions thereof, and hereby accepts the Shares subject to all of the terms and provisions hereof and thereof. The Participant has reviewed this Notice, the Award Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Award Agreement and the Plan. The Participant hereby agrees that all questions of interpretation and administration relating to this Notice, the Award Agreement and the Plan shall be resolved by the Committee. The Participant further agrees to the venue selection in accordance with Section 16 of the Award Agreement.
  
 	  
	  
	  
	  

	  
	  
	 Signature
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	  
	 Print Name
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	  
	 Dated
	  

   
 	 
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 ENGLOBAL CORPORATION 
 2021 LONG TERM INCENTIVE PLAN
 RESTRICTED STOCK AWARD AGREEMENT
  
 1. Grant of Shares. Subject to the terms and provisions of the ENGlobal Corporation 2021 Long Term Incentive Plan (the “Plan”), the Notice of Restricted Stock Award for Directors (the “Notice”), and this Restricted Stock Award Agreement (the “Award Agreement”), the Company hereby grants to the Participant named in the Notice, the Total Number of Shares of Restricted Stock Granted (the “Shares”) as provided in the Notice. Terms used in this Award Agreement and not defined herein shall have the meaning of such terms in the Notice, and if not otherwise defined, shall have the meaning of such terms as defined in the Plan.
  
 2. Purchase Price Per Share. If the granted Shares are subject to a purchase price, as set forth in the Notice, the Participant shall have the right to purchase such Shares at the specified purchase price in accordance with such procedures as may be established by the Committee from time to time.
  
 3. Vesting. The Shares shall vest in accordance with the Vesting Schedule set forth in the Notice and in connection with a Change in Control as provided in the Notice.
  
 4. Risk of Forfeiture.
  
 4.1  General Rule. The Shares shall initially be subject to a risk of forfeiture. The Participant may not transfer, assign, encumber, or otherwise dispose of any Shares subject to a risk of forfeiture.
  
 4.2 Lapse of Risk of Forfeiture. The risk of forfeiture shall lapse as the Participant vests in the Shares in accordance with the Vesting Schedule and in connection with a Change in Control as provided in the Notice.
  
 4.3 Forfeiture of Shares. The Shares unvested and subject to a risk of forfeiture shall automatically be forfeited and immediately returned to the Company upon the Participant’s cessation of Service as a Director.
  
 5. Transfer Restrictions. The Shares issued to the Participant hereunder may not be sold, transferred by gift, pledged, hypothecated, or otherwise transferred or disposed of by the Participant prior to the date when the Shares become vested pursuant to the Vesting Schedule. Any attempt to transfer Shares in violation of this Section 5 shall be null and void and shall be disregarded.
  
 6. Issuance of Shares. The Company shall take the actions as it determines necessary in its sole discretion to cause the Shares to be issued subject to the forfeiture provisions and other requirements as the Committee determines necessary. Shares awarded hereunder may be evidenced in a manner as the Committee shall deem appropriate, including without limitation, book entry, Shares issued in the name of the Participant and held, together with a Stock power endorsed in blank, by the Committee or Company (or their delegates), or in trust or in escrow pursuant to an agreement satisfactory to the Committee, as determined by the Committee, until such time as the restrictions on transfer have expired or the Committee may provide for the transfer of the Shares to a transfer agent on behalf of the Participant pursuant to terms as determined by the Committee to maintain the restricted status of the Shares until vested. If the Company issues a Stock certificate, registered in the name of the Participant to whom such Shares were granted, evidencing such Shares, the Company shall not cause to be issued such a Stock certificate unless it has received a Stock power duly endorsed in blank with respect to such Shares.
  
 	 
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 7. Adjustments. The Shares subject to the Notice and this Award Agreement shall be adjusted as provided in Section 4.2 of the Plan.
  
 8. Dividends Distributions. The Company shall disburse to the Participant all Regular Dividends with respect to the Shares, whether vested or otherwise, less any applicable withholding obligations. For purposes of this Section 8, the term Regular Dividends means any distribution of cash or property other than securities that is considered to be received as a result of a sale or exchange of the Shares for purposes of the Code.
  
 9. Taxes.
  
 9.1 Tax Liability. The Participant is ultimately liable and responsible for all taxes owed by the Participant in connection with the grant of the Shares, regardless of any action the Company or any Affiliate takes with respect to any tax withholding obligations that arise in connection with the grant of such Shares. Neither the Company nor any Affiliate makes any representation or undertaking regarding the treatment of any tax consequences or tax withholding in connection with the grant, vesting or the subsequent sale of Shares. The Company and its Affiliates do not commit and are under no obligation to structure the grant of the Shares to reduce or eliminate the Participant’s tax liability.
  
 9.2 Payment of Withholding Taxes. Prior to any event in connection with the Shares (e.g., vesting) that the Company determines may result in any tax withholding obligation, whether United States federal, state, local or non-U.S., including any employment tax obligation, the Participant must arrange for the satisfaction of the minimum (or such other amount to the extent permitted under the terms of the Plan) amount of such tax withholding obligation in accordance with Section 10 of the Plan, but only to the extent as permitted by the Committee in its sole and absolute discretion.
  
 10. Stop-Transfer Notices. In order to ensure compliance with the restrictions on transfer set forth in this Award Agreement, the Notice or the Plan, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
  
 11. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Award Agreement or (ii) treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.
   
 	 
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 12. Restrictive Legends. The certificates evidencing the Shares shall bear legends substantially equivalent to the following:
   
 	  
	 “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THAT CERTAIN STOCK AWARD AGREEMENT BETWEEN ENGLOBAL CORPORATION (THE “COMPANY”) AND THE NAMED STOCKHOLDER. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH SUCH AWARD AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.”
	  

   
 13. Entire Agreement/Governing Law. The Notice, this Award Agreement, and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations, or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof. Subject to Section 16 hereof, these agreements and all related matters are governed by the laws of the State of Nevada without giving effect to any choice of law rule that would cause the application of the laws of a different state. If any provision of the Notice, this Award Agreement or the Plan be determined to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.
  
 14. Construction. The captions used in the Notice and this Award Agreement are inserted for convenience and shall not be deemed a part of the Shares for construction or interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
  
 15.  Administration and Interpretation. Any question or dispute regarding the administration or interpretation of the Notice, this Award Agreement or the Plan shall be submitted by the Participant or by the Company to the Committee for its exclusive determination. The resolution of such question or dispute by the Committee shall be final and binding on all Persons.
  
 16. Venue. The Company, the Participant and the Participant’s assignees agree that any suit, action or proceeding arising out of or related to the Notice, this Award Agreement or the Plan shall be brought in the United States District Court for the Southern District of Texas (or should such court lack jurisdiction to hear such action, suit or proceeding, in a Texas state court in the County of Harris) and that all parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court. If any one or more provisions of this Section 16 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.
   
 	 
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 17. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown in these instruments, or to such other address as such party may designate in writing from time to time to the other party.
   
 18.  Section 83(b) Election. The Participant may make an election under Code Section 83(b) (a “Section 83(b) Election”) with respect to the Shares. Any such election must be made within 30 days after the Date of Grant. If the Participant elects to make a Section 83(b) Election, the Participant shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the US Internal Revenue Service. The Participant agrees to assume full responsibility for ensuring that the Section 83(b) Election is actually and timely filed with the US Internal Revenue Service and for all tax consequences resulting from the Section 83(b) Election.
  
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