-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MQ1sDVCf6jlnlsMEwneRijbJ6x9HBL+84EbJIi7e2P80rbk/xCEVPhNdj3qAoMta OODu8Kgiy8p7Of+eMCGhbQ== 0000914062-05-000103.txt : 20050211 0000914062-05-000103.hdr.sgml : 20050211 20050211152600 ACCESSION NUMBER: 0000914062-05-000103 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050207 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050211 DATE AS OF CHANGE: 20050211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRG SCHULTZ INTERNATIONAL INC CENTRAL INDEX KEY: 0001007330 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 582213805 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28000 FILM NUMBER: 05598133 BUSINESS ADDRESS: STREET 1: 600 GALLERIA PARKWAY STREET 2: STE 100 CITY: ATLANTA STATE: GA ZIP: 30339-5949 BUSINESS PHONE: 7707793311 MAIL ADDRESS: STREET 1: 600 GALLERIA PARKWAY STREET 2: STE 100 CITY: ATLANTA STATE: GA ZIP: 30339-5949 FORMER COMPANY: FORMER CONFORMED NAME: PROFIT RECOVERY GROUP INTERNATIONAL INC DATE OF NAME CHANGE: 19960207 8-K 1 prg8k20705.txt FORM 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 Date of Report (Date of earliest event reported): FEBRUARY 7, 2005 ----------------------- PRG-SCHULTZ INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) -------------------------
GEORGIA 000-28000 58-2213805 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.)
600 GALLERIA PARKWAY, SUITE 100 (Address of principal executive office) (zip code) Registrant's telephone number, including area code: (770) 779-3900 N/A (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 DEFINITIVE AGREEMENT. Amendments to Employment Agreements On February 11, 2005, following negotiation and recommendation of the Compensation Committee of the Board of Directors (the "Board") of PRG-Schultz International, Inc. (the "Company"), the independent directors of the Board approved final forms of agreement with Mr. Cook, Chairman and Chief Executive Officer, Mr. Toma, Vice Chairman, and the Company's Executive Vice Presidents implementing the change of control program approved by the Compensation Committee on October 19, 2004, and previously reported on Form 8-K filed with the U.S. Securities and Exchange Committee on October 26, 2004, which is incorporated herein by reference. The final, material terms and conditions of the agreements between the Company and those executive officers who were named in its 2004 annual proxy statement and those expected to be named in the 2005 annual proxy statement (collectively, Messrs. Cook, Toma, Bacon, Benjamin, Goldfarb, and Moylan, hereafter the "Named Executive Officers") are as previously reported, except in the following respects: o Restrictive Covenants. The restrictive covenants have been narrowed to increase the likelihood that they will be enforceable under Georgia law. o Transaction Success Fees. If any of Mr. Toma and the Executive Vice Presidents has not remained in service with the Company through the date of a change of control, he or she will nonetheless be entitled to the entirety of the Transaction Success Fee, if he or she was terminated in contemplation of a Change of Control, or at the insistence of the prospective purchaser of the Company, but only if the Change of Control actually occurs prior to a particular date set forth in the agreement. The Transaction Success Fee will be payable 30 days following the termination or Change of Control, whichever occurs later. o Forfeiture. A portion of the cash and restricted stock provided under the agreements is subject to forfeiture in the event of specified breaches of the restrictive covenants. o Mr. Toma's Agreement. With respect to Mr. Toma's agreement, the termination payment benefit remains substantially unaltered from his pre-existing employment agreement, except that the definitions of Good Reason and Change of Control were updated and standardized to be consistent with those of the other Key Officers. However, consistent with his pre-existing agreement, Mr. Toma's termination payment benefit remains payable in the event of a Change of Control without regard to the date of its occurrence. Mr. Cook's departure as CEO of the Company for any reason will constitute involuntary termination of Mr. Toma's employment without cause, except with respect to the acceleration of his restricted stock award, which is governed by the terms of the Company's Stock Incentive Plan. o Mr. Moylan's Agreement. Following valuation of Mr. Moylan's 2 restrictive covenants, the Compensation Committee determined to increase Mr. Moylan's termination payment benefit to provide him a benefit comparable to that of the other Key Officers. Due to the unique nature of Mr. Moylan's position as chief financial officer of a public company, the Compensation Committee determined it appropriate to provide that in the case of Mr. Moylan, the definition of Good Reason would include the event that the Company ceases to be a public company. The agreements are not effective until fully executed and delivered. Appointment of Special Committee and Approval