**Exhibit 10.1APPENDIX A**

**TEKGRAF, INC.**

**1997 STOCK OPTION PLAN(As Amended and Restated Effective June 29, 2001)**

**1.**          **Purpose.**

             The purpose of this plan (the“Plan”) is to secure for TEKGRAF, INC. (the “Company”) and its stockholders thebenefits arising from capital stock ownership by employees, officers anddirectors of, and consultants or advisors to, the Company who are expected tocontribute to the Company’s future growth and success. Except where the contextotherwise requires, the term “Company” shall include all present and futuresubsidiaries of the Company as defined in Sections 424(e) and 424(f) of theInternal Revenue Code of 1986, as amended or replaced from time to time (the“Code”). Those provisions of the Plan which make express reference to Section422 shall apply only to Incentive Stock Options (as that term is defined in thePlan).

**2.**          **Type ofOptions and Administration.**

             (a)             Typesof Options. Options granted pursuant to the Plan may be either incentive stockoptions (“Incentive Stock Options”) meeting the requirements of Section 422 ofthe Code or nonqualified stock options which are not intended to meet therequirements of Section 422 of the Code, as determined by the Committee (asdefined below).

             (b)             Administration.The Plan will be administered by a committee (the “Committee”) appointed by theBoard of Directors of the Company (“Board”), whose construction andinterpretation of the terms and provisions of the Plan shall be final andconclusive. To the extent determined necessary or desirable by the Board, theCommittee shall consist of two or more members of the Board, each of whom shallconstitute both a “non-employee director” within the meaning of Rule 16b-3(“Rule 16b-3”) promulgated under the Securities Exchange Act of 1934 (the“Exchange Act”) and an “outside director” within the meaning of Code Section162(m). The Committee may in its sole discretion grant options to purchaseshares of the Company’s Class A Common Stock, $.001 par value per share(“Common Stock”) and issue shares upon exercise of such options as provided inthe Plan. The Committee shall have authority, subject to the express provisionsof the Plan, to construe the respective option agreements and the Plan, toprescribe, amend and rescind rules and regulations relating to the Plan, todetermine the terms and provisions of the respective option agreements, whichneed not be identical, and to make all other determinations in the judgment ofthe Committee necessary or desirable for the administration of the Plan. TheCommittee may correct any defect or supply any omission or reconcile anyinconsistency in the Plan or in any option agreement in the manner and to theextent it shall deem expedient to carry the Plan into effect and it shall bethe sole and final judge of such expediency. No director or person actingpursuant to authority delegated by the Committee shall be liable for any actionor determination under the Plan made in good faith. If at any time the Boardhas not appointed a Committee under the Plan, the Board shall act as theCommittee.

**3.**          **Eligibility**

             Options may be granted to personswho are, at the time of grant, employees, officers or directors of, orconsultants or advisors to, the Company provided, that Incentive Stock Optionsmay only be granted to individuals who are employees of the Company (within themeaning of Section 3401(c) of the Code). A person who has been granted anoption may, if he or she is otherwise eligible, be granted additional optionsif the Committee shall so determine.

**4.**          **StockSubject to Plan.**

             The stock subject to optionsgranted under the Plan shall be shares of authorized but unissued or reacquiredCommon Stock. Subject to adjustment as provided in Section 15 below, (i) themaximum number of shares of Common Stock of the Company which may be issued andsold under the Plan is 1,250,000 shares, and (ii) in no event shall the numberof shares of Common Stock underlying options awarded to any individual in any12-month period exceed 300,000 shares. If an option granted under the Planshall expire, terminate or is cancelled for any reason without having beenexercised in full, the unpurchased shares subject to such option shall again beavailable for subsequent option grants under the Plan.

**5.**          **Forms ofOption Agreements.**

             As a condition to the grant of anoption under the Plan, each recipient of an option shall execute an optionagreement in such form not inconsistent with the Plan as may be approved by theCommittee. Such option agreements may differ among recipients.

