DIVERSIFIED CORPORATE RESOURCES, INC.
1996 NONQUALIFIED STOCK OPTION PLAN
ARTICLE I. GENERAL PURPOSE OF PLAN
The name of this plan is the 1996 Nonqualified Stock Option Plan (the
"Plan") of Diversified Corporate Resources, Inc., a Texas corporation (the
"Company"). The purpose of the Plan is to enable the Company (the "Company"), to
obtain and retain the services of the types of employees and officers who will
contribute to the Company's long range success and to provide incentives which
are linked directly to increases in share value which will inure to the benefit
of all shareholders of the Company.
ARTICLE II. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.
"COMMITTEE" means a committee of one or more officers of the Company as
selected from time to time by the Board of Directors of the Company.
"COMPANY" means Diversified Corporate Resources, Inc. (or any successor
business entity) and all of its subsidiaries.
"DATE OF GRANT" means the date on which the Board of Directors adopts a
resolution expressly granting a Stock Option to a Participant.
"ELIGIBLE PERSON" means any person who is a key employee (including
officers) of the Company or entity which is the parent of, or a subsidiary of,
the Company.
"EXERCISE PRICE" means the price at which the Shares subject to a Stock
Option may be purchased.
"KEY EMPLOYEE" means any person employed by the Company, or any parent
or subsidiary of the Company, as a full-time employee in a key managerial
capacity.
"PARTICIPANT" means any Eligible Person selected by the Board of
Directors to receive grants of Stock Options.
"PLAN" means the Company's 1996 Nonqualified Stock Option Plan.
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"RETIREMENT" means retirement from active employment with the Company,
or any parent or subsidiary of the Company.
"SHARES" means shares of Common Stock of the Company.
"STOCK OPTION" means any option to purchase Shares granted pursuant to
the Plan.
ARTICLE III. ADMINISTRATION
SECTION 3.1 THE ADMINISTRATOR.
a. The Plan shall be administered by the Committee.
b. Only the Board of Directors of the Company shall have the
power and authority to grant Stock Options to Eligible Persons,
pursuant to the terms of the Plan. The Board of Directors shall
determine (i) those Eligible Persons to whom Stock Options are to be
granted, (ii) the number of Shares to be made subject to each Stock
Option, and (iii) the terms and conditions of each Stock Option,
including, without limitation, the exercise price and the medium of
payment.
c. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final and binding on the Company and
the Participants.
ARTICLE IV. SHARES SUBJECT TO PLAN
SECTION 4.1 SHARES SUBJECT TO THE PLAN. Subject to adjustment as herein
provided, the total number of Shares reserved and available for issuance under
the Plan shall be 600,000 Shares which shall consist, in whole or in part, of
authorized and unissued shares of Common Stock of the Company.
SECTION 4.2 UNEXERCISED SHARE OPTIONS. To the extent that any Stock
Options expire or are otherwise terminated without being exercised, the Shares
underlying such Stock Options shall again be available for issuance in
connection with future Stock Options granted under the Plan.
ARTICLE V. ELIGIBILITY
All persons who are Key Employees (including officers) of the Company,
or any parent or any subsidiary of the Company, who are responsible for or
contribute to the management, growth or profitability of the business of the
Company, or any parent or subsidiary of the Company, shall be eligible to be
granted Stock Options hereunder subject to the limitations set forth in this
Plan.
ARTICLE VI. STOCK OPTIONS
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SECTION 6.1 GENERAL. The Plan provides for the grant of Stock Options
to Eligible Persons selected by the Board of Directors for participation in the
Plan. Each grant of Stock Options pursuant to the Plan shall be evidenced by a
Stock Option Agreement between the Participant and the Company in the form from
time to time adopted by the Committee and containing such terms and conditions
which the Committee deems appropriate. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.
SECTION 6.2 TERMS AND CONDITIONS OF THE STOCK OPTIONS. Each Stock
Option granted pursuant to the Plan shall be evidenced by a written Stock Option
Agreement between the Company and the Participant, which agreement shall comply
with and be subject to the following terms and conditions:
a. NUMBER OF SHARES. Each Stock Option Agreement shall state
the number of Shares which may be purchased upon exercise of the Stock
Option.
b. EXERCISE PRICE. Each Stock Option Agreement shall state the
Exercise Price.
c. MEDIUM AND TIME OF PAYMENT. To the extent permitted under
the Texas law, as currently in effect, the Exercise Price shall be paid
in full, at the time of exercise, in cash or, with the approval of the
Board of Directors, in Shares which have a fair market value equal to
the Exercise Price or in a combination of cash and such Shares.
d. RESTRICTIONS ON TRANSFER OF SHARES. Each Stock Option
Agreement may contain such restrictions on the transfer of Shares sold
under the Plan as the Committee may determine, including, without
limitation, rights of repurchase and rights of first refusal.
e. TERM AND EXERCISE OF STOCK OPTION. Stock Options shall be
exercisable over the exercise period at the times the committee may
determine, as reflected in the related Stock Option Agreements. The
exercise period of any Stock Option shall not exceed ten (10) years
from the Date of Grant. The exercise period shall be subject to earlier
termination as provided in this Agreement. A Stock Option may be
exercised, as to any or all full shares as to which the Stock Option
has become exercisable, by giving written notice of such exercise to
the Company.
