Exhibit 10.2
SURREY, INC.
AMENDED AND RESTATED 1997 NON-EMPLOYEE DIRECTORS PLAN
The purpose of the Surrey, Inc. 1997 Non-Employee Directors' Stock
Option Plan (the "Plan") is to secure for Surrey, Inc. (the "Company") and its
stockholders the benefits inherent in increased common stock ownership by the
members of the Board of Directors of the Company (the "Board") who are not
employees of the Company ("Non-Employee Directors").
1. STOCK SUBJECT TO PLAN. An aggregate of 100,000 shares (the "Shares")
of the Common Stock, no par value, of the Company ("Common Stock") may be
subject to stock options granted under the Plan. Such Shares may be authorized
but unissued Common Stock or authorized and issued Common Stock that has been or
may be acquired by the Company. Shares that are subject to an option which
expires or is terminated unexercised shall again be available for issuance under
the Plan.
2. ADMINISTRATION. The Plan shall be administered by the Board. The
Board shall have sole discretion and authority to make rules and regulations
governing the administration of the Plan, to grant options in accordance with
the provisions of the Plan, and to prescribe the form of agreement evidencing
options granted under the Plan. All interpretations, decisions, or
determinations made by the Board pursuant to the Plan shall be final and
conclusive.
3. ELIGIBILITY. Subject to the limitations of paragraph 1:
a. INITIAL GRANTS. Each individual who is a Non-Employee
Director on April 13, 1999 [the date on which the amendment to the Plan
was adopted by the Board] shall be granted, in addition to the option
to purchase 6,000 Shares currently outstanding and granted in 1997, a
stock option under the Plan to purchase 9,000 Shares effective on April
13, 1999. Each individual who first becomes a Non-Employee Director
after April 13, 1999 shall receive a stock option under the Plan to
purchase 15,000 Shares. Each such option granted under the Plan shall
entitle the optionee, upon exercise, to purchase Shares upon the terms
and conditions set forth in paragraph 4.
b. ANNUAL GRANTS. Each Non-Employee Director who is re-elected
by the shareholders to a fourth or subsequent term as a director, shall
receive additional options under the Plan upon such re-election. Each
such additional option shall entitle the optionee, upon exercise, to
purchase 5,000 Shares.
Notwithstanding the foregoing, if the number of Shares available for issuance
pursuant to paragraph 1 on any date is less than the aggregate number of Shares
for which options are to be granted on such date, then the number of Shares for
which options are granted to each director on such date shall be reduced, pro
rata, until the aggregate number of Shares for which options are to be granted
equals the number of Shares then available for issuance.
4. TERMS AND CONDITIONS OF OPTIONS. Each stock option granted under the
Plan shall be subject to the following terms and conditions:
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a. GRANT DATES.
1) INITIAL GRANTS. The initial options, each to
purchase 6,000 Shares, granted under paragraph 3.a. to an
individual who was a Non-Employee Director on the date on
which the Plan was adopted by the Board, were granted as of
December 3, 1997, the date on which the Registration Statement
on Form SB-2 became effective with the Securities and Exchange
Commission with respect to the initial public offering of the
Common Stock of the Company. An option granted under paragraph
3.a. to an individual who was a Non-Employee Director on April
13, 1999 [the date on which the amendment to the Plan was
adopted by the Board] shall be granted as of April 13, 1999.
An option granted under paragraph 3.a. to an individual who
first becomes a Non-Employee Director after April 13, 1999
shall be granted as of the date on which the individual first
becomes a Non-Employee Director. Each such date is referred to
as a "Grant Date."
2) ANNUAL GRANTS. An option granted under paragraph
3.b. shall be automatically granted upon the re-election of
such Non-Employee Director to the Board by the shareholders of
the Company. Each such date is referred to as a "Grant Date."
b. OPTION PRICE. The purchase price of Shares that are subject
to an option shall be the fair market value of such Shares at the time
the option is granted, as determined in good faith by the Board.
c. EXERCISE PERIODS.
1) INITIAL GRANTS. Except as provided in the
following sentence, an option granted pursuant to paragraph
3.a. shall become exercisable with respect to one-third of the
Shares subject to the option on the first anniversary of the
Grant Date, and with respect to an additional one-third of the
Shares subject to the option on each of the next two
anniversaries of the Grant Date. Notwithstanding the prior
sentence, the initial grant to purchase 9,000 Shares made on
April 13, 1999 to each Non-Employee Director on such date
shall become exercisable immediately with respect to one-third
of the Shares subject to the option, and shall become
exercisable with respect to an additional one-third of the
Shares subject to the option on each of December 3, 1999 and
December 3, 2000.
2) ANNUAL GRANTS. An option granted pursuant to
paragraph 3.b. shall become exercisable with respect to all of
the Shares subject to the option on the Grant Date.
3) EXPIRATION. Each stock option shall expire and
become nonexercisable on the tenth anniversary of the Grant
Date or on any earlier date specified in paragraph 4.d.
