o Preliminary Proxy Statement | ||
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
þ Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to Section 240.14a-12 |
þ | No fee required. |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
1. | Election of four directors each to hold office until a successor is duly elected and qualified at the 2006 Annual Meeting of Stockholders or otherwise or until any earlier removal or resignation; | |
2. | To approve the 2005 Incentive Compensation Plan; and | |
3. | To transact any and all other business that may properly come before the meeting or any adjournment thereof. |
By Order of the Board of Directors | |
Paul W. Bridge, Jr. | |
Chief Financial Officer & Secretary |
1
2
3
4
5
Number of securities | |||||||||||||
Number of | remaining available | ||||||||||||
securities to be | for future issuance | ||||||||||||
issued upon | Weighted-average | under equity | |||||||||||
exercise of | exercise price of | compensation plans | |||||||||||
outstanding | outstanding | (excluding securities | |||||||||||
options, warrants | options, warrants | reflected in column | |||||||||||
Plan category | and rights | and rights | (a)) | ||||||||||
(a) | (b) | (c) | |||||||||||
Equity compensation plans approved by security holders | 536,942 | $ | 3.01 | 644,586 | 2 | ||||||||
Equity compensation plans not approved by security holders | 5,000 | 1 | $ | 14.50 | — | ||||||||
Total3 | 541,942 | $ | 3.01 | 644,586 | |||||||||
1 | The Company granted a director 5,000 options outside of the 1996 Non-employee Directors Stock Option Plan at the time he first agreed to serve as a director for the Company as further inducement for him to serve as a director. |
2 | Includes 378,527 shares that can be issued under the 1996 Employee Stock Purchase Plan. |
3 | Excludes Warrants issued in connection with the 1998 Long-term debt to acquire 750,000 shares of Common Stock. |
6
7
8
Shares | |||||||||
Beneficially | Percent | ||||||||
Name and Address of Beneficial Owner | Owned1 | of Class2 | |||||||
Blue Chip Capital Fund Limited Partnership3 | 761,000 | 8.36 | % | ||||||
250 East 5th Street Cincinnati, Ohio 45202 | |||||||||
The HillStreet Fund, L.P.9 | 750,000 | 7.63 | % | ||||||
300 Main Street Cincinnati, Ohio 45202 | |||||||||
Eric S. Lombardo | 2,161,200 | 23.79 | % | ||||||
7173 Royalgreen Drive Cincinnati, Ohio 45244 | |||||||||
J. Brian Patsy | 2,279,200 | 25.09 | % | ||||||
10200 Alliance Road, Suite 200 Cincinnati, Ohio 45242-4716 | |||||||||
George E. Castrucci4 | 35,000 | * | |||||||
Richard C. Levy, M.D.5 | 45,000 | * | |||||||
Z. David Patterson3 | 761,000 | 8.36 | % | ||||||
Jonathan R. Phillips | — | — | |||||||
Edward J. VonderBrink | — | — | |||||||
William A. Geers8 | 75,333 | * | |||||||
Paul W. Bridge, Jr.6 | 147,381 | 1.61 | % | ||||||
Donald E. Vick, Jr.7 | 50,059 | * | |||||||
All current directors and executive officers as a group (7 persons) | 3,392,973 | 36.37 | % |
* | Represents less than 1%. |
1 | Unless otherwise indicated below, each person listed has sole voting and investment power with respect to all shares shown as beneficially owned, subject to community property laws where applicable. For purposes of this table, shares subject to stock options or warrants are considered to be beneficially owned if by their terms they may be exercised as of the date of mailing of this Proxy Statement or if they become exercisable within sixty days thereafter. |
2 | These percentages assume the exercise of certain currently exercisable stock options and warrants. |
3 | Mr. Z. David Patterson, a current Director of the Company, is also Executive Vice President of Blue Chip Venture Company, the general partner of Blue Chip Capital Fund Limited Partnership. Mr. Patterson may be deemed to be the beneficial owner of such shares and shares investment power with the other officers of Blue Chip Venture Company. The beneficial ownership includes 746,000 shares owned and 15,000 shares that are issuable upon exercise of currently exercisable options. |
4 | Includes 10,000 shares owned by Mr. Castrucci and 25,000 shares that are issuable upon the exercise of currently exercisable options. |
5 | Includes 30,000 shares owned by Dr. Levy and 15,000 shares that are issuable upon the exercise of currently exercisable options. |