ARTICLE VII. ADJUSTMENTS
SECTION 7.1 EFFECT OF CERTAIN CHANGES.
a. If there is any change in the number of Shares outstanding
through the distribution of Shares or through a recapitalization
resulting in Share splits or combinations or exchanges of the Shares
outstanding, (i) the number of Shares covered by Stock Options
outstanding; and (ii) the Exercise Price in effect prior to such change
shall be proportionately adjusted by the Committee to reflect any
increase or decrease in the
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number of Shares issued; provided, that any fractional Shares resulting
from the adjustment shall be eliminated.
b. In the event of the proposed dissolution or liquidation of
the Company, or in the event of any corporate separation or division,
including, but not limited to, a split-up, split-off or spin-off (each,
a "liquidating event"), the Committee may provide that the holder of
any Stock Option then exercisable shall have the right to exercise such
Stock Option subsequent to the liquidating event, at the price provided
in the Stock Option Agreement, for the total number of Shares to which
the Stock Option relates (less the number of shares, if any, previously
purchased pursuant to the Plan), and for the balance of its term,
solely for the kind and amount of shares of stock and other securities,
property, cash or any combination thereof receivable upon such
liquidating event by a holder of the number of Shares for or with
respect to which such Stock Option might have been exercised
immediately prior to such liquidating event; or the Committee may
provide, in the alternative, that each Stock Option granted under the
Plan shall terminate as of a date to be fixed by the Board of
Directors; provided, that not less than thirty (30) days written notice
of the date so fixed shall be given to each Participant and if such
notice is given, each Participant shall have the right, during the
period of thirty (30) days preceding such termination, to exercise the
Stock Option as to all or any part of the Shares covered thereby, on
the condition, however, that the liquidating event actually occurs; and
if the liquidating event actually occurs, such exercise shall be deemed
effective (and, if applicable, the Participant shall be deemed a member
with respect to Stock Option exercised immediately preceding the
occurrence of the liquidating event) on the date of record for
shareholders entitled to share in such liquidating event, if a record
date is set.
c. Each Stock Option outstanding shall terminate upon (i) a
merger or consolidation in which the Company is not the surviving
entity, or (ii) a sale or transfer of all or substantially all of the
capital stock or assets of the Company to any entity or person that is
not a parent or subsidiary and the Company is not the surviving entity
((i) and (ii) shall be collectively referred to as a "Change of
Control") provided that (A) each Participant to whom no Stock Options
have been tendered by the surviving entity pursuant to the terms of
item (B) immediately below shall have the right exercisable during a
ten-day period ending on the fifth business day prior to such Change of
Control in which the Company is not the surviving entity, to exercise
his or her Stock Option in whole or in part with respect to the total
number of Shares to which the Stock Option relates (less the number of
shares, if any, previously purchased pursuant to the Plan), on the
condition, however, that the Change of Control is actually effected;
and if the Change of Control is actually effected, such exercise shall
be deemed effective (and, if applicable, the Participant shall be
deemed a shareholder with respect to the Stock Option exercised)
immediately preceding the effective time of such Change of Control (on
the date of record for shareholders entitled to share in the securities
or property distributed in such Change of Control, if a record date is
set); and (B) in its sole and absolute discretion, the surviving entity
may, but shall not be obligated to, tender to any Participant share
options with respect to the surviving entity, and such new share
options shall contain such terms and provisions as shall substantially
preserve the rights and benefits of any Stock Options then outstanding
under the Plan. Notwithstanding the foregoing, in the event of a Change
of
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Control in which the Company is not the surviving entity, the Committee
shall have the right in its sole discretion to pay to each Participant
possessing unexercised Stock Options, as soon as practicable following
consummation of such Change of Control, an amount equal to the fair
market value of all Shares purchasable (without regard to vesting
provisions) under the unexercised Stock Options less the Exercise Price
of such unexercised Stock Options (the "Net Value").
