Exhibit 10.2
AMENDED AND RESTATED
ALLIANCE STOCK OPTION AGREEMENT
PART I
Optionee: _________________________________________
Grant Date: ________________
Extension Date: December 20, 2006
Vesting: The option granted hereunder shall vest only
upon the consummation of a "Company Sale Event"
as defined herein.
Aggregate Number of
Option Shares: ______________
Exercise Price per Share: 12/21/06 to 12/20/07 $1.56
12/21/07 to 12/20/08 $1.95
12/21/08 to 12/21/09 $2.44
12/21/09 to 12/20/10 $3.05
12/21/10 to 12/20/11 $3.81
Lapse Date Any options not exercised on or prior to
December 20, 2011 (the "Expiration Date") shall
lapse and be of no further force and effect.
Part II of this Agreement is attached hereto and incorporated herein for
all purposes. EXECUTED to be effective as of the Grant Date set forth above.
ENGLOBAL CORPORATION ALLIANCE 2000, LTD.
By: By: BHC Management Corporation
__________________________ General Partner
Michael L. Burrow, CEO
_______________________________
By: William A. Coskey, President
OPTIONEE
Signature: _________________________
Print Name:_________________________
Address:
____________________________________
____________________________________
PART II
This Amended and Restated Stock Option Agreement (this "Agreement") is made
and entered into by and between Alliance 2000, Ltd., a Texas limited partnership
(the "Alliance"), ENGlobal Corporation, formerly known as Industrial Data
Systems Corporation (the "Company" or "ENGlobal") and the optionee named on Part
I (the "Optionee"), as of the date set forth on Part I (the "Grant Date"). This
Agreement is entered into pursuant to that certain Option Pool Agreement by and
between ENGlobal (including its subsidiaries) and Alliance dated to be effective
December 21, 2001, together with an amendment and restatement of the Option Pool
Agreement dated to be effective December 20, 2006.
RECITALS:
Alliance and the Company entered into an Option Pool Agreement on December
21, 2001 in order to provide an incentive for key employees of the Company and
of its subsidiaries to remain in the service of the Company or its subsidiaries,
to extend to them the opportunity to acquire a proprietary interest in the
Company so that they would apply their best efforts for the benefit of the
Company and its subsidiaries, and would aid the Company in attracting able
persons to enter the service of the Company and its subsidiaries.
To accomplish these purposes, Alliance agreed, in accordance with the terms
of an Agreement and Plan of Merger dated July 31, 2001, to give certain current
and future employees of ENGlobal options to acquire up to 2,600,000 shares of
the common stock, par value, $.001 per share (the "Common Stock"), of ENGlobal
held by Alliance, in accordance with the terms of the Option Pool Agreement.
Alliance, the Company, and Optionee wish to amend and restate the terms of
the unexpired options granted under the Option Pool Agreement.
NOW, THEREFORE, parties agree as follows:
1. Grant of the Option. Alliance hereby extends the term of the option
granted to Optionee under the Option Pool Agreement (the "Option") to purchase
from Alliance the aggregate number of shares set forth on Part I (such number
being subject to adjustment as provided below and as provided in Section 8) of
common stock, $0.001 par value per share, of the Company (the "Shares") on the
terms and conditions set forth in this Agreement. The Option may be exercised in
whole or in part, subject to the terms and conditions of this Agreement. The
Option is not intended to qualify as an "incentive stock option" under Section
422 of the Code.
2. Exercise Price. The price at which the Optionee shall be entitled to
purchase the Shares shall be dependent on the date of exercise, as set forth on
Part I subject to adjustment as provided in Section 8.
3. Vesting and Term of the Option.
(a) General. The Option shall vest and be exercisable in the hands of
the Optionee only upon the consummation of a Company Sale Event. A "Company Sale
Event" is (i) a sale of substantially all of the assets of the Company to a
person or entity that is not an affiliate of the Company, (ii) any sale in a
single transaction or in a series of related and substantially similar
contemporaneous transactions of the issued and outstanding securities of the
Company representing 50% or more of the total number of shares of the Company
then outstanding to any person or entity that is not an affiliate of the selling
shareholders, or (iii) any merger, consolidation or reorganization of the
Company with or into one or more entities that are not Affiliates of the
Company, as a result of which less than 50% of the outstanding voting
securities, partnership interests or membership interests of the surviving or
resulting entity are owned by the holders of the Company's securities (or their
Affiliates) immediately prior to such merger, consolidation or reorganization.