**6.**          **PurchasePrice.**

             (a)             General.The purchase price per share of stock deliverable upon the exercise of anoption shall be determined by the Committee at the time of grant of suchoption; provided, however, that in the case of an Incentive Stock Option, theexercise price shall not be less than 100% of the Fair Market Value (ashereinafter defined) of such stock, at the time of grant of such option, orless than 110% of such Fair Market Value in the case of options described inSection 11(b). “Fair Market Value” of a share of Common Stock of the Company asof a specified date for the purposes of the Plan shall mean the closing priceof a share of the Common Stock on the principal securities exchange on whichsuch shares are traded on the day immediately preceding the date as of whichFair Market Value is being determined, or on the next preceding date on whichsuch shares are traded if no shares were traded on such immediately precedingday, or if the shares are not traded on a securities exchange, Fair MarketValue shall be deemed to be the average of the high bid and low asked prices ofthe shares in the over-the-counter market on the day immediately preceding thedate as of which Fair Market Value is being determined or on the next precedingdate on which such high bid and low asked prices were recorded. If the sharesare not publicly traded, Fair Market Value of a share of Common Stock(including, in the case of any repurchase of shares, any distributions withrespect thereto which would be repurchased with the shares) shall be determinedin good faith by the Committee.

             (b)             Paymentof Purchase Price. Options granted under the Plan may provide for the paymentof the exercise price by delivery of cash or a check to the order of theCompany in an amount equal to the exercise price of such options, or, to theextent provided in the applicable option agreement, (i) by delivery to theCompany of shares of Common Stock of the Company that have been held by theoptionee at least six months having a Fair Market Value on the date of exerciseequal in amount to the exercise price of the options being exercised, (ii) byany other means which the Committee determines are consistent with the purposeof the Plan and with applicable laws and regulations (including, withoutlimitation, the provisions of Rule 16b-3 and Regulation T promulgated by theFederal Reserve Board) or (iii) by any combination of such methods of payment. Payment of the exercise price by delivery of CommonStock then owned by the optionee may be made, if permitted by the Committee,only if such payment does not result in a charge to earnings for financialaccounting purposes as determined by the Committee.

**7.**          **OptionPeriod.**

             Subject to earlier termination asprovided in the Plan, each option and all rights thereunder shall expire onsuch date as determined by the Board of Directors and set forth in theapplicable option agreement, provided, that such date shall not be later than(10) ten years after the date on which the option is granted.

**8.**          **Exercise ofOptions.**

             Each option granted under the Planshall be exercisable either in full or in installments at such time or timesand during such period as shall be set forth in the option agreement evidencingsuch option, subject to the provisions of the Plan. If an option is not at thetime of grant immediately exercisable, the Committee may (i) in the agreementevidencing such option, provide for the acceleration of the exercise date ordates of the subject option upon the occurrence of specified events, and/or(ii) at any time prior to the complete termination of an option, accelerate theexercise date or dates of such option.

**9.**             **Nontransferabilityof Options.**

             No option granted under this Planshall be assignable or otherwise transferable by the optionee except by will orby the laws of descent and distribution or pursuant to a domestic relationsorder that would satisfy the applicable requirements of a qualified domesticrelations order within the meaning of Section 414(p) of the Code and the rulesthereunder, if those provisions were applicable to the Plan. An option may beexercised during the lifetime of the optionee only by the optionee. In theevent an optionee dies during his employment by the Company or any of itssubsidiaries, or during the three-month period following the date oftermination of such employment, his option shall thereafter be exercisable,during the period specified in the option agreement, by his executors oradministrators to the full extent to which such option was exercisable by theoptionee at the time of his death during the periods set forth in Section 10 or11(d).  Notwithstandingthe foregoing provisions of this Section 9, the Committee may, in its solediscretion and subject to such limits as the Committee may determine, provideat the time an option is granted or thereafter, that the option may betransferred for no consideration to members of the optionee’s immediate family,to a trust solely for the benefit of the optionee or members of the optionee’simmediate family, or to a partnership or limited liability company, the solepartners or members of whom are the optionee or members of the optionee’simmediate family.  For purposes of thisSection 9, “immediate family” means the optionee’s spouse, children, stepchildren,brothers, sisters and grandchildren, and the spouse of any such individual. Anyoption transferred pursuant to this Section 9 shall remain subject to all ofthe terms and conditions applicable to the option prior to such transfer.