Subject to the foregoing, an option may be exercised from time
to time with respect to any number of whole Shares, up to the
aggregate
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number of Shares subject to the option.
d. CESSATION OF DIRECTORSHIP. If an optionee ceases to be a
director of the Company for any reason, each option granted to such
optionee shall immediately expire and become nonexercisable as to any
Shares with respect to which it has not yet become exercisable, but it
shall remain exercisable as to any remaining Shares until the first to
occur of the following:
1) the expiration of three months from the date on
which the optionee ceases to be a director of the Company;
provided, that if the optionee dies during such three-month
period, the option shall remain exercisable for the period
specified in subparagraph (2) below;
2) the expiration of 12 months following the date of
the optionee's death; or
3) the tenth anniversary of the Grant Date.
e. PAYMENT. The purchase price for Shares subject to an option
shall be payable in full at the time the option is exercised. Payment
may be made in cash, in shares of Common Stock having a fair market
value on the date of exercise which is equal to the option price, by
directing the Company to withhold from the Shares that would otherwise
be issued upon exercise a number of Shares having a fair market value
on the date of exercise which is equal to the exercise price, or by any
combination of the foregoing, subject to such terms and conditions as
the Board deems necessary or appropriate. The Board, in its discretion,
may also cooperate with an optionee who participates in a cashless
exercise program of a broker or other agent under which all or part of
the Shares received upon exercise of an option are sold through the
broker or other agent or under which the broker or other agent makes a
loan to such optionee.
5. AGREEMENTS. Each stock option granted pursuant to the Plan shall be
evidenced by an agreement setting forth the terms and conditions upon which it
is granted.
6. ADJUSTMENTS. If there is a change in the outstanding Shares of
Common Stock by reason of a stock dividend or split, recapitalization,
reclassification, combination, or exchange of Shares, or by reason of a similar
corporate change, the Board may adjust the number of Shares subject to an
option, the option price, or the maximum number of Shares subject to this Plan,
as may be appropriate to reflect the nature of the change. Any such adjustments
shall be conclusive and binding for all purposes of this Plan.
7. MERGER, CONSOLIDATION, ETC. If the Company becomes a party to a
corporate merger, consolidation, major acquisition of property for stock,
spinoff, reorganization, or liquidation, the Board may make any arrangement it
deems advisable with respect to outstanding options and in the number of Shares
subject to this Plan. Such an arrangement may include, but shall not be limited
to, the substitution of new options for options then outstanding, the assumption
of any option, and the termination of any option. Any such arrangements shall be
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conclusive and binding for all purposes of this Plan.
8. INDEMNIFICATION. Each member of the Board shall be indemnified by
the Company against any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him as a result of any claim, action, suit, or
proceeding in which he may be involved by reason of any action taken or omitted
under this Plan; provided, such person gives the Company an opportunity, at its
own expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which any person may be
entitled under the Company's articles of incorporation or bylaws, as a matter of
law, or otherwise.
9. RIGHTS AS STOCKHOLDER. Except to the extent otherwise specifically
provided herein, the recipient of an option shall have no rights as a
stockholder with respect to Shares issued pursuant to the Plan until
certificates for such Shares have been issued to such person.
10. GENERAL RESTRICTIONS. Each option granted pursuant to the Plan
shall be subject to the requirement that if, in the opinion of the Board:
a. the listing, registration, or qualification of any Shares
related thereto upon any securities exchange or under any state or
federal law;
b. the consent or approval of any regulatory body; or
c. an agreement by the recipient with respect to the
disposition of any such Shares;
is necessary or desirable as a condition of the issuance or sale of such Shares,
such option shall not be consummated unless and until such listing,
registration, qualification, consent, approval, or agreement is effected or
obtained in form satisfactory to the Board.
11. RIGHTS AS A DIRECTOR. Nothing in this Plan, or in any agreement
entered into hereunder, shall confer upon any director the right to continue as
a director of the Company.
12. WITHHOLDING. If the Company proposes or is required to issue Shares
pursuant to the Plan, it may require the recipient to remit to it, or withhold
from such Shares or from the recipient's other compensation, an amount
sufficient to satisfy any applicable federal, state, or local tax withholding
requirements prior to the delivery of any certificates for such Shares.
13. AMENDMENTS. The Board may at any time, and from time to time, amend
the Plan in any respect.
14. DURATION. No options or rights shall be granted under the Plan
after the date on which the Plan is terminated by the Board.
15. COMPLIANCE WITH SECTION 16(b). In the case of directors who are or
may be subject to Section 16 of the Securities Exchange Act of 1934 (the "Act"),
it is the intent of the Company that the Plan and any stock option granted
hereunder satisfy and be interpreted in a
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manner that satisfies the applicable requirements of Rule 16b-3, so that such
persons will be entitled to the benefits of Rule 16b-3 or other exemptive rules
under Section 16 of the Act and will not be subjected to liability thereunder.
If any provision of the Plan or any stock option would otherwise conflict with
the intent expressed herein, that provision, to the extent possible, shall be
interpreted and deemed so as to avoid such conflict. To the extent of any
remaining irreconcilable conflict with such intent, such provision shall be
deemed void as applicable to directors who are or may be subject to Section 16
of the Act.
16. EFFECTIVE DATE OF PLAN. The Plan was initially adopted by the Board
of Directors and approved by the shareholders effective as of September 9, 1997.
The Plan was Amended and Restated by the Board of Directors April 13, 1999 and
approved by the shareholders on May 2, 2000.
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