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STOCK COMPENSATION PLANS

12 Months Ended

Dec. 30, 2023

NOTE 10 – STOCK COMPENSATION PLANS

The Company’s 2021 Long Term Incentive Plan (the “Long Term Incentive Plan”), currently provides for the aggregate issuance of up to 1,500,000 shares of common stock. The Long Term Incentive Plan provides for grants of non-statutory options, incentive stock options, restricted stock awards, performance shares, performance units, restricted stock units and other stock-based awards, in order to enhance the ability of ENGlobal to motivate current employees, to attract employees of outstanding ability and to provide for grants to be made to non-employee directors. At December 30, 2023, 5,376 shares of common stock are available to be issued pursuant to the Long Term Incentive Plan.

We recognized non-cash stock-based compensation expense related to our Long Term Incentive Plan and the expired Amended and Restated 2009 Equity Incentive Plan of $0.3 million for the year ended December 30, 2023 and $0.2 million for the year ended December 31, 2022.

Restricted Stock Awards – Restricted stock awards granted to non-employee directors are intended to compensate and retain the directors over the one-year service period commencing July 1 of the year of service. These awards generally vest in quarterly installments beginning September 30^th of the year of grant, so long as the grantee continues to serve as a director of the Company as of each vesting date. In 2023, members of the Board of Directors received additional restricted stock awards in lieu of a cash payment for compensation of their service.

Restricted stock awards granted to employees generally vest in four equal annual installments on the anniversary date of grant, so long as the grantee remains employed full-time with us as of each vesting date. Restricted stock awards are generally issued as new shares at the time of grant. The grant-date fair value of restricted stock grants is determined using the closing quoted market price on the grant date. The restricted shares and weighted-average grant-date fair value has been recast to reflect the one-for-eight reverse stock split effected on November 30, 2023.

The following is a summary of the status of our restricted stock awards and of changes in restricted stock outstanding for the year ended December 30, 2023:

	Number of unvested restricted shares		Weighted-average grant-date fair value
Outstanding at December 31, 2022		11,622	$	19.20
Granted		155,235		5.19
Vested		48,050		2.80
Forfeited		1,818		34.42
Outstanding at December 30, 2023		116,989	$	2.96

As of December 30, 2023, there was $0.3 million of total unrecognized compensation cost related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 1.4 years.

During the year ended December 30, 2023, the Company granted the following restricted stock awards:

Date Issued	Issued to	Number of Shares		Market Price		Fair Value
July 12, 2023	Directors (5)		142,860	$	2.80	$	400,008
August 9, 2023	Employees (4)		12,375		2.80		34,650

During the year ended December 31, 2022, the Company granted the following restricted stock awards:

Date Issued		Issued to		Number of Shares				Market Price				Fair Value
June 9, 2022		Director (3)			14,313			$	10.48			$	150,000