If the Committee elects to pay each Participant the Net Value
rather than grant the Participants the rights described in this Section
7.1(c), the Participants shall not be entitled to prior notice of such
Change of Control. Upon payment of the Net Value, all Stock Options
outstanding under this Plan shall be null and void and the Participants
shall have no further rights thereunder. The Company shall have the
right to withhold all applicable taxes from the Net Value prior to
making payment to the Participants.
d. Section 7.1(c) shall not apply to a Change of Control in
which the Company is the surviving entity.
e. The determination as to which party to a Change of Control
is the "surviving entity" shall be made by the Board of Directors.
f. In the event of a change in the Shares of the Company as
presently constituted which is limited to a change of all of its
authorized shares with par value into the same number of shares without
par value, or a change in the par value, the shares resulting from any
such change shall be "Shares" within the meaning of the Plan.
g. To the extent that the foregoing adjustments relate to
shares or securities of the Company, such adjustments shall be made by
the Committee, whose determination in that respect shall be final,
binding and conclusive.
h. Except as hereinbefore expressly provided in this Article
VII, no Participant shall have any rights by reason of any subdivision
or consolidation of Shares or the payment of any dividend or any other
increase or decrease in the number of Shares of any class or by reason
of any liquidating event, Change of Control of assets or equity
securities of another equity, or any other issue by the Company of
shares of any class, or securities convertible into shares of any
class; and except as provided in this Article VII, none of the
foregoing events shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares subject to
Stock Options. The grant of a Stock Option pursuant to the Plan shall
not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structures or to effect a Change of Control or to
dissolve, liquidate or sell, or transfer all of part of its business or
assets.
i. Except as specifically provided in this Article VII, a
Participant or a transferee of a Stock Option shall have no rights as a
shareholder with respect to any Shares covered by the Stock Options
until the date of the issuance of a Share certificate to him or her for
such Shares, and no adjustment shall be made for dividends (ordinary or
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extraordinary, whether in cash, securities or other property) or
distributions of other rights for which the record date is prior to the
date such Share certificate is issued, except as herein provided.
ARTICLE VIII. AMENDMENT AND TERMINATION
The Board of Directors may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuance shall be made which would impair the
rights of the Participant under any Stock Option theretofore granted without
such Participant's consent, or which without the approval of the members would
(a) except as provided in Article VII, materially increase the total number of
Shares reserved for the purposes of the Plan, (b) materially increase the
benefits accruing to Participants or Eligible Persons under the Plan, or (c)
materially modify the requirements for eligibility under the Plan.
The Board of Directors may amend the terms of any award theretofore
granted, prospectively or retroactively, but, subject to the terms of the Plan,
no such amendment shall impair the rights of any holder without his or her
consent.
ARTICLE IX. GENERAL PROVISIONS
SECTION 9.1 GENERAL PROVISIONS.
a. The Committee may require each person purchasing Shares
pursuant to the Plan to represent to and agree with the Company in
writing that such person is acquiring the Shares without a view to
distribution thereof. The certificates for such Shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer.
b. All certificates for Shares delivered under the Plan shall
be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable.
SECTION 9.2 OTHER COMPENSATION ARRANGEMENTS. Nothing contained in this
Plan shall prevent the Company from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific areas.
SECTION 9.3 TERMINATION OF EMPLOYMENT. Except as herein provided or in
any Stock Option Agreement, no Stock Option may be exercised unless the
Participant is then in the employ of the Company, or any parent or any
subsidiary of the Company, and unless he or she has remained continuously so
employed since the Date of Grant. If the employment or services of a Participant
shall terminate, unless otherwise provided in the Stock Option Agreement, all
Stock Options previously granted to the Participant shall terminate on the date
notice is given or received regarding such termination. Nothing in the Plan or
in any Stock Option granted Pursuant to the Plan shall confer upon an employee
any right to continue in the employ of the Company, or any parent or any
subsidiary of the Company, or interfere in any way with the right of the Company
to terminate such employment at any time.
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SECTION 9.4 NONTRANSFERABILITY OF STOCK OPTIONS. Stock Options granted
under the Plan shall not be transferable otherwise than by will or by the laws
of descent and distribution, and Stock Options may be exercised, during the
lifetime of the Participant, only by the Participant or by his or her guardian
or legal representative.
SECTION 9.5 REGULATORY MATTERS. Each Stock Option Agreement shall
provide that no shares shall be purchased or sold thereunder unless and until
(a) any then applicable requirements of state or federal laws and regulatory
agencies shall have been fully complied with to the satisfaction of the Company
and its counsel, and (b) if required to do so by the Company, the Participant
shall have executed and delivered to the Company a letter of investment intent
in such form and containing such provisions as the Committee may require.
SECTION 9.6 DELIVERY. Upon exercise of a Stock Option granted under
this Plan, the Company shall issue a Share certificate on the date of exercise,
which will be delivered to the Participant exercising the Stock Option as
promptly as practicable thereafter.
SECTION 9.7 OTHER PROVISIONS. The Stock Option Agreement authorized
under the Plan may contain such other provisions not inconsistent with the Plan,
including, without limitation, restrictions upon the exercise of the Stock
Option, as the Board of Directors may deem advisable.
ARTICLE X. EFFECTIVE DATE OF PLAN
The Plan became effective as of December 27, 1996, the date as of which
the Plan was adopted by the Board of Directors.
ARTICLE XI. TERM OF PLAN
No Stock Option shall be granted pursuant to the Plan after December
27, 2006 but Stock Options theretofore granted may extend beyond that date.
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