EXHIBIT 10.1

SRI/SURGICAL EXPRESS, INC.

2009 STOCK COMPENSATION PLAN

SRI/Surgical Express, Inc. establishes the following 2009 Stock Compensation
Plan for the exclusive benefit of its eligible employees and non-employee
Directors:

ARTICLE I

PURPOSE AND INTERPRETATION

1.1 PURPOSE. The purpose of this Plan is to further the interests of the
Company, its Subsidiaries (if any), and its shareholders by providing incentives
in the form of Stock Options and Restricted Stock grants to key employees and
non-employee Directors who contribute materially to the success and
profitability of the Company. The Plan is intended to enable the Company to
attract and retain key employees and non-employee Directors, to reward
outstanding individual contributions, and to give selected key employees and
non-employee Directors an interest in the Company parallel to that of its
shareholders, thus enhancing their proprietary interest in the Company’s
continued success and progress.

1.2 DEFINITIONS. As used in this Plan, the following capitalized terms have the
respective definitions attributed to them:

“ADMINISTRATIVE COMMITTEE” means the Board of Directors or any Board Committee
to whom the Board of Directors has delegated the administration of this Plan
pursuant to Section 2.1. However, with respect to any Award granted to a
non-employee Director, “Administrative Committee” means the Board of Directors.

“AFFILIATE” means a Subsidiary, a parent corporation of the Company, or a
corporation of which 50% or more of the total combined voting power of all
classes of its stock is owned directly or indirectly by a parent corporation of
the Company.

“AWARD” means, individually or collectively, a grant under this Plan of
Restricted Stock or Stock Options.

“BOARD OF DIRECTORS” means the Board of Directors of the Company.

“BOARD COMMITTEE” means a committee consisting of two or more directors who are
appointed by the Board of Directors of the Company.

“CHANGE IN CONTROL” means any of the following: (a) the shareholders of the
Company approve a liquidation of all or substantially all the consolidated
assets of the Company and its Subsidiaries, other than a liquidation of a
Subsidiary into the Company or another Subsidiary (unless the transaction is
subsequently abandoned or otherwise fails to occur); (b) the shareholders of the
Company approve a sale, lease, exchange, or other transfer to any person,
persons or group other than the Company or a Subsidiary (in a single transaction
or related series of transactions) of all or substantially all of consolidated
assets of the Company and its Subsidiaries, excluding the creation (but not the
foreclosure) of a lien, mortgage, security interest, or other financing
arrangement (unless the transaction is subsequently abandoned or otherwise fails
to occur); (c) during any period of two consecutive years, individuals who at
the beginning of the period constitute the Board of Directors, and any new
Director whose election by the Board of Directors or nomination for election by
the Company’s shareholders was approved by a vote of at least two-thirds
(2/3) of the Directors then still in office who either were Directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
of the Board of Directors; (d) the shareholders of the Company approve a merger
or a

 

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consolidation of the Company with any other entity (unless the transaction is
subsequently abandoned or otherwise fails to occur), other than (i) a merger or
consolidation that would result in the voting securities of the Company
outstanding immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50 percent of the combined voting power of the
voting securities of the Company or the surviving entity outstanding immediately
after the merger or consolidation or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
“person,” as the term is used in Sections 13(d) and 14(d) of the Exchange Act
acquires more than 50 percent of the combined voting power of the Company’s then
outstanding securities; or (e) the occurrence of any event, transaction, or
arrangement that results in any “person” (as defined above), or group (as
determined for purposes of Section 13(d)(3) of the Exchange Act) becoming a
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing a majority of the
combined voting power of all the outstanding securities of the Company that are
entitled to vote generally in the election of its directors, unless the
beneficial owner is the Company, a Subsidiary, an employee benefit plan
sponsored by the Company, a person or group who is a record or beneficial owner
of 25% or more of the outstanding Shares on the Date of Grant, or a person who
becomes a beneficial owner of 25% or more of the outstanding Shares solely by
becoming a trustee of an inter vivos trust created by a person who is the record
or beneficial owner of 25% or more of the outstanding Shares on the Date of
Grant.

“COMMON STOCK” means the common stock, $.001 par value, of the Company.

“COMPANY” means SRI/Surgical Express, Inc., a Florida corporation and the
sponsor of this Plan.

“COVERED EMPLOYEE” means a “covered employee” within the meaning of
Section 162(m)(3) of the Internal Revenue Code, or any successor provision
thereto.

“DATE OF GRANT” means the date as of which an Award is granted to a Participant
by the Administrative Committee.

“DIRECTOR” means a member of the Board of Directors or a member of the board of
directors of any Subsidiary.

“EMPLOYEE” means a person who is employed by the Company or a Subsidiary on a
full-time, salaried basis for at least 30 hours each week.

“EXCHANGE ACT” means the United States Securities Exchange Act of 1934, as
amended, and includes all rules and regulations of the Securities and Exchange
Commission promulgated under that act.

“INCENTIVE OPTION” means a Stock Option granted under this Plan that is intended
to qualify as an “incentive stock option,” as defined in section 422 of the
Internal Revenue Code, as in effect on the Date of Grant of the Stock Option.

“INTERNAL REVENUE CODE” means the United States Internal Revenue Code of 1986,
as amended from time to time, or any United States income tax law subsequently
enacted in substitution for that code.

“MARKET VALUE” means, as of any particular day, the closing sales price of the
Shares on such day (or if such day is not a business day, on the preceding
business day) as reported on the Nasdaq National Market (“Nasdaq”), or if not
reported on Nasdaq, as reported on the principal national securities exchange or
other market on which the Shares are listed or admitted to trading (the
“Exchange”). If no regular sale of the Shares was reported on such day, Market
Value shall mean the closing sales price of the Shares on the preceding business
day on which there were sales, as reported on Nasdaq or, if not reported on
Nasdaq, on the Exchange.

