STOCK OPTION AGREEMENT PURSUANT TO THE SHELLS SEAFOOD RESTAURANTS, INC.
NON-EMPLOYEE
DIRECTOR FORM
PURSUANT
TO THE
SHELLS
SEAFOOD RESTAURANTS, INC.
2002
EQUITY INCENTIVE PLAN
AGREEMENT,
made as of the __ day of _____________, 200_, by and between Shells Seafood
Restaurants, Inc., a Delaware corporation (the “Company”), and _____________
(the “Optionee”).
1. Grant
of Option.
The
Company hereby grants to the Optionee, pursuant to the Company’s 2002 Equity
Incentive Plan, as amended (the “Plan”), an option (the “Option”) to purchase
_______ shares of the Company’s common stock, $.01 par value per share (the
“Common Stock”), at a purchase price per share of $_____.
2. Tax
Status of Option.
This
Option is not intended to qualify as an “incentive stock option” under Section
422 of the Internal Revenue Code of 1986, as amended.
3. Term
of Option.
The
term of this Option shall be for a period of seven (7) years from the date
hereof, subject to earlier termination as provided herein.
4. Vesting
of Option.
This
Option shall become vested and exercisable in accordance with the provisions
of
Exhibit
A
attached
hereto, subject to the Optionee remaining in the continuous service with
the
Company through each applicable anniversary date. Notwithstanding the preceding
sentence, if there occurs a Change in Control of the Company (as defined
below),
the Optionee’s right to exercise this Option shall immediately become vested and
exercisable in full. A “Change in Control” of the Company is deemed to occur if
(1) there occurs (A) any consolidation or merger in which the Company is
not the
continuing or surviving entity or pursuant to which shares of the Common
Stock
would be converted into cash, securities or other property, other than a
consolidation or merger of the Company in which the holders of the Common
Stock
immediately prior to the consolidation or merger own not less than fifty
percent
(50%) of the total voting power of the surviving corporation immediately
after
the consolidation or merger, or (B) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially
all the Company’s assets, (2) the Company’s stockholders approve any plan or
proposal for the complete liquidation or dissolution of the Company, (3)
any
person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) who, at the time of the
execution of this Agreement, does not own (of record or beneficially) five
percent (5%) or more of the Company’s Common Stock, shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of forty
percent
(40%) or more of the Common Stock other than pursuant to a plan or arrangement
entered into by such person and the Company, or (4) during any period of
two (2)
consecutive years, individuals who at the beginning of such period constitute
the entire Board of Directors of the Company shall cease for any reason to
constitute a majority of the Board of Directors, unless the election or
nomination for election by the Company’s stockholders of each new director was
approved by a vote of at least two-thirds of the directors then still in
office
who were directors at the beginning of the period.
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(a) If
the
Optionee’s service with the Company is terminated due to his or her death or
Disability (as defined in the Plan), then: (i) that portion of this Option
that
is exercisable on the date of termination shall remain exercisable by the
Optionee (or, in the event of death, the Optionee’s beneficiary) during the one
year period following the date of termination but in no event after expiration
of the stated term hereof and, to the extent not exercised during such period,
shall thereupon terminate, provided that, in the event of a termination due
to
Disability, if the Optionee dies during such one-year period, then the
Optionee’s beneficiary may exercise this Option, to the extent exercisable by
the Optionee immediately prior to his or her death, for a period of one year
following the date of death but in no event after expiration of the stated
term
hereof, and (ii) that portion of this Option that is not exercisable on the
date
of termination shall thereupon terminate.
(b) If
the
Optionee’s service with the Company terminates for any reason other than death
or Disability), then: (i) that portion of this Option that is exercisable
on the
date of termination shall remain exercisable by the Optionee during the ninety
(90) day period following the date of termination but in no event after
expiration of the stated term hereof and, to the extent not exercised during
such period, shall thereupon terminate, and (ii) that portion of this Option
that is not exercisable on the date of termination shall thereupon
terminate.
6. Method
of Exercise.
