EXHIBIT 4.1
VISUAL MANAGEMENT SYSTEMS, INC.
EQUITY INCENTIVE PLAN
1. PURPOSE.
The purpose of this Visual Management Systems, Inc. Equity Incentive
Plan (the "Plan") is to advance the interests of Visual Management
Systems, Inc. (the "Company") and its subsidiaries by enhancing the
ability of the Company to (i) attract and retain employees and other
persons or entities who are in a position to make significant
contributions to the success of the Company and its subsidiaries; (ii)
reward such persons for such contributions; and (iii) encourage such
persons or entities to take into account the long-term interest of the
Company through ownership of shares of the Company's common stock, $.001
par value per share (the "Common Stock").
The Plan is intended to accomplish these objectives by enabling the
Company to grant awards ("Awards") in the form of incentive stock
options ("ISOs"), nonqualified stock options ("Nonqualified Options")
(ISOs and Nonqualified Options shall be collectively referred to herein
as "Options"), stock appreciation rights ("SARs"), restricted stock
("Restricted Stock"), deferred stock ("Deferred Stock"), or other stock
based awards ("Other Stock Based Awards"), all as more fully described
below.
2. ADMINISTRATION.
(a) The Plan will be administered by the Board of Directors of the
Company (the "Board") or, if in existence, the Compensation
Committee (the "Committee") of the Board of Directors (such
party administering the Plan to be referred to herein as the
"Administrator"). The Administrator may be constituted to permit
the Plan to comply with the "outside director" requirement of
Section 162(m)(4)(c)(i) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated
thereunder, or any successor rules. The Administrator will
determine the recipients of Awards, the times at which Awards
will be made, the size and type or types of Awards to be made to
each recipient, and will set forth in each such Award the terms,
conditions and limitations applicable to the Award granted.
Awards may be made singly, in combination or in tandem. The
Administrator will have full and exclusive power to interpret
the Plan, to adopt rules, regulations and guidelines relating to
the Plan, to grant waivers of Plan restrictions and to make all
of the determinations necessary for its administration. Such
determinations and actions of the Administrator, and all other
determinations and actions of the Administrator made or taken
under authority granted by any provision of the Plan, will be
conclusive and binding on all parties. Except to the extent
otherwise required under Code Section 409A, related regulations,
or other guidance, the Administrator shall have the authority,
in its sole discretion, to accelerate the date that any Award
which was not otherwise exercisable, vested or earned shall
become exercisable, vested or earned in whole
or in part without any obligation to accelerate such date with
respect to any other Award granted to any recipient. In
addition, the Administrator shall have the authority and
discretion to establish terms and conditions of Awards as the
Administrator determines to be necessary or appropriate to
conform to the applicable requirements or practices of
jurisdictions outside of the United States. In addition to
action by meeting in accordance with applicable laws, any action
of the Administrator with respect to the Plan may be taken by a
written instrument signed by all of the members of the
Administrator, and any such action so taken by written consent
shall be as fully effective as if it had been taken by a
majority of the members at a meeting duly held and called.
3. EFFECTIVE DATE AND TERM OF PLAN.
The Plan will become effective on June 28, 2007 by the requisite vote of
the Company's shareholders. Any Awards granted under the Plan prior to
such shareholder approval shall be conditioned upon such shareholder
approval and shall be null and void if such approval is not obtained.
The Plan will terminate on June 28, 2017, subject to earlier termination
of the Plan by the Board pursuant to Section 18 herein. No Award may be
granted under the Plan after the termination date of the Plan, but
Awards previously granted may extend beyond that date pursuant to the
terms of such Awards.
4. SHARES SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 16 herein, the aggregate
number of shares of Common Stock reserved for issuance pursuant to
Awards granted under the Plan shall be _____ million (__________) shares
[20% of shares of Common Stock outstanding on a fully diluted basis
after completion of private offering of units]. The maximum number of
shares of Common Stock which may be issued to the Chief Executive
Officer ("CEO") of the Company pursuant to all Awards granted the CEO
under the Plan shall not exceed thirty-five percent (35%) of the number
of shares of the Company's Common Stock reserved for issuance hereunder.
