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 19, 2007
(March 15, 2007)
CATUITY INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-30045 38-3518829
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
300 PRESTON AVE., SUITE 302
CHARLOTTESVILLE, VA 22902 (434) 979-0724
(Address of principal (Registrant's telephone number,
executive offices) 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 COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
On March 15, 2007, Catuity Inc. (the "Company") entered into an employment
agreement with Graham McStay. On January 30, 2007, Mr. McStay was appointed
Chief Executive Officer and Managing Director of Loyalty Magic ("Loyalty
Magic"), an Australian subsidiary of the Company. The following brief
description of this employment agreement is qualified in its entirety by
reference to the full text of the agreement, a copy of which is attached as
Exhibit 10.1.
Mr. McStay's employment agreement with the Company is for an initial term
commencing on March 15, 2007 and ending on March 14, 2010. The employment
agreement is automatically renewable for successive one-year terms thereafter
unless either party timely terminates the agreement. Pursuant to the employment
agreement, Mr. McStay is paid an annual base salary of $180,000 AUD
(approximately $142,000 USD), which will be at least reviewed annually by the
Company's Chief Executive Officer and Board of Directors. In addition to his
base salary, Mr. McStay is entitled to certain incentive-based compensation
payable in shares of the Company's common stock if Loyalty Magic achieves
certain performance criteria.
In addition, Mr. McStay is entitled to receive: (1) options to acquire 10,000
shares of the Company's common stock (the "Options") at an exercise price equal
to the volume weighted average of the trading price of the Company's common
stock on the Nasdaq Small Cap Market during the thirty calendar days preceding
(and ending on) March 15, 2007. Twenty five percent of the Options will vest on
each of March 15, 2007, 2008, 2009 and 2010; and (2) 15,000 shares of restricted
stock (the "Restricted Stock"). One-half of the Restricted Stock will vest if
Loyalty Magic achieves 100% of EBIT goals for 2007, subject to audit and
one-half of the Restricted Stock will vest if Loyalty Magic achieves 100% of
EBIT goals for 2008, subject to audit.
SIGNATURE
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 thereunto duly authorized.
CATUITY INC.
(Registrant)
By /s/ Debra Hoopes
-------------------------------------
Debra Hoopes
Senior Vice President and
Chief Financial Officer
Date: March 19, 2007
1
EXHIBIT INDEX
EX NO. DESCRIPTION
- ------ -----------
10.1 EMPLOYMENT AGREEMENT BETWEEN CATUITY INC. AND GRAHAM MCSTAY
2