6 | Includes 45,000 shares held in trust for the benefit of Mr. Bridge’s wife of which Mr. Bridge is a contingent beneficiary of the trust, 1,600 shares held in trust for the benefit of Mr. Bridge, 15,448 shares, which were acquired through participation in the 1996 Employee Stock Purchase Plan and are held of record by Mr. and |
9
Mrs. Bridge as joint tenant in common with the right of survivorship, and 85,333 shares that are issuable upon the exercise of currently exercisable options. Mr. Bridge may be deemed to be the beneficial owner of all such shares and shares investment power with Mrs. Bridge with respect to 15,448 shares. Mr. Bridge was appointed an executive officer of the Company in January 2001. See “Executive Compensation — Employment Agreements.” | |
7 | Includes 16,226 shares held of record by Mr. and Mrs. Vick as joint tenant in common with the right of survivorship, 5,000 shares held by Mr. Vick as custodian for his minor children, and 28,833 shares that are issuable upon the exercise of currently exercisable stock options. Mr. Vick may be deemed to be the beneficial owner of 16,226 and shares investment power with Mrs. Vick may be deemed to be the beneficial owner of the 5,000 shares as custodian and has investment power with respect to the 5,000 shares for which he is custodian. Mr. Vick was appointed an executive officer of the Company in February 2002. See “Executive Compensation — Employment Agreements.” |
8 | Includes 75,333 shares that are exercisable by Mr. Geers upon the exercise of currently exercisable options. Mr. Geers was appointed an executive officer of the Company in December 2004. See “Executive Compensation — Employment Agreements.” |
9 | Registrant, in 1998, issued a warrant to purchase 750,000 shares of Common Stock of the Company at $3.87 per share in connection with obtaining a $6,000,000 loan from HillStreet. The Loan has been repaid but the warrant remains outstanding and can be exercised at any time through July 16, 2008. |
Long-Term | |||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||
Stock Options | All Other | ||||||||||||||||||||||||
Salary1 | Bonus | Other2 | Granted3 | Compensation4 | |||||||||||||||||||||
Name and Principal Position10 | Year | ($) | ($) | ($) | (#) | ($) | |||||||||||||||||||
J. Brian Patsy5 | 2004 | 225,000 | — | — | — | — | |||||||||||||||||||
Chairman of the Board, Chief | 2003 | 225,000 | — | — | — | — | |||||||||||||||||||
Executive Officer and President | 2002 | 175,875 | 25,000 | — | — | — | |||||||||||||||||||
Eric S. Lombardo9 | 2004 | 166,666 | — | — | — | — | |||||||||||||||||||
Former Executive Vice President | 2003 | 200,000 | — | — | — | — | |||||||||||||||||||
and Corporate Secretary | 2002 | 173,670 | 25,000 | — | — | — | |||||||||||||||||||
William A. Geers6 | 2004 | 170,775 | 15,000 | — | 20,000 | — | |||||||||||||||||||
Vice President Product Development and Chief Operating Officer | |||||||||||||||||||||||||
Paul W. Bridge, Jr.7 | 2004 | 148,005 | — | — | — | — | |||||||||||||||||||
Chief Financial Officer, Treasurer | 2003 | 143,000 | — | — | 10,000 | — | |||||||||||||||||||
and Secretary | 2002 | 130,000 | 27,010 | — | — | — | |||||||||||||||||||
Donald E. Vick, Jr.8 | 2004 | 86,940 | 9,375 | — | — | — | |||||||||||||||||||
Controller and Assistant Treasurer | 2003 | 84,000 | — | — | 2,500 | — | |||||||||||||||||||
2002 | 76,859 | 8,505 | — | — | — |
10
1 | All amounts include amounts contributed by the officers to the Company’s 401(k) plan. There was no Company contribution to the plan in any years reported. |
2 | Does not include perquisites and other personal benefits, the aggregate amount of which with respect to each of the Named Executive Officers does not exceed the lesser of $50,000 or 10% of the total salary and bonus reported for that year. |
3 | All amounts reflect the number of options to purchase Common Stock. |
4 | Term life insurance premiums were paid by the Company for the benefit of each Named Executive Officer, but only to the extent that the Company paid such premiums for all of its employees. |
5 | For additional information on Mr. Patsy see Nominees for Election as Directors. |
6 | Mr. Geers is 51 years old and was appointed an executive officer in December 2004; prior thereto he served as Vice President Product Development. |
7 | Mr. Bridge is 61 years old and was appointed an executive officer in January 2001; prior thereto he served as the Company Controller. |
8 | Mr. Vick is 41 years old and was appointed an executive officer in February 2002; prior thereto he served as the Company Assistant Controller. |
