EXHIBIT 10.4

TALX CORPORATION OUTSIDE DIRECTORS’ STOCK OPTION PLAN

SECTION I. PURPOSE

The purpose of this Plan is to provide an incentive which will motivate and
reward “Outside Directors” of the Company and promote the best interests and
long-term performance of the Company by encouraging the ownership of the
Company’s stock by such “Outside Directors”. None of the options granted
pursuant to this Plan will qualify as Incentive Stock Options under Section 422
of the Internal Revenue Code of 1986, as amended (“Code”). This Plan is not
intended to preclude the use of Common Stock for other compensation purposes in
line with the needs and objectives of the Company.

SECTION II. DEFINITIONS

A. “Board of Directors” means the board of directors of the Company.

B. “Common Stock” means shares of the common stock (including treasury stock) of
the Company.

C. “Company” means TALX Corporation, a Missouri corporation, or any successor
thereto.

D. “Disability” means inability of a Participant to perform his or her duties as
an Outside Director by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months.

E. “Fair Market Value,” as of a given date, means the last price of the Common
Stock as reported by the National Association of Securities Dealers Automated
Quotation System on such given date or, if none, on the last day preceding such
given date on which a sale of the Common Stock was so reported.

F. “Outside Director” means a person who is a member of the Board of Directors
but who is not an employee of the Company or any subsidiary of the Company.

G. “Participant” means an Outside Director who is granted a stock option
hereunder.

H. “Plan” means this TALX Corporation Outside Directors’ Stock Option Plan.

SECTION III. STOCK

The total amount of stock which may be either granted or sold under this Plan
shall not exceed 80,000 shares of the Company’s Common Stock (as adjusted for
the proposed 1-for-3.5 reverse stock split). If an option expires or is
terminated or surrendered without having been fully exercised, the unpurchased
shares of Common Stock subject to the option shall again be available for the
purposes of this Plan.

SECTION IV. ELIGIBILITY

Stock options may be granted under the Plan only to Outside Directors.

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SECTION V. STOCK OPTIONS

A. Grant of Options. Each Outside Director shall be granted an option to
purchase 1,500 shares of Common Stock (as adjusted for the proposed 1-for-3.5
reverse stock split) on April 1 of each year.

B. Option Price. The purchase price of the Common Stock under each option
granted hereunder shall be equal to one hundred percent (100%) of the Fair
Market Value of the Common Stock at the time of the grant of the option.

C. Term and Exercise of Options. The term of each option shall be six (6) years
from the date of granting thereof. Each option shall be exercisable in full on
the first anniversary date of the granting thereof; provided, however, that
except as provided in Subsection E of this Section, no option may be exercised
at any time unless the Participant is then an Outside Director and has been so
continuously since the granting of the option, and provided further, that in the
event of a Change in Control (as hereinafter defined), the option holder will be
entitled to purchase, at any time thereafter and during the term thereof, the
entire number of shares to which the option relates.

The term “Change in Control” shall mean:

(i) The purchase or other acquisition by any person, entity or group of persons,
within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the Exchange Act”) (excluding, for this purpose, the Company
or its subsidiaries or any employee benefit plan of the Company or its
subsidiaries), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the combined voting power
of the Company’s then-outstanding voting securities entitled to vote generally
in the election of directors in any transaction or series of transactions; or

(ii) When individuals who, as of June 30, 1996, constitute the Board (the
“Continuing Directors”), cease for any reason to constitute at least a majority
of the Board, provided that any person who becomes a director subsequent to the
date hereof whose election or nomination for election by the Company’s
shareholders, was approved in advance by a vote of at least three-quarters of
the Continuing Directors (other than a nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be, for purposes of this Paragraph, considered as though such person were
a Continuing Director; or

(iii) Approval by the stockholders of the Company of (a) a reorganization,
merger or consolidation with respect to which persons who were stockholders of
the Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 50% of the combined voting power of
the voting securities entitled to vote generally in the election of directors of
the reorganized, merged or consolidated corporation’s then-outstanding voting
securities, or (b) a liquidation or dissolution of the Company or of the sale of
all or substantially all of the assets of the Company; or

(iv) Any other event that a majority of the Continuing Directors, in their sole
discretion, shall determine constitutes a Change in Control.

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D. Non-Transferability of Options. Each option granted under this Plan shall by
its terms be non-transferable by the Participant other than by will or the laws
of descent and distribution. An option may be exercised, during the lifetime of
the Participant, only by the Participant.