“NONQUALIFIED OPTION” means a Stock Option granted under this Plan that is not
designated as an Incentive Option.

“OPTION AGREEMENT” means an agreement between the Company and a Participant that
sets forth the terms, conditions, limitations, and restrictions applicable to
the Participant’s Stock Option.

 

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“OPTION YEAR” means, with respect to a Stock Option granted under this Plan, a
period of 12 consecutive months beginning on its Date of Grant or an anniversary
of its Date of Grant.

“PARTICIPANT” means an Employee who is selected by the Administrative Committee,
or a non-employee Director who is selected by the Board of Directors, to receive
an Award pursuant to this Plan, in the person’s capacity as a participant under
the Plan.

“PERIOD OF RESTRICTION” means the period during which the transfer of Shares of
Restricted Stock is restricted, pursuant to Article V.

“PLAN” means this 2009 Stock Compensation Plan of the Company, as originally
adopted and as subsequently amended, modified, restated or supplemented in
accordance with its terms.

“RESTRICTED STOCK” means Common Stock granted to a Participant pursuant to
Article V of this Plan.

“SECURITIES ACT” means the United States Securities Act of 1933, as amended, and
includes all rules and regulations of the Securities and Exchange Commission
promulgated under that Act.

“SHARES” means shares of the Common Stock or any securities issued in exchange
or substitution for those shares pursuant to a transaction described in
Section 6.1.

“STOCK OPTION” means an option to purchase Shares from the Company that is
granted to a Participant pursuant to this Plan, whether as an Incentive Option
or a Nonqualified Option.

“STOCK RESTRICTION AGREEMENT” means an agreement between the Company and a
Participant that sets forth the terms, conditions, limitations, and restrictions
applicable to the Participant’s Restricted Stock.

“SUBSIDIARY” means a corporation of which 80% of its voting securities are owned
directly or indirectly by the Company and includes any corporation that
qualifies as a “subsidiary corporation” as defined in section 424(f) of the
Internal Revenue Code.

1.3 OTHER WORDS. As used in this Plan, (a) the word “or” is not exclusive,
(b) the words “consent” and “approval” are synonymous, (c) the word “including”
is always without limitation, (d) words in the singular number include words in
the plural number and vice versa, and (e) the following uncapitalized words and
terms have the respective meanings ascribed to them:

“AFFILIATE” has the meaning attributed to it in Rule 12b-2 under the Exchange
Act.

“BENEFICIAL OWNER” has the meaning attributed to it under Rule 13d-3 under the
Exchange Act, and the terms “BENEFICIALLY OWNED” and “BENEFICIAL OWNERSHIP” have
the same meaning as “BENEFICIAL OWNER.”

“BUSINESS DAY” has the meaning attributed to it in Rule 14d-1(c)(6) under the
Exchange Act.

“DISABILITY” means a total and permanent disability as defined in section
22(e)(3) of the Internal Revenue Code.

“GROUP” has the meaning attributed to that term in Rule 13d-5(b)(1) under the
Exchange Act and includes two or more persons who agree to act in concert for
the purpose of voting, acquiring, or holding any securities of the Company or
any Subsidiary.

“PARENT CORPORATION” has the meaning attributed to that term in section 424(e)
of the Internal Revenue Code.

1.4 HEADINGS AND REFERENCES. The titles and headings preceding the text of the
articles and sections of this Plan are solely for convenient reference and
neither constitute a part of this Plan nor affect its meaning, interpretation,
or effect. Unless otherwise expressly stated, a reference in this Plan to a
Section refers to a section of this Plan and a reference in this Plan to an
Article refers to an article of this Plan.

 

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1.5 LIMITATION OF RIGHTS. Nothing in this Plan, whether express or implied, is
intended or should be construed to confer upon, or to grant to, any person
(other than the Participants and their respective heirs, guardians, and personal
representatives) any claim, right, remedy, or privilege under or because of this
Plan or any provision of it, except that every member of the Administrative
Committee is a third-party beneficiary of the provisions of Sections 2.2 and
2.4. An employee or non-employee Director of the Company or any Subsidiary does
not have any claim or right to participate in this Plan, and the grant of an
Award to a Participant does not create or extend any right of the Participant to
continue to serve as an employee or non-employee Director of the Company or any
Subsidiary, to participate in any other stock option or employee benefit plan of
the Company or any Subsidiary, or to receive the same employee benefits as any
other employee of the Company or any Subsidiary. Furthermore, an employee’s
selection as a Participant does not restrict in any way the right of the Company
or a Subsidiary to terminate at any time the Participant’s employment with it
either at will or as provided in any written employment agreement between it and
the Participant.

1.6 GOVERNING LAW. The validity, construction, enforcement, and interpretation
of this Plan are governed by the laws of the United States of America and the
State of Florida, excluding the laws of those jurisdictions relating to
resolution of conflicts with laws of other jurisdictions.