9 | Mr. Lombardo resigned effective December 8, 2004. Under the terms of the severance agreement with Mr. Lombardo he will be available through October 31, 2005 to provide consulting services to the Company, for which he will be paid the aggregate amount of $200,000 covering the period November 1, 2004 through October 31, 2005, an auto allowance in the amount of $550 per month through October 31, 2005. and further provide through October 31, 2006, at no cost to him, continued health care and dental care coverage under LanVision’s plans then in effect. In addition, $6,500 of legal expenses incurred by Mr. Lombardo in connection with the preparation, negotiation and execution of the severance agreement was paid to his legal counsel by the Company. |
10 | All officers serve at the pleasure of the Board of Directors and are appointed annually to their current positions. |
Potential Realizable | ||||||||||||||||||||||||
Value at Assumed | ||||||||||||||||||||||||
Annual Rates of | ||||||||||||||||||||||||
Stock Price | ||||||||||||||||||||||||
Number of | Appreciation for | |||||||||||||||||||||||
Shares | % of Total | Option Term3 | ||||||||||||||||||||||
Underlying | Options Granted | Exercise or | ||||||||||||||||||||||
Options | In | Base Price | Expiration | 5% | 10% | |||||||||||||||||||
Name | Granted | Fiscal Year1 | ($/sh)2 | Date | ($) | ($) | ||||||||||||||||||
J. Brian Patsy | — | — | — | — | — | — | ||||||||||||||||||
Eric S. Lombardo | — | — | — | — | — | — | ||||||||||||||||||
William A. Geers | 20,000 | 4 | 67 | % | $ | 2.61 | 12-16-14 | 28,779 | 70,885 | |||||||||||||||
Paul W. Bridge, Jr. | — | — | — | — | — | — | ||||||||||||||||||
Donald E. Vick, Jr. | — | — | — | — | — | — |
1 | Stock options exercisable into 30,000 shares of Common Stock were granted to all employees and Non-employee Directors of the Company as a group during fiscal year 2004. |
2 | Options were granted at an exercise price equal to the fair market value per share at the date of grant. |
3 | Potential realizable values are net of exercise price, but before taxes associated with exercise. Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the |
11
option term. The assumed 5% and 10% rates of stock price appreciation are provided in accordance with rules of the Securities and Exchange Commission and do not represent the Company’s estimate or projection of the future Common Stock price. Actual gains, if any, on stock option exercises are dependent on the future performance of Common Stock, overall market conditions and the option holders’ continued employment through the vesting period. This table does not take into account any appreciation in the price of Common Stock from the date of grant to date. The closing price of Common Stock on January 31, 2005 was $3.07. |
4 | These options were granted on December 14, 2004, and vest as follows: 6,667 options on each of December 15, 2005 and 2006, and 6,666 options on December 15, 2007. All such options will expire on the earlier of ninety days after termination of employment or December 16, 2014. |
Number of | ||||||||||||||||
Unexercised | Value of Unexercised | |||||||||||||||
Options | in-the-Money | |||||||||||||||
Shares | at Fiscal | Options at | ||||||||||||||
Acquired | Value | Year-End (#) | Fiscal Year-End ($)1 | |||||||||||||
on Exercise | Realized | Exercisable/ | Exercisable/ | |||||||||||||
(#) | ($) | Unexercisable | Unexercisable | |||||||||||||
J. Brian Patsy | — | — | —/ | — | —/ | — | ||||||||||
William A. Geers | 75,333/ | 26,667 | 66,773/ | 16,667 | ||||||||||||
Paul W. Bridge, Jr. | — | — | 85,333/ | 6,667 | 105,648/ | 7,467 | ||||||||||
Donald E. Vick, Jr. | — | — | 28,833/ | 1,667 | 37,927/ | 1,867 |
1 | The closing market price for one share of Common Stock on January 31, 2005, the end of fiscal year 2004, was $3.07. |
12
13
14
The Compensation Committee | |
George E. Castrucci,Chairman | |
Richard C. Levy, M.D. | |
Z. David Patterson |
15
The Audit Committee | |
Z. David Patterson,Chairman | |
George E. Castrucci | |
Richard C. Levy, M.D. |
16
1/31/001 | 1/31/011 | 1/31/021 | 1/31/031 | 1/31/041 | 1/31/051 | |||||||||||||||||||
LanVision Systems, Inc. Common Stock | $ | 100.00 | $ | 72.48 | $ | 280.00 | $ | 233.60 | $ | 246.40 | $ | 245.60 | ||||||||||||
Nasdaq US Total Return Index | $ | 100.00 | $ | 70.19 | $ | 49.29 | $ | 33.96 | $ | 52.86 | $ | 52.95 | ||||||||||||
