Document:

Exhibit 4.11

 

CERTIFICATE
OF DESIGNATION

 

of

 

SERIES
A CONVERTIBLE PREFERRED STOCK

 

of

 

DIVERSIFIED CORPORATE RESOURCES, INC.

 

Pursuant
to Article 2.13(D) of the

Texas Business Corporation Act

 

DIVERSIFIED CORPORATE RESOURCES, INC., a corporation organized
and existing under the laws of the State of Texas (the “Corporation”),
in accordance with the applicable provisions thereof, DOES HEREBY CERTIFY:

 

That
pursuant to the authority vested in the Board of Directors in accordance with
the provisions of the Articles of Incorporation of the said Corporation, the
said Board of Directors on the 5th of February, 2004, adopted the
following resolution creating a series of shares of Preferred Stock designated
as “Series A Convertible Preferred Stock”:

 

RESOLVED, that pursuant to the authority vested in the
Board of Directors of the Corporation in accordance with the provisions of the
Articles of Incorporation, a series of Preferred Stock, par value $10 per
share, of the Corporation be and hereby is created, and that the designation
and number of shares thereof and the voting and other powers, preferences and
relative, participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as follows:

 

Series A
Convertible Preferred Stock

 

1.                                       Designation and Amount. 
There shall be a series of
Preferred Stock that shall be designated as “Series A
Convertible Preferred Stock,” and the number of shares constituting such series
shall be 215,000.  Such number of shares
may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease shall reduce the number of shares of the
Series A Convertible Preferred Stock to less than the number of shares then
issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.

 

2.                                       Dividends and Distribution.

 

(A)                              Subject to the prior and superior rights of the holders
of any class or series of stock of the Corporation ranking prior and superior
to the shares of the Series A Convertible 

 

 

Preferred
Stock with respect to dividends, the holders of shares of the Series A
Convertible Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, cumulative dividends, payable in
cash on the 15th day of January, April, July and October, in each year
(each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the
last issuance of a share of the Series A Convertible Preferred Stock.  The dividend shall be paid at the annual rate
of ten percent (10%) of the purchase price of each share of the Series A
Convertible Preferred Stock, which purchase price per share for purposes of
this Section 2 shall be deemed to be $10.00, subject to any adjustment for
any stock dividends, combinations, recapitalizations, splits or otherwise with
respect to such shares).  Such dividends
shall accrue on each share from the date of purchase of each such share from
the Corporation, and shall accrue from day to day, whether earned or declared.  No dividends may be paid with respect to the
Common Stock until all dividends declared or accrued on all outstanding shares
of the Series A Convertible Preferred Stock pursuant to this Section 2
have been set apart and paid.

 

(B)                                The Board of Directors may fix a record date for the
determination of holders of shares of the Series A Convertible Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 60 days prior to the date fixed for the
payment thereof.

 

3.                                       Voting Rights.  The holders of shares of Series A
Convertible Preferred Stock shall have the following voting rights:

 

(A)                              Each share of the Series A
Convertible Preferred Stock shall entitle the holder thereof to ten (10) votes
on all matters submitted to a vote of the shareholders of the Corporation.

 

(B)                                Except as required by law, holders of the Series A
Convertible Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of the Common Stock as set forth herein) for taking any corporate
action.

 

4.                                       Certain Restrictions.  Whenever quarterly dividends or
other dividends or distributions payable on the Series A
Convertible Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of the Series A Convertible Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

 

(A)                              declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Convertible Preferred Stock.

 

(B)                                declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Convertible Preferred Stock, except dividends paid ratably on the Series A Convertible
Preferred Stock and all such parity stock on which dividends are payable or 

 

 

in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
or

 

(C)                                purchase or otherwise acquire for consideration any shares
of the Series A Convertible Preferred Stock, or any shares of stock ranking on
a parity with the Series A Convertible Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of the Series A Convertible Preferred Stock,
or to such holders and holders of any such shares ranking on a parity
therewith, upon such terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative rights and preferences
of the respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.

 

5.                                       Conversion.  The holders of the Series A Convertible
Preferred Stock have conversion rights as follows:

 

(A)                              Right
to Convert.

 

(i)                                     Each share
of the Series A Convertible Preferred Stock shall be convertible, at the option
of the holder thereof, at any time after the date of issuance of such share,
into ten (10) fully paid and nonassessable shares of Common Stock (the “Conversion
Rate”); and

 

(ii)                                  Each
share of the Series A Convertible Preferred Stock shall be convertible, at the
option of the Corporation, at any time after the occurrence of a trade of a
share of its Common Stock on a national securities exchange for a price
exceeding $2.00, into ten (10) fully paid and nonassessable shares of Common
Stock; provided, however, that such share shall be convertible only after the
holder thereof has received an amount equal to the sum of eight (8) quarterly
dividend payments less any dividend payments actually made on and
received by the holder with respect to such share of the Series A Convertible
Preferred Stock (the “Conversion Dividend Payment”).

 

(B)                                Automatic
Conversion.

