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

October 25, 2017

Date of Report (Date of earliest event reported)

 

 

PRGX Global, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Georgia

(State or Other Jurisdiction of Incorporation)

 

0-28000   58-2213805
(Commission File Number)   (IRS Employer Identification No.)
600 Galleria Parkway, Suite 100, Atlanta, Georgia   30339-5949
(Address of Principal Executive Offices)   (Zip Code)

770-779-3900

(Registrant’s 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):

 

  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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers .

On October 25, 2017, PRGX Global, Inc. (the “Company” or “PRGX”) and Ronald E. Stewart, the Company’s President and Chief Executive Officer, entered into a second amendment (the “Amendment”) to Mr. Stewart’s employment agreement, which, among other things, (1) extended the term of Mr. Stewart’s employment agreement until December 31, 2021, (2) increased Mr. Stewart’s annual base salary from $515,000 to $550,000, (3) increased the target and maximum short-term annual incentive opportunities (as a percentage of base salary and to conform to Mr. Stewart’s 2017 incentive opportunities under the Company’s 2017 Short Term Incentive plan) from 90% and not less than 180%, respectively, to 100% and not less than 200%, respectively, (4) updated the “Restricted Territory” in which Mr. Stewart will be restricted from certain activities after the termination of his employment with PRGX, and (5) provided for the grant to Mr. Stewart of stock options to acquire 500,000 shares of the common stock, no par value, of the Company, which are discussed in more detail below.

In accordance with the Amendment, on October 25, 2017 the Company granted Mr. Stewart stock options to acquire 500,000 shares of the common stock, no par value, of the Company (the “2017 Stock Options”) at an exercise price equal to $7.35, the closing price of the Company’s common stock on October 25, 2017, pursuant to a Non-Qualified Stock Option Agreement, the form of which is filed with this Current Report on Form 8-K. The 2017 Stock Options were approved by the Company’s Compensation Committee and were granted under the PRGX Global, Inc. 2017 Equity Incentive Compensation Plan. The 2017 Stock Options have a five-year term, and will vest and become exercisable as to one-third of the 2017 Stock Options (rounded down to the nearest whole share) on each of December 31, 2019 and December 31, 2020, and as to the remaining 2017 Stock Options on December 31, 2021, subject to Mr. Stewart’s continued employment through such dates and any other acceleration provisions set forth in the award agreement or the Amendment.

Except as described above, all other material terms of Mr. Stewart’s employment agreement remain in full force and effect. The foregoing is qualified in its entirety by reference to the full text of the Amendment attached as Exhibit 10.1 to this Current Report and incorporated herein by reference. In addition, the foregoing is qualified in its entirety by reference to the PRGX Non-Qualified Stock Option Agreement, attached as Exhibit 10.2 to this Current Report.

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits

The following exhibits are filed herewith:

 

Exhibit 10.1    Second Amendment of Employment Agreement dated October 25, 2017, by and between Ronald E. Stewart and the Company
Exhibit 10.2    PRGX Non-Qualified Stock Option Agreement dated October 25, 2017, by and between Ronald E. Stewart and the Company


EXHIBIT INDEX

 

Exhibit

Number

 

Description of Exhibits

10.1   Second Amendment of Employment Agreement dated October 25, 2017, by and between Ronald E. Stewart and the Company
10.2   PRGX Non-Qualified Stock Option Agreement dated October 25, 2017, by and between Ronald E. Stewart 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.

 

PRGX Global, Inc.
By:  

/s/ Victor A. Allums

  Victor A. Allums
  Senior Vice President, Secretary and General Counsel

Dated: October 26, 2017

Exhibit 10.1

SECOND AMENDMENT OF EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT OF EMPLOYMENT AGREEMENT (this “Second Amendment”) is made and entered into as of October 25, 2017 (the “Second Amendment Effective Date”) by and between PRGX Global, Inc., a Georgia corporation (the “Company”), and Ronald E. Stewart (the “Executive”).

