Document:

EXHIBIT
        10.2

       

      NON-EMPLOYEE
        DIRECTOR FORM

       

      STOCK
        OPTION AGREEMENT

      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.

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      5.    Termination
        of Service.

       

      (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.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      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.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, this Agreement has been executed as of the date first above
        written.

      
        	 	 	 
	 	SHELLS
                SEAFOOD RESTAURANTS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              
	 	
                 

                 

                
                  

                

              

      

    

     

     

    
      
         

      

        -4-EXHIBIT
        10.3

       

      EMPLOYEE
        FORM

       

      STOCK
        OPTION AGREEMENT

      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 (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 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.

       

      (a)  Vesting
        Schedule.
        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 employment or
        other
        service with the Company or any of its subsidiaries, affiliates or associated
        entities (collectively, the “Company Group”), all as determined by the
        Committee, through each applicable anniversary date.

       

      (b)  Accelerated
        Vesting upon a Change in Control.
        Notwithstanding the provisions of Section 4(a) above or Section 9(a)(iii)
        of the
        Plan, if there occurs a Change in Control of the Company (as defined in Section
        4(c) below), the Optionee’s right to exercise this Option shall accelerate as
        follows:

       

      (i)  If
        the
        Optionee is not offered a Comparable Position (as defined in Section 4(c)
        below)
        with the Company Group (or a successor thereto) following the Change in Control,
        this Option shall immediately become vested and exercisable in full;
        or

       

      (ii)  If
        the
        Optionee is offered a Comparable Position with the Company Group (or a successor
        thereto) following the Change in Control, (A) this Option shall immediately
        become vested and exercisable with respect to one-half of the shares of Common
        Stock for which this Option is not vested and exercisable immediately prior
        to
        the Change in Control (in addition to those shares for which this Option
        is
        otherwise vested and exerciseable immediately prior to such Change in Control),
        and (B) if the Optionee accepts such Comparable Position with the Company
        Group
        (or a successor thereto) following the Change in Control and remains in
        continuous employment or other service with the Company Group (or a successor
        thereto) through the first anniversary of the Change in Control (or through
        such
        earlier date, if any, as is requested by the Company Group (or successor
        thereto) or as may be determined by the Committee in its sole discretion),
        this
        Option, to the extent not already vested and exerciseable, shall become vested
        and exercisable in full on such first anniversary (or earlier)
        date.

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      In
        no
        event shall the provisions of this Section 4(b) be construed as extending
        the
        dates on which this Option (or any portion thereof) would otherwise become
        vested and exercisable pursuant to Section 4(a) above.

       

      (c)    Certain
        Definitions.

       

      (i)  Change
        in Control.
        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.

       

      (ii)  Comparable
        Position.
        A
“Comparable Position” shall mean a position that has the same or better overall
        working conditions or terms of employment or other service as in effect
        immediately prior to the Change in Control; provided, however, that a diminution
        of responsibilities or authority, without more, subsequent to the Change
        in
        Control shall not be classified as a change in employment or other service
        which
        is not to a Comparable Position.

       

      (d)    Certain
        Determinations Following a Change in Control.
        Notwithstanding the provisions of Section 9(a)(ii) of the Plan, upon any
        purported termination for Cause (as defined in Section 9(a)(ii) of the Plan)
        or
        a Demotion (as defined in Section 5(d) below), in either instance, following
        a
        Change in Control, the determination of whether “Cause” or a “Demotion” exists
        shall be made by a majority of the Board or Committee members then serving
        on
        the Company Group Board or Committee who were also serving on the Board or
        Committee prior to the Change in Control, or if none, by a majority of either
        such persons who served as Board or Committee members immediately prior to
        the
        Change in Control. Similar rules shall apply, if applicable, to the
        determination of whether a position is a “Comparable Position.”

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      5.    Termination
        of Employment or other Service; Demotion.

       

      (a)    Termination
        by Reason of Death or Disability.
        If the
        Optionee’s employment or other service with the Company Group 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)    Termination
        for Cause.
        If the
        Optionee’s employment or other service is terminated by the Company Group for
        Cause (as defined in the Plan), then this Option (whether or not then
        exercisable) shall immediately terminate and cease to be
        exercisable.

       

      (c)    Other
        Termination.
        If the
        Optionee’s employment or other service with the Company Group terminates for any
        other reason (other than those described in Section 5(a) or 5(b) above) or
        no
        reason, 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.

       

      (d)    Demotion.
        If the
        Optionee remains employed by, or in other service with, the Company Group
        following a demotion of the Optionee to a position of lesser capacity or
        responsibility, as determined by the Committee (a “Demotion”), the Committee
        may, in its sole discretion, treat this Option in the same manner as if the
        Optionee’s employment or other service with the Company Group had terminated for
        a reason covered by Section 5(c) above as of the date of the
        Demotion.

       

      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, including, without limitation, pursuant to a
        cashless exercise procedure approved by the Committee. The Company may (in
        its
        sole discretion) permit all or part of the exercise price to be paid with
        shares
        of Common Stock which, if acquired through the Company, have been owned by
        the
        Optionee for at least six (6) months (free and clear of any liens or
        encumbrances).

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      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.

       

      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
        Employment or other Service Rights.
        Nothing
        contained in this Agreement shall confer upon the Optionee any right with
        respect to the continuation of the Optionee’s employment or other service with
        the Company or any of its subsidiaries, affiliates or associated entities,
        or
        interfere in any way with the right of the Company or any subsidiary, affiliate
        or associated entity at any time to terminate such employment or other service
        or to increase or decrease, or otherwise adjust, the other terms and conditions
        of the Optionee’s employment or other service with the Company and its
        subsidiaries, affiliates and associated entities.

       

      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.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      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.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, this Agreement has been executed as of the date first above
        written.

      
        	 	 	 
	 	SHELLS
                SEAFOOD RESTAURANT, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              
	 	 
	 	 
	 	
                

              
	 	[Name of Optionee]

      

    

     

     

    
      
         

      

        -6-

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