of Retainer Fee On February 8, 2005, at a regularly scheduled meeting of the Board of Directors (the "Board") of PRG-Schultz International, Inc. (the "Company"), the Board determined to create a new special committee for the purpose of analyzing the Company's strategic alternatives and to consider, evaluate and approve any such potential alternatives (to the extent permitted by law) or otherwise make recommendations to the Board regarding same. The Board named the following independent directors to serve on the special committee: o Garth H. Greimann (chair); o David A. Cole; o Gerald E. Daniels; o N. Colin Lind; and o Jimmy M. Woodward. In connection therewith, the Board determined that because of the substantial amount of time and effort which will be required in connection with such an undertaking, members who serve on the new special committee are entitled to a one-time supplemental retainer fee of $20,000 for the chair, and $15,000 for the other members, plus reimbursement for all out-of-pocket expenses reasonably incurred. Committee members will not be entitled to any additional attendance fees for attending meetings of the special committee. Option Grants to Non-employee Directors On February 7, 2005, in consultation with the Nominating and Corporate Governance Committee of the Board, the Compensation Committee granted options to purchase 10,000 shares of the Company's common stock to the following non-employee directors: o David A. Cole; o Gerald E. Daniels; o Jonathan Golden; o Garth H. Greimann; o N. Colin Lind; o Thomas S. Robertson; and o Jimmy M. Woodward. 3 The exercise price will be set at the closing price of the Company's common stock on February 25, 2005. The options will be exercisable as of February 25, 2005, will expire on February 25, 2010, and are fully vested. A form of the non-employee director option agreement is attached. Material Relationships Neither the Company nor any of its affiliates has any material relationship with any of the above-referenced directors or its Named Executive Officers, apart from their status as directors and officers of the Company, as holders of Company securities, and as otherwise described in the Company's previously filed annual proxy statement and periodic reports. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Businesses Acquired. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. Exhibit Number Description -------------------- ----------------------------------------------------- 99.1 Form of Non-employee Director Option Agreement 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, PRG-Schultz International, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PRG-SCHULTZ INTERNATIONAL, INC. Date: February 11, 2005 By: /s/ C. McKellar, Jr. -------------------------------------- Clinton McKellar, Jr. General Counsel and Secretary 5 EX-99 2 prg8k20705ex99.txt FORM OF STOCK OPTION AGREEMENT EXHIBIT 99.1 YOUR NAME: ______________________________________ TOTAL NO. SHARES COVERED BY THE OPTION: ___________ PRG-SCHULTZ NON-QUALIFIED STOCK OPTION AGREEMENT FOR NON-EMPLOYEE DIRECTORS PRG-SCHULTZ INTERNATIONAL, INC. ("PRG-Schultz") is pleased to grant to the person signing below ("you" or "Optionee") the nonqualified stock option described below under the PRG-Schultz Stock Incentive Plan (the "Plan"). For tax law purposes, this Option shall be treated as a Non-Qualified Stock Option. This Option is not intended to be and shall not be treated as an "incentive stock option" for U.S. tax law purposes. GRANT DATE: ______________ EXERCISE PRICE PER SHARE: $_____________ OPTION EXPIRATION DATE: ______________ START DATE FOR VESTING SCHEDULE: _______________ - IMMEDIATE VESTING VESTING SCHEDULE: IMMEDIATE VESTING - subject to the Plan and this Agreement, this Option may be immediately exercised in whole or in part, before the Option Expiration Date THE FOLLOWING DOCUMENTS (INCORPORATED IN THIS AGREEMENT BY REFERENCE) CONTAIN IMPORTANT INFORMATION ABOUT YOUR OPTIONS. PLEASE REVIEW CAREFULLY EACH OF THESE ITEMS AND CONTACT PRG-SCHULTZ HUMAN RESOURCES IF YOU HAVE ANY QUESTIONS: 1) Additional Terms and Conditions (attached) describes how to exercise your Option, what happens if you are no longer employed by PRG-Schultz before you exercise your Option and where to send notices, 2) the Plan contains the detailed terms that govern your Option, 3) the Plan Prospectus contains important information about the Plan and 4) the ________ Annual Report of PRG-Schultz. The _______ Annual Report of PRG-Schultz is available on the PRG-Schultz internet website (http://www.prgx.com) under Investor Relations. If anything in this Agreement or these other documents is inconsistent with the Plan, the terms of the Plan, as amended from time to time, will control. If you have previously executed an election to obtain future materials of PRG-Schulz electronically instead of by mail or hand delivery, and have not revoked it, this notice shall serve as delivery of such materials to you.. If you have not completed such an election or have revoked a