DIVERSIFIED CORPORATE RESOURCES, INC.
1998 NONQUALIFIED STOCK OPTION PLAN
ARTICLE I. GENERAL PURPOSE OF PLAN
The name of this plan is the 1998 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 to obtain and
retain the services of the types of employees, officers and directors 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 the Compensation Committee of the Company or, in the
absence of a Compensation Committee, a committee composed 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, or a director of the Company.
"EXERCISE PRICE" means the price at which the Shares subject to a Stock
Option may be purchased.
"PARTICIPANT" means any Eligible Person selected by the Board of Directors
to receive grants of Stock Options.
"PLAN" means the Company's 1998 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 Committee shall have the power and authority to grant
Stock Options to Eligible Persons, pursuant to the terms of the Plan. The
Committee 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 THE PLAN
Subject to adjustment as herein provided, the total number of Shares
reserved and available for issuance under the Plan shall be 300,000 Shares which
shall consist, in whole or in part, of authorized and unissued shares of Common
Stock of the Company. Shares covered by Stock Options which are forfeited or
terminated for any reason, which expire unexercised, or which are exchanged for
other Stock Options, shall again be available for grant hereunder. Shares
received by the Company in connection with the exercise of Stock Options by
delivery of other shares, or by surrender of Shares subject to such Stock
Option, and shares received in connection with payment of withholding taxes,
shall again be available for grant hereunder.
ARTICLE V. ELIGIBILITY
All persons who are Eligible Persons shall be eligible to be granted Stock
Options hereunder subject to the limitations set forth in this Plan. Without
limitation, in no case may an Eligible Person be granted a Stock Option covering
more than 200,000 Shares during any calendar year.
ARTICLE VI. STOCK OPTIONS
SECTION 6.1 GENERAL. The Plan provides for the grant of Stock Options to
Eligible Persons selected by the Committee 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
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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
Committee, 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 Plan. 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; (ii) the number
of Shares reserved and available for issuance under the Plan; and (iii)
the Exercise Price in effect prior to such change shall be proportionately
adjusted by the Committee to reflect any increase or decrease in the number
of Shares issued; PROVIDED, that any fractional Shares resulting from the
adjustment shall be eliminated.
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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 Committee;
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 shareholder with respect to Stock Options
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 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
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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
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.
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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 shareholders
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.
SECTION 9.4 NONTRANSFERABILITY OF STOCK OPTIONS. Except as otherwise
provided in any Stock Option agreement, 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,
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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 agreements 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 THE PLAN
The Plan is effective January 1, 1998, provided that the Plan, and any
Stock Options granted hereunder, will be null and void ab initio unless on or
before January 1, 1999 the Plan is approved by the affirmative vote of the
holders of a majority of the shares present in person or represented by proxy at
the shareholder meeting of reference and entitled to vote on the matter in
question.
ARTICLE XI. TERM OF THE PLAN
No Stock Option shall be granted pursuant to the Plan after December 31,
2007, but Stock Options theretofore granted may extend beyond that date.
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