exv10w5






EXHIBIT 10.5




GeoVax Labs, Inc. 2006 Equity Incentive Plan



 









 





GEOVAX LABS, INC.

2006 EQUITY INCENTIVE PLAN

(as amended April 13, 2010)




1. PURPOSE.




     The purpose of this Plan is to provide incentives to attract, retain and motivate eligible
persons whose present and potential contributions are important to the success of the Company, and
its Parent and Subsidiaries (if any), by offering them an opportunity to participate in the
Company’s future performance through awards of Options, the right to purchase Common Stock and
Stock Bonuses. Capitalized terms not defined in the text are defined in Section 2.



2. DEFINITIONS.




     As used in this Plan, the following terms will have the following meanings:



     “AWARD” means any award under this Plan, including any Option, Stock Award or Stock Bonus.



     “AWARD AGREEMENT” means, with respect to each Award, the signed written agreement between the
Company and the Participant setting forth the terms and conditions of the Award.



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



     “CAUSE” means any cause, as defined by applicable law, for the termination of a Participant’s
employment with the Company or a Parent or Subsidiary of the Company.



     “CODE” means the Internal Revenue Code of 1986, as amended.



     “COMPANY” means GeoVax Labs, Inc. (formerly Dauphin Technology, Inc.), an Illinois
corporation, or any successor corporation.



     “COMMITTEE” means that committee appointed by the Board of Directors to administer and
interpret the Plan as more particularly described in Section 5 of the Plan; provided, however, that
the term Committee will refer to the Board of Directors during such times as no Committee is
appointed by the Board of Directors.



     “DISABILITY” means a disability, whether temporary or permanent, partial or total, as
determined by the Committee.



     “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.



     “EXERCISE PRICE” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.



     “FAIR MARKET VALUE” means, as of any date, the value of a share of the Company’s Common Stock
determined as follows:



			
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	 	(a)	 	if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading;
	 
	 	(b)	 	if such Common Stock is quoted on the NASDAQ National Market or the
NASDAQ SmallCap Market, its closing price on the NASDAQ National Market or the
NASDAQ SmallCap Market, respectively, on the date of determination;
	 
	 	(c)	 	if neither of the foregoing is applicable, by the Committee in good
faith.





     “INSIDER” means an officer or director of the Company or any other person whose transactions
in the Company’s Common Stock are subject to Section 16 of the Exchange Act.



     “OPTION” means an award of an option to purchase Shares pursuant to Section 6.



     “PARENT” means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain.



     “PARTICIPANT” means a person who receives an Award under this Plan.



     “PERFORMANCE FACTORS” means the factors selected by the Committee, in its sole and absolute
discretion, from among the following measures to determine whether the performance goals applicable
to Awards have been satisfied:




	 	(a)	 	Net revenue and/or net revenue growth;
	 
	 	(b)	 	Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth;
	 
	 	(c)	 	Operating income and/or operating income growth;
	 
	 	(d)	 	Net income and/or net income growth;
	 
	 	(e)	 	Earnings per share and/or earnings per share growth;
	 
	 	(f)	 	Total stockholder return and/or total stockholder return growth;
	 
	 	(g)	 	Return on equity;
	 
	 	(h)	 	Operating cash flow return on income;
	 
	 	(i)	 	Adjusted operating cash flow return on income;
	 
	 	(j)	 	Economic value added; and
	 
	 	(k)	 	Individual business objectives.





     “PERFORMANCE PERIOD” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for Stock Awards or
Stock Bonuses, if such Awards are restricted.



     “PLAN” means this GeoVax Labs, Inc. 2006 Stock Plan, as amended from time to time.



     “PURCHASE PRICE” means the price at which the Participant of a Stock Award may purchase the
Shares.



     “SEC” means the Securities and Exchange Commission.




			
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     “SECURITIES ACT” means the Securities Act of 1933, as amended.



     “SHARES” means shares of the Company’s Common Stock reserved for issuance under this Plan, as
adjusted pursuant to Sections 3 and 19, and any successor security.