The maximum number of shares of the Company's Common Stock awarded to
any other "Participant" (as defined in Section 5 below) pursuant to all
Awards granted to such Participant under the Plan shall not exceed
twenty percent (20%) of the number of shares of the Company's Common
Stock reserved for issuance hereunder.
The shares of Common Stock delivered under the Plan may be either
authorized but unissued shares of Common Stock or shares of the
Company's Common Stock held by the Company as treasury shares, including
shares of Common Stock acquired by the Company in open market and
private transactions. No fractional shares of Common Stock will be
delivered pursuant to Awards granted under the Plan and the
Administrator shall determine the manner in which fractional share value
will be treated.
If any Award requiring exercise by a Participant for delivery of shares
of Common Stock is cancelled or terminates without having been exercised
in full, or if any Award payable
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in shares of Common Stock or cash is satisfied in cash rather than
Common Stock, the number of shares of Common Stock as to which such
Award was not exercised or for which cash was substituted will be
available for future Awards of Common Stock; provided, however, that
Common Stock subject to an Option cancelled upon the exercise of an SAR
shall not again be available for Awards under the Plan unless, and to
the extent that, the SAR is settled in cash. Shares of Restricted Stock
and Deferred Stock forfeited to the Company in accordance with the Plan
and the terms of the particular Award shall be available again for
Awards under the Plan unless the Administrator determines otherwise.
5. ELIGIBILITY AND PARTICIPATION.
Those eligible to receive Awards under the Plan (each, a "Participant"
and collectively, the "Participants") will be persons in the employ of
the Company or any of its subsidiaries designated by the Administrator
("Employees") and other persons or entities who, in the opinion of the
Administrator, are in a position to make a significant contribution to
the success of the Company or its subsidiaries, including, without
limitation, consultants and agents of the Company or any subsidiary. A
"subsidiary" for purposes of the Plan will be a present or future
corporation or other entity of which the Company owns or controls, or
will own or control, more than 50% of the total combined voting power of
all classes of stock or other equity interests.
6. OPTIONS.
(a) NATURE OF OPTIONS. An Option is an Award entitling the
Participant to purchase a specified number of shares of Common
Stock at a specified exercise price. Both ISOs, as defined in
Section 422 of the Code, and Nonqualified Options may be granted
under the Plan; provided, however, that ISOs may be awarded only
to Employees.
(b) EXERCISE PRICE. The exercise price of each Option shall be equal
to the "Fair Market Value" (as defined below) of the Common
Stock on the date the Award is granted to the Participant;
provided, however, that (i) in the Administrator's discretion,
the exercise price of a Nonqualified Option may be less than the
Fair Market Value of the Common Stock on the date of grant; (ii)
with respect to a Participant who owns more than ten percent
(10%) of the total combined voting power of all classes of stock
of the Company, the option price of an ISO granted to such
Participant shall not be less than one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock on the date
the Award is granted; and (iii) with respect to any Option
repriced by the Administrator, the exercise price shall be equal
to the Fair Market Value of the Common Stock on the date such
Option is repriced unless otherwise determined by the
Administrator. For purposes of this Plan, Fair Market Value
shall mean the closing price of the Common Stock as reported on
the principal securities exchange on which the Common Stock is
listed, or if not so listed, the last sale price (or the average
of the high asked and low bid prices of the Common Stock if
sales price information is not reported) of the Common Stock as
reported by the Nasdaq Stock Market or,
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if not reported on the Nasdaq Stock Market, by the NASD OTC
Bulletin Board or similar quotation service. If the Common Stock
is not publicly traded, Fair Market Value shall be determined in
good faith by the Board of Directors.
(c) DURATION OF OPTIONS. The term of each Option granted to a
Participant pursuant to an Award shall be determined by the
Administrator; provided, however, that in no case shall an
Option be exercisable more than ten (10) years (five (5) years
in the case of an ISO granted to a ten percent (10%) stockholder
as defined in (b) above) from the date of the Award.