ARTICLE II

PLAN ADMINISTRATION

2.1 ADMINISTRATIVE COMMITTEE. This Plan will be administered by the Board of
Directors, or, at its election, the Board of Directors may delegate
administration of this Plan (other than with respect to non-employee Directors)
to an Administrative Committee consisting of two or more directors who are
appointed by the Board of Directors and satisfy the criteria described below.
The members of the Administrative Committee will serve for unspecified terms at
the discretion of the Board of Directors. The Board of Directors has the
exclusive power to increase or decrease the size of the Administrative
Committee, appoint additional members of the Administrative Committee, remove a
member of the Administrative Committee (as such) at any time, with or without
cause, and appoint a successor to fill any vacancy on the Administrative
Committee. The Board of Directors shall not appoint as a member of the
Administrative Committee any director who (a) is an officer or employee of the
Company, any Subsidiary, or any parent corporation of the Company or who does
not qualify as an “outside director” for purposes of section 162(m) of the
Internal Revenue Code, (b) receives directly or indirectly from the Company, any
Subsidiary, or any parent corporation of the Company a dollar amount of
compensation for services rendered as a consultant or in any capacity other than
as a director for which disclosure would be required pursuant to Item 404(a) of
Regulation S-K under the Exchange Act and the Securities Act, (c) possesses an
interest in any other transaction to which the Company or any Subsidiary was or
will be a party and for which disclosure would be required pursuant to
Item 404(a) of Regulation S-K under the Exchange Act and the Securities Act, or
(d) has a business relationship for which disclosure would be required pursuant
to Item 404(b) of Regulation S-K under the Exchange Act and the Securities Act.
If the Board of Directors is unable to appoint an Administrative Committee
comprising two or more directors who satisfy the foregoing criteria, or if the
Administrative Committee ceases at any time to comprise directors who satisfy
those criteria, the Board of Directors shall serve as the Administrative
Committee for this Plan, and all Awards granted under this Plan must be approved
by the Board of Directors.

2.2 POWER AND AUTHORITY. Subject to compliance with all applicable rules and
regulations of any relevant authorities, including stock exchanges and the
Securities and Exchange Commission, the Administrative Committee has the
exclusive power and authority, and the sole and absolute discretion, to do the
following: (a) construe and interpret this Plan; (b) select the Employees and
non-employee Directors who will be Participants in this Plan; (c) adopt, amend,
and rescind forms, rules, procedures, and regulations relating to this Plan (all
of which must be approved by the Board of Directors if a Board Committee serves
as the Administrative Committee); (d) grant Awards under the Plan, either
conditionally or unconditionally; (e) determine when

 

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Awards will be granted under the Plan; (f) determine the number of Shares
subject to each Award; (g) determine the Market Value of a Share in accordance
with the provisions of this Plan; (h) determine the terms and conditions of each
Award, including, in the case of Restricted Stock, the duration of the
restriction period, the conditions under which the Restricted Stock will vest,
and any limitations, restrictions, performance criteria, or forfeiture
conditions applicable to the Restricted Stock, and in the case of a Stock
Option, the exercise price (which must comply with Section 4.2), the methods of
exercising the Stock Option, the methods for payment of the exercise price, the
time or times when the Stock Option will become exercisable and the duration of
the exercise period (which must not exceed the limitations specified in
Section 4.2), the conditions under which the Stock Option will vest and become
exercisable, and any limitations, restrictions, performance criteria, or
forfeiture conditions applicable to the Stock Option or any Shares purchased
pursuant to it; (i) determine the consideration for the granting of an Award and
the consideration to be paid for Shares purchased pursuant to a Stock Option
(subject to Section 4.5); (j) to approve and recommend amendments to the Plan
for adoption by the Board of Directors and (if necessary or desirable) the
shareholders of the Company; (k) authorize any officer or director of the
Company to execute in the name and on behalf of the Company any agreement,
certificate, instrument, or other document required to carry out the purposes of
this Plan; (l) engage the services of any agent, expert, or professional advisor
in furtherance of the Plan’s purposes; (m) amend any outstanding Stock
Restriction Agreement or Option Agreement, subject to complying with applicable
legal restrictions and obtaining the approval of the Participant who is a party
to such agreement; (n) determine whether, to what extent, and under what
circumstances payment of cash, Shares, other property and other amounts payable
with respect to an Award made under the Plan shall be deferred either
automatically or at the election of the Participant; and (o) take all other
actions, and make all other determinations, that are advisable or necessary for
the Plan’s administration. Except as provided in Section 6.9, the Administrative
Committee shall be authorized to make adjustments in Award criteria or in the
terms and conditions of Awards in recognition of unusual or nonrecurring events
affecting the Company or its financial statements or changes in applicable laws,
regulations or accounting principles. The Administrative Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent it shall deem desirable to carry it
into effect. In the absence of fraud or mistake, any action, decision,
interpretation, or determination by the Administrative Committee, including
constructions of disputed or doubtful Award or Plan provisions, will be final
and binding on all persons.

The Board of Directors may reserve to itself any of the power and authority
conferred on the Administrative Committee, provided that any Awards to executive
officers of the Company are approved or recommended by the Compensation
Committee of the Company. All references in this Plan to the Administrative
Committee include the Board of Directors whenever it is exercising the power and
authority of the Administrative Committee.

2.3 APPROVAL PROCEDURES. All actions and determinations of the Administrative
Committee must be unanimous, unless the Board of Directors is exercising the
power and authority of the Administrative Committee. All actions and
determinations of the Board of Directors with respect to this Plan must be
approved in the manner provided by the Company’s Bylaws and applicable law.
Every action or determination of the Administrative Committee that is expressly
required or permitted under this Plan will be valid only if undertaken pursuant
to a vote, consent, or approval that is evidenced by either (a) a resolution
adopted by the affirmative vote of the requisite number of members of the
Administrative Committee at a meeting, or (b) a written consent signed by the
requisite number of members of the Administrative Committee. The members of the
Administrative Committee may execute a written consent in counterparts. Each
executed counterpart will constitute an original document, and all of them,
together, will constitute the same document. A properly executed written consent
will be effective as of the date specified in it or, if an effective date is not
so specified, on the date when it is signed by the last director whose signature
is necessary to validate it, and will be valid if it is executed before, after,
or concurrently with the action or determination to which it applies.

2.4 INDEMNIFICATION. A member of the Administrative Committee is not liable for,
and the Company and each Participant releases each member of the Administrative
Committee from all liability for, any punitive, incidental, compensatory,
consequential, or other damages or obligation to the Company or any Employee,

 

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Participant, or other person for any act or omission by the member of the
Administrative Committee (including the person’s own negligence), or by any
agent, employee, professional advisor, or other expert used or engaged by the
Administrative Committee, if the act or omission does not constitute gross
negligence or willful misconduct and is done or omitted in good faith, on behalf
of the Company, and in a manner reasonably believed by the member of the
Administrative Committee to be both in the best interests of the Company and
within the scope of the authority granted to the Administrative Committee by
this Plan. The Company shall indemnify each member of the Administrative
Committee, and shall reimburse the member from the Company’s assets, for any
cost, loss, damage, expense, or liability (including fines, amounts paid in
settlement, and legal fees and expenses) incurred by the member by reason of any
act or omission for which the member is released from liability pursuant to this
Section 2.4.

