Document:

EX-10.1 FORM OF NON-EMPLOYEE DIRECTOR STOCK OPTION

 

Exhibit 10.1

Your Name:                    

Total No. of Options:                    

PRG-SCHULTZ NON-QUALIFIED STOCK OPTION AGREEMENT

FOR NON-EMPLOYEE DIRECTORS

PRG-SCHULTZ INTERNATIONAL, INC. (“PRG-Schultz”) is pleased to grant to the person signing below
(“you” or “Optionee”) the nonqualified stock option described below under the PRG-Schultz Stock
Incentive 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:
	 	 
	 

	 	 
	Exercise Price per Share:

	 	$                    
	Option Expiration Date:
	 	 
	 

	 	 

Vesting: Subject to the Plan and this Agreement, including, without limitation, any termination of
this Option on the Option Expiration Date, 100% of the shares subject to this Option may be
purchased on or after the earlier of (1) the date of, and
immediately prior to, PRG-Schultz’s 2008 annual meeting of
shareholders and (2) June 1, 2008.

The following documents are incorporated in this Agreement by reference and contain important
information about your Options. Copies of these documents are being provided to you concurrently
with this Stock Option Agreement. Please review carefully and contact PRG-Schultz Human Resources
if you have any questions:

Additional Terms and Conditions describes how to exercise your Option, what happens if
you cease to serve as a director of PRG-Schultz 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 attachments is inconsistent with the Plan, the terms of the Plan, as
amended from time to time, will control;

Plan Prospectus Document covering the Options contains important information; and

2006 Annual Report of PRG-Schultz.

Please sign below to show that you accept these Options, keep a copy and return both originals to
PRG-Schultz Human Resources.

Optionee:

			
	Print Your Name:	 	
 

			
	Your Residence Address:	 	
 

	 	 
	 	 

 

PRG-SCHULTZ INTERNATIONAL, INC.

			
	By:	 	
 

			
	Name:	 	
 

			
	Its:	 	
 

 

 

ADDITIONAL TERMS AND CONDITIONS OF YOUR OPTION

HOW TO EXERCISE YOUR OPTION

	•	 	The Plan is administered by a Stock Option Plan Administrator in the Finance Department in
the Atlanta office. The Administrator is responsible for assisting you in the exercise of your
option and maintaining the records of the Plan. He may be reached at (770) 779-6554 or 3037.
If you have questions about your options, how you go about exercising your options or how the
Plan works, please contact the Administrator during normal business hours.

EFFECT OF TERMINATION OF BOARD SERVICE.

	•	 	Termination of Board Service for Any Reason. Except as set forth below regarding
a “Change in Control,” if your Board service terminates for any reason, you (or your estate)
can exercise any portion of your vested Options at any time until the earlier of (a) three
(3) years after the date of termination of your board service or (b) the Option Expiration
Date. After such earlier date, the unexercised Options shall terminate. Except as set
forth below regarding a “Change in Control,” all of your unvested Options will terminate
immediately following the termination of your Board service for any reason.

	•	 	Change in Control. Upon the occurrence of a Change in Control, as such term is
defined in the Company’s Amended and Restated 2006 Management Incentive Plan, as in effect on
the date hereof, all of your unvested Options shall immediately vest, and all of your
outstanding Options shall remain exercisable until the Option Expiration Date, regardless of
whether or not your Board service shall terminate for any reason.

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 the Company:

	 	PRG-Schultz International, Inc.
	 

	 	600 Galleria Parkway, Suite 100
	 

	 	Atlanta, GA 30339
	 

	 	Attention: Senior Vice President, Human Resources
	 
	 	 
	To you:

	 	The address set forth on page 1

MISCELLANEOUS. Failure by you or PRG-Schultz 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 PRG-Schultz 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 and the Plan contain 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.Ex-10.1

 

EXHIBIT 10.1

WAIVER AND FOURTH AMENDMENT TO

REVOLVING CREDIT AND TERM LOAN AGREEMENT

     THIS WAIVER AND FOURTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (this “Waiver and
Amendment”) is dated the 13th day of September, 2007 by and among FIRST ACCEPTANCE CORPORATION (the
“Borrower”), SUNTRUST BANK as Administrative Agent and as a Lender and FIRST BANK as a Lender.

RECITALS:

     A. The Borrower, Administrative Agent and Lenders are parties to a Revolving Credit and Term
Loan Agreement dated as of January 12, 2006 (as previously amended by the Waiver and First
Amendment to Revolving Credit and Term Loan Agreement, as previously amended by the Waiver and
Second Amendment to Revolving Credit and Term Loan Agreement, as previously amended by the Waiver
and Third Amendment to Revolving Credit and Term Loan Agreement, and as amended from time to time,
collectively, the “Credit Agreement”).

     B. Borrower has requested a waiver of compliance by the Borrower with certain provisions of
the Credit Agreement and has requested that certain provisions of the Credit Agreement be amended.

