Item 1.01. Entry into a Material Definitive Agreement.
On September 28, 2018, PRGX Global, Inc. (the “Company”), its wholly-owned subsidiary PRGX USA, Inc. (the Company and PRGX USA, Inc. are collectively referred to as the “Borrowers”), and each of the Company’s subsidiaries that are guarantors (the “Guarantors”) under the SunTrust Credit Agreement (as defined herein) entered into a Twelfth Loan Documents Modification Agreement (the “Amendment”) with SunTrust Bank as Administrative Agent, the sole Lender and Issuing Bank (“SunTrust”), which amends that certain Amended and Restated Revolving Credit Agreement, dated as of December 23, 2014, as amended, by and among the Borrowers and SunTrust (the “SunTrust Credit Agreement”).
The Amendment amended the SunTrust Credit Agreement to modify the minimum fixed charge coverage ratio required for the Company with respect to the Company’s fiscal quarter ended September 30, 2018. The Amendment also clarified that the Company’s right to repurchase or otherwise reacquire its outstanding common stock also applies to the repurchase or other reacquisition of outstanding options or warrants to acquire shares of the Company’s common stock.
A copy of the Amendment is attached to this Current Report as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 27, 2018, the Company entered into a Separation Agreement (the “Separation Agreement”) with Deborah M. Schleicher, the Company’s prior Chief Financial Officer, Treasurer and Controller. Pursuant to the Separation Agreement, the employment agreement between the Company and Ms. Schleicher was terminated. Ms. Schleicher’s active service as Chief Financial Officer, Treasurer and Controller ended on August 30, 2018 and her employment with the Company terminated effective as of September 29, 2018. The other material terms of the Separation Agreement are as follows:
1.Post-employment Compensation. The Separation Agreement provides for the Company to pay severance to Ms. Schleicher in the form of salary continuation for six (6) months from the date of termination of Ms. Schleicher’s employment to be paid in accordance with the Company’s standard pay practices. Ms. Schleicher will also receive the actual earned full-year bonus, if any, that she would have received for 2018,pro-rated based on the number of days she was employed. Such bonus, if any, will be paid at the time such bonus would otherwise have been paid had Ms. Schleicher continued employment. The Company will permit Ms. Schleicher to continue healthcare plan coverage for herself, her spouse, and her eligible dependents for a period of six (6) months from the termination date on the same basis and at the same cost as if she remained employed, provided that such coverage shall terminate in the event Ms. Schleicher becomes eligible for coverage under another employer’s plan. A prorated number of Ms. Schleicher’s outstanding unvested options and shares of restricted stock that would have vested based solely on the continued employment of Ms. Schleicher through the first applicable vesting date immediately following the date of termination of Ms. Schleicher’s employment based on the number of months elapsed since the immediately preceding vesting date (or, if none, since the grant date) will vest in full on the date which the applicable revocation period expires under a release agreement executed by Ms. Schleicher, provided that Ms. Schleicher has not elected to revoke the release. Ms. Schleicher’s 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. The Separation Agreement also provides for the Company to make a single lump sum payment to Ms. Schleicher in the aggregate amount of $50,000 on the firstbi-weekly payroll date for the Company occurring after the date upon which the revocation period expires under the release agreement executed by Ms. Schleicher, provided that Ms. Schleicher has not elected to revoke the release and on which it is administratively practicable to make such payment. Ms. Schleicher is also entitled to one year of outplacement services of up to $20,000.