**10.**        **Effect ofTermination of Employment or Other Relationship.**

             Except as provided in Section 11(d)with respect to Incentive Stock Options, and subject to the provisions of thePlan, an optionee may exercise an option at any time within three (3) monthsfollowing the termination of the optionee’s employment or other relationshipwith the Company or within one (1) year if such termination was due to thedeath or disability (as determined by the Committee) of the optionee, to theextent that such option was exercisable at the optionee’s termination ofemployment or other relationship, but in no event later than the expirationdate of the option. If the termination of the optionee’s employment orrelationship with the Company is for cause or is otherwise attributable to abreach by the optionee of an employment or confidentiality or non-disclosureagreement, the option shall expire immediately upon such termination. TheCommittee shall have the power to determine what constitutes a termination forcause or a breach of an employment or confidentiality or non-disclosureagreement, whether an optionee has been terminated for cause or has breachedsuch an agreement, and the date upon which such termination for cause or breachoccurs. Any such determinations shall be final and conclusive and binding uponthe optionee.  Unless the Committeedetermines otherwise, any portion of an option that is not exercisable on theoptionee’s termination of employment or other relationship with the Companywill be forfeited on such termination date.

**11.**        **IncentiveStock Options.**

             Options granted under the Planwhich are intended to be Incentive Stock Options shall be subject to thefollowing additional terms and conditions:

             (a)             ExpressDesignation. All Incentive Stock Options granted under the Plan shall, at thetime of grant, be specifically designated as such in the option agreementcovering such Incentive Stock Options.

             (b)             10%Stockholder. If any employee to whom an Incentive Stock Option is to be grantedunder the Plan is, at the time of the grant of such option, the owner of stockpossessing more than 10% of the total combined voting power of all classes ofstock of the Company (after taking into account the attribution of stockownership rules of Section 424(d) of the Code), then the following specialprovisions shall be applicable to the Incentive Stock Option granted to suchindividual:

|              (i)     The purchase price per share of the  Common Stock subject to such Incentive Stock Option shall not be less than  110% of the Fair Market Value of one share of Common Stock at the time of  grant; and |
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|              (ii)    the option exercise period shall not  exceed five years from the date of grant.                                                                                                                             |

             (c)             DollarLimitation. For so long as the Code shall so provide, options granted to anyemployee under the Plan (and any other incentive stock option plans of theCompany) which are intended to constitute Incentive Stock Options shall not, inthe aggregate, become exercisable for the first time in any one calendar yearfor shares of Common Stock with an aggregate Fair Market Value, as of therespective date or dates of grant, of more than $100,000.

             (d)             Terminationof Employees, Death or Disability. No Incentive Stock Option may be exercisedunless, at the time of such exercise, the optionee is, and has beencontinuously since the date of grant of his or her option, employed by theCompany, except that:

|              (i)     an Incentive Stock Option may be  exercised within the period of three months after the date the optionee  ceases to be an employee of the Company (or within such lesser period as may  be specified in the applicable option agreement), provided, that the  agreement with respect to such option may designate a longer exercise period  and that the exercise after such three-month period shall be treated as the  exercise of a non-statutory option under the Plan; |
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|              (ii)    if the optionee dies while in the employ  of the Company, or within three months after the optionee ceases to be such  an employee, the Incentive Stock Option may be exercised by the person to  whom it is transferred by will or the laws of descent and distribution within  the period of one year after the date of death (or within such lesser period  as may be specified in the applicable option agreement); and                                                       |
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|              (iii)   if the optionee becomes disabled (within  the meaning of Section 22(e) (3) of the Code or any successor provisions  thereto) while in the employ of the Company, the Incentive Stock Option may  be exercised within the period of one year after the date the optionee ceases  to be such an employee because of such disability (or within such lesser period  as may be specified in the applicable option agreement).                                                              |