This
Option may be exercised in whole or in part in accordance with Section 4
above
by delivering to the Secretary of the Company (a) a written notice specifying
the number of shares to be purchased, and (b) payment in full of the exercise
price, together with the amount, if any, deemed necessary by the Company
to
enable it to satisfy any tax withholding obligations with respect to the
exercise (unless other arrangements, acceptable to the Company, are made
for the
satisfaction of such withholding obligation). The exercise price shall be
payable in cash, bank or certified check or such other methods permitted
by the
Committee from time to time.
7. Rights
as a Stockholder.
No
shares of Common Stock shall be issued hereunder until full payment for such
shares has been made and any other exercise conditions have been fully
satisfied. The Optionee shall have no rights as a stockholder with respect
to
any shares covered by this Option until the date such shares are reflected
as
having been issued to the Optionee on the Company’s records. Except as otherwise
specifically provided in the Plan, no adjustment shall be made for dividends
or
distributions or the granting of other rights for which the record date is
prior
to the date such shares are issued.
8. Nontransferability.
The
Option is not assignable or transferable other than to a beneficiary designated
to receive this Option upon the Optionee’s death in a manner acceptable to the
Company or by will or the laws of descent and distribution, and this Option
shall be exercisable during the lifetime of the Optionee only by the Optionee
(or, in the event of the Optionee’s incapacity, the Optionee’s legal
representative or guardian). Any attempt by the Optionee or any other person
claiming against, through or under the Optionee to cause this Option or any
part
of it to be transferred or assigned in any manner and for any purpose shall
be
null and void and without effect upon the Company, the Optionee or any other
person.
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9. Adjustments
Upon Changes in Capitalization.
Upon a
Change in Capitalization (as defined in the Plan), an equitable substitution
or
adjustment may be made in the kind, number and/or exercise price of shares
or
other property subject to this Option as may be determined by the Committee,
in
its sole discretion. Without limiting the generality of the foregoing, in
connection with a Change in Capitalization, the Committee may provide, in
its
sole discretion, on a case by case basis, for the cancellation of this Option
(i) in exchange for payment in cash or other property of the Fair Market
Value
of the shares of Common Stock covered by this Option (whether or not otherwise
vested or exercisable), reduced by the exercise price of this Option, or
(ii)
for no consideration, in the case (and to the extent) that this Option is
not
otherwise then vested or exerciseable.
10. No
Service Rights.
Nothing
contained in this Agreement shall confer upon the Optionee any right with
respect to the continuation of the Optionee’s service with the Company or
interfere in any way with the right of the Company at any time to terminate
such
service.
11. Provisions
of the Plan Control.
This
Agreement is subject to all the terms, conditions and provisions of the Plan
and
to such rules, regulations and interpretations as may be established or made
by
the Committee acting within the scope of its authority and responsibility
under
the Plan. The Optionee acknowledges receipt of a copy of the Plan prior to
execution of this Agreement. The applicable provisions of the Plan shall
govern
in any situation where this Agreement is silent or where the applicable
provisions of this Agreement are contrary to or not reconcilable with such
Plan
provisions.
12. Compliance
with Law.
Shares
of Common Stock shall not be issued pursuant to the exercise of this Option
unless such exercise and the issuance and delivery of such shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act and
the
requirements of any stock exchange or market upon which the Common Stock
may
then be listed, and shall be further subject to the approval of counsel for
the
Company with respect to such compliance. The Committee may require each person
acquiring shares of Common Stock to represent to and agree with the Company
in
writing that such person is acquiring the shares without a view to distribution
thereof. All certificates for shares of Common Stock delivered hereunder
shall
be subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of
the
Securities and Exchange Commission, any stock exchange or market upon which
the
Common Stock may then be listed, and any applicable federal or state securities
law. The Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
13. Miscellaneous.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware, without regard to its principles of conflict of laws.
This
Agreement, together with the Plan, constitutes the entire agreement between
the
parties with respect to the subject matter hereof and may not be amended,
except
as provided in the Plan, other than by a written instrument executed by the
parties hereto.
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SHELLS SEAFOOD RESTAURANTS, INC. | ||
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