Item 1.01. Entry into a Material Definitive Agreement
.
On November 10, 2016, PRGX Global, Inc. (the Company) entered into an agreement (the Agreement) with Matthew A.
Drapkin, Northern Right Capital Management, L.P., Northern Right Capital (QP), L.P., and BC Advisors, LLC (collectively, the Shareholder Group).
Under the terms of the Agreement, the Company has agreed (a) on the date of the Agreement to (i) increase the size of the Board of
Directors of the Company (the Board) from six to seven total directors; and (ii) appoint Mr. Drapkin as a Class I director, to serve until the Companys next annual meeting of shareholders to be held in 2017; (b) on
or prior to December 13, 2016, to appoint Mr. Drapkin to either the Nominating and Corporate Governance Committee or Compensation Committee of the Board, as determined by the Board; (c) to nominate Mr. Drapkin for election to the
Board at the Companys 2017 annual meeting of the shareholders, subject to the nonoccurrence of certain events described in the Agreement; (d) for so long as Mr. Drapkin is a member of the Board, (i) that Mr. Drapkin shall
be a member of either the Nominating and Corporate Governance Committee or Compensation Committee, as determined by the Board and subject to Mr. Drapkin meeting certain qualifications as set forth in the Agreement, and (ii) to consider
Mr. Drapkin, in good faith, for membership on any committee of the Board that may be constituted to evaluate strategic opportunities or transactions for the Company; and (e) that with respect to the Companys annual shareholders
meeting to be held in 2018 (the 2018 Annual Meeting), to notify the Shareholder Group in writing, no later than 45 days prior to the timely notice deadline for such annual meeting, as set forth in the Companys organizational
documents, whether the Nominating and Corporate Governance Committee or the Board, as applicable, has resolved to nominate Mr. Drapkin for election at such annual meeting.
The Agreement provides that the Shareholder Group shall have certain obligations until the end of the Standstill Period, which period
commenced upon the effective date of the Agreement and will end (a) if the Board recommends Mr. Drapkin for election to the Board at the Companys 2018 Annual Meeting, on the date on which Mr. Drapkin ceases to be a member of the
Board; (b) if the Board does not recommend Mr. Drapkin for election to the Board at the Companys 2018 Annual Meeting, on the date on which Mr. Drapkin resigns from the Board pursuant to the terms of the Agreement; or
(c) such earlier date, if any, on which (i) the Company materially breaches certain provisions of the Agreement, (ii) the Shareholder Group materially breaches certain provisions of the Agreement, or (iii) the Shareholder Group
does not maintain beneficial ownership of 3% or more of the outstanding common stock of the Company (the Standstill Period).
During the Standstill Period, the Shareholder Group has agreed to (a) cause all shares of the Companys common stock beneficially
owned by the Shareholder Group (i) to be present for quorum purposes at all shareholders meetings, (ii) to be voted in favor of all directors nominated by the Board for election and against the removal of any directors whose removal
is not recommended by the Board, (iii) to be voted in favor of the Boards recommendation regarding appointment of the Companys independent registered public accounting firm, and (iv) to be voted in favor of the Boards
recommendation with respect to any advisory vote on executive compensation; and (b) refrain from taking certain actions, including, subject to certain exceptions, to not (i) acquire
beneficial ownership of more than 10% of the Companys common stock; (ii) engage in activities to control or influence the governance or policies of the Company, including by submitting shareholder proposals, nominating candidates for
election to the Board or opposing candidates nominated by the Board, attempting to call special meetings of the Companys shareholders or soliciting proxies with respect to voting securities of the Company; (iii) participate in any
group, within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with respect to the Companys common stock; (iv) be involved with certain business combination or extraordinary
transactions; (v) disparage the Company or any member of the Board or management of the Company; (vi) engage in any short sale or derivatives transaction that derives any significant part of its value from a decline in the market price or
value of the Companys securities; or (vii) demand or make a request for inspection of the Companys records under the Georgia Business Corporation Code. Mr. Drapkin has also agreed not to serve on the board of directors of a
competing business of the Company while serving as a director of the Company.
In addition, the Agreement provides that Mr. Drapkin
will irrevocably tender his resignation as a director of the Company effective as of the date that (a) the Shareholder Group does not have beneficial ownership of 3% or more of the outstanding common stock of the Company; or (b) the
Shareholder Group materially breaches certain provisions of the Agreement.
The full text of the Agreement is attached as Exhibit 10.1 to
this report and incorporated herein by reference. The foregoing does not purport to be a complete summary of the Agreement and is qualified in its entirety by reference to Exhibit 10.1.