 

             Forall purposes of the Plan and any option granted hereunder, “employment” shallbe defined in accordance with the provisions of Section 1.421-7(h) of theIncome Tax Regulations (or any successor regulations). Notwithstanding theforegoing provisions, no Incentive Stock Option may be exercised after itsexpiration date.  Unless determinedotherwise by the Committee, any portion of an Incentive Stock Option which isnot exercisable on the optionee’s termination of employment with the Companyshall be forfeited.  To the extent thatan option which is intended to be an Incentive Stock Option does not satisfythe requirements of Code Section 422, it shall be treated as a nonqualifiedoption.

**12.**        **AdditionalProvisions.**

             (a)             AdditionalOption Provisions. The Committee may, in its sole discretion, includeadditional provisions in option agreements covering options granted under thePlan, including without limitation restrictions on transfer, repurchase rights,rights of first refusal, commitments to pay cash bonuses, to make, arrange foror guaranty loans or to transfer other property to optionees upon exercise ofoptions, or such other provisions as shall be determined by the Committee;provided, that such additional provisions shall not be inconsistent with anyother term or condition of the Plan.

             (b)             Acceleration,Extension, Etc. The Committee may, in its sole discretion, (i) accelerate thedate or dates on which all or any particular option or options granted underthe Plan may be exercised or (ii) extend the dates during which all, or anyparticular, option or options granted under the Plan may be exercised.

**13.**        **GeneralRestrictions.**

             (a)             InvestmentRepresentations. The Company may require any person to whom an option isgranted, as a condition of exercising such option, to give written assurancesin substance and form satisfactory to the Company to the effect that suchperson is acquiring the Common Stock subject to the option for his or her ownaccount for investment and not with any present intention of selling orotherwise distributing the same, and to such other effects as the Company deemsnecessary or appropriate in order to comply with federal and applicable statesecurities laws, or with covenants or representations made by the Company inconnection with any public offering of its Common Stock.

             (b)             ComplianceWith Securities Laws. Each option shall be subject to the requirement that if,at any time, counsel to the Company shall determine that the listing,registration or qualification of the shares subject to such option upon anysecurities exchange or under any state or federal law, or the consent orapproval of any governmental or regulatory body, or that the disclosure ofnon-public information or the satisfaction of any other condition is necessaryas a condition of, or in connection with the issuance or purchase of sharesthereunder, such option may not be exercised, in whole or in part, unless suchlisting, registration, qualification, consent, or approval, or satisfaction ofsuch condition shall have been effected or obtained on conditions acceptable tothe Committee. Nothing herein shall be deemed to require the Company to applyfor or to obtain such listing, registration or qualification, or to satisfysuch condition.

**14.**        **Rights as aStockholder.**

             The holder of an option shall haveno rights as a stockholder with respect to any shares covered by the option(including, without limitation, any rights to receive dividends or non-cash distributionswith respect to such shares) until the date of issue of a stock certificate tohim or her for such shares. No adjustment shall be made for dividends or otherrights for which the record date is prior to the date such stock certificate isissued.

**15.**             **AdjustmentProvisions for Recapitalizations, Reorganizations and Related Transactions.**

             (a)             Recapitalizationsand Related Transactions. If, through or as a result of any recapitalization,reclassification, stock dividend, stock split, reverse stock split, spinoff orother similar transaction, (i) the outstanding shares of Common Stock areincreased, decreased or exchanged for a different number or kind of shares orother securities of the Company, or (ii) additional shares or new or differentshares or other non-cash assets are distributed with respect to such shares ofCommon Stock or other securities, the Committee, in its sole discretion, shallmake an appropriate and proportionate adjustment in (x) the maximum number andkind of shares reserved for issuance under the Plan, (y) the number and kind ofshares or other securities subject to any then outstanding options under thePlan, and (z) the price for each share subject to any then outstanding optionsunder the Plan, without changing the aggregate purchase price as to which suchoptions remain exercisable.

