STOCK OPTION AGREEMENT (1998) RE: FARRINGTON
THIS AGREEMENT is executed by Diversified Corporate Resources, Inc., a
Texas corporation (herein called "Company"), and Deborah A. Farrington (herein
called "Optionee") on the date set forth on the signature page hereof, but
effective as of April 29, 1998.
WHEREAS, the Optionee is a director 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 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 Common Stock; and
WHEREAS, the option covered by this Agreement is issued pursuant to
Diversified Corporate Resources, Inc.'s 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 right, privilege and 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, 2008. Subject to Section 11
hereof, the option herein granted shall be exercisable (i.e. shall vest) as to
5,000 shares immediately as of the date hereof and shall
become exercisable (i.e. shall vest) as to 2,500 shares of Common Stock on
the last day of each of the following calendar quarters: the quarter ended
December 31, 2000 and the quarter ended March 31, 2001. The exercise price
of the option shall be $12.75 per share, subject to adjustment as provided
herein. 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" occurs, and whether or not Optionee
continues as a director of the Company following the Effective Date of such
Special Change in Control, then, notwithstanding any provision of this Agreement
to the contrary, and without limitation, this option will become exercisable
with respect to all of the Shares subject to this option, at the exercise price
set forth in the preceding paragraph as may be adjusted pursuant to Section 5(a)
hereof, and will terminate as provided herein.
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 holder'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, (B) notice
that the exercise price is satisfied by reduction of the number of shares to be
received by holder 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 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 total exercise price for such exercise. In such instance, no cash
or other consideration will be paid by the holder 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) April 29, 2008,
(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, and
(c) one (1) year from the date on which Optionee ceases to be a
director of the Company if such event is due to 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, or J. Michael Moore ("Moore") and
any affiliate of Moore, 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 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 (as defined pursuant to Section 13(d) of the Exchange Act),
directly or indirectly, by any entity, person or group (other than the
Company, a majority-owned subsidiary of the Company, or Moore and any
affiliate of Moore) 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 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; 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).
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 this
Agreement, including the incorporated provisions of the Plan, shall be
determined by the Board 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 parties hereto have caused this Agreement to be
executed effective as of April 29, 1998.
DIVERSIFIED CORPORATE RESOURCES, INC.
By:
Name:
Title:
OPTIONEE:
Deborah A. Farrington