UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 27, 2005
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LanVision Systems, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-28132 31-1455414
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(Commission File Number) (IRS Employer Identification No.)
5481 Creek Road, Cincinnati, Ohio 45242-4001
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(Address of Principal Executive Offices) (Zip Code)
(513) 794-7100
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 - ENTRY INTO A MATERIAL AGREEMENT
On January 27, 2005, the Compensation Committee of the Board of Directors of
LanVision Systems, Inc. approved Amendment No. 1 to the Employment Agreement
among J. Brian Patsy (LanVision's Chief Executive Officer and President),
LanVision Systems, Inc. and LanVision, Inc. Amendment No. 1, a copy of which is
attached hereto as Exhibit 10.1, renewed the Agreement for the period February
1, 2005 through January 31, 2006, and modified Section 11(D) to provide for
certain severance payments if the Agreement is not renewed other than for good
cause or upon Mr. Patsy's death or disability. The Compensation Committee also
authorized the payments of $15,044.13 and $6,600.86, respectively, to Mr. Patsy
and to William A. Geers, Vice President and Chief Operating Officer, for accrued
and unused vacation for calendar year 2004.
On January 27, 2005, the Compensation Committee also adopted executive bonus
arrangements for fiscal year 2005. These arrangements are not contained in a
formal written plan, but a summary of the manner in which executive officer
bonuses will be determined for fiscal year 2005 is set forth below and in
Exhibit 10.2 attached hereto (the "FY 2005 Executive Bonus Plan"). The FY 2005
Executive Bonus Plan is composed of two separate bonus components, both of which
are considered part of the total targeted compensation for LanVision's
executives.
The first component of the Plan provides for the payment of a target profit
bonus based upon achieving 100% of LanVision's targeted operating profit as
established by the Compensation Committee. Participating executives will be
entitled to payment of 100% of the target profit bonus if LanVision achieves
100% of the targeted operating profit. Executives may receive a reduced profit
bonus, provided that LanVision's actual operating profit is greater than 80% of
the targeted operating profit. If the Company achieves 80% or less of the
targeted operating profit no profit bonuses are earned under this component of
the Plan. At greater than 80% but less than 100% of the targeted operating
profit, the payments are reduced so that, for example, achieving 90% of the
targeted operating profit would result in the payment of 50% of the target
profit bonus. If LanVision exceeds 100% of the targeted operating profit, then
the bonuses are increased by the percentage that the actual operating profit
exceeds the target operating profit. For example, if LanVision achieves 130% of
the targeted operating profit, then the bonuses earned would be 130% of the
target profit bonuses. There is no upper limitation of the payment of the
bonuses for this component that exceed the targeted operating profit amounts.
The second component of the Plan provides for the payment of a target revenue
bonus based upon achieving 100% of targeted revenues, excluding the sale of
third party hardware. If less than 100% of the targeted revenues is achieved,
then no revenue bonus will be earned under this component of the Plan. If 100%
of the targeted revenues is achieved, then the target revenue bonuses associated
with this portion of the Plan will be paid at 100%. If the targeted revenues are
exceeded, than the revenue bonuses are increased by the percentage that the
revenues exceeds the target revenues. For example, if LanVision achieves 130% of
the targeted revenues, then the bonuses earned would be 130% of the target
revenue bonus. There is no upper limitation of the payment of the bonuses for
this component that exceed the targeted revenue amounts.
The Compensation Committee established the target operating profit, target
revenues and target bonuses on January 27, 2005.
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ITEM 5.02(b) - DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
On January 27, 2005, two Directors of LanVision advised the Board of Directors
at its regularly scheduled meeting of their decision to retire from the Board
effective as of the 2005 Annual Meeting of Stockholders. Those Directors are
George E. Castrucci and Z. David Patterson. Accordingly, neither such individual
will stand for reelection to the Board of Directors at the 2005 Annual Meeting
of Stockholders.
Mr. Patterson further advised the Board that, on behalf of Blue Chip Venture
Company, the General Partner of Blue Chip Capital Fund Limited Partnership
("Blue Chip"), will not designate a nominee for election to the Board at the
2005 Annual Meeting of Stockholders. Blue Chip has the contractual right to so
nominate an individual pursuant to a stockholder agreement among LanVision
Systems, Inc., Blue Chip Capital Fund Limited Partnership, J. Brian Patsy and
Eric S. Lombardo, as long as Blue Chip beneficially owns at least 8% of
LanVision's outstanding common stock. Blue Chip currently owns in excess of 8%
of the outstanding common stock and Mr. Patterson has served as Blue Chip's
nominee to the Board since 1996. Notwithstanding Blue Chip's decision not to
designate a director nominee for election at the 2005 Annual Meeting of
Stockholders, the stockholder agreement will not be amended at this time and
will remain in force.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit Description
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10.1 Amendment No. 1 dated January 27, 2005 to the Employment
Agreement among J. Brian Patsy, LanVision Systems, Inc.
and LanVision, Inc.*
10.2 Summary of Fiscal Year 2005 Executive Bonus Plan*
* Denotes management contract.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LANVISION SYSTEMS, INC.
By: /s/ Paul W. Bridge, Jr.
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Paul W. Bridge, Jr.
Chief Financial Officer
Date: February 1, 2005
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