1997 Stock Incentive Plan

EXHIBIT 10.17
BIOSHIELD TECHNOLOGIES, INC.


1997 STOCK INCENTIVE PLAN


TABLE OF CONTENTS


Page SECTION 1: DEFINITIONS 1
1.1 Definitions 1


SECTION 2: THE STOCK INCENTIVE PLAN 3
2.1 Purpose of the Plan 3
2.2 Stock Subject to the Plan 3
2.3 Administration of the Plan 3
2.4 Eligibility and Limits 4


SECTION 3: TERMS OF STOCK INCENTIVES 4
3.1 Terms and Conditions of All Stock Incentives 4
3.2 Terms and Conditions of Options 5
(a) Option Price 5
(b) Option Term 5
(c) Payment 5
(d) Conditions to the Exercise of an Option 6
(e) Termination of Incentive Stock Option 6
(f) Special Provisions for Certain Substitute Options 6
3.3 Omitted 7
3.4 Omitted 7
3.5 Omitted 7
3.6: Omitted 7
3.7 Omitted 7
3.8 Treatment of Awards Upon Termination of Employment 7


SECTION 4: RESTRICTIONS ON STOCK 7
4.1 Escrow of Shares. 7
4.2 Restrictions on Transfer 8


SECTION 5: GENERAL PROVISIONS 8
5.1 Withholding 8
5.2 Changes in Capitalization; Merger; Liquidation 8
5.3 Cash Awards 9
5.4 Compliance with Code 9
5.5 Right to Terminate Employment 9
5.6 Non-alienation of Benefits 9
5.7 Restrictions on Delivery and Sale of Shares; Legends 10
5.8 Listing and Legal Compliance 10
5.9 Termination and Amendment of the Plan 10
5.10 Stockholder Approval 10
5.11 Choice of Law 10
5.12 Effective Date of Plan 11


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BIOSHIELD TECHNOLOGIES, INC.


1997 STOCK INCENTIVE PLAN


SECTION 1: DEFINITIONS


1.1. DEFINITIONS. Whenever used herein, the masculine pronoun will be deemed to include the feminine, and the singular to include the plural, unless the context clearly indicates otherwise, and the following capitalized words and phrases are used herein with the meaning thereafter ascribed:


(a) "Affiliate" means:


(1) an entity that directly or through one or more intermediaries is controlled by the Company, and


(2) any entity in which the Company has a significant equity interest, as determined by the Company.


(b) "Board of Directors" means the board of directors of the Company.


(c) "Code" means the Internal Revenue Code of 1986, as amended.


(d) "Committee" means the committee appointed by the Board of Directors to administer the Plan. The Board of Directors shall consider the advisability of whether the members of the Committee shall consist solely of at least two members of the Board of Directors who are both "outside directors" as defined in Treas. Reg. 1.162-27(e) as promulgated by the Internal Revenue Service and "non-employee directors" as defined in Rule 16b-3(b)(3) as promulgated under the Exchange Act.


(e) "Company" means BioShield Technologies, Inc., a Georgia corporation.


(f) "Disability" has the same meaning as provided in the long-term disability plan or policy maintained or, if applicable, most recently maintained, by the Company or, if applicable, any Affiliate of the Company for the Participant. If no long-term disability plan or policy was ever maintained on behalf of the Participant or, if the determination of Disability relates to an Incentive Stock Option, Disability means that condition described in Code Section 22(e)(3), as amended from time to time. In the event of a dispute, the determination of Disability will be made by the Committee and will be supported by advice of a physician competent in the area to which such Disability relates.


(g) Omitted


(h) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time.


