X. XXXXXXX XXXXX NUMBER OF SHARES 100,000
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 X. Xxxxxxx
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 100,000 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, 2008. Subject to the terms hereof,
the Option herein granted shall become exercisable (i.e. shall vest) as to 8,333
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; (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 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 thereof 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 (but only after receiving written notice thereof).
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 the Optionee and any affiliate of the
Optionee, 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 or termination of Optionee's employment without cause, 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 or
termination of Optionee's employment without cause.
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.
11. 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. Xxx Xxxxxxx, President
X. Xxxxxxx Xxxxx
