EXHIBIT 10.1
TAG-IT PACIFIC, INC.
AMENDED AND RESTATED
1997 STOCK PLAN
1. PURPOSE OF THE PLAN.
The purpose of this 1997 Stock Plan (the "Plan") is to provide
incentives and rewards to selected eligible directors, officers, employees and
consultants of Tag-It Pacific, Inc. (the "Company") or its subsidiaries in order
to assist the Company and its subsidiaries in attracting, retaining and
motivating those persons by providing for or increasing the proprietary
interests of those persons in the Company, and by associating their interests in
the Company with those of the Company's stockholders.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors of the Company
(the "Board"), or a committee of the Board (the "Committee") whose members shall
serve at the pleasure of the Board. If administration is delegated to the
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board (and references in this
Plan to the Board shall thereafter be to the Committee), subject, however, to
such resolutions, not inconsistent with the provisions of the Plan as may be
adopted from time to time by the Board.
The Board shall have all the powers vested in it by the terms of the
Plan, including exclusive authority (i) to select from among eligible directors,
officers, employees and consultants, those persons to be granted "Awards" (as
defined below) under the Plan; (ii) to determine the type, size and terms of
individual Awards (which need not be identical) to be made to each person
selected; (iii) to determine the time when Awards will be granted and to
establish objectives and conditions (including, without limitation, vesting and
performance conditions), if any, for earning Awards; (iv) to amend the terms or
conditions of any outstanding Award, subject to applicable legal restrictions
and to the consent of the other party to such Award; (v) to determine the
duration and purpose of leaves of absences which may be granted to holders of
Awards without constituting termination of their employment for purposes of
their Awards; (vi) to authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan; (vii) by
resolution adopted by the Board, to authorize one or more officers of the
Company to do one or both of the following: (a) designate eligible officers and
employees of the Company or any of its subsidiaries to be recipients of Awards
and (b) determine the number of such Awards to be received by such officers and
employees, provided that the resolution so authorizing such officer or officers
shall specify the total number of Awards such officer or officers may award; and
(viii) to make any and all other determinations which it determines to be
necessary or advisable in the administration of the Plan. The Board shall have
full power and authority to administer and interpret the Plan and to adopt,
amend and revoke such rules, regulations, agreements, guidelines and instruments
for the administration of the Plan and for the conduct of its business as the
Board deems necessary or advisable. The Board's interpretation of the Plan, and
all actions taken and determinations made by the Board pursuant to the powers
vested in it hereunder, shall be conclusive and binding on all parties
concerned, including the
Company, its stockholders, any participants in the Plan and any other employee
of the Company or any of its subsidiaries.
3. PERSONS ELIGIBLE UNDER THE PLAN.
Any person who is a director, officer, employee or consultant of the
Company, or any of its subsidiaries (a "Participant"), shall be eligible to be
considered for the grant of Awards under the Plan.
4. AWARDS.
(a) COMMON STOCK AND DERIVATIVE SECURITY AWARDS. Awards authorized
under the Plan shall consist of any type of arrangement with a Participant that
is not inconsistent with the provisions of the Plan and that, by its terms,
involves or might involve or be made with reference to the issuance of (i)
shares of the Common Stock, $.001 par value per share, of the Company (the
"Common Stock") or (ii) a "derivative security" (as that term is defined in Rule
16a-1(c) of the Rules and Regulations of the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, as the same may be
amended from time to time) with an exercise or conversion price related to the
Common Stock or with a value derived from the value of the Common Stock.
(b) TYPES OF AWARDS. Awards are not restricted to any specified
form or structure and may include, but need not be limited to, sales, bonuses
and other transfers of stock, restricted stock, stock options, reload stock
options, stock purchase warrants, other rights to acquire stock or securities
convertible into or redeemable for stock, stock appreciation rights, phantom
stock, dividend equivalents, performance units or performance shares, or any
other type of Award which the Board shall determine is consistent with the
objectives and limitations of the Plan. An Award may consist of one such
security or benefit, or two or more of them in tandem or in the alternative.
(c) CONSIDERATION. Common Stock may be issued pursuant to an Award
for any lawful consideration as determined by the Board, including, without
limitation, a cash payment, services rendered, or the cancellation of
indebtedness.
(d) GUIDELINES. The Board may adopt, amend or revoke from time to
time written policies implementing the Plan. Such policies may include, but need
not be limited to, the type, size and term of Awards to be made to participants
and the conditions for payment of such Awards.
