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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 14, 2006
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PRG-SCHULTZ INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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GEORGIA 000-28000 58-2213805
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
600 GALLERIA PARKWAY, SUITE 100, ATLANTA, GEORGIA 30339-5949
(Address of principal executive office) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 779-3900
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(Former name or former address, if changed since last report)
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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)
|X| 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))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 14, 2006, PRG-Schultz International, Inc. (the "Company") entered
into an employment agreement (the "Employment Agreement") with N. Lee White,
under which Mr. White will serve as Executive Vice President - U.S. of the
Company, beginning June 19, 2006. Mr. White succeeds James L. Benjamin, who
served in that position since 2002. The material terms of Mr. White's Employment
Agreement are as follows:
1. Employment Period. The Employment Agreement provides for an employment
period that expires on June 19, 2009, unless sooner terminated. However,
absent notice of termination by the Company or Mr. White, the Employment
Agreement will automatically be extended until June 19, 2010.
2. Compensation.
(a) Salary. The Employment Agreement provides for an initial salary of
$325,000 per year, subject to increase from time to time by the
Compensation Committee in its sole discretion. The Employment Agreement
provides that Mr. White's salary is not subject to decrease except in the
case of certain general salary deductions applicable to all senior
executives.
(b) Annual Bonus. Mr. White will be entitled to receive a bonus with
respect to fiscal year 2006 equal to 40% of his salary, prorated based on
the number of days actually employed during the year. However, for each
subsequent fiscal year that he remains employed, he will be eligible to
receive a bonus in an amount equaling between 40% and 80% of his salary,
based upon the achievement of certain performance objectives to be set by
the Company's Compensation Committee.
(c) 2006 MIP. The Company is obligated to use best efforts to provide Mr.
White participation in the Company's 2006 Management Incentive Plan, which
is expected to be approved in the near future and submitted to the
Company's shareholders at the Company's 2006 Annual Meeting for permission
to pay out a portion of the awards under the Plan in Company stock.
(d) Other. The Employment Agreement also provides for standard expense
reimbursement, vacation time, and other standard executive benefits. Mr.
White's compensation may also include additional compensation awarded by
the Compensation Committee from time to time.
3. Post-termination Benefits. If Mr. White terminates his employment for Good
Reason, or his employment is terminated without Cause (as those terms are
defined in the Employment Agreement), or if the Company fails to renew the
Employment Agreement at the end of the three-year term, he will be entitled
to receive termination payments as follows: (i) within the first 120 days
of his employment, in the absence of a Change of Control (as defined in the
Employment Agreement), payments equal to 50% of his salary for the
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then-current fiscal year; (ii) after the first 120 days (or within the
first 120 days of employment if termination follows a Change of Control),
payments equal to 100% of his salary for the then-current fiscal year.
Termination payments are payable bi-weekly over a twelve-month period. Mr.
White will also be eligible for certain post-termination insurance
benefits.
4. Restrictive Covenants. The Employment Agreement includes standard
non-compete, non-solicitation and other restrictive covenants.
The Company and Mr. White also entered into an indemnification agreement
with substantially the same terms as the Company's standard form of
Indemnification Agreement, a copy of which is filed with the U.S. Securities and
Exchange Commission as Exhibit 10.4 of the Company's Form 10-K for the year
ended December 31, 2003.
A copy of the Employment Agreement is filed as Exhibit 10.1 to this Form
8-K.
Mr. Benjamin will remain with the Company through September 1, 2006,
assisting in the transition of responsibilities to Mr. White. Mr. Benjamin will
continue to be compensated in accordance with the terms of his employment
agreement with the Company during the transition period. On June 16, 2006, the
Company and Mr. Benjamin reached an agreement in principle under which Mr.
Benjamin's severance arrangements will be modified to provide him with
termination payments equal to sixteen months' salary, upon execution of a
separation agreement and mutual release with the Company.
There are no material relationships between the Company (or any of its
affiliates) and Messrs. White and Benjamin other than their respective
relationships with the Company arising out of their employment.
ITEM 3.01 NOTICE OF DELISTING OR FAILURE TO SATISFY A CONTINUED LISTING RULE OR
STANDARD; TRANSFER OF LISTING.
As announced in the Company's press release on June 20, 2006, a copy of
which is filed with this Form 8-K as Exhibit 99.1 and incorporated by reference
herein, on June 14, 2006, the Company received a staff determination letter from
the Nasdaq Stock Market indicating that the Company has failed to comply with
the $1.00 minimum bid price required for continued listing by Marketplace Rule
4450(a)(5) over the prior 180 days, and that, unless the Company requests a
formal hearing, its common stock will be delisted from the Nasdaq National
Market at the opening of business on June 23, 2006. The Company intends to file
a request for a hearing before the Nasdaq Qualifications Panel in order to
appeal the staff determination. As a result, the Company's stock will continue
to be traded on the Nasdaq National Market, and will not be delisted on June 23,
2006, pending the hearing date and the final decision by Nasdaq.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
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10.1 Employment Agreement with N. Lee White dated June 14, 2006
99.1 Press Release dated June 20, 2006
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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: June 20, 2006 By: /s/ Victor A. Allums
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Victor A. Allums
Senior Vice President, General
Counsel and Secretary
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