E. Termination of Service. Any option not exercised prior to the termination of
a Participant’s service as a Director of the Company shall expire.
Notwithstanding the foregoing:

1. If a Participant’s employment is terminated by reason of death, the personal
representative of the Participant may exercise any or all of the Participant’s
unexercised unexpired options provided such exercise occurs within twelve (12)
months of the date of the Participant’s death, but not after the term of the
option;

2. If a Participant’s service is terminated by reason of Disability, the
Participant (or the personal representative of the Participant if the
Participant has died) may exercise any or all of the Participant’s unexercised
unexpired options, provided such exercise is within twelve (12) months of the
date of the Participant’s termination but not after the term of the option; and

3. If a Participant’s service is terminated following a Change in Control, the
Participant may exercise any or all of the Participant’s unexercised unexpired
options, but not after the term of the option.

F. Payment of Option Price. The purchase price is to be paid in full upon the
exercise of an option, either (1) in cash, (2) in shares of Common Stock having
a Fair Market Value equal to the cash exercise price of the option being
exercised, or (3) by any combination of the payment methods specified in clauses
(1) and (2) hereof; provided, however, that (a) shares of Common Stock tendered
in payment must be either shares owned by the Participant and registered in the
Participant’s name and may not include shares of Common Stock acquired by the
Participant through exercise of an option granted less than six months prior to
the date of exercise of the option being exercised. The proceeds received by the
Company upon exercise of an option are to be added to the general funds of the
Company, if cash, or to the shares of the Common Stock held in treasury, if
shares of Common Stock, and used for the corporate purposes of the Company.

SECTION VI. EFFECT OF CHANGE IN STOCK

Notwithstanding any other provision in the Plan, if there is any change in the
Common Stock of the Company by reason of stock dividends, spinoffs, split ups,
recapitalizations, mergers, consolidations, reorganizations, combinations or
exchanges of shares and the like (other than the proposed 1-for-3.5 reverse
stock split), the number and class of shares available for grants of options and
the number of shares subject to any outstanding options, and the price thereof,
as applicable, shall be appropriately adjusted by the President of the Company.

SECTION VII. AMENDMENT OR TERMINATION

Unless this Plan shall theretofore have been terminated as hereinafter provided,
this Plan shall terminate, and no stock option shall be granted hereunder, after
ten (10) years from the date of its adoption by the Board of Directors. Any
option outstanding at the termination of this Plan shall continue in full force
and effect in accordance with its terms and shall not be affected by such
termination of this Plan. The Board of Directors of the Company may, at any time
prior to that date, terminate this Plan or make such modifications of the Plan
as it may deem advisable; provided, however, that, if approval by shareholders
of the Company of any amendment is required to comply with the requirements of
Rule 16b-3 or other applicable requirement, such amendment shall be subject to
stockholder approval.

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VIII. WITHHOLDING

The Company, at the time any distribution is made under this Plan, whether in
cash or in shares of stock, may withhold from such payment any amount necessary
to satisfy any federal and state income tax withholding requirements with
respect to such distribution. Such withholding may be in cash or in shares of
stock.

IX. MISCELLANEOUS

A. Rights to Continued Service. Nothing in this Plan or in any option granted
pursuant to this Plan shall confer on any individual any right to continue as an
Outside Director.

B. Investment Undertakings. Until and unless the issuance of shares of Common
Stock pursuant to this Plan shall have been registered pursuant to the
Securities Act of 1933 and applicable state securities laws, each Participant
acquiring shares of Common Stock under this Plan may be required, as a condition
precedent to such issuance, to execute and deliver to the Company a letter or
certificate containing such investment representations, agreements restricting
sale (including, without limitation, provision for stop transfer orders and
restrictive legend on stock certificates) and confirmation of other relevant
facts to support any exemption from the registration requirements under the
Securities Act of 1933 and such state securities laws on which the Company
intends to rely, all as shall be deemed reasonably necessary by counsel for the
Company and in such form as such counsel shall determine.

SECTION X. EFFECTIVENESS OF THE PLAN

The Plan will be effective upon adoption by the Board of Directors of the
Company, subject, however, to its approval by the shareholders of the Company
given within 12 months after the date the Plan is adopted by the Board of
Directors, at a regular meeting of the shareholders or at a special meeting of
the shareholders duly called and held for such purpose, or by written consent of
the shareholders, and subject further to completion of the Company’s initial
public offering of its common stock within 12 months from the date the Plan is
adopted by the Board of Directors.

The foregoing Plan was adopted by the Board of Directors of the Company on July
12, 1996, and approved by the shareholders of the Company on July 26, 1996.

 

TALX CORPORATION

 

 

 

By

 

 

 

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