XXXXXXX X. XXXXX NUMBER OF SHARES 10,000
NONQUALIFIED STOCK OPTION
UNDER THE
DIVERSIFIED CORPORATE RESOURCES, INC.
1998 NONQUALIFIED STOCK OPTION PLAN
THIS AGREEMENT is executed by Diversified Corporate Resources, Inc., a
Texas corporation (herein called "Company") to evidence the grant to Xxxxxxx
X. Xxxxx (herein called "Optionee") of a stock option effective as of April
29, 1998.
WHEREAS, the Optionee is an key employee of the Company; and
WHEREAS, the Optionee has been granted an option to purchase shares of
common stock, par value $.10 per share (the "Common Stock"), of the Company
pursuant to the Company's 1996 Amended and Restated Nonqualified Stock Option
Plan, as amended; and
WHEREAS, the Company considers it desirable and in its best interests
that Optionee be given an opportunity to acquire an additional equity
interest in the Company in the form of an option to purchase shares of the
Common Stock; and
WHEREAS, this Option is granted under, and pursuant to the terms of the
Diversified Corporate Resources, Inc. 1998 Nonqualified Stock Option Plan
(the "Plan").
NOW, THEREFORE, in consideration of the premises, it is agreed as
follows:
1. GRANT OF OPTION. The Company shall and does hereby grant to
Optionee the option (the "Option") to purchase 10,000 shares (the "Shares")
of Common Stock for the price per share in the manner and subject to the
conditions hereinafter provided.
2. TIME OF EXERCISE, VESTING AND EXERCISE PRICE OF OPTION. Subject to
the terms hereof, the Option herein granted must be exercised in whole or in
part at any time or times prior to April 29, 2003. Subject to the terms
hereof, the Option herein granted shall become exercisable (i.e. shall vest)
as to 833 shares of Common Stock per quarter on the last day of each calendar
quarter ended the last day of March, June, September and December commencing
with the quarter ended June 30, 1998 and ending with the quarter ended March
31, 2001. The exercise price of the Option shall be $12.75 per share, subject
to adjustment as provided in the plan. The parties hereto acknowledge and
agree that (A), except as set forth below, such vesting is contingent upon
the Optionee being an officer of the Company as of any applicable vesting
date regardless of the reason that the Optionee may cease to be an officer of
the Company, and (B) subject to the restrictions herein as to when the Option
is exercisable, the Optionee shall have the right to select the portion of
the Option if and when the Optionee exercises any of this Option.
If
(i) a "Special Change in Control" occurs, and
(ii) Optionee's employment with the Company terminates for any reason
other than Voluntary Termination or Termination for Cause, during
the twenty-four (24) month period immediately following the
Effective Date (as reasonably determined by the Committee) of
such Change in Control,
then, notwithstanding the vesting schedule above, and any other provision
of this Agreement to the contrary, this Option will become exercisable with
respect to all of the Shares subject to this Option at the exercise prices
at which the Option would have been exercisable if the Optionee had
continued in employment through the dates set forth in
the preceding paragraph on which the Option would have been exercisable
with respect to all of the Shares, subject to this Option and will
terminate as provided herein.
For the purposes hereof, "Voluntary Termination" shall mean the
Optionee's resignation from the Company unless such resignation is as a
direct proximate result of (i) without Optionee's express written consent,
the assignment to Optionee of any duties materially inconsistent with his
positions, duties, responsibilities and status with the Company on the
Effective Date of the Special Change in Control; (ii) a reduction of
Optionee's base compensation and bonus to an amount which is greater than ten
percent (10%) lower than such compensation on the Effective Date of the
Special Change In Control; (iii) relocation of Optionee's principal location
of work to any location which is both (x) in excess of fifty (50) miles from
the location of Optionee's principal location of work on the Effective Date
of the Special Change in Control, and (y) in excess of the sum of the
distance from Optionee's principal residence on such Effective Date to the
location of the Optionee's principal location of work on such Effective Date,
plus 50 miles; or (iv) failure by the Company to require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company, by
agreement in form and substance reasonably satisfactory to the Optionee,
expressly to assume and agree to perform the obligations of the Company under
his Employment Agreement and this Agreement; or (v) any material breach of
his Employment Agreement as in effect on the Effective Date of the Special
Change in Control, or this Agreement, by the Company.