Nasdaq Computer and Data Processing Services Stock Index | $ | 100.00 | $ | 60.09 | $ | 41.63 | $ | 28.22 | $ | 39.03 | $ | 40.24 |
1 | Assumes that $100.00 was invested on January 31, 2000 in Common Stock at the closing price of $1.25 per share and at the closing sales price of each index on that date and that all dividends were reinvested. No dividends have been declared on Common Stock. Stockholder returns over the indicated period should not be considered indicative of future stockholder returns. |
17
2004 | 2003 | |||||||
Audit Fees | $ | 97,900 | $ | 90,700 | ||||
Audit-Related Fees | 10,000 | 5,000 | ||||||
Tax Fees | 35,000 | 47,000 | ||||||
All Other Fees | — | — | ||||||
Total Fees | $ | 142,900 | $ | 142,700 | ||||
18
By Order of the Board of Directors, | |
Paul W. Bridge, Jr. | |
Chief Financial Officer and Secretary |
19
Page | ||||||||
Article 1. Establishment, Purpose, and Duration | A-3 | |||||||
1.1 | Establishment of the Plan | A-3 | ||||||
1.2 | Purpose of the Plan | A-3 | ||||||
1.3 | Duration of the Plan | A-3 | ||||||
Article 2. Definitions and Construction | A-3 | |||||||
2.1 | Definitions | A-3 | ||||||
2.2 | Gender and Number | A-5 | ||||||
2.3 | Severability | A-5 | ||||||
Article 3. Administration | A-5 | |||||||
3.1 | Authority of the Committee | A-5 | ||||||
3.2 | Decisions Binding | A-6 | ||||||
3.3 | Delegation of Certain Responsibilities | A-6 | ||||||
3.4 | Procedures of the Committee | A-6 | ||||||
3.5 | Award Agreements | A-6 | ||||||
3.6 | Rule 16b-3 Requirements | A-6 | ||||||
Article 4. Stock Subject to the Plan | A-7 | |||||||
4.1 | Number of Shares | A-7 | ||||||
4.2 | Adjustments in Authorized Shares | A-7 | ||||||
Article 5. Eligibility and Participation | A-7 | |||||||
5.1 | Eligibility | A-7 | ||||||
5.2 | Actual Participation | A-7 | ||||||
Article 6. Stock Appreciation Rights | A-7 | |||||||
6.1 | Grant of Stock Appreciation Rights | A-7 | ||||||
6.2 | Exercise of SARs | A-7 | ||||||
6.3 | Payment of SAR Amount | A-8 | ||||||
6.4 | Form of Payment | A-8 | ||||||
6.5 | Duration of SAR | A-8 | ||||||
6.6 | Termination of Employment or Service | A-8 | ||||||
6.7 | Nontransferability of SARs | A-8 | ||||||
Article 7. Restricted Stock | A-8 | |||||||
7.1 | Grant of Restricted Stock | A-8 | ||||||
7.2 | Transferability | A-8 | ||||||
7.3 | Other Restrictions | A-8 | ||||||
7.4 | End of Period of Restriction | A-8 | ||||||
7.5 | Voting Rights | A-8 | ||||||
7.6 | Dividends and Other Distributions | A-8 | ||||||
7.7 | Termination of Employment or Service | A-9 |
A-1
Page | ||||||||
Article 8. Options | A-9 | |||||||
8.1 | Grant of Options | A-9 | ||||||
8.2 | Option Award Agreement | A-9 | ||||||
8.3 | Option Price | A-9 | ||||||
8.4 | Duration of Options | A-9 | ||||||
8.5 | Exercise of Options | A-9 | ||||||
8.6 | Payment | A-9 | ||||||
8.7 | Restrictions on Stock Transferability | A-10 | ||||||
8.8 | Special Provisions Applicable to Incentive Stock Options | A-10 | ||||||
8.9 | Termination of Employment or Service | A-10 | ||||||
8.10 | Nontransferability of Options | A-10 | ||||||
Article 9. Termination of Employment or Service as a Director | A-10 | |||||||
9.1 | Termination of Employment or Service Other Than Due to Death or Disability | A-10 | ||||||
9.2 | Termination Due to Death or Disability | A-10 | ||||||
9.3 | Effect of Termination of Employment or Service | A-10 | ||||||
Article 10. Beneficiary Designation | A-11 | |||||||
Article 11. Rights of Participants | A-11 | |||||||
11.1 | Employment or Service | A-11 | ||||||
11.2 | Participation | A-11 | ||||||
11.3 | No Implied Rights | A-11 | ||||||
11.4 | No Right to Company Assets | A-11 | ||||||
11.5 | Rights as Shareholder; Fractional Shares | A-11 | ||||||
11.6 | Other Restrictions and Limitations | A-11 | ||||||
Article 12. Change in Control | A-12 | |||||||
Article 13. Amendment, Modification, and Termination | A-12 | |||||||
13.1 | Amendment, Modification and Termination of Plan | A-12 | ||||||
13.2 | Amendment or Modification of Awards | A-12 | ||||||
13.3 | Effect on Outstanding Awards | A-12 | ||||||
Article 14. Withholding | A-12 | |||||||
14.1 | Tax Withholding | A-12 | ||||||
14.2 | Stock Delivery or Withholding | A-12 | ||||||
Article 15. Successors | A-13 | |||||||
Article 16. Requirements of Law | A-13 | |||||||
16.1 | Requirements of Law | A-13 | ||||||
16.2 | Governing Law | A-13 |
A-2
(a) “Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights or Restricted Stock. | |
