EXHIBIT 99.1
SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION AND RELEASE AGREEMENT AND COVENANT NOT TO XXX (the
"Agreement") is entered into by and between PRG-Xxxxxxx USA, Inc., a Georgia
corporation (the "Company"), successor to The Profit Recovery Group
International II, L.P., and Xxxx X. Xxxx, a resident of the state of Georgia
("Executive"), as of the Effective Date of the Agreement, as defined below.
WITNESSETH
Executive and the Company entered into that certain Employment Agreement,
dated as of March 20, 1996, as amended by the First Amendment to Employment
Agreement dated March 7, 1997, effective as of December 31, 1996, and as amended
by the Second Amendment to Employment Agreement dated September 17, 1997,
effective as of July 22, 1997, and as amended by the letter amendment dated May
1, 2002, and as amended by the letter dated March 7, 2003, and as amended by the
Amendment to Employment Agreement and Restrictive Covenant Agreement dated March
7, 2005, (the "Employment Agreement").
Executive and the Company are terminating their employment relationship,
subject to the terms hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
contained herein and other good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Termination of Employment. The parties hereto hereby acknowledge and
agree that Executive's employment with the Company will automatically terminate
as of the close of business on July 31, 2005.
2. General Release of Claims by Executive. In consideration of the
covenants from the Company to Executive set forth herein and in the Employment
Agreement, the receipt and sufficiency of which is hereby acknowledged,
Executive, on his behalf and on behalf of his heirs, devisees, legatees,
executors, administrators, personal and legal representatives, assigns and
successors in interest (collectively, the "Derivative Claimants" and each a
"Derivative Claimant"), hereby IRREVOCABLY, UNCONDITIONALLY AND GENERALLY
RELEASES, ACQUITS, AND FOREVER DISCHARGES, to the fullest extent permitted by
law, the Company, PRG-Xxxxxxx International, Inc. ("Parent") and each of
Parent's and the Company's directors, officers, employees, representatives,
stockholders, predecessors, successors, assigns, agents, attorneys, divisions,
subsidiaries and affiliates (and agents, directors, officers, employees,
representatives and attorneys of such stockholders, predecessors, successors,
assigns, divisions, subsidiaries and affiliates), and all persons acting by,
through, under or in concert with any of them (collectively, the "Company
Releasees" and each a "Company Releasee"), or any of them, from any and all
charges, complaints, claims, damages, actions, causes of action, suits, rights,
demands, grievances, costs, losses, debts, and expenses (including attorneys'
fees and costs incurred), of any nature whatsoever, known or unknown, that
Executive now has, owns, or holds, or claims to have, own, or hold, or which
Executive at any time heretofore had, owned, or held, or claimed to have, own,
or hold from the beginning of time to the date that Executive signs this
Agreement, including, but not limited to, those claims arising out of or
relating to (i) any agreement, commitment, contract, mortgage, deed of trust,
bond, indenture, lease, license, note, franchise, certificate, option, warrant,
right or other instrument, document, obligation or arrangement, whether written
or oral, or any other relationship, involving Executive and/or any Company
Releasee, (ii) breach of any express or implied contract, breach of implied
covenant of good faith and fair dealing, misrepresentation, interference with
contractual or business relations, personal injury, slander, libel, assault,
battery, negligence, negligent or intentional infliction of emotional distress
or mental suffering, false imprisonment, wrongful termination, wrongful
demotion, wrongful failure to promote, wrongful deprivation of a career
opportunity, discrimination (including disparate treatment and disparate
impact), hostile work environment, sexual harassment, retaliation, any request
to submit to a drug or polygraph test, and/or whistleblowing, whether said
claim(s) are brought pursuant to the AGE DISCRIMINATION IN EMPLOYMENT ACT (29
U.S.C. SECTIONS 621-634), TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED,
THE EQUAL PAY ACT, 42 U.S.C. SECTIONS 1981, 1983, OR 1985, THE VOCATIONAL
REHABILITATION ACT OF 1977, THE AMERICANS WITH DISABILITIES ACT, THE FAMILY AND
MEDICAL LEAVE ACT OR THE FAIR CREDIT REPORTING ACT or any other constitutional,
federal, regulatory, state or local law, or under the common law or in equity,
and (iii) any other matter (each of which is referred to herein as a "Claim");
provided, however, that nothing contained herein shall operate to release any
obligations of the Company, its successors or assigns arising under any claims
under the Employment Agreement or under any written Company benefit plans, any
401(k) plan, any pension plan and any similar plan, to the extent Executive is
entitled to benefits under the respective terms thereof.
