Legend Stock . . .

refers to a certificate of equity ownership that carries a description, usually on its face or back, of the restrictions imposed upon the ability of the holder to sell or otherwise transfer its ownership. Most legend stock carries one section identifying the restrictions imposed by state law and another identifying those imposed by federal law. If the holder of the stock has entered into a shareholders agreement or agreed to some other restriction on his ability to own or resell his securities, these will also typically appear on his stock certificate.

The purpose of legending stock certificates is to alert potential purchasers to the restrictions imposed upon the stock. The absence of restrictive language on a share certificate, however, does not necessarily mean that the stock is freely tradable and unrestricted. The legends may have been left off by accident. If they were, the purchaser may acquire fewer share rights than he anticipated unless he investigates to determine what restrictions apply. A typical stock legend might read as follows:

The shares of stock represented by this certificate have not been registered under the Securities Act of 1933, as amended, the Georgia Securities Act of 1973, as amended, or any other state securities law;, and may not be transferred, sold or otherwise disposed of in the absence of an effective registration statement with respect to the shares evidenced by this certificate, filed and made effective under the Securities Act of 1933, as amended, the Georgia Securities Act of 1973, as amended, or any other state securities law, or an opinion of counsel satisfactory to the Company to the effect that registration under such Acts is not required.

The shares represented by this Certificate are also subject to the restrictions as to their transferability as set forth in that certain Agreement dated as of July 1, 2000 between the holder and the Company, a copy of which is on file in the offices of the Company.

See: Restricted Securities, Shareholders’ Agreements, Vesting Schedules, Voting Agreements.