previous election, the Plan, the Plan Prospectus Document and the ____ Annual Report of PRG-Schultz are enclosed with this Stock Option Agreement. In either event, PRG-Schultz will provide you with copies of these documents upon your written request. PLEASE SIGN BELOW TO SHOW THAT YOU ACCEPT THIS OPTION AND HAVE RECEIVED COPIES, EITHER ELECTRONIC OR PAPER, AS SPECIFIED ABOVE, OF THE PLAN, THE PLAN PROSPECTUS DOCUMENT AND THE ______ ANNUAL REPORT OF PRG-SCHULTZ, KEEP A COPY OF THIS DOCUMENT AND RETURN TWO SIGNED ORIGINALS TO PRG-SCHULTZ HUMAN RESOURCES, ATTN: STEPHANIE HOLLIDAY. OPTIONEE: PRG-SCHULTZ INTERNATIONAL, INC. _____________________________________ By: __________________________________ Print Your Name: ____________________ Name: __________________________________ Your Residence Address:______________ Its: __________________________________ _____________________________________ ADDITIONAL TERMS AND CONDITIONS OF YOUR OPTION HOW TO EXERCISE YOUR OPTION o This Option must be exercised for whole shares only and in increments of at least 40 shares per exercise. o The Plan is administered by a Stock Option Plan Administrator in the Finance Department in the Atlanta office. The Administrator is responsible for assisting you in the exercise of your option and maintaining the records of the Plan. The Administrator may be reached at (770) 779-6537 or 6536. If you have questions about your Option, how you go about exercising your Option or how the Plan works, please contact the Administrator during normal business hours. EFFECT OF TERMINATION OF EMPLOYMENT. For this Option, service on the Board of Directors of PRG-Schultz shall constitute "employment" for the purposes of the Plan. Termination of Service. If you are a Director of PRG-Schultz and after __________ you leave the Board for any reason having served as Director for either one entire term (or the remaining portion of the term to which you were first elected a Director), then the vested unexercised portion of this Option as of the date you leave the Board will remain exercisable by your (or your estate) until the original termination date of this Option or three (3) years from the date of termination of your Board service, whichever occurs first. If your service as member of the Board of Directors of PRG-Schultz terminates before serving either one entire term (or the remaining portion of the term to which you were first elected a Director), you (or your estate) may exercise the vested portion of your Option at any time within ninety (90) days after the date of termination of such service as a director after which any remaining unexercised portion of this Option shall terminate. NOTICES. All notices pursuant to this Agreement will be in writing and either (i) delivered by hand, (ii) mailed by United States certified mail, return receipt requested, postage prepaid, or (iii) sent by an internationally recognized courier which maintains evidence of delivery and receipt. All notices or other communications will be directed to the following addresses (or to such other addresses as either of us may designate by notice to the other): To PRG-Schultz: PRG-Schultz International, Inc. 600 Galleria Parkway, Suite 100 Atlanta, GA 30339 Attention: Executive Vice President, Human Resources To you: The address set forth on page 1 MISCELLANEOUS. Failure by you or PRG-Schultz at any time or times to require performance by the other of any provisions in this Agreement will not affect the right to enforce those provisions. Any waiver by you or PRG-Schultz of any condition or the breach of any term or provision in this Agreement, whether by conduct or otherwise, in any one or more instances, shall apply only to that instance and will not be deemed to waive conditions or breaches in the future. If any court of competent jurisdiction holds that any term or provision of this Agreement is invalid or unenforceable, the remaining terms and provisions will continue in full force and effect, and this Agreement shall be deemed to be amended automatically to exclude the offending provision. This Agreement may be executed in multiple copies and each executed copy shall be an original of this Agreement. This Agreement shall be subject to and governed by the laws of the State of Georgia. No change or modification of this Agreement shall be valid unless it is in writing and signed by the party against which enforcement is sought. This Agreement shall be binding upon, and inure to the benefit of, the permitted successors, assigns, heirs, executors and legal representatives of the parties hereto. The headings of each Section of this Agreement are for convenience only. This Agreement and the Plan contain the entire agreement of the parties hereto and no representation, inducement, promise, or agreement or otherwise between the parties not embodied herein shall be of any force or effect, and no party will be liable or bound in any manner for any warranty, representation, or covenant except as specifically set forth herein. -----END PRIVACY-ENHANCED MESSAGE-----