     C. Subject to the terms of this Fourth Amendment to Revolving Credit and Term Credit
Agreement, the Lenders have agreed to such waivers and amendments as set forth herein.

     D. Terms not defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.

     NOW, THEREFORE, in consideration of the foregoing, the covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

     Section 1. Waiver of Compliance with Section 6.1 for Certain Period. Compliance by
the Borrower with the terms of Section 6.1 of the Credit Agreement for the quarter ending June 30,
2007 is hereby waived.

     Section 2. Waiver of Compliance with Section 6.4 for Certain Period. Compliance by
the Borrower with the terms of Section 6.4 of the Credit Agreement for the quarter ending June 30,
2007 is hereby waived.

     Section 3. Financial Covenant Waiver for Certain Periods. For the periods ending
September 30, 2007, December 31, 2007, March 31, 2008 and June 30, 2008, compliance by the Borrower
with the terms of Section 6.4 of the Credit Agreement is hereby waived.

     Section 4. Fixed Charge Coverage Ratio. Compliance by the Borrower with Section 6.1 of
the Credit Agreement for the period ended September 30, 2007 is hereby waived. For the period
ending December 31, 2007, compliance with Section 6.1 of the Credit Agreement shall be

 

 

calculated for the period from July 1, 2007 through December 31, 2007. For the period ending
March 31, 2008, compliance with Section 6.1 of the Credit Agreement shall be calculated for the
period from July 1, 2007 through March 31, 2008. For the period ending June 30, 2008, compliance
with Section 6.1 of the Credit Agreement shall be calculated for the period from July 1, 2007
through June 30, 2008.

     After June 30, 2008, compliance with Section 6.1 of the Credit Agreement shall be computed and
measured as set forth in such section of the Credit Agreement.

     Section 5. Minimum Thresholds with respect to Fixed Charge Coverage Ratio. The
required minimum threshold for the Fixed Charge Coverage Ratio as set forth in Section 6.1 of the
Credit Agreement shall be as follows:

	 	 	 
	For the period ending December 31, 2007

	 	Not less than 1.20 to 1.0
	For the period ending March 31, 2008

	 	Not less than 1.40 to 1.0
	For the period ending June 30, 2008 and at all
times thereafter

	 	Not less than 1.50 to 1.0

     Section 6. Minimum Net Income. A new Section 6.6 is added to Article VI of the Credit
Agreement and shall read as follows:

     Section 6.6 Minimum Net Income. The Borrower shall maintain minimum
Net Income for the following four fiscal quarters ending as set forth below:

	 	 	 	 	 
	September 30, 2007
	 	$	1,000,000	 
	December 31, 2007
	 	$	1,200,000	 
	March 31, 2008
	 	$	3,000,000	 
	June 30, 2008
	 	$	2,300,000	 

Net Income shall be defined as follows: for any period, the net income (or loss) of
the Borrower and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.

     Section 7. Minimum Mandatory Principal Prepayment. On or prior to December
31, 2007, the Borrower shall make a principal prepayment on the Term Loan in the minimum amount of
$6,000,000. From and after the date of such principal prepayment, the scheduled repayment amounts
of the Term Loan required and described in the Credit Agreement shall be reduced, on a ratable
basis, to reflect such $6,000,000 (or such larger amount actually paid) Term Loan prepayment. The
principal payment described in this Section shall not be included for purposes of computing the
Fixed Charge Coverage Ratio.

     Section 8. Permanent Revolving Commitment Reduction. As of the date of this
Waiver and Amendment, the Revolving Commitments are permanently reduced to an aggregate amount
equal to $2,000,000.

2

 

     Section 9. Interest Rate Change. Effective as of June 30, 2007, the definition of
“Applicable Margin” is deleted and the following is substituted in lieu thereof:

     “Applicable Margin” shall mean for all Loans outstanding on any date, 1.00%
per annum with respect to Base Rate Loans and 2.50% per annum with respect to
Eurodollar Loans.

     Section 10. Amendment Fee. Concurrently with the execution of this Waiver and
Amendment, Borrower shall pay an amendment fee of $50,000 to Administrative Agent for the account
of the Lenders.

     Section 11. Mandatory Reduction of Term Loans. A new paragraph is added at the end of
Section 7.6 of the Credit Agreement and shall read as follows:

     All net proceeds from the sale of any assets described in either subparagraph
(c) or (d) above shall be paid by Borrower to the Administrative Agent and shall be
applied as a mandatory prepayment of the outstanding Term Loans within thirty days
of the date of any such sale of assets.

     Section 12. No Additional Indebtedness. Section 7.1(i) of the Credit Agreement is
deleted and the following is substituted in lieu thereof:

     (i) other Indebtedness existing in an aggregate principal amount not to exceed
$3,000,000 at any time outstanding, provided, however, that Borrower shall not create or
incur any additional such Indebtedness after the date of this Waiver and Amendment without
the prior written consent of Lenders.