3. Release of Unknown Claims. Executive recognizes that he may have some
claim, demand, or cause of action against the Company Releasees relating to any
Claim of which he is totally unaware and unsuspecting and which is given up by
the execution of this Agreement. It is Executive's intention in executing this
Agreement with the advice of legal counsel that this Agreement will deprive him
of any such Claim and prevent Executive or any Derivative Claimant from
asserting the same. The provisions of any local, state, federal, or foreign law,
statute, or judicial decision providing in substance that this Agreement shall
not extend to such unknown or unsuspecting claims, demands, or damages, are
hereby expressly waived.
4. Release of Claims by Company. As a material inducement to Executive to
enter into this Agreement, the Company hereby, on behalf of itself and its
successors and assigns, to the fullest extent permitted by law, absolutely,
unconditionally, completely and irrevocably releases, acquits, discharges, and
waives forever and for all purposes Executive from any and all charges,
complaints, claims, promises, agreements, demands, actions or causes of action,
suits, damages (including attorneys' fees and costs actually incurred),
expenses, compensation, penalties, liabilities and obligations of any kind or
nature whatsoever, that any of the Company, Parent, or any other subsidiary of
Parent, or any of their respective shareholders, may have, in each such case, of
which the Independent Directors of Parent have actual knowledge as of the date
hereof ("Company Claims"). For purposes hereof, "Independent Director" means a
director of Parent that satisfies the criteria for independence under the
listing standards established by the National Association of Securities Dealers,
Inc. as in effect on the date hereof.
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5. Acknowledgments.
(a) Executive acknowledges that he has thoroughly discussed all aspects of
this Agreement with his attorney, that he has carefully read and fully
understands all of the provisions of this Agreement, and that he is voluntarily
entering into this Agreement. Executive hereby waives the requirement under the
Age Discrimination in Employment Act that Executive has twenty-one (21) days to
review and consider this Agreement before executing it. Executive acknowledges
and understands that he shall have seven (7) days after signing this Agreement
during which he may revoke this Agreement by providing written notice to the
Company within seven (7) days following its execution. Any notice of revocation
of this Agreement shall not be effective unless given in writing and received by
the Company within the seven-day revocation period via personal delivery,
overnight courier, or certified U.S. mail, return receipt requested, to
PRG-XXXXXXX USA, INC., 000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
Attention: General Counsel. THIS AGREEMENT SHALL NOT BECOME EFFECTIVE AND
ENFORCEABLE UNTIL SUCH SEVEN (7) DAY PERIOD HAS EXPIRED. IF EMPLOYEE REVOKES
THIS AGREEMENT WITHIN SUCH SEVEN (7) DAY PERIOD, EMPLOYEE WILL NOT BE ENTITLED
TO RECEIVE ANY OF THE RIGHTS AND BENEFITS DESCRIBED HEREIN (INCLUDING, WITHOUT
LIMITATION, THE RELEASE PROVIDED IN SECTION 4 ABOVE), EXCEPT TO THE EXTENT THAT
EXECUTIVE WOULD HAVE BEEN ENTITLED TO RECEIVE SUCH BENEFITS INDEPENDENT OF THIS
AGREEMENT (INCLUDING, WITHOUT LIMITATION, EXECUTIVE'S BENEFITS PROVIDED FOR
UNDER THE TERMS OF HIS EMPLOYMENT AGREEMENT).
(b) Executive acknowledges and agrees that:
(I) Executive's stock options for (i) 110,295 shares of Parent common
stock, dated December 31, 1996, with an exercise price of $10.6667 per share,
(ii) 129,995 shares of Parent common stock, dated December 31, 1997, with an
exercise price of $11.8333 per share and (iii) 200,000 shares of Parent common
stock, dated January 24, 2002, with an exercise price of $9.28 per share, are
hereby forfeited and cancelled as of the Termination Date; and
(II) Executive shall be entitled to receive the following:
(A) in equal bi-weekly installments consistent with the Company's payroll
practices, commencing February 1, 2006, payment of $5,512,423.14, paid over
three (3) years from that date; and
(B) Upon expiration of eighteen months from July 31, 2005, the Company
shall assist Executive and/or his spouse in obtaining an individual health
insurance policy which provides health coverage on terms substantially similar
to those provided under COBRA coverage (the "Individual Replacement Policy").
