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
May 26, 2009
Date of Report (Date of earliest event reported)
PRG-Schultz International, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
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0-28000
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58-2213805 |
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(Commission File Number)
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(IRS Employer Identification No.) |
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600 Galleria Parkway, Suite 100, Atlanta, Georgia
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30339-5949 |
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(Address of Principal Executive Offices)
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(Zip Code) |
770-779-3900
(Registrants 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 (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement
As previously announced, the Board of Directors of PRG-Schultz International, Inc. (the
Company) has appointed Robert B. Lee to serve as Chief Financial Officer and Treasurer of the
Company, effective June 1, 2009, in addition to his current position as Controller of the Company.
In connection with his additional appointments, on May 26, 2009, the Company entered into an
employment agreement with Mr. Lee (the Agreement). The material terms of the Agreement are as
follows:
1. Term. The Agreement provides for a term of one year ending on June 1, 2010, which will
automatically be extended for additional one-year periods, unless either party notifies the other
in writing at least 30 days prior to the end of the original term or any additional term of its
intention not to extend the Agreement.
2. Compensation. Mr. Lee will receive an annual base salary of $205,000 and will be eligible
for an annual incentive bonus (target bonus equal to 50% of his annual base salary up to a maximum
bonus equal to 100% of his annual base salary), based on the achievement of certain performance
objectives to be set by the Companys Compensation Committee. For calendar year 2009, Mr. Lees
annual incentive bonus shall be equal to the sum of (i) a prorated bonus for the period from
January 1, 2009 through May 31, 2009, based on the bonus plan that would have been applicable to
Mr. Lee for 2009 (including a target bonus of $50,000 and a maximum bonus of $100,000), had he not
accepted the offer to become the Companys Chief Financial Officer, and (ii) a prorated bonus under
the Agreement based on the number of days that Mr. Lee is actually employed by the Company as its
Chief Financial Officer during 2009 (beginning June 1, 2009). Mr. Lee will also be eligible to
receive stock options, restricted stock, stock appreciation rights and/or other equity awards under
the Companys applicable equity plans on such basis as the Compensation Committee may determine.
The Agreement also provides for standard expense reimbursement, paid time off, and other standard
executive benefits.
3. Post-Termination Benefits.
(a) No Change of Control. If Mr. Lee, other than within two years after a Change of Control
(as defined in the Agreement), (x) terminates his employment for Good Reason (as defined in the
Agreement), (y) is terminated by the Company without Cause (as defined in the Agreement), or (z)
terminates his employment upon the Companys failure to renew the Agreement, then he is entitled to
the following: (i) payment of his annual base salary for the period equal to the greater of one
year or the sum of four weeks for each full year of continuous service Mr. Lee has with the Company
(the Severance Period); (ii) payment of any actual earned full-year bonus (pro-rated) for the
year in which Mr. Lees employment termination occurs; (iii) continuation of health care plan
coverage for the Severance Period; (iv) payment of accrued obligations; (v) vesting in
full of Mr. Lees outstanding unvested options, restricted stock and other equity-based awards
that would have vested solely based on his continued employment, as well as the continuation of
outstanding stock options, until the earlier of one year after the date of termination of his
employment or the original expiration date of the options; and (vi) payment of up to $20,000 of
outplacement services.
(b) Change of Control. If, within 2 years following a Change in Control, Mr. Lee (x)
terminates his employment for Good Reason, (y) is terminated by the Company without Cause, or (z)
terminates his employment upon the Companys failure to renew the Agreement, then he is entitled to
receive the same benefits he would have received as described above under No Change in Control
except that (i) the payment of his annual base salary shall be for the period equal to the
greater of 18 months or the sum of four weeks for each full year
of continuous service that Mr. Lee
has with the Company (the Change in Control Severance Period) and (ii) Mr. Lees health care plan
coverage shall continue for the Change in Control Severance Period.