     “STOCK AWARD” means an award of Shares pursuant to Section 7.



     “STOCK BONUS” means an award of Shares, or cash in lieu of Shares, pursuant to Section 8.



     “SUBSIDIARY” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.



     “TERMINATION” or “TERMINATED” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, officer,
director, consultant, independent contractor or advisor to the Company or a Parent or Subsidiary of
the Company. An employee will not be deemed to have ceased to provide services in the case of (i)
sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Company,
provided that such leave is for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant
to a formal policy adopted from time to time by the Company and issued and promulgated to employees
in writing. In the case of any employee on an approved leave of absence, the Committee may make
such provisions respecting suspension of vesting of the Award while on leave from the employ of the
Company or a Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option agreement. The Committee will
have sole discretion to determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the “Termination Date”).



3. SHARES SUBJECT TO THE PLAN.




     3.1 Number of Shares Available. Subject to Sections 3.2 and 19, the total aggregate number of
Shares reserved and available for grant and issuance pursuant to this Plan, shall be
1,040,0001 Shares and will include Shares that are subject to: (a) issuance upon
exercise of an Option but cease to be subject to such Option for any reason other than exercise of
such Option; (b) an Award granted hereunder but forfeited or repurchased by the Company at the
original issue price; and (c) an Award that otherwise terminates without Shares being issued. At
all times the Company shall reserve and keep available a sufficient number of Shares as shall be
required to satisfy the requirements of all outstanding Options granted under this Plan and all
other outstanding but unvested Awards granted under this Plan.



     3.2 Adjustment of Shares. In the event that the number of outstanding shares is changed by a
stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company without





 




			
	1	 	Adjusted to reflect the 1-for-50 reverse
split of the Company’s Common Stock effected on April 28, 2010.




			
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consideration, then (a) the number of Shares reserved for issuance under this Plan, (b) the
Exercise Prices of and number of Shares subject to outstanding Options, and (c) the number of
Shares subject to other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance with applicable
securities laws; provided, however, that fractions of a Share will not be issued but will either be
replaced by a cash payment equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.




4. ELIGIBILITY.




     ISOs (as defined in Section 6 below) may be granted only to employees (including officers and
directors who are also employees) of the Company or of a Parent or Subsidiary of the Company. All
other Awards may be granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent or Subsidiary of the Company, provided such consultants,
independent contractors and advisors render bona-fide services not in connection with the offer and
sale of securities in a capital-raising transaction or promotion of the Company’s securities. A
person may be granted more than one Award under this Plan.



5. ADMINISTRATION.




     5.1 Committee.




	 	(a)	 	The Plan shall be administered and interpreted by a committee
consisting of two (2) or more members of the Board.
	 
	 	(b)	 	Members of the Committee may resign at any time by delivering
written notice to the Board. The Board shall fill vacancies in the Committee.
The Committee shall act by a majority of its members in office. The Committee
may act either by vote at a meeting or by a memorandum or other written
instrument signed by a majority of the Committee.
	 
	 	(c)	 	If the Board, in its discretion, does not appoint a Committee,
the Board itself will administer and interpret the Plan and take such other
actions as the Committee is authorized to take hereunder; provided that the
Board may take such actions hereunder in the same Manner as the Board may take
other actions under the Certificate of Incorporation and bylaws of the Company
generally.





     5.2 Committee Authority. Without limitation, the Committee will have the authority to:




	 	(a)	 	construe and interpret this Plan, any Award Agreement and any
other agreement or document executed pursuant to this Plan;
	 
	 	(b)	 	prescribe, amend and rescind rules and regulations relating to
this Plan or any Award;
	 
	 	(c)	 	select persons to receive Awards;
	 
	 	(d)	 	determine the form and terms of Awards;
	 
	 	(e)	 	determine the number of Shares or other consideration subject
to Awards;
	 
	 	(f)	 	determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to, other Awards
under






			
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	 	 	 	this Plan or any other incentive or compensation plan of the Company or any
Parent or Subsidiary of the Company
	 
	 	(g)	 	grant waivers of Plan or Award conditions;
	 
	 	(h)	 	determine the vesting, exercisability and payment of Awards;
	 
	 	(i)	 	correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;
	 
	 	(j)	 	determine whether an Award has been earned; and
	 
	 	(k)	 	make all other determinations necessary or advisable for the
administration of this Plan.