(b) “Award Agreement” means the agreement or other writing (which may be framed as a plan or program) that sets forth the terms and conditions of each Award under the Plan, including any amendment or modification thereof. | |
(c) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. | |
(d) “Board” or “Board of Directors” means the Board of Directors of the Company. | |
(e) “Change in Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied: |
(i) any Person (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, or a corporation owned directly or indirectly by the common stockholders of the Company in substantially the same proportions as their ownership of Stock of the Company), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, unless arranged by, or consummated with, the prior approval of the Board of Directors; or | |
(ii) during any period of two (2) consecutive years (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board and any new Director, whose election by the Board or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or |
A-3
(iii) the consummation of (1) the sale or disposition of all or substantially all the Company’s assets; or (2) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), at least 50% of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger or consolidation; or | |
(iv) the stockholders of the Company approve a plan of complete liquidation of the Company. |
However, in no event shall a Change in Control be deemed to have occurred, with respect to a Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed “part of a purchasing group...” for purposes of the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant in the purchasing company or group (except for (i) passive ownership of less than 5% of the voting securities of the purchasing company or (ii) ownership of equity participation in the purchasing company or group which is otherwise not deemed to be significant, as determined prior to the Change in Control by a majority of the continuing members of the Board who are not also Employees). | |
(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time. | |
(g) “Committee” means the LanVision Systems, Inc. Compensation Committee, or such other committee designated by the Board of Directors to administer this Plan. The Committee shall be appointed by the Board, shall consist of two or more outside, independent members of the Board, and in the judgment of the Board, shall be qualified to administer the Plan as contemplated by (i) Rule 16b-3 of the Securities Exchange Act of 1934 (or any successor rule), (ii) Section 162(m) of the Code, as amended, and the regulations thereunder (or any successor Section and regulations), and (iii) any rules and regulations of the Nasdaq Stock Market (or such other stock exchange on which the Stock is traded). Any member of the Committee who does not satisfy the qualifications set out in the preceding sentence may recuse himself or herself from any vote or other action taken by the Committee. The Board may, at any time and in its complete discretion, remove any member of the Committee and may fill any vacancy in the Committee. | |
(h) “Company” means LanVision Systems, Inc., a Delaware corporation, or any successor thereto as provided in Article 15 herein. | |
(i) “Covered Employee” means any Participant who is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which an Award becomes taxable to such Participant. | |
(j) “Director” means a director of the Company or a Subsidiary. | |
(k) “Disability” means totally and permanently disabled as from time to time defined under the long-term disability plan of the Company or a Subsidiary applicable to Employee, or in the case where there is no applicable plan, permanent and total disability as defined in Section 22(e)(3) of the Code (or any successor Section). | |
(l) “Effective Date” means the date this Plan is approved by the Company’s stockholders. | |
(m) “Employee” means an employee of the Company or any of its Subsidiaries, including an employee who is an officer or a Director. | |
(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. | |
(o) As used in this Plan (unless a different method of calculation is required by applicable law) “Fair Market Value” on or as of any date shall mean (i) the closing price of the Stock as reported by the Nasdaq Stock Market (or, if the Stock is not listed for trading on the Nasdaq Stock Market, then on such other national exchange upon which the Stock is then listed) for such date, or if there are no sales on such date, on the next following business day on which there were sales, or (ii) in the event that the Stock is no longer listed for trading on a national exchange, an amount determined in accordance with standards adopted by the Committee. |