W I T N E S S E T H :

WHEREAS , the Company and the Executive previously entered into that certain Employment Agreement, dated as of December 13, 2013 (the “Employment Agreement”), as amended by that certain Amendment of Employment Agreement, dated as of April 27, 2016 (the “First Amendment” and together with the Employment Agreement, the “Amended Employment Agreement”), to set forth the terms and conditions of the Executive’s employment as the Company’s Chief Executive Officer and President; and

WHEREAS , the Company and the Executive now desire to further amend the Amended Employment Agreement as set forth herein.

NOW, THEREFORE , in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth and intending to be legally bound, the Company and the Executive agree as follows:

1. Section 2 of the Amended Employment Agreement is hereby amended by deleting it in its entirety and inserted the following in lieu thereof:

“Term. This Agreement is effective as of the Effective Date, and will continue through December 31, 2021 (the “Term”), unless terminated earlier as hereinafter provided.”

2. Section 3(a) of the Amended Employment Agreement is hereby amended by deleting the first sentence therein and inserting the following in lieu thereof, and by changing the reference to “2015” in the third sentence to “2019”:

“Beginning as of the Second Amendment Effective Date, the Company shall pay the Executive an annual base salary of $550,000.”

3. Section 3(b) of the Amended Employment Agreement is hereby amended by deleting the fourth sentence therein and inserting the following in lieu thereof:

“In connection with such annual incentive bonus plan, subject to the corresponding performance levels being achieved, beginning with calendar year 2017, the Executive shall be eligible for an annual target bonus equal to one hundred percent (100%) of the Executive’s annual base salary and an annual maximum bonus of not less than two hundred percent (200%) of the Executive’s annual base salary.”

 

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4. Section 3(c)(iii) of the Amended Employment Agreement is hereby amended by (i) changing the reference to “2014” in the first sentence to “2019” and (ii) deleting the last sentence of such section and inserting the following in lieu thereof:

“Except as specifically set forth above, however, nothing herein shall require the Company to make any equity grants or other awards to the Executive in any specific year, and the Executive acknowledges and agrees that the grant of the 2017 Stock Options (as defined below) is in lieu of any equity awards to be granted to Executive in calendar year 2018.”

5. Section 3(c) of the Amended Employment Agreement is hereby further amended by adding the following new clause (v) to the end thereof:

“(v)    The Company shall grant to the Executive, as of the Second Amendment Effective Date, stock options to acquire 500,000 shares of the common stock, no par value per share, of the Company (the “2017 Stock Options”), at an exercise price equal to the closing price, as of the date of grant, of the underlying shares of common stock, pursuant to a form of Stock Option Agreement under the 2017 Equity Incentive Compensation Plan that is approved by the Compensation Committee of the Company and reflects the terms of the 2017 Stock Options stated herein. The 2017 Stock Options will have a term of five years and vest as to one-third of the 2017 Stock Options (rounded down to the nearest whole share) on each of December 31, 2019 and December 31, 2020, and as to the remaining 2017 Stock Options on December 31, 2021, subject to the Executive’s continued employment through such dates and the acceleration provisions in this Agreement.”

6. Section 8(b) of the Amended Employment Agreement is hereby amended by adding the following new clause (ix) to the end thereof:

“(ix) vesting of a prorated number of the Executive’s outstanding unvested options, restricted stock and other equity-based awards (other than the “Cash-Settled SARs,” as defined in the First Amendment) that would have vested based solely on the continued employment of the Executive through the first applicable vesting date immediately following the date of Executive’s termination of employment for each type of award (e.g., options, restricted stock, etc.) equal to the number of such awards that would vest as of such next vesting date multiplied by a fraction, the numerator of which is the number of monthly anniversaries that have occurred, as measured from the immediately preceding vesting date of such awards (or, if none, since the date of grant of such awards), to the date of termination of the Executive’s employment, and the denominator of which is the number of monthly anniversary dates between such immediately preceding vesting date (or, if none, such date of grant) and the first vesting date immediately following the date of termination of the Executive’s employment. Additionally, all of the Executive’s outstanding stock options shall remain outstanding until the earlier of (i) one year after the date of termination of the Executive’s employment or (ii) the original expiration date of the options (disregarding any earlier expiration date provided for in any other agreement, including without limitation any related grant agreement, based solely on the termination of the Executive’s employment).”