             (b)             Reorganization,Merger and Related Transactions. If the Company shall be the survivingcorporation in any reorganization, merger or consolidation of the Company withone or more other corporations, any then outstanding option granted pursuant tothe Plan shall pertain to and apply to the securities to which a holder of thenumber of shares of Common Stock subject to such options would have beenentitled immediately following such reorganization, merger, or consolidation,with a corresponding proportionate adjustment of the purchase price as to whichsuch options may be exercised so that the aggregate purchase price as to whichsuch options may be exercised shall be the same as the aggregate purchase priceas to which such options may be exercised for the shares remaining subject tothe options immediately prior to such reorganization, merger, orconsolidation.  For purposes of thisSection 15 and Section 16, the Company will be treated as the “survivingcorporation” in a merger, consolidation or similar transaction if substantiallyall of the individuals and entities who were the beneficial owners of thevoting securities of the Company immediately prior to the transaction continueto own, directly or indirectly, immediately after the transaction at least 60%of the outstanding shares of voting securities of the corporation resultingfrom the transaction.

             (c)             Board Authority to MakeAdjustments. Any adjustments under this Section 15 will be made by theCommittee, whose determination as to what adjustments, if any, will be made andthe extent thereof will be final, binding and conclusive. No fractional shareswill be issued under the Plan on account of any such adjustments.

**16.**        **Merger,Consolidation, Asset Sale, Liquidation, Etc.**

             (a)             General.In the event of a consolidation or merger in which the Company is not thesurviving corporation, or sale of all or substantially all of the assets of theCompany in which outstanding shares of Common Stock are exchanged forsecurities, cash or other property of any other corporation or business entityor in the event of a liquidation of the Company (collectively, a “CorporateTransaction”), the Committee, or the board of directors of any corporationassuming the obligations of the Company, may, in its discretion, take any oneor more of the following actions, as to outstanding options: (i) provide thatsuch options shall be assumed, or equivalent options shall be substituted, bythe acquiring or succeeding corporation (or an affiliate thereof), providedthat any such options substituted for Incentive Stock Options shall meet therequirements of Section 424(a) of the Code, (ii) upon written notice to theoptionees, provide that all unexercised options will terminate immediatelyprior to the consummation of such transaction unless exercised by the optioneewithin a specified period following the date of such notice, (iii) in the eventof a Corporate Transaction under the terms of which holders of the Common Stockof the Company will receive upon consummation thereof a cash payment for eachshare surrendered in the Corporate Transaction (the “Transaction Price”), makeor provide for a cash payment to the optionees equal to the difference between(A) the Transaction Price times the number of shares of Common Stock subject tosuch outstanding options (to the extent then exercisable at prices not inexcess of the Transaction Price) and (B) the aggregate exercise price of allsuch outstanding options in exchange for the termination of such options, and(iv) provide that all or any outstanding options shall become exercisable infull immediately prior to such event.

             (b)             SubstituteOptions. The Company may grant options under the Plan in substitution foroptions held by employees of another corporation who become employees of theCompany, or a subsidiary of the Company, as the result of a merger orconsolidation of the employing corporation with the Company or a subsidiary ofthe Company, or as a result of the acquisition by the Company, or one of itssubsidiaries, of property or stock of the employing corporation. The Companymay direct that substitute options be granted on such terms and conditions asthe Committee considers appropriate in the circumstances.

**17.**        **No SpecialEmployment Rights.**

             Nothing contained in the Plan or inany option shall confer upon any optionee any right with respect to thecontinuation of his or her employment by the Company or interfere in any waywith the right of the Company at any time to terminate such employment or toincrease or decrease the compensation of the optionee.

**18.**        **OtherEmployee Benefits.**

             Except as to plans which by theirterms expressly include such amounts as compensation, the amount of anycompensation deemed to be received by an employee as a result of the exerciseof an option or the sale of shares received upon such exercise will notconstitute compensation with respect to which any other employee benefits ofsuch employee are determined, including, without limitation, benefits under anybonus, pension, profit-sharing, life insurance or salary continuation plan,except as otherwise specifically determined by the Board of Directors.