The Company shall pay all premiums for any Individual Replacement Policy for
Executive and his spouse up to $25,000 per calendar year in the aggregate, which
maximum amount shall be increased each calendar year commencing January 1, 2003,
by a percentage equal to the percentage increase in the "CPI" occurring since
January 1, 2002. For purposes hereof, "CPI" means the index now known as the
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"Consumer Price Index for All Urban Consumers, All Items, U.S. Cities Average,
(1982-1984 = 100)", issued and published by the Bureau of Labor Statistics of
the United States Department of Labor. If the CPI ceases to use 1982-1984
equaling 100 as the basis of calculation, or if a change is made in the terms or
number of items contained in the CPI, or if the CPI is altered, modified,
converted or revised in any way, then the increase in annual premiums hereunder
shall be determined by reference to the index designated as the successor to the
CPI or other substitute index published by the government of the United States.
In the event the CPI shall hereafter be converted to a different standard
reference base or otherwise revised, determinations based upon the CPI shall be
made with the use of such conversion factor, formula or table for converting the
CPI as may be published by the Bureau of Labor Statistics, or, failing such
publication, with the use of such conversion factor, formula, or table as may be
published by any other nationally recognized publisher of similar statistical
information. In the event the publication of the CPI is hereafter discontinued,
Parent shall designate a comparable index to be used in lieu thereof. For
purposes hereof, the CPI for a given date shall be determined by reference to
the CPI for the calendar month in which such date falls. Upon Executive and/or
his wife becoming enrolled for Medicare coverage, the obligation of the Company
with respect to the Individual Replacement Policy shall terminate but the
Company shall become responsible for paying (or reimbursing Executive and/or his
spouse for) any premiums required by Medicare for Part A or B coverage and for
any premiums associated with any supplemental individual insurance policy
selected and obtained by Executive and/or his spouse for each up to the age of
80, respectively. In no event, however, shall the Company's obligation pursuant
to the immediately preceding sentence exceed $25,000 per year, as adjusted by
the CPI escalator described above. The Company's obligations with respect to
Executive and/or his spouse under this paragraph shall terminate upon Executive
or his spouse becoming covered under a group health plan sponsored by any other
employer, other than CT Investments, LLC, due to the employment of Executive or
his spouse."
(c) The obligations in Section 5(b)(II)(A) and (B) above are undertaken by
the Company in full satisfaction for, and in lieu of, any and all obligations
owing to Executive by the Company pursuant to the Employment Agreement
(including, without limitation, a three (3) year post-termination car allowance,
three (3) year's base salary and target bonus, and payment of COBRA premiums and
post-COBRA health insurance costs).
6. No Assignment. Executive represents and warrants that he has not
assigned or transferred, or purported to assign or transfer, to any person,
entity, or individual whatsoever, any of the Claims released herein. Executive
agrees to indemnify and hold harmless the Company Releasees against any Claim
based on, arising out of, or due to any such assignment or transfer. Company
represents and warrants that it has not assigned or transferred, or purported to
assign or transfer, to any person, entity, or individual whatsoever, any of the
Company Claims released herein. Company agrees to indemnify and hold harmless
Executive, his successors and assigns, against any Company Claim based on,
arising out of, or due to any such assignment or transfer.
7. Cooperation and Non-Disparagement. For so long as payments are due and
owing to Executive pursuant to Section 5(b)(II)(A) hereof, Executive hereby
agrees that he will cooperate in any reasonable requests by the Company in
effecting an orderly management transition and will cooperate with all corporate
or independent investigations by the Parent Board or the Company Board and all
governmental investigations of the Company or Parent. Executive hereby agrees
that he will not make any disparaging comments or accusations detrimental to the
reputation, business, or business relationships of the Company, the Company's
affiliates or subsidiaries and/or their respective shareholders, directors or
employees. Likewise, Company agrees that it will not make any disparaging
comments or accusations detrimental to the reputation, business, or business
relationships of Executive. In the event Executive becomes legally compelled to
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disclose information that may be disparaging to the Company, the Company's
affiliates or subsidiaries and/or their respective shareholders, directors or
employees or detrimental to the business or business relationships of the
Company, or the Company becomes legally compelled to disclose information that
may be disparaging to Executive or detrimental to the business or business
relationships of Executive, the party who is so legally compelled will provide
the other with prompt notice so that it may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this Release.