     Section 13. Representations and Warranties. To induce the Administrative Agent, the
Issuing Bank, the Swingline Lender and the Lenders to enter into this Waiver and Amendment, the
Borrower hereby represents and warrants to the Lenders that:

     (a) Reaffirmation. As of the date of this Waiver and Amendment and after
giving effect to this Waiver and Amendment, the representations and warranties set forth in
Article IV of the Credit Agreement are true and correct in all material respects
(except to the extent that any such representation or warranty expressly relates to a
specified earlier date, in which case such representation or warranty shall be true and
correct as of such earlier date, and except for changes in facts and circumstances which are
not prohibited by the terms of the Credit Agreement); and

     (b) No Default. As of the date hereof and after giving effect to this Waiver
and Amendment, no Default or Event of Default shall have occurred and be continuing.

     Section 14. Payment of Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for its reasonable out-of-pocket costs and expenses incurred in connection
with the preparation and execution of this Waiver and Amendment.

     Section 15. Conditions. The effectiveness of this Waiver and Amendment is subject to
the satisfaction of the following conditions precedent:

3

 

     (a) The Lenders shall have received this Waiver and Amendment (and any other documents
necessary to evidence the transactions relating thereto) duly executed by the Borrower and
the Guarantors, as applicable;

     (b) No Default or Event of Default shall exist;

     (c) Payment of the amendment fee described in Section 10 above; and

     (d) The Administrative Agent shall have received an incumbency certificate with respect
to the officer(s) of Borrower executing this Waiver and Amendment, and a certificate of
existence for the Borrower.

     Section 16. Resolutions. Within 10 days of the date of this Waiver and Amendment,
Borrower shall deliver to the Administrative Agent a resolution of the Borrower ratifying and
affirming the execution and delivery of this Waiver and Amendment and all transactions related
thereto, in form and substance satisfactory to the Administrative Agent and its counsel. Failure to
deliver such resolution within such period shall constitute an Event of Default under the Credit
Agreement.

     Section 17. Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.

     Section 18. Severability; Headings. Any provision of this Waiver and Amendment which
is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability, without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. The section and
subsection headings used in this Amendment are for convenience of reference only and are not to
affect the construction hereof or to be taken into consideration in the interpretation hereof.

     Section 19. Continuing Effect of Other Documents. This Waiver and Amendment shall not
constitute an amendment or waiver of any other provision of the Credit Agreement not expressly
referred to herein and, except to the extent that the Credit Agreement expressly has been amended
hereby, shall not be construed as a waiver or consent to any further or future action on the part
of the Borrower that would require a waiver or consent of the Required Lenders or the
Administrative Agent. Except as expressly amended, modified or supplemented hereby, the provisions
of the Credit Agreement are and shall remain in full force and effect.

     Section 20. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

4

 

     IN WITNESS WHEREOF, the parties hereto have executed this Waiver and Fourth Amendment to
Revolving Credit and Term Loan Agreement as of the date first set forth above.

	 	 	 	 	 
	 	 	FIRST ACCEPTANCE CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Bodayle
	 

	 	 	 	 
	 

	 	Title:
	 	Chief Financial Officer — Insurance
	 

	 	 	 	Company Operations
	 
	 	 	 	 
	 	 	SUNTRUST BANK, as Administrative Agent and as a
Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William Christensen
	 

	 	 	 	 
	 

	 	Title:
	 	Director
	 
	 	 	 	 
	 	 	FIRST BANK, as a Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Douglas A. Remke
	 

	 	 	 	 
	 

	 	Title:
	 	Vice President

5

 

CONSENT OF GUARANTORS

The undersigned, each a Guarantor, as defined in the Subsidiary Guarantee Agreement, hereby execute
this Waiver and Fourth Amendment to Revolving Credit and Term Loan Agreement to evidence their
consent thereto, as well as the transactions contemplated thereby, and agree that the Subsidiary
Guarantee Agreement dated January 12, 2006, remains in full force and effect.

	 	 	 	 	 
	 	USAUTO HOLDINGS, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 
	 	TRANSIT AUTOMOBILE CLUB, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 
	 	ALABAMA ACCEPTANCE INSURANCE AGENCY, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 
	 	ACCEPTANCE INSURANCE AGENCY OF TENNESSEE, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 

6

 

	 	 	 	 	 
	 	ACCEPTANCE INSURANCE AGENCY, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 
	 	FIRST ACCEPTANCE SERVICES, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 
	 	ACCEPTANCE INSURANCE AGENCY OF ILLINOIS, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 
	 	LNC HOLDINGS, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 
	 	ACCEPTANCE INSURANCE AGENCY OF TEXAS, INC., as a Guarantor

 	 
	 	By:  	/s/ Michael J. Bodayle
 	 
	 	 	Name:  	Michael J. Bodayle 	 
	 	 	Title:  	Treasurer 	 
	 

7

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