 

(i)  Each share of the Series A
Convertible Preferred Stock shall automatically be converted into ten (10)
fully paid and nonassessable shares of the Common Stock after at least 825,000
shares of the Common Stock have traded on a national securities exchange for a
price exceeding $3.00 per share; provided, however, that such share shall be
converted only after the holder thereof has received an amount equal to the
Conversion Dividend Payment; and

 

(ii)  Each share of the Series A Convertible
Preferred Stock shall automatically be converted into ten (10) fully paid and
nonassessable shares of the Common Stock within five (5) business days after
the shares of the Common Stock into which the shares 

 

 

of the Series A
Convertible Preferred Stock are convertible become subject to an effective
registration statement under the Securities Act of 1933, as amended.

 

(C)                                Mechanics
of Conversion.  Before any of the
Series A Convertible Preferred Stock shall be converted into full shares of the
Common Stock and to receive certificates therefor, the holders of the Series A
Convertible Preferred Stock shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Series A Convertible Preferred Stock and shall give written
notice to the Corporation at such office that it elects to convert the same and
shall state therein the name(s) in which the certificate(s) for shares of the
Common Stock are to be issued.  The
Corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder of the Series A Convertible Preferred Stock, or to the
nominee(s) of such holder, a certificate or certificates for the number of
shares of the Common Stock to which it shall be entitled as aforesaid and a
check payable to the holder in the amount of the Conversion Dividend Payment,
if applicable.  Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of the Series A Convertible Preferred Stock,
and the person or persons entitled to receive the shares of the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of the Common Stock on such date.

 

(D)                               Reservation
of Stock Issuable upon Conversion. 
The Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of the Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series A Convertible Preferred
Stock, such number of its shares of the Common Stock as shall from time to time
be sufficient to effect the conversion of all outstanding shares of the Series
A Convertible Preferred Stock, and if at any time the number of authorized but
unissued shares of the Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series A Convertible Preferred
Stock, in addition to such other remedies as shall be available to the holders
of the Series A Convertible Preferred Stock, the Corporation will take such
corporate action as may, in the opinion of its counsel be necessary to increase
its authorized but unissued shares of the Common Stock to such number of shares
as shall be sufficient for such purposes.

 

6.                                       Reacquired Shares. 
Any shares of the Series A Convertible Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired promptly
after the acquisition thereof.  All such
shares shall upon their retirement become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject
to any conditions and restrictions on issuance set forth herein.

 

7.                                       Liquidation, Dissolution or Winding Up.

 

(A) Upon any liquidation, dissolution or winding up of the
Corporation, voluntary or otherwise, no distribution shall be made to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Convertible Preferred
Stock unless, prior thereto, the holders of shares of the Series A Convertible
Preferred Stock shall have received an amount per share (the “Series A
Liquidation Preference”) equal to 

 

 

$10.00 plus an amount
equal to accrued and unpaid dividends and distributions thereon whether or not
declared, to the date of such payment.

 

(B)                                In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other classes and series of
stock of the Corporation, if any, that rank on a parity with the Series A
Convertible Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series A
Convertible Preferred Stock and the holders of such parity shares in proportion
to their respective liquidation preferences.

 

(C)                                Neither the merger or
consolidation of the Corporation into or with another corporation nor the
merger or consolidation of any other corporation into or with the Corporation
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 7.

 

8.                                       Adjustment to Conversion Rate.  If prior to the
conversion of all of the shares of the Series A Convertible Preferred Stock,
the number of outstanding shares of Common Stock of the Company is increased by
a stock split, stock dividend, or other similar event, the Conversion Rate
shall be proportionately increased, or if the number of outstanding shares of
Common Stock is decreased by a combination or reclassification of shares, or
other similar event, the Conversion Rate shall be proportionately decreased.

 

9.                                       Consolidation, Merger, Etc.  In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the outstanding shares of the Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other property,
then in any such case each share of the Series A Convertible Preferred Stock
shall at the same time be similarly exchanged or changed in an amount per share
equal to ten (10) times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of the Common Stock is changed or exchanged.

 

10.                                 Ranking.  The Series A
Convertible Preferred Stock shall rank junior to all other series of the
Preferred Stock as to the payment of dividends, and as to the distribution of
assets upon liquidation, dissolution or winding up, unless the terms of any
such series shall provide otherwise, and shall rank senior to the Common Stock
as to such matters.

 

11.                                 Amendment, etc.  At any time that any shares of the Series A Convertible
Preferred Stock are outstanding, the Restated Certificate of Incorporation of
the Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Convertible
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds of the outstanding shares of the Series A Convertible
Preferred Stock, voting separately as a class, and the Company will not,
through any reorganization, transfer of assets, consolidation, merger, share
exchange, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company.

 

[Signature on Following Page]

 

 

IN WITNESS WHEREOF, the undersigned has executed this
Certificate this 5th day of February, 2004.

 

 

	
   

  	
  DIVERSIFIED CORPORATE RESOURCES, INC.

