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
January 8, 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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)) |
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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.
Appointment of Romil Bahl as President and Chief Executive Officer
On January 9, 2009, PRG-Schultz International, Inc. (the Company) announced that the Board
of Directors has selected Romil Bahl to serve as the Companys next President and Chief Executive
Officer. Mr. Bahl will succeed Patrick G. Dills who has been serving as President and Chief
Executive Officer on an interim basis since the departure of former Chairman, President and Chief
Executive Officer, James B. McCurry, on November 30, 2008. Mr. Bahls appointment will become
effective as of January 21, 2009, at which time Mr. Bahl will also be elected to serve as a member
of the Companys Board of Directors. Mr. Dills will continue to serve as the Companys President
and Chief Executive Officer until Mr. Bahl joins the Company, and will remain as Chairman of the
Board.
Prior to joining the Company, Mr. Bahl worked with Infosys Technologies, a publicly traded
global technology and consulting services company, since April 2004. Mr. Bahl was one of the
founders and a Managing Director of Infosys Consulting, a wholly-owned subsidiary of Infosys
Technologies, and since November 2007, he has led Infosys
global Systems Integration business unit. Prior
to joining Infosys in 2004, Mr. Bahl led the global Consulting Services business of EDS and between
1995 and 2002 he held a number of senior roles at the management consulting firm of A.T.
Kearney, last serving as the leader of the firms European
Strategic Technology and Transformation
Practice based in London. From 1992 to 1995, Mr. Bahl served in a number of roles at Deloitte
Consulting.
Employment Agreement with Romil Bahl
In connection with his appointment, on January 8, 2009, the Company entered into an employment
agreement (the Employment Agreement) with Mr. Bahl, a copy of which is filed herewith as Exhibit
10.1 and incorporated herein by reference. Mr. Bahls employment agreement will become effective
as of Mr. Bahls employment with the Company which is expected to be January 21, 2009 (the
Effective Date). The material terms of the Employment Agreement are as follows:
1. Term. The Employment Agreement provides for a term of four years which will automatically be
extended for additional one-year periods, unless either party notifies the other in writing at
least 90 days prior to the end of the original term or any additional term of its intention not to
extend the agreement.
2. Compensation. The Employment Agreement provides for an annual base salary of $600,000. Mr.
Bahl will be eligible for an annual target bonus equal to 100% of his annual base salary and a
maximum bonus equal to 150% of his annual base salary, based
on the achievement of certain performance objectives to be set by the Companys Compensation
Committee. Mr. Bahl will also be eligible to receive an additional one-time bonus in the aggregate
amount of $1 million payable on the last regular payroll date in July 2010, subject to Mr. Bahls
continued employment until such time. Mr. Bahl 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 Employment
Agreement provides for standard expense reimbursement, vacation time, and other standard executive
benefits. Finally, the Company provided Mr. Bahl with relocation benefits in connection with his
relocation to Atlanta, Georgia.
3. Equity Inducement Awards. Under the terms of the Employment Agreement, the Company intends to
grant equity awards to Mr. Bahl consisting of an aggregate of 296,296 non-qualified options and
344,445 shares of restricted stock (the Equity Inducement Awards). The Equity Inducement Awards
have been approved by the Companys Compensation Committee and will be granted to Mr. Bahl in
reliance upon Nasdaq Marketplace Rule 4350(i)(1)(A)(iv) outside of the companys 2008 Equity
Incentive Plan as inducement awards material to Mr. Bahls employment. All of the options will
have a seven year term and an exercise price equal to the closing price of the company common stock
on the date of grant. 111,111 of the options and 233,334 shares of restricted stock will vest in
equal increments over a period of four years. The remaining 185,185 options and 111,111 shares of
restricted stock will vest in equal increments on the second and fourth anniversaries of the date
of grant. In addition, the Equity Inducement Awards will vest upon a Change of Control of the
Company (as defined in the Employment Agreement), and a portion of the Equity Inducement Awards
will vest upon the occurrence of certain other events including the termination of Mr. Bahl by the
Company without Cause or by Mr. Bahl for Good Reason (as such terms are defined in the Employment
Agreement). The forms of the agreements covering the Equity Inducement Awards are filed herewith
as Exhibits 10.2 and 10.3 and are incorporated herein by reference.
4. Post-Termination Benefits.
(a) No Change of Control. If Mr. Bahl, other than within two years after a Change of Control,
(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 the following: (i) payment of his annual base salary for the period equal to the
greater of 18 months or the sum of four weeks for each full year of continuous service he has with
the Company (the Severance Period); (ii) payment of any actual earned full-year bonus (pro-rated)
for the year in which Mr. Bahls employment termination occurs; (iii) continuation of health care
plan coverage for the Severance Period; (iv) payment of any accrued obligations; (v) vesting of Mr.
Bahls outstanding unvested Equity Inducement Awards that would have vested based solely on Mr.
Bahls continued employment through the anniversary date of the commencement of Mr. Bahls
employment with the Company immediately following the termination of his employment, and vesting in
full of Mr. Bahls other 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 Mr. Bahls employment or the original
expiration date of the options; (vi) payment of up to $20,000 of outplacement services; and (vii)
if Mr. Bahls termination occurs before July 30, 2010, payment of a pro rata portion of Mr. Bahls
$1 million bonus described above.
(b) Change of Control. If, within 2 years following a Change in Control, Mr. Bahl (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 Employment Agreement, then he is
entitled to receive the same benefits as he would have received as described above under No Change
of Control except that (i) the payment of Mr. Bahls annual base salary shall be for the period
equal to the greater of two years or the sum of four weeks for each full year of continuous service
he has with the Company (the Change in Control Severance Period) and (ii) the executives health
care plan coverage shall continue for the Change in Control Severance Period.
(c) For Cause. If the Company terminates Mr. Bahls employment for Cause or Mr. Bahl
terminates the executives employment for other than a Good Reason, the Employment Agreement
terminates and the Company will have no further obligations to Mr. Bahl other than to pay any
accrued obligations.
5. Business Protection Agreements. Mr. Bahl 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 Employment
Agreement.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed herewith:
Exhibit 10.1 Employment Agreement dated January 8, 2009, by and between Mr. Romil Bahl and
the Company
Exhibit 10.2 Form of Nonqualified Stock Option Agreement
Exhibit 10.3 Form of Restricted Stock Agreement
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: January 14, 2009