For all purposes hereof, "Termination For Cause" shall mean Optionee's
(i) violation of any provision of this Agreement (but only after Optionee has
received written notice therof and
been given a reasonable period, not less than thirty (30) days, to cure said
violation); or (ii) conviction of a felony, or a misdemeanor involving moral
turpitude.
For all purposes hereof "Special Change in Control" means (i) any person
or entity, including a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), other than
the Company, a majority-owned subsidiary thereof or X. Xxxxxxx Xxxxx
("XXXXX") and any affiliate of Xxxxx, becomes the beneficial owner (as
defined in Schedule 13(d) under the Exchange Act) of the Company's securities
having 25% or more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of directors of
the Company; or (ii) as the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sales of assets or
contested election, or any combination of the foregoing transactions, less
than a majority of the combined voting power of the then outstanding
securities of the Company or any successor corporation or entity entitled to
vote generally in the election of the directors of the Company or such other
corporation or entity after such transaction are beneficially owned (as
defined in Section 13(d) of the Exchange Act) in the aggregate by the holders
of the Company's securities entitled to vote generally in the election of
directors of the Company immediately prior to such transaction; or (iii)
during any period of two consecutive years, individuals who at the beginning
of any such period constitute the Board of Directors of the Company cease
for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's shareholders, of
each director of the Company first elected during such period was approved by
a vote of at least two-thirds of the directors of the Company then still in
office who were directors of the Company at the beginning of any such period.
The "Effective Date" of
such Special Change in Control shall be the earlier of the date on which an
event described in (i), (ii), or (iii) occurs, or if earlier, the date of the
occurrence of (iv) the approval by shareholders of an Agreement by the
Company, the consummation of which would result in an event described in (i),
(ii), or (iii), or (v) the acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than the Company, a
majority-owned subsidiary of the Company or Xxxxx and any affiliate of Xxxxx)
of securities of the Company representing 5% or more of the combined voting
power of the Company's outstanding securities, provided, however, that the
events described in (iv) and (v) will be considered the Effective Date of a
Special Change in Control only if they are followed within six (6) months by
an event described in (i), (ii) or (iii).
3. METHOD OF EXERCISE. (a) In order to exercise this Option, in whole
or in part, the Optionee shall deliver to the Company at its principal place
of business, or at such other offices as shall be designated by the Company
(i) a written notice of such Optionee's election to exercise this Option,
which notice shall specify the number of Shares to be purchased pursuant to
such exercise and (ii) either (A) cash or a check payable to the order of the
Company, (B) notice that the exercise price is satisfied by reduction of the
number of Shares to be received by Optionee upon exercise of this Option as
provided in Section (b) below, with the amount of such reduction specified in
such notice, (C) shares of Common Stock having a fair market value equal to
the Exercise Price, or (D) a combination of the above. The Company shall
undertake to make prompt delivery of the stock certificate(s) evidencing such
part of the Shares, provided that if any law or regulation requires the
Company to take any action with respect to the Shares specified in such
notice before the issuance thereof, then the date of delivery of such Shares
shall be extended for the period necessary to take such action.
(b) At the election of the Optionee, the Optionee may exercise this
Option without a cash payment of the exercise price by designating that the
number of Shares issuable to Optionee upon such exercise shall be reduced by
the number of Shares having a fair market value equal to the amount of the
total Exercise Price for such exercise. In such instance, no cash or other
consideration will be paid by the Optionee in connection with such exercise
and no commission or other remuneration will be paid or given by the Optionee
or the Company in connection with such exercise.
(c) For all purposes relating to the surrender or delivery of Shares in
satisfaction of obligations described in subsection (a) and (b) of this
Section, the fair market value of the shares of Common Stock delivered or
surrendered shall be determined as of the business day next preceding the
date of their surrender or delivery, and shall mean the price at which such
shares would exchange hands between a willing buyer and willing seller,
neither of whom are under compulsion to buy or sell, as reasonably determined
by the Committee; provided, however, that so long as such shares are listed
on a national stock exchange or quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), it shall mean the
closing sale price (or, if no closing sale price is quoted, the mean between
the closing bid and sale price) of such shares on such exchange or on NASDAQ
on such next business day, or, if no such shares were traded on such business
day, the closing sale price (or, if no closing sale price is quoted, the mean
between the closing bid and sale price) on the next preceding business day on
which such shares were traded.