(d) EXERCISE OF OPTIONS AND CONDITIONS. Except as otherwise provided
in Sections 18 and 19 herein, and except as otherwise provided
below with respect to ISOs, Options granted pursuant to an Award
will become exercisable at such time or times, and subject to
such conditions, as the Administrator may specify at the time of
the Award. The Options may be subject to such restrictions,
conditions and forfeiture provisions as the Administrator may
determine, including, but not limited to, restrictions on
transfer, continuous service with the Company or any of its
subsidiaries, achievement of business objectives, and
individual, division and Company performance. To the extent
exercisable, an Option may be exercised either in whole at any
time or in part from time to time. With respect to an ISO
granted to a Participant, the Fair Market Value of the shares of
Common Stock on the date of grant which are exercisable for the
first time by a Participant during any calendar year shall not
exceed $100,000.
(e) PAYMENT FOR AND DELIVERY OF STOCK. Full payment for shares of
Common Stock purchased will be made at the time of the exercise
of the Option, in whole or in part. Payment of the purchase
price will be made in cash or in such other form as the
Administrator may permit, including, without limitation,
delivery of shares of Common Stock.
7. STOCK APPRECIATION RIGHTS.
(a) NATURE OF STOCK APPRECIATION RIGHTS. An SAR is an Award
entitling the recipient to receive payment, in cash and/or
shares of Common Stock, determined in whole or in part by
reference to appreciation in the value of a share of Common
Stock. An SAR entitles the recipient to receive in cash and/or
shares of Common Stock, with respect to each SAR exercised, the
excess of the Fair Market Value of a share of Common Stock on
the date of exercise over the Fair Market Value of a share of
Common Stock on the date the SAR was granted.
(b) GRANT OF SARS. SARs may be subject to Awards in tandem with, or
independently of, Options granted under the Plan. An SAR granted
in tandem with an Option which is not an ISO may be granted
either at or after the time the Option is granted. AN SAR
granted in tandem with an ISO may be granted only at the time
the ISO is granted and may expire no later than the expiration
of the underlying ISO.
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(c) EXERCISE OF SARS. An SAR not granted in tandem with an Option
will become exercisable at such time or times, and on such
conditions, as the Administrator may specify. An SAR granted in
tandem with an Option will be exercisable only at such times,
and to the extent, that the related option is exercisable. An
SAR granted in tandem with an ISO may be exercised only when the
market price of the shares of Common Stock subject to the ISO
exceeds the exercise price of the ISO, and the SAR may be for no
more than one hundred percent (100%) of the difference between
the exercise price of the underlying ISO and the Fair Market
Value of the Common Stock subject to the underlying ISO at the
time the SAR is exercised. At the option of the Administrator,
upon exercise, an SAR may be settled in cash, Common Stock or a
combination of both.
8. RESTRICTED STOCK.
A Restricted Stock Award entitles the recipient to acquire shares of
Common Stock, subject to certain restrictions or conditions, for no cash
consideration, if permitted by applicable law, or for such other
consideration as may be determined by the Administrator. The Award may
be subject to such restrictions, conditions and forfeiture provisions as
the Administrator may determine, including, but not limited to,
restrictions on transfer, continuous service with the Company or any of
its subsidiaries, achievement of business objectives, and individual,
division and Company performance. Subject to such restrictions,
conditions and forfeiture provisions as may be established by the
Administrator, any Participant receiving an Award of Restricted Stock
will have all the rights of a stockholder of the Company with respect to
the shares of Restricted Stock, including the right to vote the shares
and the right to receive any dividends thereon.
9. DEFERRED STOCK.
A Deferred Stock Award entitles the recipient to receive shares of
Common Stock to be delivered in the future. Delivery of the shares of
Common Stock will take place at such time or times, and on such
conditions, as the Administrator may specify. At the time any Deferred
Stock Award is granted, the Administrator may provide that the
Participant will receive an instrument evidencing the Participant's
right to future delivery of Deferred Stock.
