SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (this "Agreement"), dated April 2,
2007, (the "Effective Date"), sets forth the mutual agreement of ENGlobal
Corporation, a Nevada corporation, for itself and its subsidiaries and
affiliates (collectively "ENGlobal"), and Michael L. Burrow ("Burrow"),
regarding Burrow's separation from employment with ENGlobal. Terms not otherwise
defined in this Agreement shall have the meanings ascribed to them in that
certain Key Executive Employment Agreement dated January 1, 2006 between
ENGlobal and Burrow (the "Employment Agreement").
Burrow has been employed by and has served as an officer and a member of
the Board of Directors of ENGlobal since December 2001.
On the Effective Date, Burrow resigned as President and Chief Executive
Officer, as a member of ENGlobal' s Board of Directors, and as an employee of
The parties to this Agreement have decided to resolve any differences that
may exist in connection with Burrow's employment with ENGlobal, service on
ENGlobal's Board of Directors, and separation therefrom.
The parties desire to keep the terms of this Agreement confidential, to be
knows only by the parties to this Agreement and their attorneys, except as
otherwise required by law.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, including the recitals set forth above, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
agree as follows:
1. Consideration from ENGlobal. If Burrow signs this Agreement, does not
revoke this Agreement, and complies fully with this Agreement, ENGlobal will
provide Burrow with the following valuable consideration, a portion of which is
expressly agreed to be in addition to anything to which Burrow is currently
entitled and not otherwise required by ENGlobal's policies, procedures, or
(a) Severance Payments.
(i) During the Initial Severance Benefit Period, ENGlobal will
pay Burrow severance benefits (subject to applicable tax and other withholdings)
in payroll period installments in accordance with ENGlobal's normal payroll
policies, in an amount equal to the monthly amount of Burrow's Annual Salary in
effect at the Effective Date. In addition, ENGlobal will (under the same cost
sharing arrangements as were in place prior to the Effective Date), continue to
include Burrow and his eligible dependents under the coverage of all group
health, medical and dental insurance policies, plans and programs maintained by
ENGlobal during the Initial Severance Benefit Period for ENGlobal's employees,
or management employees, generally.
(ii) ENGlobal hereby extends the Restricted Period, and ENGlobal
will pay Burrow severance benefits (subject to applicable tax and other
withholdings) during the Second Severance Benefit Period, in payroll period
installments in accordance with ENGlobal's normal payroll policies, in an amount
equal to the monthly amount of Burrow's Annual Salary in effect at the Effective
Date. In addition, ENGlobal will (under the same cost sharing arrangements as
were in place prior to the Effective Date), continue to include Burrow and his
eligible dependents under the coverage of all group health, medical and dental
insurance policies, plans and programs maintained by ENGlobal during the Second
Severance Benefit Period for ENGlobal's employees, or management employees,
(b) Benefits and Expenses.
(i) Burrow understands and agrees that balances or vested
balances Burrow has in any ENGlobal benefit plan will be available to Burrow
consistent with applicable law, regulations and the administrative provisions of
the various plan documents. Except as provided in Section 1(b)(ii), any options
to acquire shares of ENGlobal's common stock will expire or be exercisable in
accordance with the terms and provisions of the applicable agreement, plans and
plan documents. Burrow further understands that he will not receive any grants
of stock or options from ENGlobal in the future.
(ii) On the Effective Date, ENGlobal and Alliance 2000, Ltd. will
enter into the Second Amended and Restated Alliance Stock Option Agreement
attached as Exhibit A.
(iii) Burrow agrees that he will not conduct any market
transactions in ENGlobal stock (including purchasing or selling shares and
moving funds in or out of the ENGlobal 401(k) Plan) until ENGlobal files its
definitive proxy statement on Schedule 14A for year 2007. This restriction shall
not impede Burrow's ability to exercise his vested options to acquire shares of
ENGlobal common stock as permitted under the applicable option agreements.
(iv) ENGlobal agrees to reimburse Burrow for all reasonable
business expenses incurred through March 31, 2007.
(a) Burrow hereby knowingly and voluntarily waives, relieves,
releases, acquits and forever discharges ENGlobal, and its predecessors, parent
and affiliated companies, successors and assigns, officers, directors, agents,
employees, shareholders, attorneys, accountants, employee benefit plans and
trustees, and any and all other related individuals and entities (collectively,
the "Releasees"), from any and all claims, debts, liabilities, demands,
obligations, liens, promises, acts, agreements, costs, expenses (including, but
not limited to, attorneys' fees), damages, actions and causes of action, of any
nature whatsoever, including, without limitation, any statutory, civil or
administrative claim, or any claim, arising out of facts, whether known or
unknown, suspected or unsuspected, fixed or contingent, apparent or not,
including, but not limited to, any claims based on, arising out of, related to
or connected with Burrow's employment with, or termination of employment from,
ENGlobal, including but not limited to, any claims arising from federal, state
or local laws which prohibit discrimination on the basis of race, national
origin, religion, age, sex, marital status, pregnancy, disability, perceived
disability, ancestry, sexual orientation, family or personal leave, or any other
form of discrimination, or from any common law claims of any kind, including,
but not limited to, contract, tort, or property rights, including, but not
limited to, breach of contract, breach of the implied covenant of good faith and
fair dealing, tortious interference with contract or current or prospective
economic advantage, fraud, deceit, breach of privacy, misrepresentation,
defamation, wrongful termination, tortious infliction of emotional distress,
loss of consortium and breach of fiduciary duty, violation of public policy and
any other common law claim of any kind whatsoever, and claims for severance pay,
sick leave, family leave, vacation, life insurance, bonuses, health insurance,
disability or medical insurance or any other fringe benefit or compensation, or
from any and all rights or claims arising under the Civil Rights Act of 1964, as
amended, 42 U.S.C. ss.ss. 2000e, et seq.; the Americans with Disabilities Act,
42 U.S.C. ss.ss. 12101, et seq.; the Age Discrimination in Employment Act, as
amended, 29 U.S.C. ss.ss. 621 et seq.; the Older Workers Benefit Protection Act;
the Sarbanes-Oxley Act of 2002, including the whistleblower provisions thereof;
the Texas Commission on Human Rights Act, Tex. Labor Code ss.ss. 21.001, et seq.
(prohibiting discrimination based upon age, race, sex, religion, national origin
or disability); the Family & Medical Leave Act; the Employee Retirement Income
Security Act of 1974; and the Worker Adjustment Retraining and Notification Act.
Claims which cannot be waived by law are excluded from the release provisions of
this Section 2; however, Burrow does waive his right to any monetary recovery
should any agency pursue claims against any Releasee on Burrow's behalf.
(b) Burrow understands and agrees, in compliance with any statute or
ordinance which requires a specific release of unknown claims or benefits, that
this Agreement includes a release of unknown claims, and Burrow hereby expressly
waives and relinquishes any and all claims, rights or benefits that Burrow may
have which are unknown to Burrow at the time of the execution of this Agreement.
Burrow understands and agrees that if, hereafter, Burrow discovers facts
different from or in addition to those which Burrow now knows or believes to be
true, that the waivers and releases of this Agreement shall be and remain
effective in all respects notwithstanding such different or additional facts or
the discovery of such fact.
(c) If Burrow is at least 40 years old, Burrow agrees and expressly
acknowledges that this Agreement includes a waiver and release of all claims
which Burrow has or may have under the Age Discrimination in Employment Act of
1967, as amended, 29 U.S.C. ss.ss. 621, et seq. ("ADEA"), the Older Workers
Benefit Protection Act, as amended, or any equivalent or comparable provision of
federal, state or local law, including, without limita