ARTICLE III

PARTICIPANTS AND BENEFIT LIMITATIONS

3.1 PARTICIPANTS. Every Employee and non-employee Director is eligible to be
selected to participate in this Plan; provided, however, that Incentive Options
shall only be awarded to employees within the meaning of Section 422 of the
Internal Revenue Code. Notwithstanding any provision in this Plan to the
contrary, the Board of Directors shall have the authority, in its sole and
absolute discretion, to select non-employee Directors as Participants who are
eligible to receive Awards other than Incentive Options under the Plan. The
Board of Directors shall set the terms of any such Awards in its sole and
absolute discretion, and the Board of Directors shall be responsible for
administering and construing such Awards in substantially the same manner that
the Administrative Committee administers and construes Awards to Employees. The
Administrative Committee’s designation of a Participant at any particular time
does not require the Administrative Committee to designate that Participant to
receive any Award at any other time or to receive the same Award as any other
Participant at any time. The Administrative Committee may consider factors that
it considers pertinent in selecting Participants and in determining the terms
and conditions of Awards granted to them, including the following: (a) the
consolidated financial condition of the Company; (b) the expected net income of
the Company for the current or future years; (c) the contributions of a
Participant to the success and profitability of the Company; and (d) the
adequacy of the Participant’s other compensation. The Administrative Committee
may grant an Award to a Participant even if an Award previously was granted to
the Participant under this Plan or another grant was made to the Participant
under another plan of the Company or an Affiliate, and whether or not the
previously granted benefits have been fully exercised. An Employee or
non-employee Director who participates in another benefit plan of the Company or
an Affiliate also may participate in this Plan.

3.2 BENEFIT LIMITATIONS. The total number of Shares that are authorized to be
issued pursuant to the award of Restricted Stock or exercise of Stock Options
granted under this Plan is limited to Six Hundred Thousand (600,000) Shares.
This amount will be adjusted automatically in accordance with Section 6.1. If an
Award lapses, expires, or is cancelled, forfeited, or terminated as a whole or
in part for any reason other than the exercise of a Stock Option, the forfeited
Shares or the Shares subject to the unexercised portion of the Stock Option (or
the part of it so cancelled, forfeited, or terminated) will be available for the
future grants of Awards under this Plan. If a Participant pays the exercise
price for Shares purchased pursuant to the exercise of a Stock Option by
delivering to the Company previously acquired Shares, the number of Shares
available for future Awards under this Plan will be reduced only by the net
amount of Shares issued in connection with the exercise of the Stock Option
(that is the number of Shares issuable pursuant to the exercise of the Stock
Option, less the number of Shares retained by, or delivered to, the Company in
payment of the exercise price).

 

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ARTICLE IV

STOCK OPTIONS

4.1 STOCK OPTION GRANTS. Subject to the terms and provisions of the Plan, the
Administrative Committee, at any time and from time to time, may grant Stock
Options under the Plan to such Participants and in such amounts as it shall
determine. Stock Options granted to non-employee Directors shall be Nonqualified
Options. Each Stock Option issued to an Employee will constitute an Incentive
Option unless the Administrative Committee designates such Stock Option as a
Nonqualified Option or such Stock Option fails to comply with the requirements
of Section 4.3 (in which case it will constitute a Nonqualified Option). The
Administrative Committee may grant an Employee both Incentive Options and
Nonqualified Options, at the same time or at different times.

4.2 EXERCISE PRICE AND DATES. The purchase price for each Share issuable
pursuant to the exercise of a Stock Option must be not less than the Market
Value of a Share on the Date of Grant of the Stock Option. Every Stock Option
must expire not later than ten years after its Date of Grant, and, except as
otherwise provided in Sections 4.6 and 6.2 or in the Option Agreement, it will
expire on the 90th day following the date when the Participant ceases to be an
Employee or non-employee Director. However, if a Participant owns (within the
meaning of section 422(b)(6) of the Internal Revenue Code) at the time when an
Incentive Option is granted to the Participant stock representing more than 10%
of the total combined voting power of all classes of outstanding stock of the
Company, any Subsidiary, or any parent corporation of the Company, then: (a) the
Incentive Option must expire not later than five years after its Date of Grant;
and (b) the exercise price of the Incentive Option must be not less than 110% of
the Market Value of a Share on the Date of Grant of the Incentive Option. Stock
Options are not exercisable until they have been accepted by the Participant. An
award of a Stock Option to a Participant will be cancelled automatically if the
Participant does not accept the award within 90 calendar days following the date
when the Participant is given written notice of the award. Unless a
Participant’s Option Agreement expressly provides otherwise, every Stock Option
will be exercisable in serial increments after each Option Year as follows:

 

After Option Year

   Percentage Exercisable      Per Option Year     Cumulatively  

            1

   20 %   20 %

            2

   20 %   40 %

            3

   20 %   60 %

            4

   20 %   80 %

            5

   20 %   100 %

Subject to the foregoing limitations, the Administrative Committee may impose on
an award of a Stock Option any terms and conditions that it determines to be
desirable, including performance criteria, forfeiture provisions, and additional
or different vesting conditions. Extension of the expiration date of a Stock
Option beyond its initially scheduled expiration date is not permitted. In
calculating the stock ownership of any person for purposes of the foregoing, the
attribution rules of section 424(d) of the Internal Revenue Code will apply.