10. OTHER STOCK BASED AWARDS.
The Administrator shall have the right to grant Other Stock Based Awards
under the Plan to Employees which may include, without limitation, the
grant of shares of Common Stock as bonus compensation and the issuance
of shares of Common Stock in lieu of an Employee's cash compensation.
11. AWARD AGREEMENTS.
The grant of any Award under the Plan may be evidenced by an agreement
which shall describe the specific Award granted and the terms and
conditions of the Award. Any Award shall be subject to the terms and
conditions of any such agreement required by the Administrator.
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12. TRANSFERS.
No Award (other than an outright Award in the form of Common Stock
without any restrictions) may be assigned, pledged or transferred other
than by will or by the laws of descent and distribution and, during a
Participant's lifetime, will be exercisable only by the Participant or,
in the event of a Participant's incapacity, by the Participant's
guardian or legal representative.
13. RIGHTS OF A STOCKHOLDER.
Except as specifically provided by the Plan, the receipt of an Award
will not give a Participant rights as a stockholder of the Company. The
Participant will obtain such rights, subject to any limitations imposed
by the Plan, or the instrument evidencing the Award, upon actual receipt
of shares of Common Stock.
14. CONDITIONS ON DELIVERY OF STOCK.
The Company will not be obligated to deliver any shares of Common Stock
pursuant to the Plan or to remove any restrictions or legends from
shares of Common Stock previously delivered under the Plan until, (a) in
the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, (b) until the shares of
Common Stock to be delivered have been listed or authorized to be listed
on the American Stock Exchange (or such other exchange or quotation
system on which shares of Common Stock may be listed or quoted), and (c)
until all other legal matters in connection with the issuance and
delivery of such shares of Common Stock have been approved by the
Company's counsel. If the sale of shares of Common Stock has not been
registered under the Securities Act of 1933, as amended (the "Act"), and
qualified under the appropriate "blue sky" laws, the Company may
require, as a condition to exercise of the Award, such representations
and agreements as counsel for the Company may consider appropriate to
avoid violation of such Act and laws and may require that the
certificates evidencing such shares of Common Stock bear an appropriate
legend restricting transfer.
If an Award is exercised by a Participant's legal representative, the
Company will be under no obligation to deliver shares of Common Stock
pursuant to such exercise until the Company is satisfied as to the
authority of such representative.
15. TAX WITHHOLDING.
The Company will have the right to deduct from any cash payment under
the Plan taxes that are required to be withheld and to condition the
obligation to deliver or vest shares of Common Stock under this Plan
upon the Participant's paying the Company such amount as the Company may
request to satisfy any liability for applicable withholding taxes. The
Administrator may in its discretion permit Participants to satisfy all
or part of their withholding liability either by delivery of shares of
Common Stock held by the Participant or by withholding shares of Common
Stock to be delivered to a Participant upon the grant or exercise of an
Award.
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16. ADJUSTMENT OF AWARD.
(a) The Administrator may make or provide for such adjustments in
the numbers of shares of Common Stock covered by outstanding
Awards granted hereunder, and any applicable exercise price
provided in outstanding Awards and in the kind of shares covered
thereby, as the Administrator, in its sole discretion, may
determine is equitably required to prevent dilution or
enlargement of the rights of Participants that otherwise would
result from (i) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital
structure of the Company, or (ii) any merger, consolidation,
spin-off, split-off, spin-out, split-up, reorganization, partial
or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (iii)
any other corporate transaction or event having an effect
similar to any of the foregoing. Moreover, in the event of any
such transaction or event, the Administrator, in its discretion,
may provide in substitution for any or all outstanding awards
under this Plan such alternative consideration (including cash),
if any, as it may determine to be equitable in the circumstances
and may require in connection therewith the surrender of all
Awards so replaced. The Administrator may also make or provide
for such adjustments in the numbers of shares specified in
Section 4 of this Plan as the Administrator in its sole
discretion may determine is appropriate to reflect any
transaction or event described in this Section 18(a); provided,
however, that any such adjustment to the number specified in
Section 4 will be made only if and to the extent that such
adjustment would not cause any option intended to qualify as an
ISO to fail to so qualify.