(i) "Fair Market Value" with regard to a date means the closing price at which Stock was sold on the last trading date prior to that date as reported by the Nasdaq Stock Market (or, if applicable, as reported by a national securities exchange selected by the Committee on which the shares of Stock are then actively traded) and published in The Wall Street Journal; provided that, for purposes of granting awards other than Incentive Stock Options, Fair Market Value of the shares of Stock may be determined by the Committee by reference to the average market value determined over a period certain or as of specified dates, to a tender offer price for the shares of Stock (if settlement of an award is triggered by such an event) or to any other reasonable measure of fair market value.


(j) "Option" means a non-qualified stock option or an incentive stock option.


(k) "Over 10% Owner" means an individual who at the time an Incentive Stock Option is granted owns Stock possessing more than 10% of the total combined voting power of the Company or one of its Subsidiaries, determined by applying the attribution rules of Code Section 424(d).


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(l) "Participant" means an individual who receives a Stock Incentive hereunder.


(m) Omitted


(n) Omitted


(o) "Plan" means the BioShield Technologies, Inc. 1997 Stock Incentive Plan.


(p) "Stock" means the Company's common stock.


(q) Omitted


(r) "Stock Award" means a stock award described in Section 3.4.


(s) "Stock Incentive Agreement" means an agreement between the Company and a Participant or other documentation evidencing an award of a Stock Incentive.


(t) "Stock Incentive Program" means a written program established by the committee, pursuant to which Stock Incentives are awarded under the Plan under uniform terms, conditions and restrictions set forth in such written program.


(u) "Stock Incentives" means, collectively, incentive stock options, non-qualified stock options and Stock Awards.


(v) "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, with respect to Incentive Stock Options, at the time of the granting of the Option, 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 the chain.


(w) "Termination of Employment" means the termination of the employee-employer relationship between a Participant and the Company and its Affiliates, regardless of whether severance or similar payments are made to the Participant for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability or retirement. The committee will, in its absolute discretion, determine the effect of all matters and questions relating to a Termination of Employment, including, but not by way of limitation, the question of whether a leave of absence constitutes a Termination of Employment.


SECTION 2: THE STOCK INCENTIVE PLAN


2.1. PURPOSE OF THE PLAN. The Plan is intended to: (a) provide incentive to officers and key employees of the Company and its Affiliates to stimulate their efforts toward the continued success of the Company and to operate and manage the business in a manner that will provide for the long-term growth and profitability of the Company; (b) encourage stock ownership by officers and key employees by providing them with a means to acquire a proprietary interest in the Company, acquire shares of Stock, or to receive compensation which is based upon appreciation in the value of Stock; and (c) provide a means of obtaining, rewarding and retaining key personnel and consultants.


2.2. STOCK SUBJECT TO THE PLAN. Subject to adjustment in accordance with Section 5.2, 400,000 shares of Stock (the "Maximum Plan Shares") are hereby reserved exclusively for issuance pursuant to Stock Incentives. At no time may the Company have outstanding under the Plan, Stock Incentives subject to Section 16 of the Exchange Act and shares of Stock issued in respect of Stock Incentives under the Plan in excess of the Maximum Plan Shares. The shares of Stock attributable to the nonvested, unpaid, unexercised, unconverted or otherwise unsettled portion of any Stock Incentive that is forfeited or canceled or expires or terminates for any reason without becoming vested, paid, exercised, converted or otherwise settled in full will again be available for purposes of the Plan.


2.3. ADMINISTRATION OF THE PLAN. The Plan is administered by the Committee. The Committee has full


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authority in its discretion to determine the officers and key employees of the Company or its Affiliates to whom Stock Incentives will be granted and the terms and provisions of Stock Incentives, subject to the Plan. Subject to the provisions of the Plan, the Committee has full and conclusive authority to interpret the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the respective Stock Incentive Agreements and to make all other determinations necessary or advisable for the proper administration of the Plan. The Committee's determinations under the Plan need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, awards under the Plan (whether or not such persons are similarly situated). The Committee's decisions are final and binding on all Participants.


2.4. ELIGIBILITY AND LIMITS. Stock Incentives may be granted only to officers, ...