 

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7. Section 8(d) of the Amended Employment Agreement is hereby amended by adding the following new clause (vi) to the end thereof:

“(vi) vesting of a prorated number of the Executive’s outstanding unvested options, restricted stock and other equity-based awards (other than the Cash-Settled SARs) that would have vested based solely on the continued employment of the Executive through the first applicable vesting date immediately following the date of Executive’s termination of employment for each type of award (e.g., options, restricted stock, etc.) equal to the number of such awards that would vest as of such next vesting date multiplied by a fraction, the numerator of which is the number of monthly anniversaries that have occurred, as measured from the immediately preceding vesting date of such awards (or, if none, since the date of grant of such awards), to the date of termination of the Executive’s employment, and the denominator of which is the number of monthly anniversary dates between such immediately preceding vesting date (or, if none, such date of grant) and the first vesting date immediately following the date of termination of the Executive’s employment. Additionally, all of the Executive’s outstanding stock options shall remain outstanding until the earlier of (i) one year after the date of termination of the Executive’s employment or (ii) the original expiration date of the options (disregarding any earlier expiration date provided for in any other agreement, including without limitation any related grant agreement, based solely on the termination of the Executive’s employment).”

8. Section 8(f) of the Amended Employment Agreement is hereby amended by deleting the second sentence thereof and adding the following as the new second sentence thereof:

“If the Executive’s employment terminates upon expiration of the Term in accordance with Section 7(e) hereof, all of the Executive’s outstanding stock options shall remain outstanding until the earlier of (i) one year after the date of termination of the Executive’s employment or (ii) the original expiration date of the stock options (disregarding any earlier expiration date provided for in any agreement, including without limitation any related grant agreement, based solely on the termination of the Executive’s employment).”

9. Section 8(g) of the Amended Employment Agreement is hereby amended by deleting the reference in the first sentence to Section 8(b)(i), (ii), (iii), (v), (vi), (vii) and (viii) therein and inserting the following in lieu thereof:

“8(b)(i), (ii), (iii), (v), (vi), (vii), (viii) and (ix)”

10. Exhibit A, Restricted Territory, of the Amended Employment Agreement is hereby amended by deleting it in its entirety and inserting the attached Exhibit A, Restricted Territory, in lieu thereof.

11. Except as otherwise set forth herein, the Amended Employment Agreement shall continue in accordance with its terms as in effect prior to this Second Amendment.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the Second Amendment Effective Date set forth above.

 

PRGX GLOBAL, INC.
By:  

/s/ Victor A. Allums

Its:   Senior Vice President and General Counsel

EXECUTIVE

/s/ Ronald E. Stewart

Ronald E. Stewart

 

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EXHIBIT A

RESTRICTED TERRITORY

“Restricted Territory” refers to all of the geographic areas described in I. and II. below, collectively.

I.      All of the following Metropolitan Statistical Areas in the U.S., collectively:

Akron, OH

Atlanta-Sandy Springs-Roswell, GA

Austin-Round Rock, TX

Boise City, ID

Bridgeport-Stamford-Norwalk, CT

Charlotte-Concord-Gastonia, NC-SC

Chicago-Naperville-Elgin, IL-IN-WI

Cincinnati, OH-KY-IN

Dallas-Fort Worth-Arlington, TX

Danville, IL

Fayetteville-Springdale-Rogers, AR-MO

Grand Rapids-Wyoming, MI

Harrisburg-Carlisle, PA

Hartford-West Hartford-East Hartford, CT

Houston-The Woodlands-Sugar Land, TX

Indianapolis-Carmel-Anderson, IN

Jacksonville, FL

Kansas City, MO-KS

Killeen-Temple, TX

Miami-Fort Lauderdale-West Palm Beach, FL

Minneapolis-St. Paul-Bloomington, MN-WI

Nashville-Davidson-Murfreesboro-Franklin, TN

New York-Newark-Jersey City, NY-NJ-PA

Phoenix-Mesa-Scottsdale, AZ

Riverside-San Bernardino-Ontario, CA

San Francisco-Oakland-Hayward, CA

San Jose-Sunnyvale-Santa Clara, CA

Seattle-Tacoma-Bellevue, WA

St. Louis, MO-IL

York-Hanover, PA

II.    All of the area within the city limits of the following cities and within 25 kilometers of the city limits of the following cities, collectively:

Bangkok, Thailand

Boulogne-Billancourt, France

Brampton, Ontario, Canada

 

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Brno, Czech Republic

Cheshunt, United Kingdom

Croix, Nord-Pas-de-Calais, France

Hampshire, United Kingdom

Hemel Hempstead, United Kingdom

Laval, Quebec, Canada

Letchworth Garden City, United Kingdom

Levallois-Perret, France

London, United Kingdom

Luton, United Kingdom

Manchester, United Kingdom

Hawthorn East, Victoria, Australia

Mexico City, Mexico

Milton Keynes, United Kingdom

Mississauga, Ontario, Canada

Montreal, Quebec, Canada

Perth, Western Australia, Australia

Pune, India

Pymble, New South Wales, Australia

Rungis, France

Sao Paulo, Brazil

Saskatoon, Saskatchewan, Canada

Stellarton, Nova Scotia, Canada

Surrey, United Kingdom

Sydney, New South Wales, Australia

Toronto, Ontario, Canada

Worksop, United Kingdom

 

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Exhibit 10.2

 

Your Name:   Ronald E. Stewart
Total No. of Shares Covered by the Option:   500,000

PRGX NON-QUALIFIED STOCK OPTION AGREEMENT

PRGX GLOBAL, INC. (“PRGX”) is pleased to grant to the person signing below (“you” or “Participant”) the Non-Qualified Stock Option described below under the PRGX 2017 Equity Incentive Compensation 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 tax law purposes.

 

Grant Date:        October 25, 2017
Exercise Price per Share:        $7.35
Option Expiration Date:        October 24, 2022
Number of Shares of Common Stock:        500,000 (the “Shares”)

Vesting Schedule: Subject to the Plan and this Agreement, this Option may be exercised in whole or in part in accordance with the following schedule, provided you remain continuously employed with PRGX from the Grant Date until such time(s):

 

On and after

    

Cumulative Number of Shares

Purchasable Upon Exercise of Option

December 31, 2019

    

1/3 of the Shares (rounded down to the nearest whole share)

December 31, 2020

    

2/3 of the Shares (rounded down to the nearest whole share)

December 31, 2021

    

100% of the Shares

The Additional Terms and Conditions and the Plan described below are incorporated in this Agreement by reference and contain important information about your Option. Copies of all of the documents referenced below are being provided to you in connection with this Agreement. Please review them carefully and contact PRGX Human Resources if you have any questions.

Additional Terms and Conditions describes how to exercise your Option, what happens if you cease to remain employed with PRGX before you exercise your Option, and where to send notices;

The Plan contains the detailed terms that govern your Option. If anything in this Agreement or the other referenced documents is inconsistent with the Plan, the terms of the Plan, as amended from time to time, will control. All terms used herein that are not defined herein but that are defined in the Plan have the same meaning given them in the Plan;

Plan Prospectus; and 2016 Annual Report on Form 10-K of PRGX for the Year Ended December 31, 2016.

Please sign in the space provided below to show that you accept the Option on these terms, keep a copy of this Agreement for your records, and return both originals to PRGX Human Resources.

 

Participant:      PRGX GLOBAL, INC.

/s/ Ronald E. Stewart

     By:   

/s/ Victor A. Allums

Ronald E. Stewart      Name:    Victor A. Allums
5360 Long Island Drive      Its:    Senior Vice President & General Counsel
Atlanta, Georgia 30327        


ADDITIONAL TERMS AND CONDITIONS OF YOUR OPTION

HOW TO EXERCISE YOUR OPTION .

 

  This Option must be exercised for whole shares only and in increments of at least 100 shares per exercise or, if less, all of the remaining shares to which the Option is subject.