     5.3 Committee Discretion. Any determination made by the Committee with respect to any Award
will be made at the time of grant of the Award or, unless in contravention of any express term of
this Plan or Award, at any later time, and such determination will be final and binding on the
Company and on all persons having an interest in any Award under this Plan. The Committee may
delegate to one or more officers of the Company the authority to grant an Award under this Plan to
Participants who are not Insiders of the Company. No member of the Committee shall be personally
liable for any action taken or decision made in good faith relating to this Plan, and all members
of the Committee shall be fully protected and indemnified to the fullest extent permitted under
applicable law by the Company in respect to any such action, determination, or interpretation.



6. OPTIONS.




     The Committee may grant Options to eligible persons and will determine whether such Options
will be Incentive Stock Options within the meaning of the Code (“ISO”) or Nonqualified Stock
Options (“NQSOs”), the number of Shares subject to the Option, the Exercise Price of the Option,
the period during which the Option may be exercised, and all other terms and conditions of the
Option, subject to the following:



     6.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award
Agreement which will expressly identify the Option as an ISO or an NQSO (hereinafter referred to as
the “Stock Option Agreement”), and will be in such form and contain such provisions (which need not
be the same for each Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.



     6.2 Date of Grant. The date of grant of an Option will be the date on which the Committee
makes the determination to grant such Option, unless otherwise specified by the Committee. The
Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a
reasonable time after the granting of the Option.



     6.3 Exercise Period. Options may be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of ten (10) years from
the date the Option is granted; and provided further that no ISO granted to a person who directly
or by attribution owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company (“Ten Percent




			
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Stockholder”) will be exercisable after the expiration of five (5) years from the date the ISO
is granted. The Committee also may provide for Options to become exercisable at one time or from
time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the
Committee determines, provided, however, that in all events a Participant will be entitled to
exercise an Option at the rate of at least 20% per year over five years from the date of grant,
subject to reasonable conditions such as continued employment; and further provided that an Option
granted to a Participant who is an officer or director may become fully exercisable, subject to
reasonable conditions such as continued employment, at any time or during any period established by
the Company.




     6.4 Exercise Price. The Exercise Price of an Option will be determined by the Committee when
the Option is granted and may be not less than 85% of the Fair Market Value of the Shares on the
date of grant; provided that: (a) the Exercise Price of an ISO will be not less than 100% of the
Fair Market Value of the Shares on the date of grant; and (b) the Exercise Price of any Option
granted to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of the
Shares on the date of grant. Payment for the Shares purchased may be made in accordance with
Section 9 of this Plan.



     6.5 Method of Exercise. Options may be exercised only by delivery to the Company of a written
stock option exercise agreement (the “Exercise Agreement”) in a form approved by the Committee,
(which need not be the same for each Participant), stating the number of Shares being purchased,
the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding the Participant’s investment intent and access to
information and other matters, if any, as may be required or desirable by the Company to comply
with applicable securities laws, together with payment in full of the Exercise Price for the number
of Shares being purchased.



     6.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option
Agreement, exercise of an Option will always be subject to the following:




	 	(a)	 	If the Participant’s service is Terminated for any reason
except death or Disability, then the Participant may exercise such
Participant’s Options only to the extent that such Options would have been
exercisable upon the Termination Date no later than three (3) months after the
Termination Date (or such longer time period not exceeding five (5) years as
may be determined by the Committee, with any exercise beyond three (3) months
after the Termination Date deemed to be an NQSO).
	 