A-4
(p) “Incentive Stock Option” or “ISO” means an option to purchase Stock, granted under Article 8 herein, which is designated as an incentive stock option and is intended to meet the requirements of Section 422 of the Code (or any successor Section). | |
(q) “Nonqualified Stock Option” or “NQSO” means an option to purchase Stock, granted under Article 8 herein, which is not intended to be an Incentive Stock Option. | |
(r) “Option” means an Incentive Stock Option or a Nonqualified Stock Option. | |
(s) “Participant” means an Employee or Director who has been granted an Award under the Plan. | |
(t) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock is restricted, during which the Participant is subject to a substantial risk of forfeiture, pursuant to Article 7 herein. | |
(u) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof. | |
(v) “Plan” means this LanVision Systems, Inc. 2005 Incentive Compensation Plan, as herein described and as hereafter from time to time amended. | |
(w) “Predecessor Plan(s)” means the LanVision Systems, Inc. 1996 Employee Stock Option Plan, as from time to time amended, and/or the LanVision Systems, Inc. 1996 Non-Employee Directors Stock Option Plan, as from time to time amended, as the context so indicates. | |
(x) “Previously-Acquired Shares” means shares of Stock acquired by the Participant or any beneficiary of a Participant, which Shares have been held for a period of not less than six months, or such longer, or shorter period as the Committee may require or permit. | |
(y) “Restricted Stock” means an Award of Stock granted to a Participant pursuant to Article 7 herein. | |
(z) “Stock” or “Shares” means the common stock without par value of the Company. | |
(aa) “Stock Appreciation Right” or “SAR” means an Award, granted to a Participant pursuant to Article 6 herein. | |
(bb) “Subsidiary” shall mean any corporation which is a subsidiary corporation of the Company, as that term is defined in Section 424(f) of the Code. | |
(cc) “Voting Stock” shall mean securities of any class or classes of stock of a corporation, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors. |
(a) The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee shall have all powers vested in it by the term of the Plan, such powers to include the authority to: |
(i) Select the persons to be granted Awards under the Plan; | |
(ii) Determine the terms, conditions, form and amount of Awards to be made to each person selected; |
A-5
(iii) Determine the time when Awards are to be made and any conditions which must be satisfied before an Award is made; | |
(iv) To establish objectives and conditions for earning Awards; | |
(v) To determine the terms of each Award Agreement and any amendments or modifications thereof (which shall not be inconsistent with the Plan); and | |
(vi) To determine the guidelines and/or procedures for the payment or exercise of Awards. |
A-6
(a) Subject to adjustment as provided in Section 4.2 herein, the aggregate number of Shares that may be delivered under this Plan at any time shall not exceed one million (1,000,000) Shares. Stock delivered under this Plan may consist, in whole or in part, of authorized and unissued Shares or treasury Shares. To the extent that Shares subject to an outstanding Award under this Plan are not issued by reason of the forfeiture, termination, surrender, cancellation or expiration while unexercised of such award, by reason of the tendering or withholding of Shares (by either actual delivery or by attestation) to pay all or a portion of the purchase price or to satisfy all or a portion of the tax withholding obligations relating to an Award, by reason of being settled in cash in lieu of Stock or settled in a manner such that some or all of the Shares covered by the Award are not issued to a Participant, or being exchanged for a grant under this Plan that does not involve Stock, then such shares shall immediately again be available for issuance under this Plan. The Committee may from time to time adopt and observe such procedures concerning the counting of Shares against the Plan maximum as it may deem appropriate. | |