In the event that such protective order or remedy is not obtained, or the party
that may be disparaged by the release of the information waives compliance with
the provisions of this Release, Executive or the Company, as the case may be,
will furnish only such information that he or it is advised by written opinion
of counsel is legally required, and will exercise best efforts to obtain a
protective order or other reliable assurance that confidential treatment will be
accorded any confidential information.
8. Indemnification and Covenant Not to Xxx.
(a) In furtherance of the foregoing, Executive agrees on behalf of himself
and the Derivative Claimants not to xxx or prosecute any matter against any
Company Releasee with respect to any Claim and agrees to hold each Company
Releasee harmless with respect to any such suit or prosecution in contravention
of this Section 8. Executive understands that if this Agreement were not signed,
he would have the right voluntarily to assist other individuals or entities in
bringing Claims against the Company Releasees. Executive hereby waives that
right and hereby agrees that he will not voluntarily provide any such
assistance. To the extent that applicable law prohibits Executive from waiving
his right to bring and/or participate in the investigation of a Claim, Executive
nevertheless waives his right to seek or accept any damages or relief in any
such proceeding.
(b) For the avoidance of doubt, Executive shall continue to be entitled to
indemnification to the extent provided by, and in accordance with the terms of,
any other indemnification provision under which Executive was entitled prior to
the execution of this Agreement, including without limitation, under Parent's
Bylaws, and the Indemnification Agreement, dated __1/26/96__, by and between
Executive and Parent (including, but not limited to, indemnification against
claims related to taxes owed by foreign subsidiaries of Company).
9. Representation Regarding Knowledge of Trade Secrets and/or Inventions.
Executive hereby acknowledges and confirms that he has no right, claim or
interest to any property, invention, trade secret, information or other asset
used in the business of the Company and that all such property, inventions,
trade secrets, information and other assets used in the business of the Company
are owned by the Company or its affiliates or licensed to the Company or its
affiliates by third parties not affiliated with Executive.
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10. Return of Company Property and Proprietary Information.
(a) Executive further promises, represents and warrants that, except as set
forth on Schedule 10 to this Agreement, Executive has returned or will return to
Xxxxxxx XxXxxxxx, by no later than upon the execution of this Agreement by
Executive: (a) all property of the Company, including, but not limited to, any
and all files, records, credit cards, keys, identification cards/badges,
computer access codes, computer programs, instruction manuals, equipment
(including computers) and business plans; (b) any other property which Executive
prepared or helped to prepare in connection with Executive's employment with the
Company; and (c) all documents, including logs or diaries, all tangible
materials, including audio and video tapes, all intangible materials (including
computer files), and any and all copies or duplicates of any such tangible or
intangible materials, including any duplicates, copies, or transcriptions made
of audio or video tapes, whether in handwriting or typewritten, that are in the
possession, custody or control of Executive or his attorneys, agents, family
members, or other representatives, which are alleged to support in any way any
of the claims Executive has released under this Agreement. Executive
acknowledges that, following August 31, 2005, Executive shall not have access to
the Company's electronic mail or managed document systems.
(b) The foregoing representation shall include, except as set forth on
Schedule 10 to this Agreement, all Proprietary Information of the Company and
its affiliates. With respect to Proprietary Information, except as set forth on
Schedule 10 to this Agreement, Executive warrants, represents, and covenants to
return such Proprietary Information on or before the close of business on July
31, 2005. As used herein, "Proprietary Information" means information in written
form or electronic media, including but not limited to technical and
non-technical data, lists, training manuals, training systems, computer based
training modules, formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, processes and plans regarding the Company or its
affiliates, clients, prospective clients, methods of operation, billing rates,
billing procedures, suppliers, business methods, finances, management, or any
other business information relating to the Company or its affiliates (whether
constituting a trade secret or proprietary or otherwise) which has value to the
Company or its affiliates and is treated by the Company or its affiliates as
being confidential; provided; however, that Proprietary Information shall not
include any information that has been voluntarily disclosed to the public by the
Company or its affiliates (except where such public disclosure has been made
without authorization) or that has been independently developed and disclosed by
others, or that otherwise enters the public domain through lawful means.