	 	(b)	 	If the Participant’s service is Terminated because of the
Participant’s death or Disability (or the Participant dies within three (3)
months after a Termination other than for Cause or because of Participant’s
Disability), then the Participant’s Options may be exercised only to the extent
that such Options would have been exercisable by the Participant on the
Termination Date and must be exercised by the Participant (or the Participant’s
legal representative) no later than twelve (12) months after the Termination
Date (or such longer time period not exceeding five (5) years as may be
determined by the Committee, with any such exercise beyond (i) three (3) months
after the Termination Date when the






			
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	 	 	 	Termination is for any reason other than the Participant’s death or
Disability, or (ii) twelve (12) months after the Termination Date when the
Termination is for Participant’s death or Disability, deemed to be an NQSO).
	 
	 	(c)	 	Notwithstanding the provisions in paragraph 6.6(a) above, if
the Participant’s service is Terminated for Cause, neither the Participant, the
Participant’s estate nor such other person who may then hold the Option shall
be entitled to exercise any Option with respect to any Shares whatsoever, after
Termination, whether or not after Termination the Participant may receive
payment from the Company or a Subsidiary for vacation pay, for services
rendered prior to Termination, for services rendered for the day on which
Termination occurs, for salary in lieu of notice, or for any other benefits.
For the purpose of this paragraph, Termination shall be deemed to occur on the
date when the Company dispatches notice or advice to the Participant that his
service is Terminated.





     6.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum number will not
prevent the Participant from exercising the Option for the full number of Shares for which it is
then exercisable.



     6.8 Limitations on ISO. The aggregate Fair Market Value (determined as of the date of grant)
of Shares with respect to which ISO are exercisable for the first time by a Participant during any
calendar year (under this Plan or under any other incentive stock option plan of the Company,
Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of Shares
on the date of grant with respect to which ISO are exercisable for the first time by a Participant
during any calendar year exceeds $100,000, then the Options for the first $100,000 worth of Shares
to become exercisable in such calendar year will be ISO and the Options for the amount in excess of
$100,000 that become exercisable in that calendar year will be NQSOs. In the event that the Code
or the regulations promulgated thereunder are amended after the Effective Date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISO,
such different limit will be automatically incorporated herein and will apply to any Options
granted after the effective date of such amendment.



     6.9 Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding
Options and authorize the grant of new Options in substitution therefore, provided that any such
action may not, without the written consent of a Participant, impair any of such Participant’s
rights under any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code. The
Committee may reduce the Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 6.4 of this Plan for Options
granted on the date the action is taken to reduce the Exercise Price.




			
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     6.10 No Disqualification. Notwithstanding any other provision in this Plan, no term of this
Plan relating to ISO will be interpreted, amended or altered, nor will any discretion or authority
granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code
or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the
Code.



7. STOCK AWARD.




     A Stock Award is an offer by the Company to sell to an eligible person Shares that may or may
not be subject to restrictions. The Committee will determine to whom an offer will be made, the
number of Shares the person may purchase, the price to be paid (the “Purchase Price”), the
restrictions to which the Shares will be subject, if any, and all other terms and conditions of the
Stock Award, subject to the following:



     7.1 Form of Stock Award. All purchases under a Stock Award made pursuant to this Plan will be
evidenced by an Award Agreement (the “Stock Purchase Agreement”) that will be in such form (which
need not be the same for each Participant) as the Committee will from time to time approve, and
will comply with and be subject to the terms and conditions of this Plan. The offer of a Stock
Award will be accepted by the Participant’s execution and delivery of the Stock Purchase Agreement
and payment for the Shares to the Company in accordance with the Stock Purchase Agreement.



     7.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Stock Award will be
determined by the Committee on the date the Stock Award is granted and may not be less than 85% of
the Fair Market Value of the Shares on the grant date, except in the case of a sale to a Ten
Percent Stockholder, in which case the Purchase Price will be 100% of the Fair Market Value.
Payment of the Purchase Price must be made in accordance with Section 9 of this Plan.