4.3 INCENTIVE OPTIONS. Notwithstanding anything in this Plan to the contrary, a
Stock Option must satisfy all conditions and requirements imposed by the
Internal Revenue Code for incentive stock options and any policies adopted by
the Administrative Committee with respect to incentive stock options in order to
qualify as an Incentive Option. In addition, if a Stock Option which is intended
to qualify as an Incentive Option is granted for a number of Shares having an
aggregate Market Value on the Date of Grant in excess of $100,000, then,
notwithstanding anything in this or the relevant Option Agreement to the
contrary, the Incentive Option will be exercisable in each calendar year as to
only that number of Shares having a Market Value on the Date of Grant of not
more than $100,000. However, the number of Shares as to which an Incentive
Option is exercisable in any one calendar year is cumulative, so, if the
Incentive Option is not exercised to the fullest extent allowed in any

 

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one calendar year, the unexercised portion will accumulate and carry forward to
ensuing years. For example, if in 2009, the Company were to grant an Employee an
Incentive Option to purchase 100,000 Shares at an exercise price of $5.00 per
Share (which was the then current Market Value), the Incentive Option would be
exercisable with respect to only 20,000 Shares during 2010, and the Incentive
Option would become exercisable with respect to 20,000 additional Shares in each
successive year (2011 through 2014). If the Participant elected to purchase only
10,000 Shares pursuant to the Incentive Option during 2010, the Participant
could purchase up to 30,000 Shares in 2011, and, if no additional purchases were
made in 2011, the Participant could purchase up to 50,000 Shares in 2012 (carry
forward of 10,000 Shares from 2010 and 20,000 Shares from 2011; plus 20,000
Shares in 2012).

4.4 EXERCISE OF STOCK OPTIONS. Subject to limitations imposed by this Plan and
the Option Agreement, a Participant may exercise a Stock Option as a whole or in
part in increments of the lesser of 100 Shares or the number of Shares then
exercisable at any time and from time to time before it expires. A partial
exercise of a Stock Option will not affect a Participant’s subsequent right to
exercise the Stock Option as to the remaining Shares subject to the Stock
Option. A Stock Option must be exercised for a number of whole Shares and is not
exercisable for a fraction of a Share. To exercise a Stock Option, a Participant
must do the following: (a) deliver to the Company a written notice of exercise
in such form as prescribed by the Administrative Committee; (b) tender to the
Company full payment for the Shares to be purchased pursuant to the exercise of
the Stock Option; (c) pay to the Company, or make an arrangement satisfactory to
the Administrative Committee for the payment of, any tax withholding required in
connection with the exercise of the Stock Option (including FICA, Medicare, and
local, state, or federal income taxes); and (d) comply with any and all other
reasonable requirements established by the Administrative Committee for the
exercise of Stock Options. The exercise date of a Stock Option will be the date
when (i) the Company has received the written notice of exercise and full
payment of the exercise price, (ii) the Participant has paid to the Company or
made a satisfactory arrangement for the payment of any requisite tax
withholding, and (iii) any and all other requirements of exercise established by
the Administrative Committee have been satisfied.

4.5 PAYMENT OF EXERCISE PRICE. A Participant may pay all or any part of the
exercise price and any applicable tax withholding for any Shares to be purchased
pursuant to exercise of a Stock Option by any combination of the following
methods:

(a) By bank draft, money order, or personal check payable to the order of the
Company; or

(b) By transferring to the Company outstanding Shares that have been owned by
the Participant for more than six months on the exercise date of the Stock
Option.

Shares that are transferred to, or withheld by, the Company in payment of the
exercise price or any tax withholding will be valued for purposes of payment at
their Market Value on the exercise date of the Stock Option, as determined
pursuant to Section 4.4. The foregoing provision does not preclude the exercise
of a Stock Option by any other proper legal method specifically approved in
advance by the Administrative Committee. The Administrative Committee shall
determine the acceptable methods for tendering or withholding Shares as payment
of the exercise price of a Stock Option and may impose limitations and
prohibitions on the use of Shares to pay the exercise price of a Stock Option as
it considers appropriate for tax, legal, business, or accounting reasons. No one
has the rights of a shareholder with respect to Shares subject to a Stock Option
until a certificate representing those Shares has been delivered to the person
exercising the Stock Option.

4.6 EXERCISE CONDITIONS. A Stock Option expires and ceases to be exercisable on
the 90th day after the Participant to whom it was granted ceases to be an
Employee or non-employee Director, except as otherwise provided in this Plan and
in the Option Agreement. If a Participant’s employment with the Company or a
Subsidiary is terminated (voluntarily or involuntarily), the Participant may
exercise her or his Stock Option within 90 calendar days following the date of
termination of employment. If a Participant dies or ceases to be an Employee or
non-employee Director because of a disability at a time when the Participant is
entitled to exercise a Stock Option, the Stock Option will continue to be
exercisable for one year after the Participant’s death or

 

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disability by the Participant or the Participant’s guardian (in the case of
disability) or the Participant’s heir or personal representative (in the case of
death). Notwithstanding the foregoing, a Stock Option is never exercisable later
than its stated expiration date. After the death, disability, or termination of
employment of a Participant, a Stock Option of the Participant will be
exercisable only with respect to the number of Shares (if any) that could have
been exercised as of the date when the Participant ceased to be an Employee or
non-employee Director (subject to any adjustment required by Section 6.1). A
Stock Option will terminate to the extent that it ceases to be exercisable for
any of the Shares subject to it.

4.7. NONTRANSFERABILITY OF STOCK OPTIONS. Except to the extent provided in the
Option Agreement, a Participant is prohibited from transferring a Stock Option,
any interest in it, or any right under an Option Agreement by any means other
than by will or the law of descent and distribution. Any prohibited transfer
(whether by gift, sale, pledge, assignment, hypothecation, or otherwise) will be
invalid and ineffective as to the Company. In addition, a Stock Option and the
Participant’s rights under it and the related Option Agreement are not subject
to any lien, levy, attachment, execution, or similar process by creditors. The
Company may cancel any Stock Option by notice to the Participant to whom it was
granted, if the Participant attempts to make a prohibited transfer, or if the
Stock Option, any interest in it, or any right under the related Option
Agreement becomes subject to a lien, levy, attachment, execution, or similar
process by any creditor.

