8-K

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

April 4, 2007 (March 29, 2007)

Date of Report (Date of earliest event reported)

EPIQ SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Missouri	0-22081	48-1056429
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification Number)

501 Kansas Avenue

Kansas City, Kansas 66105

(Address of principal executive offices)

(913) 621-9500

(Registrant’s telephone number, including area code)

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):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a–12).

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d–2(b)).

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e–4(c)).

Item 1.01Entry into a Material Definitive Agreement.

On March 29, 2007, the compensation committee of the board of directors of Epiq Systems, Inc. (the “Company”) adopted two incentive bonus plans for certain executive officers of the Company.  The Qualified Executive Performance Plan (the “Performance Plan”) and the Strategic Executive Incentive Plan (the “Strategic Plan”) apply to the Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer.

The Performance Plan is established pursuant to the Company’s Amended and Restated 2004 Equity Incentive Plan (the “2004 Plan”), which permits certain incentive awards to be deductible for federal income tax purposes under IRC Section 162(m).  The Performance Plan is intended to comply with the requirements of Section 162(m).  The Performance Plan consists of two subplans:  (1) a financial objectives subplan, with performance criteria and payout pool related to the achievement of the selected criteria to be adopted by resolution of the compensation committee, and (2) an acquisition / divestiture objectives subplan for the acquisition or divesture of a business or a portion of a business that is approved by the board prior to the transaction.  The maximum payout under the acquisition / divestiture subplan is 4% of the purchase price of the acquired business or the gross selling price of the divested business, as applicable, subject to the overall limits in the 2004 Plan.

The payout pool for either subplan will be paid 35% each to the Chief Executive Officer and the Chief Operating Officer and 30% to the Chief Financial Officer.

Pursuant to the Performance Plan, the compensation committee passed a resolution fixing the performance criteria for the financial objective subplan for calendar year 2007, which criteria are operating revenue, adjusted EBITDA and non-GAAP EPS, each in a manner consistent with the uses of those financial measures in the Company’s regular quarterly earnings calls and earnings releases.  The payouts are set at threshold and maximum amounts for each of these three measures, with payouts prorated between these two amounts.

The Strategic Plan permits the compensation committee to award discretionary bonuses, payable in cash, stock options or restricted stock under the 2004 Plan.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits.

The following exhibits are filed with this report:

10.1	Qualified Executive Performance Plan.
10.2	Strategic Executive Incentive Plan.

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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.

	EPIQ SYSTEMS, INC.
Date:    April 4, 2007
	By:	/s/ Tom W. Olofson
	Name:		Tom W. Olofson
	Title:		Chairman of the Board, Chief Executive Officer and Director

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EX-10.1

Exhibit 10.1

Executive Committee

Qualified Executive Performance Plan

The Compensation Committee (“Committee”) embraces a philosophy and guiding principles designed to achieve enhancement of long-term shareholder value.  In line with these objectives, the compensation program for senior corporate executive officers (the “Executive Committee”) consists of (i) base salary, (ii) annual incentive compensation consisting of a cash bonus if designated performance objectives are achieved, and (iii) long-term incentive opportunity composed of equity based awards related to enhancing the ongoing well being of the organization.

In addition to the performance objectives as set forth in the Strategic Executive Incentive Plan, the Committee has established pursuant to the Epiq Systems, Inc. Amended and Restated 2004 Equity Incentive Plan (“2004 Plan”) this Qualified Executive Performance Plan (the “Performance Plan”) for Eligible Employees.

Eligible Employees

·Epiq Systems, Inc. Chief Executive Officer

·Epiq Systems, Inc. Chief Operating Officer

·Epiq Systems, Inc. Chief Financial Officer

Section 162(m)

This Performance Plan is intended to comply with the requirements of IRC Section 162(m).  The Committee must certify in writing the attainment of performance goals set forth herein prior to the payment of awards.

Plan Components:

This Plan shall consist of two subplans:

·Financial Objectives Subplan

·Acquisition/Divesture Objectives Subplan

Satisfaction of the criteria under either subplan is independent of whether or not the criteria for the other subplan are satisfied.

