DIRECTOR OPTION AGREEMENT RE: XXXXX
THIS AGREEMENT, which is effective as of December 9, 1998, is by and
between Diversified Corporate Resources, Inc., a Texas corporation (herein
called the "Company"), and A. Xxxxxxx Xxxxx (herein called "Optionee").
WHEREAS, the Optionee is a director of the Company; and
WHEREAS, the Company considers it desirable and in its best interests that
Optionee be given an opportunity to acquire an equity interest in the Company in
the form of an option to purchase shares of common stock, par value $.10 per
share (the "Common Stock"), of the Company; and
WHEREAS, the option covered by this Agreement is issued pursuant to the
Company's Non-Employee Director 1998 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 right, privilege and option to purchase 15,000 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 December 9, 2008. Subject to Section 11
hereof, the option herein granted shall become exercisable (i.e. shall vest) as
to 3,750 shares of Common Stock on the last day of each calendar quarter ended
on the last day of March, June, September and December commencing with the
quarter ended March 31, 1999 and ending with the quarter ended December 31,
1999. The exercise price of the option shall be $5.75 per share, subject to
adjustment as herein provided. The parties hereto acknowledge and agree that
(a), except as set forth below, such vesting is contingent upon the Optionee
being a director of the Company
as of any applicable vesting date, regardless of the reason that the Optionee
may cease to be a director 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 a "Special Change in Control" (as herein defined) occurs, and
whether or not Optionee continues as a director of the Company following the
Effective Date (as herein defined) of such Special Change in Control, then,
notwithstanding any provision of this Agreement to the contrary, and without
limitation, the Optionee will be fully vested with respect to all of the options
then covered by this Agreement; such options will be exercisable at the exercise
price set forth in the preceding paragraph as may be adjusted pursuant to
Section 5(a) hereof, and will terminate as herein provided.
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
Optionee's election to exercise this option, which notice shall specify the
number of shares of Common Stock to be purchased pursuant to such exercise and
(ii) either (A) cash or a check, payable to the order of the Company, equal to
the option price, (B) notice that the exercise price is satisfied by reduction
of the number of shares to be received by the 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 option price, or (D) a combination of the above; the option price
shall be the exercise price multiplied by the number of shares of Common Stock
to be purchased pursuant to the exercise involved. 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 of Common Stock 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 option 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 this purpose, the fair market value of the shares of Common
Stock with respect to the exercise of an option shall be determined as of the
last business day prior to such exercise of the option.
4. TERMINATION OF OPTION. To the extent not theretofore exercised, the
option herein granted shall terminate on the earlier of (a) December 9, 2008, or
(b) six (6) months from the date on which Optionee ceases to be a director of
the Company for any reason other than death or disability of the Optionee, or
(c) one (1) year from the date on which Optionee ceases to be a director of the
Company if such event is due to the death or disability of the Optionee.
5. RECLASSIFICATION, CONSOLIDATION, MERGER AND SPECIAL CHANGE IN CONTROL.
a. If and to the extent that the number of shares of Common Stock of
the Company shall be increased or reduced by change in par value, split-up,
reclassification, distribution of a dividend payable in stock, or the like, the
number of shares of Common Stock subject to the option herein granted, and the
option price therefor, shall be appropriately adjusted.
b. 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, J. Xxxxxxx Xxxxx ("Xxxxx") or any
affiliate of Xxxxx, becomes the beneficial owner (as
defined pursuant to Schedule 13(d) under the Exchange Act) of the Company's
securities having twenty-five percent (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 pursuant to 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 (2) 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 (iv) if earlier, the date of the occurrence of the
approval by the Company's shareholders of an agreement involving the Company,
the consummation of which would result in an event described in (i), (ii), or
(iii), hereof, or (v) if earlier, the date of occurrence of the acquisition
of beneficial ownership (as defined pursuant to Section 13(d) of the Exchange
Act), directly or indirectly, by any entity, person or group (other than the
Company, majority-owned subsidiary of the Company, Xxxxx or any affiliate of
Xxxxx) of securities of the Company representing five percent (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 if they are
followed within six (6) months by an event described in (i), (ii) or (iii).
6. 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 Board of Directors of the Company, 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 at any time or times during the period
of time in which the option herein is granted. If the Optionee is disabled, as
aforesaid, the Optionee's legal representative shall have the right to exercise
all or any part of this option at any time or times during the period of time in
which the Optionee is disabled and the option herein granted has not expired by
the terms of this Agreement. With respect to the shares of stock which are
subject to the option herein granted, Optionee shall have no rights as a
stockholder until payment of the option price for the shares being purchased by
exercise of the option herein granted, and the issuance of the shares involved.
7. 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 (a) 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 the Agreement do not
require a result that is inconsistent with the Plan, (b) the parties expressly
agree that no inference shall be drawn with respect to the intent of the parties
based on the inclusion of, 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 (c) 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).
8. MULTIPLE ORIGINALS. This Agreement may be executed in multiple
counterparts with each counterpart constituting an original for all purposes.
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. BOARD AUTHORITY. Any questions concerning the interpretation of
Agreement, including the incorporated provisions of the Plan, shall be
determined by the Board of Directors of the Company 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 1999 Annual Meeting of Shareholders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on ___________, 1999, but effective as December 9, 1998.
DIVERSIFIED CORPORATE RESOURCES, INC.
By:
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Name:
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Title:
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OPTIONEE:
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A. Xxxxxxx Xxxxx