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /S/ J. Michael Moore

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  Name:

  	
  J. Michael Moore

  	
   

  
	
   

  	
   

  	 

	
   

  	
  Title:

  	
  C.E.O.Exhibit 4.12

 

SECOND AMENDMENT TO RIGHTS AGREEMENT

 

This
SECOND AMENDMENT TO RIGHTS AGREEMENT, dated as of December 31, 2003 (the “Amendment”),
is by and between DIVERSIFIED CORPORATE RESOURCES, INC., a Texas corporation
(the “Company”), and HARRIS TRUST AND SAVINGS BANK, a national banking
association, as Rights Agent (the “Rights Agent”).

 

RECITALS

 

1.                                       The
Company and the Rights Agent executed that certain Rights Agreement dated as of
May 1, 1998, as amended by means of the First Amendment to Rights Agreement,
dated as of May 14, 1999 (the “Rights Agreement”).

 

2.                                       The
Board of Directors of the Company believes it to be in the best interest of the
Company to Amend the Rights Agreement in order to prevent the triggering of the
dilutive provisions of the Rights Agreement in cases where the transaction that
would ordinarily trigger such provision is determined by the Board of Directors
to be in the best interest of the Company shareholders.

 

AGREEMENT

 

Accordingly,
in consideration of the premises and the mutual agreement herein set forth the
parties hereby agree as follows:

 

1.                                       The
Rights Agreement is hereby amended by deleting Section l(a) in its
entirety and substituting the following in lieu thereof.

 

“(a)                            “Acquiring
Person” shall mean any Person (as such term is hereinafter defined) who or
which shall be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the shares of Common Stock then outstanding, but only if the
transaction as a result of which any such Person becomes the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding is not determined
by the Board of Directors, in writing, before the Distribution Date (as such
term is hereinafter defined) caused by such transaction, to be upon terms and
conditions that are fair and adequate and in the best interest of the Company
shareholders (other than the Acquiring Person) and shall not include (i) an
Exempt Person (as such term is hereinafter defined) or (ii) any such Person who
has reported or is required to report such ownership (but less than 25%) on Schedule 13D
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or
any comparable or successor report) or on Schedule 13D under the Exchange
Act (or any comparable or successor report), which Schedule 13D (including
an amendment to Schedule 13D) does not state any intention to or reserve
the right to control or influence the management or policies of the Company or
engage in any of the actions specified in Item 4 of such Schedule 13D
(other than the disposition of the Common Stock) and, within 10 Business Days
(as such term is hereinafter defined) of being requested by the Company to
advise it regarding the same, certifies to the Company that such Person
acquired shares of Common Stock in excess of 14.99% inadvertently or

 

1

 

without
knowledge of the effect of the terms of the Rights and who, together with all
Affiliates and Associates, thereafter does not acquire additional shares of
Common Stock while the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding; provided, however, that (A) if the Person
requested to so certify fails to do so within 10 Business Days or (B) if such
Person thereafter becomes obligated to file a Schedule 13D (including an
amendment to a Schedule 13D) that would state any intention to or reserve
the right to control or influence the management or policies of the Company or
engage in any of the actions specified in Item 4 of such Schedule 13D (other
than the disposition of the Common Stock), then such Person shall become an
Acquiring Person immediately thereafter. 
Notwithstanding the foregoing, (x) if, as of the date hereof, any Person
is the Beneficial Owner of 15% or more of the shares of Common Stock
outstanding, such Person shall not be or become an Acquiring Person unless and
until such time as such Person shall become the Beneficial Owner of an
additional 1% of the shares of Common Stock (other than pursuant to a dividend
or distribution paid or made by the Company on the outstanding Common Stock in
shares of Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), unless, upon becoming the Beneficial Owner of such additional
shares of Common Stock, either such Person is not then the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding or such Person is
exempted from the definition of “Acquiring Person” pursuant to Section 1(a)(ii)
hereof and (y) no Person shall become an “Acquiring Person” as the result of an
acquisition of shares of Common Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares of
Common Stock beneficially owned by such Person to 15% or more of the shares of Common
Stock then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding by reason of such share acquisitions by the Company and shall
thereafter become the Beneficial Owner of any additional shares of Common Stock
(other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Stock in shares of Common Stock or pursuant to a
split or subdivision of the outstanding Common Stock), then such Person shall
be deemed to be an “Acquiring Person” unless, upon becoming the Beneficial
Owner of such. additional shares of Common Stock, either such Person is not
then the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding or such Person is exempted from the definition of “Acquiring Person”
pursuant to Section 1(a)(ii) hereof. 
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date hereof.”

 

2.                                       The
Rights Agreement, as amended hereby, shall remain in full force and effect.

 

3.                                       This
Amendment may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
agreement.

 

2

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed, all as of the day and year first above written.

 

	
   

  	
  DIVERSIFIED CORPORATE
  RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Michael
  Moore

  	
   

  
	
   

  	
  Name:

  	
  J. Michael Moore

  	
   

  
	
   

  	
  Its:

  	
  C.E.O.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARRIS TRUST AND
  SAVINGS BANK, as Rights Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
								

 

3

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