Notwithstanding anything to the contrary provided herein, the issuance of
securities by the Company in an acquisition by the Company or by any of its
subsidiaries of another business shall not constitute a Company Sale Event.
Options which shall have vested shall be referred to as "Vested Options."
(b) Expiration. Notwithstanding any other provision contained herein
to the contrary, the unexercised portion of the Option, if any, will
automatically and without notice terminate upon the earlier of (i) the death,
disability or termination of employment of Optionee with the Company or any of
its Subsidiaries, whether such termination is voluntary or otherwise; or (ii)
December 21, 2011 (the "Expiration Date"); provided however, this Option shall
not expire on death, disability or otherwise if Optionee retires from employment
with the Company after he reaches age 66.
4. Method of Exercising Option. The Optionee may exercise any Vested Option
concurrently with the consummation of a Company Sale Event. The Company shall
give Optionee at least 30 days notice of the contemplated consummation of a
Company Sale Event. Optionee may exercise this Option within 20 days of the
receipt of such notice as to some or all of the Option Shares by delivery to the
Company and to Alliance of a written notice in the form attached as Exhibit A
(the "Exercise Notice), which Exercise Notice shall be effective, subject to the
requirements of this Agreement, on the later of the date received by both of the
Company and Alliance. The Exercise Notice shall state the Optionee's election to
exercise the Option, the number of Options in respect of which an election to
exercise has been made, the method of payment elected (see Section 5), the exact
name or names in which the Shares then being purchased will be registered and
the social security number of the Optionee. The Exercise Notice must be signed
by the Optionee and must be accompanied by payment of the aggregate Exercise
Price of the Shares then being purchased, determined in accordance with Part I.
All Shares delivered by Alliance upon exercise of the Options as provided in
this Agreement shall be fully paid and nonassessable upon delivery. Unless the
Shares issued upon the exercise of the Options are then the subject of a
registration statement effective under the Securities Act of 1933, as amended
("Securities Act") (and, if required, there is available for delivery a
prospectus meeting the requirements of Section 10(a)(3) of the Securities Act),
the delivery of the Exercise Notice shall be deemed to be the making by the
person delivering such Exercise Notice of the representations, acknowledgments
and agreements which would be contained in the Investment Letter referred to in
Section 9.
5. Method of Payment for Options. If the Company Sale Event results in a
cash payment to the Company's stockholders, Optionee may elect to have the cash
payment due to Alliance from Optionee upon exercise of the options deducted from
the consideration Optionee would otherwise receive on the consummation of the
Company Sale Event if the stock were held by Optionee, and the amount deducted
shall be deemed paid by Optionee to Alliance as the Exercise Price. Otherwise,
unless permitted by Alliance, the full Exercise Price for the Shares purchased
upon the exercise of the Vested Options (i.e., the number of Shares being
purchased multiplied by the Exercise Price per Share) must be made in cash,
unless Alliance and the Company approve an exercise in assets other than cash,
which approval may be granted or withheld in the sole discretion of the Company
and Alliance. Alliance will accept payment by cashier's check, personal check,
provided that if such personal check is returned for insufficient funds, payment
for the Shares and for any applicable taxes required to be withheld by the
Company shall be deemed not to have occurred. In addition, the Option shall not
be deemed to be exercised until the Optionee has provided payment to the Company
for withholding taxes, if any, which may be due with respect to such exercise.
6. Delivery of Shares. No Shares and no consideration received on a Company
Sale Event shall be delivered to the Optionee upon exercise of the Option until
(i) the Exercise Price for such Shares being purchased is paid in full in the
manner provided in this Agreement by deduction or otherwise as provided in
Section 5; (ii) all the applicable taxes required to be withheld have been paid
or withheld in full; and (iii) if required by the Board of Directors, the
Optionee has delivered to the Company and Alliance an Investment Letter in form
and content satisfactory to the Company as provided in Section 10.