 

  The Plan is administered on behalf of the Committee by the Plan administrator. The Plan administrator is responsible for assisting you in the exercise of your Option and maintaining the records of the Plan. If you have questions about your Option, how you go about exercising the vested portion of your Option or how the Plan works, please contact the Plan administrator at Plan.Administrator@prgx.com or (770) 779-3309.

 

  The exercise date of your Option is the date of delivery to the Plan administrator of your notice of exercise. The notice must be accompanied by payment of the Option price and any applicable tax withholding in full. You may pay the Option price and any applicable tax withholding (i) in cash, (ii) by certified or bank cashier’s check, or (iii) by such other medium of payment as the Plan administrator in his sole discretion may permit. You will need to contact the Plan administrator before you exercise your Option to determine the amount of any required tax withholding.

 

  Except as provided herein and in the Plan, this Option is non-transferable. This Option may be transferred by will or the laws of descent and distribution and, notwithstanding the foregoing, during the Participant’s lifetime may be transferred by the Participant to any of the Participant’s Permitted Transferees (as such term is defined in the Plan). Any such transfer will be permitted only if (i) the Participant does not receive any consideration for the transfer and (ii) the Plan administrator expressly approves the transfer. Any transferee to whom this Option is transferred shall be bound by the same terms and conditions, including with respect to vesting, that govern the Option in the hands of the Participant; provided, however, that the transferee may not transfer this Option except by will or the laws of descent and distribution. No right or interest of the Participant or any transferee in this Option shall be subject to any lien, obligation or liability of the Participant or any transferee.

EFFECT OF TERMINATION OF EMPLOYMENT . If, prior to December 31, 2021 and a Change in Control, your employment with PRGX is terminated by PRGX without Cause, you terminate your employment for Good Reason, or your employment is terminated by reason of your death or Incapacity, a Pro Rata Portion of the Option shall vest and become exercisable as of the termination of your employment with PRGX for any such reason. Any portion of the Option that has not vested previously and does not vest and become exercisable under such circumstances will be forfeited at that time.

If your employment with PRGX is terminated prior to December 31, 2021 and a Change in Control, other than by PRGX without Cause, by you for Good Reason, or by reason of your death or Incapacity, the unvested portion of the Option will be forfeited immediately upon the termination of your employment.

For purposes of this Agreement, (i) “Cause” shall have the same definition as in the Employment Agreement dated December 13, 2013, between you and the Company, as amended by that certain Amendment of Employment Agreement dated April 27, 2016 and that certain Second Amendment of Employment Agreement dated October 25, 2017 (the “Employment Agreement”); (ii) “Good Reason” shall have the same definition as in your Employment Agreement; (iii) “Incapacity” shall have the same definition as in your Employment Agreement; and (iv) “Pro Rata Portion” means the portion of the Option that would have vested based on your continued employment through the vesting date immediately following the date of termination of your employment equal to the number of Shares with respect to which the Option would vest as of such next vesting date multiplied by a fraction, the numerator of which is the number of monthly anniversaries that have occurred, as measured from the immediately preceding vesting date of the Option (or, if none, since the date of grant of the Option), to the date of termination of your employment, and the denominator of which is the number of monthly anniversary dates between such immediately preceding vesting date (or, if none, such date of grant) and the first vesting date immediately following the date of termination of your employment.

For purposes of this Agreement, employment with any Affiliate of PRGX will be considered employment with PRGX.

 

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CHANGE IN CONTROL . Upon the occurrence of a Change in Control prior to December 31, 2021, the Option shall become vested and exercisable as of the Change in Control, provided you have remained in continuous employment with PRGX from the Grant Date until the time of the Change in Control. Accordingly, termination of your employment after the Change in Control for any reason other than by PRGX for Cause will not result in forfeiture of your Option.

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 PRGX:

    

PRGX Global, Inc.

    

600 Galleria Parkway, Suite 100

    

Atlanta, GA 30339-8426

    

Attention: Senior Vice President & General Counsel

To you:      The address set forth on page 1

MISCELLANEOUS . The Participant has received a copy of the Plan, has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their terms and conditions. Failure by you or PRGX 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 PRGX 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 contains 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.

 

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