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| PRGX > SEC Filings for PRGX > Form 8-K on 4-Dec-2008 | All Recent SEC Filings |
4-Dec-2008
Change in Directors or Principal Officers
Net Plus, from 2001 to 2005 and 2003 to 2005, respectively.
Executive Officer Employment Agreements
On November 28, 2008, the Company entered into new employment agreements (the
"Employment Agreements") with certain executive officers of the Company,
including the following named executive officers of the Company: Peter Limeri,
Larry Robinson, and Bradley Roos (collectively, the "Named Executive Officers")
who serve as the Company's Chief Financial Officer and Treasurer, Senior Vice
President and President-Americas, and Senior Vice President and President-Europe
and Asia Pacific, respectively. The Company entered these agreements as part of
an effort to implement a standard executive employment agreement to improve the
consistency of the terms of such agreements among its executive officers. The
material terms of the Employment Agreements, many of which are substantially
similar to the material terms of the Named Executive Officers' previous
employment arrangements, are as follows:
1. Term. Each Employment Agreement provides for a term of one year 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. The Employment Agreements for Messrs. Limeri, Robinson, and
Roos provide for an annual base salary of approximately $300,000, $419,270, and
$323,000, respectively. Each Named Executive Officer will be eligible for an
annual target bonus equal to 50% of the Named Executive Officer's annual base
salary and a maximum bonus equal to 100% of the Named Executive Officer's annual
base salary, based on the achievement of certain performance objectives to be
set by the Company's Compensation Committee. The Named Executive Officers will
also be eligible to receive stock options, restricted stock, stock appreciation
rights and/or other equity awards under the Company's applicable equity plans on
such basis as the Compensation Committee may determine. The Employment
Agreements also provide for standard expense reimbursement, paid time off, and
other standard executive benefits.
3. Post-Termination Benefits.
(a) No Change of Control. If any of the Named Executive Officers, other than
within two years after a Change of Control (as defined in the Employment
Agreements), (x) terminates his employment for Good Reason (as defined in the
Employment Agreements), (y) is terminated by the Company without Cause (as
defined in the Employment Agreements), or (z) terminates his employment upon the
Company's failure to renew the Agreement, then the Named Executive Officer is
entitled to the following: (i) payment of the Named Executive Officer's 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 the Named Executive Officer has
with the Company (the "Severance Period"); (ii)
payment of any actual earned full-year bonus (pro-rated) for the year in which
the Named Executive Officer's employment termination occurs; (iii) continuation
of health care plan coverage for the Severance Period; (iv) payment of accrued
obligations; (v) vesting in full of the Named Executive Officer's outstanding
unvested options, restricted stock and other equity-based awards that would have
vested solely based on the continued employment of the Named Executive Officer,
as well as the continuation of outstanding stock options, until the earlier of
one year after the date of termination of the Named Executive Officer's
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, any
of the Named Executive Officers (x) terminates his employment for Good Reason,
(y) is terminated by the Company without Cause, or (z) terminates his employment
upon the Company's failure to renew the Employment Agreement, then the Named
Executive Officer is entitled to receive the same benefits as such Named
Executive Officer would have received as described above under "No Change in
Control" except that (i) the payment of the Named Executive Officer's 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 the Named Executive
Officer has with the Company (the "Change in Control Severance Period") and (ii)
the Named Executive Officer's health care plan coverage shall continue for the
Change in Control Severance Period.
(c) For Cause. If the Company terminates a Named Executive Officer's
employment for Cause or a Named Executive Officer terminates his employment for
other than Good Reason, the Employment Agreements terminate and the Company will
have no further obligations to the Named Executive Officer other than to pay any
accrued obligations.
4. Business Protection Agreements. Each of the Named Executive Officers is also
bound by confidentiality provisions, non-competition covenants and
non-solicitation restrictions concerning both customers and employees of the
Company.
5. Additional Benefits. Under their respective agreements, Mr. Robinson and
Mr. Roos each receive certain additional compensation and benefits as a result
of their assignments to Dallas, Texas and the United Kingdom, respectively.
During the period of Mr. Robinson's assignment to Dallas, Texas, which is
expected to last until July 31, 2011, Mr. Robinson is entitled to a housing
allowance, a one-time relocation allowance, reimbursement of medical costs,
reimbursement of applicable costs for a work permit/visa, an auto allowance, and
tax preparation assistance associated with equalization of his tax liability to
Canada.