ARTICLE V

RESTRICTED STOCK

5.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the Plan,
the Administrative Committee, at any time and from time to time, may grant
Shares of Restricted Stock under the Plan to such Participants and in such
amounts as it shall determine. Unless required by applicable law, Participants
receiving Restricted Stock grants shall not be required to pay the Company for
such Restricted Stock (except for applicable tax withholding) other than the
rendering of services and/or until other conditions are satisfied as determined
by the Administrative Committee in its sole discretion.

5.2 STOCK RESTRICTION AGREEMENT. Each Restricted Stock grant shall be evidenced
by a Stock Restriction Agreement that will specify the Period of Restriction,
the conditions which must be satisfied prior to removal of the restriction, the
number of Shares of Restricted Stock granted, and such other provisions as the
Administrative Committee shall determine.

5.3 OTHER RESTRICTIONS. The Administrative Committee shall impose such other
restrictions on any Shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, performance criteria,
forfeiture provisions, additional or different vesting conditions, and
restrictions under applicable federal or state securities laws, and may legend
the certificates representing Restricted Stock to give appropriate notice of
such restrictions. Alternatively, the Administrative Committee, in its sole
discretion, may have Shares of Restricted Stock issued without legend and held
by the Secretary of the Company until such time that all restrictions are
satisfied.

5.4 CERTIFICATE LEGEND. In the event that the Administrative Committee elects to
legend the certificates representing Restricted Stock, and in addition to any
legends placed on certificates pursuant to Section 5.3, each certificate
representing Shares of Restricted Stock granted pursuant to the Plan shall bear
a legend in substantially the following form:

The sale or other transfer of the shares represented by this certificate,
whether voluntary, involuntary, or by operation of law, is subject to certain
restrictions on transfer as set forth in the SRI/Surgical Express, Inc. 2009
Stock Compensation Plan, effective March 27, 2009 and in a Stock Restriction
Agreement dated                     between the Company and the holder. A copy
of the Plan and Stock Restriction Agreement may be obtained from the Secretary
of SRI/Surgical Express, Inc.

 

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5.5 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Article V,
Shares of Restricted Stock granted under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction and/or upon the satisfaction of other conditions as determined by
the Administrative Committee in its sole discretion. Once the Shares of
Restricted Stock are released from all restrictions, the Participant will be
entitled to have removed any legend that may have been placed on the
certificates representing such Shares pursuant to Sections 5.3 and 5.4.

5.6 VOTING RIGHTS. During the Period of Restriction, Participants in whose name
Shares of Restricted Stock are granted under the Plan may exercise full voting
rights with respect to those Shares.

5.7 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants in whose name Shares of Restricted Stock are granted shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares. If any such dividends or distributions are paid in Shares, such
Shares shall be subject to the same restrictions on transferability as the
Shares of Restricted Stock with respect to which they were distributed, and the
Shares shall be so legended.

5.8 TERMINATION. Except as otherwise provided in this Plan and in the Stock
Restriction Agreement, if a Participant’s employment with the Company is
terminated by either the Participant or the Company, then all of that
Participant’s Shares of Restricted Stock which remain subject to restriction on
the date of termination shall be forfeited. Notwithstanding the foregoing,
(a) if a Participant dies during any applicable Period of Restriction, that
Participant’s Shares of Restricted Stock which remain subject to restriction
shall become fully vested effective as of the date of death, and (b) if a
Participant ceases to be an Employee or non-employee Director because of a
disability during any applicable Period of Restriction, that Participant’s
Shares of Restricted Stock which remain subject to restriction shall not be
forfeited, and shall continue to vest according to the terms of this Plan and
the Stock Restriction Agreement.

5.9 NONTRANSFERABILITY OF RESTRICTED STOCK. Except as provided in this Article V
or to the extent provided in the Stock Restriction Agreement, a Participant is
prohibited from transferring a Share of Restricted Stock, any interest in it, or
any right under a Stock Restriction Agreement by any means other than by will or
the law of descent and distribution. Any prohibited transfer (whether by gift,
sale, pledge, assignment, hypothecation, or otherwise) will be invalid and
ineffective as to the Company. In addition, a Share of Restricted Stock and the
Participant’s rights under it and the related Stock Restriction Agreement are
not subject to any lien, levy, attachment, execution, or similar process by
creditors. The Company may cancel any Share of Restricted Stock by notice to the
Participant to whom it was granted, if the Participant attempts to make a
prohibited transfer, or if the Share of Restricted Stock, any interest in it, or
any right under the related Stock Restriction Agreement becomes subject to a
lien, levy, attachment, execution, or similar process by any creditor.

ARTICLE VI

ADDITIONAL PROVISIONS

6.1 ADJUSTMENTS FOR CORPORATE TRANSACTIONS. The Administrative Committee may
determine that a corporate transaction has occurred affecting the Shares such
that an adjustment or adjustments to outstanding Awards is required to preserve
(or prevent the enlargement of) the benefits or potential benefits intended at
the Date of Grant. For this purpose, a corporate transaction includes, but is
not limited to, a dividend or other distribution (whether in the form of cash,
common stock, securities of a subsidiary of the Company, other securities, or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company,
or other similar corporate transaction. In the event of such a corporate
transaction, the Administrative Committee may, in the manner that the
Administrative Committee deems equitable, adjust (i) the number and kinds of
Shares that may be awarded under the Plan; (ii) the number and kinds of Shares
subject to outstanding Awards; and (iii) the exercise price of outstanding Stock
Options.