(a) This Option shall not be transferable by the Optionee, unless
Alliance and the Company approve the transfer of this Option, which approval may
be granted or withheld in the sole discretion of the Company and Alliance.
(b) If Optionee attempts or purports to transfer, assign, pledge or
hypothecate this Option, or any rights and privileges in connection herewith, in
any way, whether by operation of law or otherwise, this Agreement and the Option
granted hereunder will automatically terminate and the Option will thereafter be
null and void.
7. Adjustments. If there is any change in the capital structure of the
Company through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, combination of shares or similar event (a
"Restructuring"), the rights of the Optionee shall be adjusted accordingly,
i.e., the number of Shares exercisable hereunder shall be increased
proportionately, and the price (including Exercise Price) for each Share shall
be reduced proportionately, without changing the aggregate purchase price or
value as to which outstanding Options remain exercisable or subject to
restrictions. Nothing in this Agreement shall affect in any way the right or
power of the Company to make or authorize any Restructuring.
8. Securities Act. Alliance will not be required to deliver any Shares
pursuant to the exercise of all or any part of the Option if, in the reasonable
opinion of counsel for Alliance, such delivery would violate the Securities Act
or any other applicable federal or state securities laws or regulations.
Alliance or the Company may require that the Optionee, prior to the transfer of
any such Shares pursuant to exercise of the Option, sign and deliver to the
Company a written statement (an "Investment Letter") stating that (a) the
Optionee is purchasing the Shares for his own account and other than the Company
Sale Event, is not purchasing the Shares with a view to, or for sale in
connection with, any distribution thereof, he has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or commitment
providing for the disposition thereof and he does not currently have any reason
to anticipate a change in the foregoing; (b) the Optionee understands that the
Shares have not been registered under the Securities Act or any applicable state
securities laws or regulations and, therefore, cannot be offered or resold
unless the Shares are so registered or an applicable exemption from registration
is available; and (c) the Optionee agrees that the certificates representing the
Shares may bear a legend to the effect set forth in clause (b) above. The
Investment Letter must be in form and substance acceptable to the Company in its
reasonable discretion.
9. Notice. All notices required or permitted under this Agreement,
including an Exercise Notice, must be in writing and personally delivered or
sent by mail and shall be deemed to be delivered on the date on which actually
received by the Company properly addressed to the person who is to receive it.
An Exercise Notice shall be effective when actually received by the Company and
Alliance, in writing and in conformance with this Agreement. Until changed in
accordance herewith, the Company, Alliance and the Optionee specify their
respective addresses as set forth below:
Company: ENGlobal Corporation
654 N. Sam Houston Pkwy. E
Suite 400
Houston, Texas 77060-5914
Attention: Corporate Secretary
Alliance: ALLIANCE 2000, LTD.
654 N. Sam Houston Pkwy. E
Suite 400
Houston, Texas 77060-5914
Attention: General Partner
Optionee: As indicated on Part I.
10. Information Confidential. As partial consideration for the granting of
this Option, the Optionee agrees that he will keep confidential all information
and knowledge that he has relating to the Options granted hereunder; provided,
however, that such information may be disclosed as required by law and may be
given in confidence to the Optionee's spouse, tax and financial advisors, or a
financial institution to the extent that such information is necessary to obtain
a loan.
11. No Guarantee of Continuation as an Employee. This Agreement shall not
be construed to confer upon the Optionee any right to continue as an employee of
the Company and shall not limit the right of the Company to terminate Optionee's
employment at any time with or without cause and with or without notice, except
to the extent set forth in a written employment contract signed by Optionee and
a duly authorized officer of the Company.
12. No Obligation to Exercise. The Optionee shall have no obligation to
exercise any Option granted by this Agreement.
13. Governing Law; Construction. This Agreement shall be governed by the
laws of the State of Texas without regard to choice of law and conflicts of law
principles which direct the application of the laws of a different state. Any
disputes relating to this Agreement shall be heard in the state and federal
courts of Harris County, Texas. Titles and headings are for ease of reference
only and shall not be considered in construing this Agreement. Pronouns shall be
deemed to include the masculine, feminine, neuter, singular and plural as the
context may require. References to sections and exhibits are to Sections and
Exhibits of this Agreement unless otherwise indicated. All such Exhibits are
incorporated in this Agreement by reference and are a part hereof.
