UNITED
STATES SECURITIES AND
EXCHANGE
COMMISSION
Washington,
D.C. 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) March 31, 2008
LML
PAYMENT SYSTEMS INC.
(Exact
name of registrant as specified in its charter)
Yukon
Territory
(State or
other jurisdiction of incorporation)
0-13959
(Commission
File Number)
98-0209289
(IRS
Employer Identification No.)
1680-1140
West Pender Street, Vancouver, BC V6E 4G1
(Address
of principal executive offices and Zip Code)
(604)
689-4440
Registrant’s
telephone number, including area code
Not
Applicable
(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:
[ ]
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 5.02 Departure
of Directors or Certain Officers; Election of Directors, Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Pursuant
to a resolution of the Compensation Committee of the Board of Directors of LML
Payment Systems Inc. (“LML” or the “Corporation”), on March 31,2008, LML entered
into employment agreements (the “Agreements”) with each of Patrick H. Gaines,
LML’s President and Chief Executive Officer; Richard R. Schulz, LML’s Controller
and Chief Accounting Officer; and Carolyn L. Gaines, LML’s Corporate
Secretary. The terms of each of the Agreements are as
follows:
Patrick H.
Gaines
Salary
and Bonus: Mr. Gaines will be paid an annual base salary of
$200,000. Mr. Gaines is also eligible to earn a cash bonus of up to
thirty-five per cent (35%) of his base salary based on the Corporation’s
achievement of reasonable performance goals established by the Compensation
Committee for each fiscal year (or portion thereof) which may include targets
related to the earnings before interest, taxes, depreciation and amortization
(“EBITDA”) of the Corporation.
Equity
Awards: Mr. Gaines will be granted 1,200,000 stock options, pursuant
to the terms of the Corporation’s 1996 Stock Option Plan, which will provide for
the vesting of 400,000 stock options immediately and an additional 400,000 stock
options on each of the first and second anniversary of the grant of the stock
option. The exercise price per share will be equal to the closing
price of LML’s common stock on the date of grant with a ten (10) year exercise
term.
Separation
Benefits: In the event of Mr. Gaines’ termination following a change
in control of LML, his involuntary termination or termination without cause, Mr.
Gaines will be eligible to receive (i) a lump sum severance payment equal to his
base salary and accrued vacation pay through to the date
of termination; (ii) two (2) years’ current base salary plus two (2)
times the last annual bonus he received; and (iii) immediate vesting of the
stock option noted above.
Richard R.
Schulz
Salary
and Bonus: Mr. Schulz will be paid an annual base salary of
$120,000. Mr. Schulz is also eligible to earn a cash bonus of up to
fifteen per cent (15%) of his base salary based on the Corporation’s achievement
of reasonable performance goals established by the Compensation Committee for
each fiscal year (or portion thereof) which may include targets related to the
earnings before interest, taxes, depreciation and amortization (“EBITDA”) of the
Corporation.
Equity
Awards: Mr. Schulz will be granted 210,000 stock options, pursuant to
the terms of the Corporation’s 1996 Stock Option Plan, which will provide for
the vesting of 70,000 stock options immediately and an additional 70,000 stock
options on each of the first and second anniversary of the grant of the stock
option. The exercise price per share will be equal to the closing
price of LML’s common stock on the date of grant with a ten (10) year exercise
term.
Separation
Benefits: In the event of Mr. Schulz’s termination following a change
in control of LML, his involuntary termination or termination without cause, Mr.
Schulz will be eligible to receive (i) a lump sum severance payment equal to his
base salary and accrued vacation pay through to the date
of termination; (ii) two (2) years’ current base salary plus two (2)
times the last annual bonus he received; and (iii) immediate vesting of the
stock option noted above.
Carolyn L.
Gaines
Salary: Mrs.
Gaines will be paid an annual base salary of $71,000.
Equity
Awards: Mrs. Gaines will be granted 210,000 stock options, pursuant
to the terms of the Corporation’s 1996 Stock Option Plan, which will provide for
the vesting of 70,000 stock options immediately and an additional 70,000 stock
options on each of the first and second anniversary of the grant of the stock
option. The exercise price per share will be equal to the closing
price of LML’s common stock on the date of grant with a ten (10) year exercise
term.
Separation
Benefits: In the event of Mrs. Gaines’ termination following a change
in control of LML, her involuntary termination or termination without cause,
Mrs. Gaines will be eligible to receive (i) a lump sum severance payment equal
to her base salary and accrued vacation pay through to the date
of termination; (ii) two (2) years’ current base salary; and (iii)
immediate vesting of the stock option noted above.
The
summaries of the employment agreements set forth above do not purport to be
complete and are qualified in their entirety by reference to the full text of
such agreements, copies of which are filed herewith as exhibits and are
incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits.
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(d)
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Exhibits
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10.1
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Employment
agreement between LML Payment Systems Inc. and Patrick H. Gaines dated
March 31, 2008.
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10.2
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Employment
agreement between LML Payment Systems Inc. and Richard R. Schulz dated
March 31, 2008.
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10.3
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Employment
agreement between LML Payment Systems Inc. and Carolyn L. Gaines
dated March 31, 2008.
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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.
LML
PAYMENT SYSTEMS INC.
/s/ Carolyn
Gaines____________________________
By: Carolyn
Gaines
Corporate
Secretary
Date: April
2, 2008
Exhibit
Index
The
following is a list of the Exhibits filed or furnished herewith.
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10.1
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Employment
agreement between LML Payment Systems Inc. and Patrick H. Gaines dated
March 31, 2008.
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10.2
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Employment
agreement between LML Payment Systems Inc. and Richard R. Schulz dated
March 31, 2008.
|
|
10.3
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Employment
agreement between LML Payment Systems Inc. and Carolyn L. Gaines
dated March 31, 2008.
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