 

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6.2 CHANGE IN CONTROL.

(a) Generally. Subject to paragraph (b) of this Section 6.2, if a Change in
Control occurs, (i) all Shares of Restricted Stock which remain subject to
restriction shall become fully vested and (ii) all outstanding Stock Options
will become fully vested and exercisable as of the earlier of the effective date
of the shareholder approval or the effective date of any Change in Control
transaction. In the event of a Change in Control, the Board of Directors may
elect, in its sole discretion, to cancel any outstanding Stock Options or
Restricted Stock and pay or deliver, or cause to be paid or delivered, to the
Participant an amount in cash or securities having a value (as determined by the
Board of Directors acting in good faith), in the case of each Share of
Restricted Stock, equal to the formula or fixed price per share paid to holders
of Shares and, in the case of Stock Options, equal to the product of the number
of Shares subject to the Stock Option multiplied by the amount, if any, by which
(i) the formula or fixed price per share paid to holders of Shares pursuant to
the transaction exceeds (ii) the exercise price applicable to the Shares subject
to the Stock Option. The Company shall send written notice of a transaction or
event that will result in such a termination to all Participants not later than
the time at which the Company notifies its shareholders of the applicable
transaction or event.

(b) Special Rules Governing Mergers and Stock Exchanges. In the case of a
merger, share exchange, or other transaction in which the shareholders of the
Company receive securities of the acquirer, at the election of the Board of
Directors, the Company may (but is not obligated to) elect to continue this
Plan, in which case (i) each Share of Restricted Stock will be converted into
restricted securities of the acquirer being issued in the transaction based on
the applicable exchange or conversion ratio and (ii) each Stock Option granted
under the Plan will be converted into an option to purchase securities of the
acquirer being issued in the transaction. In such case, the exercise price and
number of Shares subject to the Stock Option will be adjusted based on the
exchange or conversion ratio (the “Ratio”) used to convert Shares into
securities of the acquirer. The adjusted exercise price will be the exercise
price per Share, divided by the Ratio. The adjusted number of Shares subject to
the Stock Option will be the product of the Ratio multiplied by the number of
Shares subject to the Stock Option before the transaction.

6.3 TAX WITHHOLDING. When a Participant is granted Shares of Restricted Stock or
exercises a Stock Option, the Administrative Committee, in its sole discretion,
may require the Participant to pay to the Company the amount (if any) that the
Company considers necessary to satisfy its legal obligation to withhold any
local, state, or federal taxes (including FICA, income, and Medicare taxes)
imposed by any governmental authority as a result of the issuance of the Shares
or the exercise of the Stock Option, and the Company may defer delivery of any
Shares so issued until it has been paid or indemnified to its satisfaction for
those taxes. A Participant may pay to the Company any requisite tax withholding
by (a) in the case of a Restricted Stock grant, (i) requesting that the Company
withhold from the Shares to be delivered Shares sufficient to satisfy all or a
portion of such tax withholding requirements or (ii) by bank draft, money order,
or personal check payable to the order of the Company, or (b) in the case of a
Stock Option exercise, any of the methods of payment authorized for payment of
the exercise price for Shares purchased pursuant to the Stock Option. In
addition, the Company shall be entitled at any other time to require payment in
cash from a Participant or deduction from other compensation payable to the
Participant of any amount required to satisfy any tax withholding obligations
with respect to the Participant’s Award. If a Restricted Stock grant or an
exercise of a Stock Option does not give rise to any tax withholding obligation
on the date of the grant or exercise but is reasonably expected to do so at a
future time, the Administrative Committee (in its sole discretion) may require
the Participant to place some or all of the Shares in escrow for the benefit of
the Company until tax withholding is required for the amounts included in the
Participant’s gross income as a result of the Participant’s Restricted Stock
grant or exercise of the Stock Option. At that time, the Administrative
Committee (in its discretion) may require the Participant to pay to it an amount
that it considers sufficient to satisfy the tax withholding obligation incurred
by it as a result of the Participant’s Restricted Stock grant or exercise of the
Stock Option, in which case the Company shall promptly release to the
Participant the escrowed Shares.

 

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6.4 RESERVATION, LISTING, AND DELIVERY OF SHARES. The Company shall reserve from
its authorized but unissued Shares and keep available until the termination of
this Plan, solely for issuance upon the grant of Restricted Stock or exercise of
Stock Options, the number of Shares issuable at any time pursuant to the grant
of Restricted Stock or exercise of Stock Options granted or available for grant
under this Plan. In addition, the Company shall take all requisite action to
assure that it validly and legally may issue fully-paid, nonassessable Shares
upon the grant of Restricted Stock or exercise of each Stock Option. Also, if
the Shares are traded in the Nasdaq Stock Market or on any United States
national securities exchange, the Company, at its sole expense, shall reserve
for quotation or listing on that market or exchange, upon official notice of
issuance pursuant to the grant of Restricted Stock or exercise of Stock Options,
the number of Shares issuable at any time upon the grant of Restricted Stock or
exercise of Stock Options granted or available for grant under this Plan, and
the Company shall maintain that listing until this Plan terminates. Promptly
after Restricted Stock is granted or a Stock Option is validly exercised, the
Company shall issue and deliver to the order of the Participant a stock
certificate representing that number of fully-paid and nonassessable Shares that
were granted or purchased, plus, instead of any fractional Share to which that
person otherwise would be entitled, a cash sum equal to the product of (a) that
fraction, multiplied by (b) the Market Value of one full Share as of the grant
date or exercise date, as the case may be. The Company shall pay all costs and
excise taxes associated with the original issuance of stock certificates
representing the Shares issued.