14. Amendments. This Agreement may be amended only by a written agreement
executed by Alliance, the Company and the Optionee.
15. Proprietary Information. In consideration of Alliance's grant of this
Option and in further consideration of the Company's agreement to provide
Optionee with confidential information of the Company, Optionee agrees to keep
confidential and not to use or to disclose to others at any time during the term
of this Agreement or after its termination, except as expressly consented to in
writing by the Company or required by law, any secrets or confidential
technology or proprietary information of the Company, including, without
limitation, any customer list, marketing plans or materials, or other trade
secrets of the Company, or any matter or thing ascertained by Optionee through
Optionee's affiliation with the Company, the use or disclosure of which matter
or thing might reasonably be construed to be contrary to the best interests of
the Company or to give any other party a competitive advantage to the Company.
Optionee further agrees that if Optionee's employment with the Company is
terminated for any reason, Optionee will neither take nor retain, without prior
written authorization from the Company, any documents pertaining to the Company.
Without limiting the generality of the foregoing, Optionee agrees that he will
not retain, use or disclose any papers, customer lists, marketing materials or
information, books, records, files, or other documents, copies thereof, or notes
or other materials derived therefrom, or other confidential information of any
kind belonging to the Company pertaining to the Company's business, sales,
financial condition, or products, and that he will delete all such information
from any electronic or other storage owned by Optionee or under Optionee's
control. Within five days of a written request from the Company, Optionee will
provide the Company with a signed affidavit verifying that all such confidential
information has been returned to the Company or destroyed, and has been deleted
from electronic or other storage. Without limiting other possible remedies to
the Company for the breach of this covenant, Optionee agrees that injunctive or
other equitable relief shall be available to enforce this covenant, such relief
to be without the necessity of posting a bond, cash, or otherwise. Optionee
further agrees that if any restriction contained in this Section is held by any
court to be unenforceable or unreasonable, a lesser restriction shall be
enforced in its place and remaining restrictions contained herein shall be
enforced independently of each other. Optionee's obligations under this Section
apply to all confidential information of the Company as well as to any and all
confidential information relating to the Company's subsidiaries and affiliates.
16. Noncompetition.
(a) Basis of Covenants. The Company's business involves providing
engineering, technical staffing, automation and control systems, field
inspection, and land management and regulatory services to the petroleum
refining, petrochemical, pipeline, production, and process industries throughout
the United States and internationally. Optionee recognizes that the Company's
and Alliance's decision to enter into this Agreement and to grant the Option
herein granted is induced primarily because of the covenants and assurances made
by Optionee in this Agreement, that irrevocable harm and damage will be done to
the Company and Alliance if Optionee violates the obligation to maintain the
confidentiality of proprietary information, or competes with the Company.
Optionee stipulates and agrees that the consideration given by the Company and
Alliance in granting this Option and in granting Optionee access to the
confidential information of the Company gives rise to the Company's and
Alliance's interest in the promises made by Optionee in this paragraph; further,
Optionee stipulates that the promises Optionee makes in this paragraph are
designed to enforce the promises made by Optionee, including those set forth in
paragraph 15. Optionee will continue to receive the Company's proprietary
information and will receive training of substantial value as a result of his
affiliation with the Company.
(b) Noncompetition Covenant. Optionee agrees that for as long as
Optionee has rights to acquire Shares under this Agreement, Optionee shall not,
directly or indirectly, as an employee, employer, contractor, consultant, agent,
principal, shareholder, corporate officer, director, or in any other individual
or representative capacity, engage or participate in any business or practice
that is in competition in any manner whatsoever with the business of the
Company.
(c) Non-Interference Covenant. Optionee covenants and agrees that, for
a period of one year subsequent to the termination, for whatever reason, of his
employment with the Company, that Optionee shall not recruit, hire or attempt to
recruit or hire, directly or by assisting others, any other employees of the
Company, nor shall Optionee contact or communicate with any other employees of
the Company for the purpose of inducing other employees to terminate their
employment with the Company. For purposes of this covenant, "other employees"
means employees who are actively employed by the Company at the time of the
attempted recruiting or hiring.