(e) TERMS AND CONDITIONS. Subject to the provisions of the Plan,
the Board, in its sole and absolute discretion, shall determine all of the terms
and conditions of each Award granted pursuant to the Plan, which terms and
conditions may include, among other things:
(i) any provision necessary for such Award to qualify as
an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") (an "Incentive Stock Option");
(ii) a provision permitting the recipient of such Award to
pay the purchase price of the Common Stock or other property issuable pursuant
to such Award, or to pay such recipient's tax withholding obligation with
respect to such issuance, in whole or in part, by delivering
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previously owned shares of capital stock of the Company (including "pyramiding")
or other property, or by reducing the number of shares of Common Stock or the
amount of other property otherwise issuable pursuant to such Award; or
(iii) a provision conditioning or accelerating the receipt
of benefits pursuant to the Award, or terminating the Award, either
automatically or in the discretion of the Board, upon the occurrence of
specified events, including, without limitation, a change of control of the
Company, an acquisition of a specified percentage of the voting power of the
Company, the dissolution or liquidation of the Company, a sale of substantially
all of the property and assets of the Company or an event of the type described
in Section 7 of the Plan.
(f) SUSPENSION OR TERMINATION OF AWARDS. If the Company believes
that a Participant has committed an act of misconduct as described below, the
Company may suspend the Participant's rights under any then outstanding Award
pending a determination by the Board. If the Board determines that a Participant
has committed an act of embezzlement, fraud, nonpayment of any obligation owed
to the Company or any subsidiary, breach of fiduciary duty or deliberate
disregard of the Company's rules resulting in loss, damage or injury to the
Company, or if a Participant makes an unauthorized disclosure of trade secret or
confidential information of the Company, engages in any conduct constituting
unfair competition, or induces any customer of the Company to breach a contract
with the Company, neither the Participant nor his or her estate shall be
entitled to exercise any rights whatsoever with respect to such Award. In making
such determination, the Board shall act fairly and shall give the Participant a
reasonable opportunity to appear and present evidence on his or her behalf to
the Board.
(g) MAXIMUM GRANT OF AWARDS TO ANY PARTICIPANT. No Participant
shall receive Awards representing more than 25% of the aggregate number of
shares of Common Stock that may be issued pursuant to all Awards under the Plan
as set forth in Section 5 hereof.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
The aggregate number of shares of Common Stock that may be issued or
issuable pursuant to all Awards under the Plan (including Awards in the form of
Incentive Stock Options and Non-Statutory Stock Options) shall not exceed an
aggregate of 3,077,500 shares of Common Stock, subject to adjustment as provided
in Section 7 of the Plan. Shares of Common Stock subject to the Plan may
consist, in whole or in part, of authorized and unissued shares or treasury
shares. Any shares of Common Stock subject to an Award which for any reason
expires or is terminated unexercised as to such shares shall again be available
for issuance under the Plan. For purposes of this Section 5, the aggregate
number of shares of Common Stock that may be issued at any time pursuant to
Awards granted under the Plan shall be reduced by: (i) the number of shares of
Common Stock previously issued pursuant to Awards granted under the Plan, other
than shares of Common Stock subsequently reacquired by the Company pursuant to
the terms and conditions of such Awards and with respect to which the holder
thereof received no benefits of ownership, such as dividends; and (ii) the
number of shares of Common Stock which were otherwise issuable pursuant to
Awards granted under this Plan but which were withheld by the Company as payment
of the purchase price of the Common Stock issued pursuant to such Awards or as
payment of the recipient's tax withholding obligation with respect to such
issuance.
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6. PAYMENT OF AWARDS.
The Board shall determine the extent to which Awards shall be payable
in cash, shares of Common Stock or any combination thereof. The Board may, upon
request of a Participant, determine that all or a portion of a payment to that
Participant under the Plan, whether it is to be made in cash, shares of Common
Stock or a combination thereof, shall be deferred. Deferrals shall be for such
periods and upon such terms as the Board may determine in its sole discretion.