(b) In the event of a proposal, which is approved by the Board, of
any merger or consolidation involving the Company where the
Company is not the surviving entity or pursuant to which any
shares of Common Stock would be converted into cash, securities
or other property of another corporation or business entity
(other than a merger or consolidation in which the holders of
Common Stock immediately prior to the merger or consolidation
continue to own at least 50% of the Common Stock after the
merger or consolidation, or if the Company is not the surviving
corporation, at least 50% of the common stock, (or other voting
securities), of the surviving corporation or other business
entity immediately after the merger, consolidation or share
exchange) or any sale of substantially all of the Company's
assets or any other transaction or series of related
transactions as a result of which a single person or several
persons (other than Jason Gonzalez and/or Caroline Gonzalez)
acting in concert own a majority of the Company's then
outstanding Common Stock (such merger, consolidation, sale of
assets or other transaction being hereinafter referred to as a
"Transaction"), unless otherwise provided in a resolution
adopted by the Board approving the Transaction, all outstanding
Options and SARs shall become exercisable immediately before or
contemporaneously with the consummation of such Transaction and
each outstanding share of Restricted Stock and each outstanding
Deferred Stock Award shall immediately become free of all
restrictions and conditions upon consummation of such
Transaction. Immediately following the
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consummation of the Transaction, all outstanding Options and
SARs shall terminate and cease to be exercisable.
In lieu of the foregoing, if the Company will not be the
surviving corporation or entity, the Administrator may arrange
to have such acquiring or surviving corporation or entity, or an
"Affiliate", (as defined below) thereof, grant replacement
Awards which shall be immediately exercisable to Participants
holding outstanding Awards.
The term "Affiliate," with respect to any Person, shall mean any
other Person who is, or would be deemed to be an "affiliate" or
an "associate" of such Person within the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934. The term
"Person" shall mean a corporation, association, partnership,
joint venture, trust, organization, business, individual or
government or any governmental agency or political subdivision
thereof.
(c) In the event of the dissolution or liquidation of the Company
(except a dissolution or liquidation relating to a sale of
assets or other reorganization of the Company referred to in the
preceding sections), the outstanding options and SARs shall
terminate as of a date fixed by the Administrator; provided,
however, that not less than thirty (30) days written notice of
the date so fixed shall be given to each Participant who shall
have the right during such period to exercise the Participant's
Options or SARs as to all or any part of the shares of Common
Stock covered thereby. Further, in the event of the dissolution
or liquidation of the Company, each outstanding share of
Restricted Stock and each outstanding Deferred Stock Award shall
immediately become free of all restrictions and conditions.
17. TERMINATION OF SERVICE.
Upon a Participant's termination of service with the Company or a
subsidiary (if an employee only of a subsidiary), any outstanding Award
shall be subject to the terms and conditions set forth below, unless
otherwise determined by the Administrator:
(a) In the event a Participant leaves the employ or service of the
Company or a subsidiary of the Company, prior to the
Participant's 65th birthday, whether voluntarily or otherwise
but other than by reason of the Participant's death or
"disability" (as such term is defined in Section 22(e)(3) of the
Code), each Option and SAR granted to the Participant shall
terminate upon the earlier to occur of (i) the expiration of the
period three (3) months after the date of such termination and
(ii) the date specified in the Option or SAR; provided, that,
prior to the termination of such Option or SAR, the Participant
shall be able to exercise any part of the Option or SAR which is
exercisable as of the date of termination. Further, each
outstanding share of Restricted Stock and each outstanding
Deferred Stock Award which remains subject to any restrictions
or conditions of the Award shall be forfeited to the Company
upon such date of termination.