(d) Remedies.
(i) This covenant shall be construed as an agreement ancillary to
the other provisions of this Agreement and the existence of any claim or cause
of action of Optionee against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company
or Alliance of this covenant. Without limiting other possible remedies to the
Company or Alliance for breach of this covenant, Optionee agrees that injunctive
or other equitable relief will be available to enforce the covenants of this
provision, such relief to be without the necessity of posting a bond, cash, or
otherwise.
(ii) If Optionee violates any of the covenants of this paragraph
16, the two-year term of the restriction violated shall be extended by the
amount of time that Optionee was in violation.
(iii) The Company, Alliance and Optionee further agree that if
any restriction contained in this paragraph 16 is held by any appropriate forum
to be unenforceable or unreasonable, a lesser restriction will be enforced in
its place and remaining restrictions contained herein will be enforced
independently of each other. Optionee agrees to pay any attorneys' fees and
expenses incurred by the Company or Alliance if the Company or Alliance chooses,
in their sole discretion, to enforce any provision hereunder.
(iv) If Optionee violates paragraph 15 or 16 of this Agreement at
a time that he holds Options, the Options shall be immediately cancelled and
shall have no further force and effect. In addition, if Optionee violates
paragraph 15 or 16 of this Agreement following his exercise of Options, he shall
forfeit to the Company an amount equal to the difference between the fair market
value on the date of exercise for the Option exercised and the Exercise Price.
This amount shall be paid to the Company in addition to payment of all other
damages that the Company and Alliance has suffered as a result of Optionee's
breach and in addition to all other relief to which the Company is entitled
under this Agreement and under applicable law.
17. No Rights as a Shareholder. Optionee shall not by virtue of this
Agreement, have any rights as a shareholder until the date of the issuance to
the Optionee of Shares pursuant to a valid Exercise Notice.
18. Severability. If any provision of this Agreement is held by final
judgment of a court of competent jurisdiction to be invalid, illegal or
unenforceable, such 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.
19. Entire Agreement. Except as provided below, this Agreement, including
the exhibits and schedules attached hereto, if any, contains the entire
agreement of the parties with respect to the subject matters hereto, and
supersedes all prior agreements between them, whether oral or written, of any
nature whatsoever with respect to the subject matter hereof. However, this
Agreement does not supersede any agreements between Optionee and the Company for
options granted under the Company's Incentive Stock Option Plan, or the
Company's rights under any agreement between Optionee and the Company that
protects the Company's proprietary information or intellectual property; rather
all such rights of the Company under any such agreements shall be in addition to
the rights granted herein.
EXHIBIT A - EXERCISE NOTICE
Notice is hereby given to the Company of Optionee's election to exercise
Options as follows:
Name of Optionee (please print): ________________________
Optionee's Social Security Number: ______________________
A. Number of Shares to be purchased:
B. Exercise Price per Share: $
C. Method of payment (check one): Cash:
Other- as authorized
by Alliance:
D. Exercise Price tendered herewith: (A x B) $
E. Market Price per Share on date of Exercise: $
F. Difference Between Market Price and Exercise Price $
(E - B):
G. Total Difference (F x A): $
H. Withholding Tax Rate: _________ %*
I. Amount of Tax Withholding tendered herewith (G x H): $
J. Total Amount Due on Exercise (D + I): $
*Upon exercise of Options, the Company may collect withholding tax on the
difference between the market value of the Shares on the day of the exercise
less the exercise price (the "difference"). This difference will be included on
a Form W2 issued to the Optionee following the end of the year.
Exact name(s) for Share certificate(s):
Date: __________________________
__________________________________
Signature of Optionee
PLEASE COMPLETE AND SIGN THIS NOTICE AND RETURN IT TO BOTH:
ENGlobal Corporation Alliance 2000, Ltd.
654 N. Sam Houston Pkwy. E 654 N. Sam Houston Pkwy. E
Suite 400 Suite 400
Houston, Texas 77060-5914 Houston, Texas 77060-5914
ATTN: Corporate Secretary Attention: General Partner