6.5 LEGAL COMPLIANCE. Stock Options are exercisable, and Shares are issuable
under this Plan, only in compliance with all applicable state and federal laws
and regulations (including securities laws) and the rules of all stock markets
or exchanges on which the Shares are quoted or listed for trading. Any
certificate representing Shares issued under the Plan will bear such legends and
statements as the Administrative Committee considers advisable to assure
compliance with those laws, rules, and regulations. In addition, the
Administrative Committee may require a Participant, as a condition to the grant
of Restricted Stock or grant or exercise of a Stock Option, to provide to the
Company any agreements, representations, and warranties that, in the opinion of
counsel for the Company, are desirable or necessary to comply with applicable
laws and all rules and regulations of any stock market or exchange on which the
Shares are traded or quoted, including a representation that the Shares granted
or Shares issuable pursuant to exercise of the Stock Option are or will be
acquired for investment purposes without a view to distribute them to others. A
grant of Restricted Stock is not effective and a Stock Option is not
exercisable, and the Company shall not issue any Shares under this Plan, until
the Company has obtained any consent or approval required from any state or
federal regulatory body having jurisdiction. Upon the transfer of Restricted
Stock or exercise of a Stock Option by an heir, guardian, or personal
representative of a Participant, the Administrative Committee may require
reasonable evidence of the person’s legal ownership of the Restricted Stock or
Stock Option and any consents and releases of governmental authorities as it
determines are advisable.

6.6 AMENDMENT AND TERMINATION. The Board of Directors may alter, amend, suspend,
or terminate this Plan at any time without approval of the Company’s
shareholders, unless the approval of the Company’s shareholders is required to
comply with applicable law or any rule or regulation of a stock market or
exchange on which the Shares are traded or quoted. An amendment or termination
of this Plan, whether with or without the approval of the Company’s
shareholders, that would adversely affect any right or obligation of a
Participant under an outstanding Award will not be valid or effective as to that
Award without that Participant’s written consent; provided that the
Administrative Committee or the Board of Directors shall have the right to amend
this Plan and any outstanding Awards or adopt other policies and procedures
applicable to this Plan and Awards (including with retroactive effect) without
Participant consent as may be necessary or appropriate to comply with the
requirements of Section 409A of the Internal Revenue Code or an exemption
thereto. No action may be taken by the Board of Directors or the Administrative
Committee without the approval of the shareholders that would, except as
expressly provided in Section 6.1, materially increase the number of Shares that
may be issued under the Plan.

 

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6.7 EXPENSES AND PROCEEDS. The Company shall pay all expenses of the Plan. The
Company may use the cash proceeds received from Participants upon the exercise
of Stock Options for general corporate purposes.

6.8 SECTION 16(b) EXEMPTIONS. With respect to Participants subject to section
16(b) of the Exchange Act, transactions under this Plan are intended to comply
with all applicable conditions of SEC Rules 16b-3 and 16b-6 and any rule
promulgated by the Securities and Exchange Commission under the Exchange Act in
substitution for either of those rules. To the extent any provision of this Plan
or action by the Administrative Committee fails to so comply, it shall be null
and void to the extent permitted by law and determined by the Administrative
Committee. In furtherance of the foregoing objective, the Administrative
Committee may include in a Stock Restriction Agreement or an Option Agreement
with a Participant who is subject to section 16 of the Exchange Act any
additional conditions or restrictions that are required to qualify the grant of
Restricted Stock or grant and exercise of the Stock Option for exemption under
Rules 16b-3 and 16b-6 or any future rule providing an exemption for such grant
of Restricted Stock or grant and exercise of stock options.

6.9 INTERNAL REVENUE CODE SECTION 162(m) PROVISIONS.

(a) Notwithstanding any other provision of the Plan, if the Administrative
Committee determines at the time an Award is granted to a Participant who is
then an officer that such Participant is, or is likely to be as of the end of
the tax year in which the Company would ordinarily claim a tax deduction in
connection with such Award, a Covered Employee, then the Administrative
Committee may provide that this Section 6.9 is applicable to such Award.

(b) If an Award is subject to this Section 6.9, then the lapsing of restrictions
thereon and the distribution of cash, Shares, or other property pursuant
thereto, as applicable, shall be subject to the achievement of one or more
objective performance goals established by the Administrative Committee, which
shall be based on the attainment of specified levels of one or any combination
of the following: revenues, cost reductions, operating income, income before
taxes, net income, adjusted net income, earnings per share, adjusted earnings
per share, operating margins, working capital measures, return on assets, return
on equity, return on invested capital, cash flow measures, market share,
shareholder return or economic value added of the Company or the Affiliate or
division of the Company for or within which the Participant is primarily
employed. Such performance goals also may be based on the achievement of
specified levels of Company performance (or performance of an applicable
Affiliate or division of the Company) under one or more of the measures
described above relative to the performance of other corporations. Such
performance goals shall be set by the Administrative Committee within the time
period prescribed by, and shall otherwise comply with the requirements of,
Section 162(m) of the Internal Revenue Code, or any successor provision thereto,
and the regulations thereunder.

(c) With respect to any Award that is subject to this Section 6.9, the
Administrative Committee may adjust downwards, but not upwards, the amount
payable pursuant to such Award, and the Administrative Committee may not waive
the achievement of the applicable performance goals, except in the case of the
death or disability of the Participant, or under such other conditions where
such waiver will not jeopardize the treatment of other Awards under this Section
as “performance-based compensation” under Section 162(m) of the Internal Revenue
Code.

(d) The Administrative Committee shall have the power to impose such other
restrictions on Awards subject to this Section 6.9 as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
“performance-based compensation” within the meaning of Section 162(m)(4)(C) of
the Internal Revenue Code, or any successor provision thereto.

6.10 DURATION AND EFFECTIVE DATE. This Plan will become effective as of March
27, 2009, subject to approval by the Company’s shareholders within 12 months
after that date, and will terminate on the tenth anniversary of its effective
date. The Company is not authorized to grant any Awards until this Plan receives
approval of the Company’s shareholders or after the termination date of this
Plan.

 

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