Exhibit 4.1
THIRD AMENDMENT TO
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS THIRD AMENDMENT (this "Amendment"), effective as of November 7, 2005,
is between PRG-SCHULTZ INTERNATIONAL, INC., a Georgia corporation (the
"Company"), and WACHOVIA BANK, NATIONAL ASSOCIATION f/k/a FIRST UNION NATIONAL
BANK, as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, in connection with that certain Shareholder Protection Rights
Agreement dated as of August 9, 2000, as amended effective May 15, 2002, and
August 16, 2002, between the Company and the Rights Agent (the "Agreement"), the
Board of Directors of the Company deems it advisable and in the best interest of
the Company and its shareholders to amend the Agreement in accordance with
Section 5.4 of the Agreement;
WHEREAS, pursuant to its authority under Section 5.4 of the Agreement, the
Board of Directors of the Company has authorized and approved this Amendment to
the Agreement set forth herein as of the date hereof.
NOW, THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment, which are not
otherwise defined herein, are used with the same meaning ascribed to such terms
in the Agreement.
2. Amendments.
(a) The definition of "Acquiring Person" in Section 1.1 is hereby deleted
in its entirety and replaced to read as follows:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person
(i) who shall become the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time
thereafter as such Person shall become the Beneficial Owner (other
than by means of a stock dividend or stock split) of any additional
shares of Common Stock, (ii) who is the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock but who acquired
Beneficial Ownership of shares of Common Stock without any plan or
intention to seek or affect control of the Company, if such Person
promptly enters into an irrevocable commitment promptly to divest, and
thereafter promptly divests (without exercising or retaining any
power, including voting, with respect to such shares), sufficient
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shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) so that such Person ceases to be
the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock, (iii) who is the Beneficial Owner of shares of Common
Stock consisting solely of shares of Common Stock, the Beneficial
Ownership of which was acquired by such Person pursuant to any action
or transaction or series of related actions or transactions approved
by the Company's Board of Directors before such person otherwise
became an Acquiring Person, (iv) who was the Beneficial Owner of 15%
or more of the outstanding shares of Common Stock on August 9, 2000
and does not thereafter acquire Beneficial Ownership of additional
shares of Common Stock that in the aggregate exceed 2% of the
outstanding shares of Common Stock, or (v) who is a member of the Ad
Hoc Committee of the Company's 4 3/4% Convertible Subordinated Note
holders formed in October 2005 (including without limitation the Blum
Investors, Parkcentral Global Hub, Limited and Petrus Securities, L.P.
and any affiliates or associates of those Persons named as reporting
persons on a Schedule 13D or amendment thereto filed by such Persons
with the Securities and Exchange Commission with respect to the
Company's securities and as a direct result of the formation and/or
activities of the Ad Hoc Committee) and who may be deemed to be an
Acquiring Person solely due to such Person's membership or
participation in the activity of the Ad Hoc Committee (as a point of
clarification of this clause (v), in no event shall any acquisition of
shares of Common Stock of the Company or securities convertible into
shares of Common Stock of the Company by any such Person be exempted
hereunder); provided, however, that the terms of this clause (v) shall
automatically expire and have no further effect upon the dissolution
of the Ad Hoc Committee by the members of the Committee. In addition,
notwithstanding any provision of this Agreement to the contrary, no
Blum Investor or Investors shall be deemed an Acquiring Person for any
purpose under this Agreement for so long as that certain standstill
agreement (the "Standstill Agreement") between the Company and the
Blum Investors dated August 16, 2002 is in effect and so long as the
Blum Investors have increased their Beneficial Ownership of Common
Stock above that shown in the Blum Investors' amendment to Schedule
13D filed with the Securities and Exchange Commission on June 17, 2002
by no more than 5,784,675 shares in the aggregate (without giving
effect to any stock split, share dividend, recapitalization,
reclassification or similar transactions effected by or with the
approval of the Board of Directors of the Company after the date
hereof and without regard to any shares that they may be deemed to own
beneficially of any member of the Ad Hoc Committee solely by reason of
their membership or participation in the activities of that Committee)
(the "Limit"); provided, however, that the Limit shall be reduced, on
a share for share basis, by any shares sold or otherwise disposed of
by any Blum Investor otherwise than to another Blum Investor and by
that number of shares that are acquired by the Company under an Option
Agreement in the form attached hereto as Annex A between the Company
and Schultz PRG Liquidating Investments Ltd.; provided, further,
however, that any termination of the Standstill Agreement by the
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Company or delivery of any notice of termination by the Blum
Investors, in each case pursuant to Section 17 of the Standstill
Agreement, shall rescind this sentence and cause the Blum Investors'
full Beneficial Ownership of Common Stock to be considered for
purposes of determining whether or not the Blum Investors are an
Acquiring Person. Additionally, the Company, any wholly-owned
Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly-owned Subsidiary of
the Company shall not be an Acquiring Person.
3. Counterparts. This Amendment may be executed in any one or more
counterparts, each of which shall be deemed an original and all of which shall
together constitute the same Amendment.
4. Ratification. Except as modified and amended as set forth herein, the
Agreement is hereby ratified and confirmed without further modification or
amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the date first above written.
PRG-SCHULTZ INTERNATIONAL, INC.
By: /s/ Clinton McKellar, Jr.
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Name: Clinton McKellar, Jr.
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Title: General Counsel and Secretary
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WACHOVIA BANK, NATIONAL ASSOCIATION
f/k/a FIRST UNION NATIONAL BANK
By: /s/ Patrick J. Edwards
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Name: Patrick J. Edwards
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Title: Vice President
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