     7.3 Terms of Stock Awards. Stock Awards may be subject to such restrictions as the Committee
may impose. These restrictions may be based upon completion of a specified number of years of
service with the Company or upon completion of the performance goals as set out in advance in the
Participant’s individual Stock Purchase Agreement. Stock Awards may vary from Participant to
Participant and between groups of Participants. Prior to the grant of a Stock Award subject to
restrictions, the Committee shall: (a) determine the nature, length and starting date of any
Performance Period for the Stock Award; (b) select from among the Performance Factors to be used to
measure performance goals, if any; and (c) determine the number of Shares that may be awarded to
the Participant. Prior to the transfer of any Stock Award, the Committee shall determine the
extent to which such Stock Award has been earned. Performance Periods may overlap and Participants
may participate simultaneously with respect to Stock Awards that are subject to different
Performance Periods and have different performance goals and other criteria.



     7.4 Termination During Performance Period. If a Participant is Terminated during a
Performance Period for any reason, then such Participant will be entitled to payment (whether in
Shares, cash or otherwise) with respect to the Stock Award only to the extent earned as of the date
of Termination in accordance with the Stock Purchase Agreement, unless the Committee determines
otherwise.




			
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8. STOCK BONUSES.




     8.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares for extraordinary services
rendered to the Company or any Parent or Subsidiary of the Company. A Stock Bonus will be awarded
pursuant to an Award Agreement (the “Stock Bonus Agreement”) that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time approve, and will
comply with and be subject to the terms and conditions of this Plan. A Stock Bonus may be awarded
upon satisfaction of such performance goals as are set out in advance in the Participant’s
individual Award Agreement (the “Performance Stock Bonus Agreement”) that will be in such form
(which need not be the same for each Participant) as the Committee will from time to time approve,
and will comply with and be subject to the terms and conditions of this Plan. Stock Bonuses may
vary from Participant to Participant and between groups of Participants, and may be based upon the
achievement of the Company, Parent or Subsidiary and/or individual performance factors or upon such
other criteria as the Committee may determine.



     8.2 Terms of Stock Bonuses. The Committee will determine the number of Shares to be awarded
to the Participant. If the Stock Bonus is being earned upon the satisfaction of performance goals
pursuant to a Performance Stock Bonus Agreement, then the Committee will: (a) determine the
nature, length and starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any; and (c) determine the
number of Shares that may be awarded to the Participant. Prior to the payment of any Stock Bonus,
the Committee shall determine the extent to which such Stock Bonuses have been earned. Performance
Periods may overlap and Participants may participate simultaneously with respect to Stock Bonuses
that are subject to different Performance Periods and different performance goals and other
criteria. The number of Shares may be fixed or may vary in accordance with such performance goals
and criteria as may be determined by the Committee. The Committee may adjust the performance goals
applicable to the Stock Bonuses to take into account changes in law and accounting or tax rules and
to make such adjustments as the Committee deems necessary or appropriate to reflect the impact of
extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.



     8.3 Form of Payment. The earned portion of a Stock Bonus may be paid to the Participant by
the Company either currently or on a deferred basis, with such interest or dividend equivalent, if
any, as the Committee may determine. Payment of an interest or dividend equivalent (if any) may be
made in the form of cash or whole Shares or a combination thereof, either in a lump sum payment or
in installments, all as the Committee will determine.



9. PAYMENT FOR SHARE PURCHASES.




     Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or, where
expressly approved for the Participant by the Committee and where permitted by law:




	 	(a)	 	by cancellation of indebtedness of the Company to the Participant;
	 
	 	(b)	 	by surrender of shares that either:






	 	(1)	 	have been owned by the Participant for more than six (6) months
and have been paid for within the meaning of SEC Rule 144; or
	 
	 	(2)	 	were obtained by the Participant in the public market;






			
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	 	(c)	 	by waiver of compensation due or accrued to the Participant for services
rendered;
	 
	 	(d)	 	with respect only to purchases upon exercise of an Option, and provided that a
public market for the Company’s stock exists:






	 	(1)	 	through a “same day sale” commitment from the Participant and a
broker-dealer that is a member of the National Association of Securities
Dealers (an “NASD Dealer”) whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price directly to the Company;
or
	 
	 	(2)	 	through a “margin” commitment from the Participant and a NASD
Dealer whereby the Participant irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or






	 	(e)	 	by any combination of the foregoing.