Proprietary Information does include information which has been disclosed to the
Company or its affiliates by a third party and which the Company or its
affiliates are obligated to treat as confidential. Proprietary Information may
or may not be marked by the Company or its affiliates as "proprietary" or
"secret" or with other words or markings of similar meaning, and the failure of
the Company to make such notations upon the physical embodiments of any
Proprietary Information shall not affect the status of such information as
Proprietary Information. With respect to any Proprietary Information listed in
Schedule 10, Executive agrees to maintain the confidentiality of such
Proprietary Information and not disclose same to any third party without the
prior written consent of the Company and, in addition, with respect to any
Proprietary Information described in the last bullet-point in Schedule 10,
Executive agrees to promptly return same (and any copies thereof) to the Company
upon request by the Company.
(c) Executive agrees that, to the extent he retains any Company property
pursuant to the provisions of Schedule 10, other than computer, telephone, or
blackberry equipment, he will provide Xxxxxxx XxXxxxxx with a photocopy of same,
made at Company expense, on or before July 31, 2005.
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11. General Provisions.
(a) This Agreement and the covenants, representations, warranties and
releases contained herein shall inure to the benefit of and be binding upon
Executive and the Company and each of their respective successors, heirs,
assigns, agents, affiliates, parents, subsidiaries and representatives.
(b) Each party acknowledges that no one has made any representation
whatsoever not contained herein concerning the subject matter hereof to induce
the execution of this Agreement. Executive acknowledges that the consideration
for signing this Agreement is a benefit to which Executive would not have been
entitled had Executive not signed this Agreement.
(c) Executive agrees that the terms and conditions of this Agreement,
including the consideration hereunder shall not be disclosed to anyone and shall
remain confidential and not disseminated to any person or entity not a party to
this Agreement except to family members, legal counsel, an accountant for
purposes of securing tax advice; the Internal Revenue Service, or the state
taxing agencies.
(d) The "Effective Date" of this Agreement shall be the eighth (8th) day
after the execution of the Agreement by Executive.
(e) This Agreement does not constitute an admission of any liability.
(f) The parties hereto and each of them agrees and acknowledges that if any
portion of this Agreement is declared invalid or unenforceable by a final
judgment of any court of competent jurisdiction, such determination shall not
affect the balance of this Agreement, which shall remain in full force and
effect. Any such invalid portion shall be deemed severable.
(g) Neither this Agreement nor any provision hereof may be modified or
waived in any way except by an agreement in writing signed by each of the
parties hereto consenting to such modification or waiver.
This Agreement shall in all respects be interpreted, enforced and governed under
the internal laws (and not the conflicts of laws and rules) of Georgia.
[SIGNATURES APPEAR ON THE NEXT PAGE]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.
EXECUTIVE ATTESTS THAT HE UNDERSTANDS THAT THIS AGREEMENT INCLUDES A RELEASE OF
ALL KNOWN AND UNKNOWN CLAIMS HELD BY EXECUTIVE.
NOTICE - THIS AGREEMENT CONTAINS A WAIVER OF RIGHTS UNDER THE AGE DISCRIMINATION
IN EMPLOYMENT ACT. EXECUTIVE IS ADVISED TO CONSULT WITH AN ATTORNEY BEFORE
SIGNING THIS AGREEMENT
EXECUTED THIS 2nd DAY OF August , 2005.
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EXECUTIVE: /s/ Xxxx X. Xxxx
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PRINT NAME: XXXX X. XXXX
Sworn to and subscribed before me this 2nd day of August, 2005.
--- ------
/s/ Xxxxx Xxxxxxx Xxxxx Xxxxxxx
--------------------------------- Notary Public, Xxxxxx County, GA
Notary Public My Commission Expires February 27, 2007
EXECUTED THIS 2nd DAY OF August , 2005.
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COMPANY: PRG-XXXXXXX USA, INC.
By: /s/ Xxxxxxx XxXxxxxx, Xx.
-----------------------------------------
Its: S.V.P. and General Counsel
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SCHEDULE 10
o IBM Model X-31 Laptop Computer
o Toshiba Portege R100 Laptop Computer
o RIM Blackberry Mondel 7210
o Copies of any e-mails received or sent by Executive during employment
with the Company.
o Such additional documents as may be necessary to assist Executive in
advising or assisting the new Chief Executive of the Company.
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