During the period of Mr. Roos' assignment to the United Kingdom, which is
expected to last through December 31, 2009, Mr. Roos is entitled to occupation
of a house leased by the Company, tax consultation and preparation assistance,
an education allowance for Mr. Roos' children to attend the American school, and
an annual tax equalization benefit designed to ensure that Mr. Roos bears a
total tax liability
approximately equivalent to the tax liabilities he would have incurred if
working for the Company in the United States.
The foregoing description is qualified in its entirety by reference to
Messrs. Limeri, Robinson, and Roos' Employment Agreements, copies of which are
filed herewith as Exhibit 10.2, Exhibit 10.3, and Exhibit 10.4, respectively,
and incorporated herein by reference.
Separation Agreement
On November 30, 2008 the Company entered into a Separation Agreement (the
"Separation Agreement") with Norman Lee White, the Company's Executive Vice
President and Executive Vice President of the Company's subsidiary, PRG-Schultz
USA, Inc. ("PRG-Schultz USA"). Pursuant to the Separation Agreement, PRG-Schultz
USA and Mr. White mutually agreed to end Mr. White's employment effective as of
December 31, 2008 (the "Termination Date"), and to terminate, as of November 30,
2008, the Employment Agreement between the parties dated June 19, 2006. The
material terms of the Separation Agreement are as follows:
1. Post-employment Compensation. The Separation Agreement provides for
PRG-Schultz USA to make severance payments to Mr. White equal to his current
annual salary for 26 bi-weekly pay periods following the Termination Date.
Mr. White will receive the full year annual bonus, if any, that he would have
received for calendar year 2008 had Mr. White remained employed with PRG-Schultz
USA. PRG-Schultz USA will permit Mr. White to continue medical and dental
insurance coverage for himself, his spouse, and his eligible dependents during
the period in which Mr. White is receiving severance payments under the
Separation Agreement on the same basis and at the same cost as if he remained
employed. Mr. White is also entitled to any vested, accrued benefits under the
Company's 401(k) plan, any base salary that accrued through the Termination
Date, and any vested benefits under the Company's 2006 Management Incentive
Plan.
2. Consulting Agreement. The Separation Agreement contemplates that, following
the Termination Date, Mr.White shall render certain consulting services to
PRG-Schultz USA. Mr. White will perform these services for no charge until
March 31, 2009, after which PRG-Schultz USA will pay Mr. White a consulting fee
of one hundred and fifty dollars ($150) per hour, as well as reimbursement for
reasonable out-of-pocket expenses.
3. Business Protection Agreements. Mr. White is also bound by confidentiality
provisions, non-competition covenants and non-solicitation restrictions
concerning both customers and employees of PRG-Schultz USA.
4. Release. In order to collect his severance benefits, Mr. White is obligated
to sign and return a release agreement, pursuant to which Mr. White will agree
to release all
current or future claims, known or unknown, arising on or before the date of the
release against PRG-Schultz USA and its affiliates and their respective
officers, directors, employees, agents, insurers, assigns, and successors in
interest.
The foregoing description is qualified in its entirety by reference to the
Separation Agreement, a copy of which is filed herewith as Exhibit 10.5 and
incorporated herein by reference.
Forward Looking Statements
In addition to historical information, this Current Report on Form 8-K
includes certain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements include both implied
and express statements regarding the status of the Company's search for the
successor to Mr. McCurry. Such forward looking statements are not guarantees of
future performance and are subject to risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the Company to
differ materially from the historical results or from any results expressed or
implied by such forward-looking statements. Risks that could affect the
Company's future performance include the Company's ability to locate a qualified
successor to Mr. McCurry and retain existing personnel, revenues that do not
meet expectations or justify costs incurred, the Company's ability to develop
material sources of revenue in addition to its core accounts payable services,
changes in the market for the Company's services, client bankruptcies, loss of
major clients, the risk that the Company may not participate in the proposed
national rollout of the Medicare recovery audit program or that the national
rollout will be significantly delayed, and other risks generally applicable to
the Company's business. For a discussion of other risk factors that may impact
the Company's business, please see the Company's filings with the Securities and
Exchange Commission, including its Form 10-K filed on March 12, 2008. The
Company disclaims any obligation or duty to update or modify these
forward-looking statements.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed herewith:
10.1 Release Agreement dated December 1, 2008 between the Company and
Mr. McCurry
10.2 Employment Agreement dated November 28, 2008 between the Company and
Mr. Limeri
10.3 Employment Agreement dated November 28, 2008 between the Company and
Mr. Robinson
10.4 Employment Agreement dated November 28, 2008 between the Company and
Mr. Roos
10.5 Separation Agreement dated November 30, 2008 between PRG-Schultz USA and
Mr. White
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