**19.**             **Amendment ofthe Plan.**

             The Board of Directors may at anytime, and from time to time, modify or amend the Plan in any respect; provided,however, subject to Sections 15 and 16 (relating to adjustments to shares), nosuch modification or amendment shall, without the optionee’s consent, adverselyaffect the rights of such optionee with respect to options previously grantedto him or her under the Plan.

**20.**             **Withholding.**

             (a)             TheCompany shall have the right to deduct from payments of any kind otherwise dueto the optionee any federal, state or local taxes of any kind required by lawto be withheld with respect to any shares issued upon exercise of options underthe Plan. Subject to the prior approval of the Committee, which may be withheldby the Committee in its sole discretion, the optionee may elect to satisfy theminimum tax withholding obligations required by law, in whole or in part, (i)by causing the Company to withhold shares of Common Stock otherwise issuablepursuant to the exercise of an option or (ii) by delivering to the Companyshares of Common Stock already owned by the optionee. The shares so deliveredor withheld shall have a Fair Market Value equal to such withholding obligationas of the date that the amount of tax to be withheld is to be determined. Anoptionee who has made an election pursuant to this Section 20(a) may only satisfyhis or her withholding obligation with shares of Common Stock which are notsubject to any repurchase, forfeiture, unfulfilled vesting or other similarrequirements.

             (b)             Theacceptance of shares of Common Stock upon exercise of an Incentive Stock Optionshall constitute an agreement by the optionee (i) to notify the Company if anyor all of such shares are disposed of by the optionee within two years from thedate the option was granted or within one year from the date the shares wereissued to the optionee pursuant to the exercise of the option, and (ii) ifrequired by law, to remit to the Company, at the time of and in the case of anysuch disposition, an amount sufficient to satisfy the Company’s federal, stateand local withholding tax obligations with respect to such disposition, whetheror not, as to both (i) and (ii), the optionee is in the employ of the Companyat the time of such disposition.

**21.**             **Cancellationand New Grant of Options, Etc.**

             The Committee shall have theauthority to effect, at any time and from time to time, with the consent of theaffected optionees, (i) the cancellation of any or all outstanding optionsunder the Plan and the grant in substitution therefor of new options under thePlan covering the same or different numbers of shares of Common Stock andhaving an option exercise price per share which may be lower or higher than theexercise price per share of the cancelled options or (ii) the amendment of theterms of any and all outstanding options under the Plan to provide an optionexercise price per share which is higher or lower than the then-currentexercise price per share of such outstanding options.

**22.**        **EffectiveDate and Duration of the Plan.**

             (a)             EffectiveDate. This amendment and restatement of the Plan shall become effective whenadopted by the Board of Directors, subject to the approval of the Company’sstockholders to the extent so provided by the Board.

             (b)             Termination.Unless sooner terminated in accordance with Section 16, the Plan shallterminate upon the earlier of (i) the close of business on the day nextpreceding the tenth anniversary of the date of its initial adoption by theBoard, or (ii) the date on which all shares available for issuance under thePlan shall have been issued pursuant to the exercise or cancellation of optionsgranted under the Plan. If the date of termination is determined under (i)above, then options outstanding on such date shall continue to have force andeffect in accordance with the provisions of the instruments evidencing such options.

**23.**        **Provisionfor Foreign Participants.**

             The Committee may, without amendingthe Plan, modify awards or options granted to participants who are foreignnationals or employed outside the United States to recognize differences inlaws, rules, regulations or customs of such foreign jurisdictions with respectto tax, securities, currency, employee benefit or other matters.

**24.**             **GoverningLaw.**

             The provisions of this Plan shallbe governed and construed in accordance with the laws of the State of Delawarewithout regard to the principles of conflicts of laws.

             Adopted by the Board of Directorson August 7, 1996, amended on May 26, 1999, amended and restated effectiveMarch 26, 2000, February 22, 2001 and June 29, 2001.