Method of Payout

Payouts earned under this Performance Plan are payable in cash at the direction and sole discretion of the Committee.  Amounts awarded under this Qualified Performance Plan are made under the 2004 Plan. This Performance Plan is entirely independent of any other executive

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compensation plan the Committee may establish from time to time, and payment under any other plan is not and will not be contingent on the satisfaction or non-satisfaction of the terms of this plan.

Payout Pool

The Payout Pool (consisting of the combined amount payable under both the Financial Objectives Subplan and the Acquisition/Divestures Objectives Subplan) shall be paid as follows:

·	Chief Executive Officer	35%
·	Chief Operating Officer	35%
·	Chief Financial Officer	30%

The maximum payable to any Eligible Employee in a calendar year shall be three times each Eligible Employee’s annual base salary (up to a maximum of $1,000,000) effective as of January 1 of each calendar year, which is the first day of each calendar year’s Performance Plan’s performance period.

No individual will receive a payment under the Performance Plan greater than the dollar amount specified above, or his or her assigned percentage of the payout pool, whichever is less.  All payout amounts represent the maximum that may be allocated to the payout pool on satisfaction of the related performance criteria.  The Committee, in its sole discretion, may reduce or eliminate any or all amounts allocated to the payout pool regardless of whether the related criteria were satisfied.

Performance Criteria

A list of performance criteria on which the Performance Plan may be based is set forth in Section 9 of the 2004 Plan.

Financial Objectives Subplan

The performance criteria, for a calendar year period under this subplan shall consist of one or more of the performance criteria as set forth in section 9 of the 2004 Plan.  The selection of the performance criteria and the payout pool related to the achievement of the established criteria shall be adopted each year by resolution of the Committee.

Acquisition/Divesture Objectives Subplan

The Committee has determined that organic expansion and potential acquisitions and divestures are a critical component relative to the attainment of strategic objectives for the company.  Separate performance goals are set forth below.

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The performance criteria under this subplan shall consist of:

·the acquisition or divesture of a business or portion of a business; and

·such acquisition or divesture having been approved by the Board on or prior to the acquisition or divesture date.

For those acquisitions or divestures for which the above criteria is satisfied prior to the end of the calendar year, an amount up to 4% of the Purchase Price or Gross Selling Price may be added to the annual Payout Pool for such calendar year.

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EX-10.2

Exhibit 10.2

Executive Committee

Strategic Executive Incentive Plan

The Compensation Committee (the “Committee”) embraces a philosophy and guiding principles designed to achieve enhancement of long-term shareholder value.  In line with these objectives, the compensation program for senior corporate executive officers (the “Executive Committee”) consists of (i) base salary, (ii) annual incentive compensation opportunity consisting of a cash bonus if designated performance objectives are achieved, and (iii) long-term incentive opportunity composed of equity based awards related to enhancing the ongoing well being of the organization.

In addition to the performance objectives as set forth in the Qualified Executive Performance Plan, the Committee has established this Strategic Executive Incentive Plan (the “Incentive Plan”) for Eligible Employees.

Eligible Employees include:

·Epiq Systems, Inc. Chief Executive Officer

·Epiq Systems, Inc. Chief Operating Officer

·Epiq Systems, Inc. Chief Financial Officer

Method and Timing of Payout

For payouts earned under this Incentive Plan, the Committee, in it sole discretion, may make the payment in either cash, stock options or restricted stock.  Amounts awarded under this Incentive Plan are made under the Epiq Systems, Inc. Amended and Restated 2004 Equity Incentive Plan (the “2004 Plan”) and are subject to limitations contained in the 2004 Plan.  Payments under this Incentive Plan may be made from time to time at the sole discretion of the Committee.  This Incentive Plan is entirely independent of any other executive compensation plan this Committee has or may establish, and payment under any other plan is not and will not be contingent on the satisfaction or non-satisfaction of the terms of this plan.

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