(c) For Cause. If the Company terminates Mr. Lees employment for Cause or Mr. Lee
terminates his employment for other than Good Reason, the Agreement terminates and the Company will
have no further obligations to him other than to pay any accrued obligations.
4. Business Protection Agreements. Mr. Lee is also bound by confidentiality provisions,
non-competition covenants and non-solicitation restrictions concerning both customers and employees
of the Company.
The foregoing description is qualified in its entirety by reference to the Agreement, a copy
of which is filed herewith as Exhibit 10.1 and incorporated herein by reference
Separation Agreement
On May 29, 2009, the Company entered into a Separation Agreement (the Separation
Agreement) with Bradley T. Roos, the Companys Senior Vice President and President- Europe and
Asia Pacific. Pursuant to the Separation Agreement, the employment agreement between the Company
and Mr. Roos (the Employment Agreement) was terminated. As previously reported, Mr. Roos
employment relationship with the Company was terminated effective May 8, 2009 (the Termination
Date). The material terms of the Separation Agreement are as follows:
1. Post-employment Compensation. The Separation Agreement provides for the Company to make
severance payments to Mr. Roos equal to his current annual salary for the period of twelve months
from the Termination Date. Mr. Roos will receive the bonus (subject to the achievement of certain
levels of EBIDTA by the Company and the Companys Europe-Asia Pacific business), if any, that he
would have received for calendar year 2009, pro-rated based on the number of days he was employed
in 2009 before the Termination Date. The Company will permit Mr. Roos to continue medical
and dental insurance coverage for himself, his spouse, and his eligible dependents for the period
of twelve months from the Termination Date on the same basis and at the same cost as if he remained
employed. Mr. Roos is also entitled to vesting in full of his outstanding unvested options,
restricted stock and other equity based awards that would have vested based solely on his continued
employment. Additionally, all of Mr. Roos outstanding stock options will remain outstanding until
the earlier of (a) one year from the Termination Date or (b) the original expiration date of the
options. Mr. Roos is also entitled to outplacement services of up to $20,000. In addition, the
Company will make a lump sum payment of $45,000 to Mr. Roos.
2. Housing and Relocation Benefits. Mr. Roos will also be entitled to continued housing and
educational allowances provided for under his Employment Agreement through June 30, 2009. The
Company will also reimburse Mr. Roos for the cost of returning to the United States.
3. Business Protection Agreements. Mr. Roos is also bound by confidentiality provisions,
non-competition covenants and non-solicitation restrictions concerning both customers and employees
of the Company.
4. Release. In order to collect his severance benefits, Mr. Roos has signed and returned a release
agreement, pursuant to which Mr. Roos agreed to release all current or future claims, known or
unknown, arising on or before the date of the release against the Company and its affiliates and
their respective officers, directors, employees, agents, insurers, assigns, and successors in
interest. In addition, as a condition to the receipt of his severance benefits, Mr. Roos agreed to
waive, other than as set forth in the Separation Agreement, any and all rights to any severance,
notice rights, payments, benefits or other amounts he may have been entitled to under the laws of
England and Wales.
The foregoing description is qualified in its entirety by reference to the Separation
Agreement, a copy of which is filed herewith as Exhibit 10.2 and incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed herewith:
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Exhibit 10.1
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Employment Agreement dated May 26, 2009, by and between Mr. Robert B. Lee and
the Company |
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Exhibit 10.2
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Separation Agreement dated May 29, 2009, by and between Mr. Bradley T. Roos
and the Company |
SIGNATURES
Pursuant to the requirements of Section 12 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.
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PRG-Schultz International, Inc.
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By: |
/s/ Victor A. Allums
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Victor A. Allums |
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Senior Vice President, Secretary and General
Counsel |
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Dated: June 1, 2009
EXHIBIT INDEX
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Exhibit |
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Number |
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Description of Exhibits |
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10.1
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Employment Agreement dated May 26, 2009, by and between
Mr. Robert B. Lee and the Company |
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10.2
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Separation Agreement dated May 29, 2009, by and between Mr. Bradley T. Roos and the Company |