10. WITHHOLDING TAXES.




     10.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards
granted under this Plan, the Company may require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such Shares. Whenever, under this Plan, payments in
satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.



     10.2 Stock Withholding. When, under applicable tax laws, a participant incurs tax liability
in connection with the exercise or vesting of any Award that is subject to tax withholding and the
Participant is obligated to pay the Company the amount required to be withheld, the Committee may
allow the Participant to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having a Fair Market Value
equal to the minimum amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined. All elections by a Participant to have Shares withheld for
this purpose will be made in accordance with the requirements established by the Committee and will
be in writing in a form acceptable to the Committee.



11. PRIVILEGES OF STOCK OWNERSHIP.




     11.1 Voting and Dividends. No Participant will have any of the rights of a stockholder with
respect to any Shares until the Shares are issued to the Participant. After Shares are issued to
the Participant, the Participant will be a stockholder and will have all the rights of a
stockholder with respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if such Shares are
issued pursuant to a Stock Award with restrictions, then any new, additional or different
securities the Participant may become entitled to receive with respect to such Shares by virtue of




			
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a stock dividend, stock split or any other change in the corporate or capital structure of the
Company will be subject to the same restrictions as the Stock Award; provided, further, that the
Participant will have no right to retain such stock dividends or stock distributions with respect
to Shares that are repurchased at the Participant’s Purchase Price or Exercise Price pursuant to
Section 13.




     11.2 Financial Statements. The Company will provide financial statements to each Participant
prior to such Participant’s purchase of Shares under this Plan, and to each Participant annually
during the period such Participant has Awards outstanding; provided, however, the Company will not
be required to provide such financial statements to Participants whose services in connection with
the Company assure them access to equivalent information.



12. NON-TRANSFERABILITY.




     Awards of Shares granted under this Plan, and any interest therein, will not be transferable
or assignable by the Participant, and may not be made subject to execution, attachment or similar
process, other than by will or by the laws of descent and distribution. Awards of Options granted
under this Plan, and any interest therein, will not be transferable or assignable by the
Participant, and may not be made subject to execution, attachment or similar process, other than by
will or by the laws of descent and distribution, by instrument to an inter vivos or testamentary
trust in which the options are to be passed to beneficiaries upon the death of the trustor, or by
gift to “immediate family” as that term is defined in 17 C.F.R. 240.16a-1(e). During the lifetime
of the Participant an Award will be exercisable only by the Participant. During the lifetime of
the Participant, any elections with respect to an Award may be made only by the Participant unless
otherwise determined by the Committee and set forth in the Award Agreement with respect to Awards
that are not ISOs.



13. REPURCHASE RIGHTS.




     At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s)
in the Award Agreement a right to repurchase a portion of or all of the unvested Shares held by a
Participant following such Participant’s Termination Date. Such repurchase by the Company shall be
for cash and/or cancellation of purchase money indebtedness and the price per share shall be the
Participant’s Exercise Price or Purchase Price, as applicable.



14. CERTIFICATES.




     All certificates for Shares or other securities delivered under this Plan will be subject to
such stop transfer orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange or automated
quotation system upon which the Shares may be listed or quoted.



15. ESCROW; PLEDGE OF SHARES.




     To enforce any restrictions on a Participant’s Shares, the Committee may require the
Participant to deposit all certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee appropriately endorsed in blank, with the




			
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Company or an agent designated by the Company to hold in escrow until such restrictions have
lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions
to be placed on the certificates.




16. EXCHANGE AND BUYOUT OF AWARDS.




     The Committee may, at any time or from time to time, authorize the Company, with the consent
of the respective Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a Participant an Award
previously granted with payment in cash, Shares or other consideration, based on such terms and
conditions as the Committee and the Participant may agree.



17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.