7. DILUTION AND OTHER ADJUSTMENT.
In the event of any change in the outstanding shares of the Common
Stock or other securities then subject to the Plan by reason of any stock split,
reverse stock split, stock dividend, recapitalization, merger, consolidation,
combination or exchange of shares or other similar corporate change, or if the
outstanding securities of the class then subject to the Plan are exchanged for
or converted into cash, property or a different kind of securities, or if cash,
property or securities are distributed in respect of such outstanding securities
as a class (other than cash dividends), then the Board may, but it shall not be
required to, make such equitable adjustments to the Plan and the Awards
thereunder (including, without limitation, appropriate and proportionate
adjustments in (i) the number and type of shares or other securities or cash or
other property that may be acquired pursuant to Incentive Stock Options and
other Awards theretofore granted under the Plan, (ii) the maximum number and
type of shares or other securities that may be issued pursuant to Incentive
Stock Options and other Awards thereafter granted under the Plan; and (iii) the
maximum number of securities with respect to which Awards may thereafter be
granted to any Participant in any fiscal year) as the Board in its sole
discretion determines appropriate, including any adjustments in the maximum
number of shares referred to in Section 5 of the Plan. Such adjustments shall be
conclusive and binding for all purposes of the Plan.
8. MISCELLANEOUS PROVISIONS.
(a) DEFINITIONS. As used herein, "subsidiary" means any current or
future corporation which would be a "subsidiary corporation," as that term is
defined in Section 424(f) of the Code, of the Company; and the term "or" means
"and/or."
(b) CONDITIONS ON ISSUANCE. Securities shall not be issued
pursuant to Awards unless the grant and issuance thereof shall comply with all
relevant provisions of law and the requirements of any securities exchange or
quotation system upon which any securities of the Company are listed, and shall
be further subject to approval of counsel for the Company with respect to such
compliance. Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is determined by Company counsel to be
necessary to the lawful issuance and sale of any security or Award, shall
relieve the Company of any liability in respect of the nonissuance or sale of
such securities as to which requisite authority shall not have been obtained.
(c) RIGHTS AS STOCKHOLDER. A participant under the Plan shall have
no rights as a holder of Common Stock with respect to Awards hereunder, unless
and until certificates for shares of such stock are issued to the participant.
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(d) ASSIGNMENT OR TRANSFER. Subject to the discretion of the
Board, and except with respect to Incentive Stock Options which are not
transferable except by will or the laws of descent and distribution, Awards
under the Plan or any rights or interests therein shall be assignable or
transferable.
(e) AGREEMENTS. All Awards granted under the Plan shall be
evidenced by written agreements in such form and containing such terms and
conditions (not inconsistent with the Plan) as the Board shall from time to time
adopt.
(f) WITHHOLDING TAXES. The Company shall have the right to deduct
from all Awards hereunder paid in cash any federal, state, local or foreign
taxes required by law to be withheld with respect to such awards and, with
respect to awards paid in stock, to require the payment (through withholding
from the participant's salary or otherwise) of any such taxes. The obligation of
the Company to make delivery of Awards in cash or Common Stock shall be subject
to the restrictions imposed by any and all governmental authorities.
(g) NO RIGHTS TO AWARD. No Participant or other person shall have
any right to be granted an Award under the Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any Participant any right to be
retained in the employ of the Company or any of its subsidiaries or shall
interfere with or restrict in any way the rights of the Company or any of its
subsidiaries, which are hereby reserved, to discharge a Participant at any time
for any reason whatsoever, with or without good cause.
(h) COSTS AND EXPENSES. The costs and expenses of administering
the Plan shall be borne by the Company and not charged to any Award nor to any
Participant receiving an Award.
(i) FUNDING OF PLAN. The Plan shall be unfunded. The Company shall
not be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Award under the Plan.
9. AMENDMENTS AND TERMINATION.
(a) AMENDMENTS. The Board may at any time terminate or from time
to time amend the Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any Awards theretofore made
under the Plan. However, with the consent of the Participant affected, the Board
may amend outstanding agreements evidencing Awards under the Plan in a manner
not inconsistent with the terms of the Plan.
(b) STOCKHOLDER APPROVAL. To the extent that Section 422 of the
Code, other applicable law, or the rules, regulations, procedures or listing
agreement of any national securities exchange or quotation system, requires that
any amendment of the Plan be approved by the stockholders of the Company, no
such amendment shall be effective unless and until it is approved by the
stockholders in such a manner and to such a degree as is required.
(c) TERMINATION. Unless the Plan shall theretofore have been
terminated as above provided, the Plan (but not the awards theretofore granted
under the Plan) shall terminate on and no awards shall be granted after October
1, 2007.
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10. EFFECTIVE DATE.
The Plan is effective on October 1, 1997, the date on which it was
adopted by the Board of Directors of the Company and the holders of the majority
of the Common Stock of the Company.
11. GOVERNING LAW.
The Plan and any agreements entered into thereunder shall be construed
and governed by the laws of the State of Delaware applicable to contracts made
within, and to be performed wholly within, such state, without regard to the
application of conflict of laws rules thereof.
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