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(b) In the event a Participant's employment with or service to the
Company or its subsidiaries terminates by reason of the
Participant's death or "disability" (as such term is defined in
Section 22(e)(3) of the Code), each Option and SAR granted to
the Participant shall become immediately exercisable in full and
shall terminate upon the earlier to occur of (i) the expiration
of the period six (6) months after the date of such termination
and (ii) the date specified in the option or SAR. Further, each
outstanding share of Restricted Stock and each outstanding
Deferred Stock Award shall immediately become free of all
restrictions and conditions upon the date of such termination.
(c) In the event a Participant voluntarily or involuntarily leaves
the employ or service of the Company or a subsidiary of the
Company, after the Participant's 65th birthday, each Option and
SAR granted to the Participant shall become immediately
exercisable in full and shall terminate upon the earlier to
occur of (i) the expiration of three (3) months after the date
of such termination and (ii) the date specified in the Option or
SAR. Further, each outstanding share of Restricted Stock and
each outstanding Deferred Stock Award shall immediately become
free of all restrictions and conditions upon the date of such
termination.
18. AMENDMENTS AND TERMINATION.
The Administrator will have the authority to make such amendments to any
terms and conditions applicable to outstanding Awards as are consistent
with this Plan; provided, that, except for adjustments under Section 16
hereof, no such action will modify such Award in a manner adverse to the
Participant without the Participant's consent except as such
modification is provided for or contemplated in the terms of the Award.
The Board may amend, suspend or terminate the Plan, subject to
shareholder approval if so required by any applicable federal or state
securities laws, tax laws or corporate statute, except that no action
may, without the consent of a Participant, adversely affect any Award
previously granted to the Participant under the Plan.
19. COMPLIANCE WITH CODE SECTION 409A.
(a) To the extent applicable, it is intended that this Plan and any
Awards made hereunder comply with the provisions of Section 409A
of the Code. This Plan and any Awards made hereunder shall be
administrated in a manner consistent with this intent, and any
provision that would cause this Plan or any Award made hereunder
to fail to satisfy Section 409A of the Code shall have no force
and effect until amended to comply with Section 409A of the Code
(which amendment may be retroactive to the extent permitted by
Section 409A of the Code and may be made by the Company without
the consent of Participants). Any reference in this Plan to
Section 409A of the Code will also include any proposed,
temporary or final regulations, or any other guidance,
promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service.
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(b) Notwithstanding any provision of this Plan to the contrary, to
the extent an Award shall be deemed to be vested or restrictions
lapse, expire or terminate upon the occurrence of a Transaction
and such Transaction does not constitute a "change in the
ownership or effective control" or a "change in the ownership or
a substantial portion of the assets" of the Company within the
meaning of Section 401A(a)(2)(A)(v) of the Code, then even
though such Award may be deemed to be vested or restrictions
lapse, expire or terminate upon the occurrence of the
Transaction or any other provision of this Plan, payment will be
made, to the extent necessary to comply with the provisions of
Section 409A of the Code, to the Participant the earliest of (i)
the Participant's "separation from service" with the Company
(determined in accordance with Section 409A of the Code);
provided, however, that if the Participant is a "specified
employee" (within the meaning of Section 409A of the Code), the
payment date shall be the date that is six months after the date
of the Participant's separation from service with the Company,
(ii) the date payment otherwise would have been made in the
absence of any provisions in this Plan to the contrary (provided
such date is permissible under Section 409A of the Code), or
(iii) the Participant's death.
20. SUCCESSORS AND ASSIGNS.
The provisions of this Plan shall be binding upon all successors and
assigns of any such Participant including, without limitation, the
estate of any such Participant and the executors, administrators, or
trustees of such estate, and any receiver, trustee in bankruptcy or
representative of the creditors of any such Participant.
21. MISCELLANEOUS.
(a) This Plan shall be governed by and construed in accordance with the laws
of the State of Nevada.
(b) Any and all funds received by the Company under the Plan may be used for
any corporate purpose.
(c) Nothing contained in the Plan or any Award granted under the Plan shall
confer upon a Participant any right to be continued in the employment of
the Company or any subsidiary, or interfere in any way with the right of
the Company, or its subsidiaries, to terminate the employment
relationship at any time.
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