(b) Shares of Stock issued in connection with the Predecessor Plans and/or awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its Subsidiaries shall not reduce the number of Shares available for issuance under this Plan. | |
(c) Subject to Section 4.2, the following limitations shall apply to awards under the Plan with respect to Awards of Incentive Stock Options, up to 1,000,000 Shares that may be issued under this Plan. |
A-7
(a) The difference between the Fair Market Value of a Share on the date of exercise over the price fixed by the Committee at the date of grant (which price shall not be less than 100% of the Fair Market Value of a Share on the date of grant); by | |
(b) The number of Shares with respect to which the SAR is exercised. |
A-8
A-9
(a) In the event that the aggregate Fair Market Value of the Stock (determined at the time the Options are granted) subject to ISOs held by a Participant that first becomes exercisable during any calendar year exceeds $100,000 then the portion of such ISOs equal to such excess shall be NQSOs; | |
(b) An Incentive Stock Option granted to an Employee who, at the time of grant, owns (within the meaning of Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of Stock of the Company, shall have an exercise price which is at least 110% of the Fair Market Value of the Stock subject to the Option; and | |
(c) No ISO granted to an Employee who, at the time of grant, has (within the meaning of Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, shall be exercisable later than the fifth (5th) anniversary date of its grant. |
(a) Each SAR shall be immediately cancelled and terminated; | |
(b) Any shares of Restricted Stock, still subject to restrictions as of the date of such termination, shall automatically be forfeited and returned to the Company or cancelled, as applicable; and | |
(c) Each Option shall be cancelled and terminated if not exercised within the 90 day period immediately following the date of termination of employment. |
(a) Each SAR and Option held by the Participant (whether or not exercisable prior to the date of termination) may be exercised on or before the earlier of the expiration date of the SAR or Option or within the applicable period provided by the Code for termination due to death or permanent disability; and | |
(b) Any remaining Period of Restriction applicable to Restricted Stock Units pursuant to Section 7.2 herein shall automatically terminate and the Shares of Restricted Stock shall thereby be free of restrictions and be fully transferable. |
A-10
A-11
A-12
A-13
LanVision Systems, Inc. | ||
10200 Alliance Road, Suite 200 | This Proxy is solicited on behalf of | |
Cincinnati, Ohio 45242-4716 | the Board of Directors of the Company |
PROXY
The undersigned hereby appointsJ. Brian Patsy and Richard C. Levy, M.D.and each of them, attorneys-in-fact and proxies, with full power of substitution, to vote as designated below all shares of the Common Stock of LanVision Systems, Inc. that the undersigned would be entitled to vote if personally present at the annual meeting of stockholders to be held on May 25, 2005, at 9:30 a.m., and at any adjournment thereof.
1. | ELECTION OF DIRECTORS: J. BRIAN PATSY, JONATHAN R. PHILLIPS, RICHARD C. LEVY, M.D. AND EDWARD J. VONDERBRINK. |
oFORall nominees listed above (except as marked below) oWITHHOLD AUTHORITYto vote for all nominees
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee’s name on the line below.)
2. | To approve the 2005 Incentive Compensation Plan |
oFORthe approval of the 2005 Incentive Compensation Plan oAGAINSTthe approval of the 2005 Incentive Compensation Plan
3. | In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. |
This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this Proxy will be votedFORProposal 1 andFORProposal 2.
(continued on other side)
The undersigned acknowledges having received from LanVision Systems, Inc., prior to the execution of this Proxy, a Notice of Annual Meeting, a Proxy Statement, and an Annual Report.
Please sign exactly as your name appears below. When shares are held as joint tenants, each holder should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
Dated: ___________________________________________, 2005 | ||
[STOCKHOLDER NAME AND ADDRESS] | [STOCKHOLDER NAME AND NUMBER OF SHARES] | |
(Signature) | ||
(Signature if held jointly) | ||
Please mark, sign, date, and return the Proxy promptly using the enclosed envelope. | ||
REVOCABLE PROXY |