     An Award will not be effective unless such Award is in compliance with all applicable federal
and state securities laws, rules and regulations of any governmental body, and the requirements of
any stock exchange or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary or advisable; and/or
(b) completion of any registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be necessary or advisable.
The Company will be under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability for any inability or
failure to do so.



18. NO OBLIGATION TO EMPLOY.




     Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer
on any Participant any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent or Subsidiary of the Company or limit in any way the right of the
Company or any Parent or Subsidiary of the Company to terminate Participant’s employment or other
relationship at any time, with or without cause.



19. CORPORATE TRANSACTIONS.




     19.1 Assumption or Replacement of Awards by Successor. In the event of (a) a dissolution or
liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation
of the Company in a different jurisdiction, or other transaction in which there is no substantial
change in the stockholders of the Company or their relative stock holdings and the Awards granted
under this Plan are assumed, converted or replaced by the successor corporation, which assumption
will be binding on all Participants), (c) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company immediately prior to such merger (other
than any stockholder that merges, or which owns or controls another corporation that merges, with
the Company in such merger) cease to




			
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own their shares or other equity interest in the Company, (d) the sale of substantially all of
the assets of the Company, or (e) the acquisition, sale, or transfer of more than 50% of the
outstanding shares or the Company by tender offer or similar transaction, any or all outstanding
Awards may be assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar shares or other
property subject to repurchase restrictions no less favorable to the Participant. In the event
such successor corporation (if any) refuses to assume or substitute Awards, as provided above,
pursuant to a transaction described in this Subsection 19.1, (i) the vesting of any or all Awards
granted pursuant to this Plan will accelerate upon a transaction described in this Section 19 and
(ii) any or all Options granted pursuant to this Plan will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Committee determines. If
such Options are not exercised prior to the consummation of the corporate transaction, they shall
terminate at such time as determined by the Committee.




     19.2 Other Treatment of Awards. Subject to any greater rights granted to Participants under
the foregoing provisions of this Section 19, in the event of the occurrence of any transaction
described in Section 19.1, any outstanding Awards will be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.



     19.3 Assumption of Awards by the Company. The Company, from time to time, also may substitute
or assume outstanding awards granted by another company, whether in connection with an acquisition
of such other company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other company’s award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company assumes an award
granted by another company, the terms and conditions of such award will remain unchanged (except
that the exercise price and the number and nature of Shares issuable upon exercise of any such
option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.



20. ADOPTION AND STOCKHOLDER APPROVAL.




     This Plan will become effective on the date on which it is adopted by the Board (the
“Effective Date”). Upon the Effective Date, the Committee may grant Awards pursuant to this Plan.
The Company intends to seek stockholder approval of the Plan within twelve (12) months after the
date this Plan is adopted by the Board; provided, however, if the Company fails to obtain
stockholder approval of the Plan during such 12-month period, pursuant to Section 422 of




			
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the Code, any Option granted as an ISO at any time under the Plan will not qualify as an ISO
within the meaning of the Code and will be deemed to be an NQSO.




21. TERM OF PLAN/GOVERNING LAW.




     Unless earlier terminated as provided herein, this Plan will terminate ten (10) years from the
date this Plan is adopted by the Board or, if earlier, the date of stockholder approval. This Plan
and all agreements thereunder shall be governed by and construed in accordance with the laws of the
State of Georgia.



22. AMENDMENT OR TERMINATION OF PLAN.




     The Board may at any time terminate or amend this Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed pursuant to this
Plan; provided, however, that the Board will not, without the approval of the stockholders of the
Company, amend this Plan in any manner that requires such stockholder approval.



23. NONEXCLUSIVITY OF THE PLAN.




     Neither the adoption of this Plan by the Board, the submission of this Plan to the
stockholders of the Company for approval, nor any provision of this Plan will be construed as
creating any limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the granting of stock options
and bonuses otherwise than under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.



24. ACTION BY COMMITTEE.




     Any action permitted or required to be taken by the Committee or any decision or
determination permitted or required to be made by the Committee pursuant to this Plan shall be
taken or made in the Committee’s sole and absolute discretion.





			
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