(d) Upon the exercise of an Option, and before the transfer of Shares,
the Optionee shall be required to pay to the Company, in cash or in Shares
(including, but not limited to, the
reservation to the Company of the requisite number of Shares otherwise
payable to such person with respect to such Option in the manner described in
(b)) the amount which the Company reasonably determines to be necessary in
order for the Company to comply with applicable federal or state tax
withholding requirements, and the collection of employment taxes; provided,
further, that the Committee may require that such payment be made in cash.
4. TERMINATION OF OPTION. To the extent not theretofore exercised,
the Option herein granted shall terminate with respect to Shares which have
not vested immediately upon Optionee's termination of employment for any
reason, and shall terminate with respect to Shares, which have vested on the
earlier of (a) April 29, 2008, (b) 180 days from the date on which Optionee's
employment with the Company is terminated for any reason other than the death
or disability of the Optionee, and (c) one (1) year from the date on which
Optionee's employment with the Company is terminated if such termination is
due to death or disability of the Optionee.
5. RIGHTS PRIOR TO EXERCISE OF OPTION. The Option herein granted is
nontransferable by Optionee except as herein otherwise provided. This Option
may be pledged for the sole purpose of exercising stock options granted to
the Optionee by the Company to purchase shares of Common Stock of the
Company. Unless the Optionee is deceased or disabled, with the determination
of the existence or nonexistence of such disability such disability left to
the reasonable discretion of the Committee, or pledged as permitted
hereunder, the Option herein may only be exercised by the Optionee. If the
Optionee dies during the period of time that all or any of part of this
Option is exercisable, the Optionee's executor or legal representative may
exercise all or any part of this Option with respect to the Shares which are
vested, at any time or times prior to the termination of the Option. If the
Optionee is disabled, as aforesaid, the Optionee's legal representative may
exercise all or any part of this Option with respect to the Shares which are
vested, at any time or times prior to the termination of the Option.
Optionee shall have no rights as a stockholder with respect to the Shares
until payment of the Exercise Price for the Shares purchased by exercise of
the Option, and the issuance of the Shares involved.
6. BINDING EFFECT. Without limitation, the Option herein granted is
issued under, and granted in all respects subject to all of the provisions
of, the Plan, all of which provisions of the Plan are incorporated herein by
reference; provided, however, without limitation, that the provisions of this
Agreement will determine the agreement of the parties with respect to each
matter set forth herein to the extent the provisions of this Agreement do not
require a result that is inconsistent with the Plan; and provided, finally,
that the parties expressly agree that no inference shall be drawn with
respect to the intent of the parties based on the inclusion of, or reference
to, some provisions of the Plan in this Agreement, and the omission of such
inclusion or reference with respect to other provisions of the Plan in this
Agreement; and provided, finally, that this Agreement shall be binding upon
and inure to the benefit of the Company, and its representatives, successors
and assigns, and the Optionee and his or her legal representative (to the
extent expressly permitted).
7. MULTIPLE ORIGINALS. This Agreement may be executed in multiple
counterparts with each counterpart constituting an original for all purposes.
8. AMENDMENT. This Agreement may not be amended or revised in such a
manner as to impair the rights of the Optionee without Optionee's written
consent.
9. TOTAL AGREEMENT. This Agreement may not be amended or revised
except by a written instrument executed by both of the parties to this
Agreement.
10. COMMITTEE AUTHORITY. Any questions concerning the interpretation of
this Agreement, including without limitation the incorporated provisions of
the Plan, shall be determined by the Committee in its reasonable discretion.
10. APPROVAL OF THE PLAN. No portion of the Option shall be exercisable
until and unless the Plan has been approved by the shareholders of the
Company at the Company's 1998 Annual Meeting of Shareholders.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
effective as of the April 29, 1998.
DIVERSIFIED CORPORATE RESOURCES, INC.
By:
X. Xxxxxxx Xxxxx
Chairman of the Board and Chief Executive Officer
Xxxxxxx X. Xxxxx
