1) As the user starts typing in the textbox on top of the table, it displays all entries (first/last names) that start with the entered character(s) as a dropdown below the textbox.
2) If there are more than 10 items to be displayed (as user types), display a "more" option at the bottom of the dropdown
3) When the user hits enter, all entries that start with the entered character(s) get displayed in the main table with refreshed paging
4) When the filtered subset is displayed, clicking on a column header will re-sort within the subset
5) Clicking on 'ALL' link takes the user back to the non-filtered whole set
Alternative design 1: