Filer:Howard Schultz & Associates International, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: Howard Schultz & Associates International, Inc.
Commission File No. 000-28000
EMPLOYEE AND CLIENT COMMUNICATIONS
INVESTOR NOTICE
The Profit Recovery Group International, Inc. ("PRG") and Howard Schultz &
Associates International, Inc. ("HS&A") will file a joint proxy
statement/prospectus and other relevant documents concerning the proposed
acquisition discussed herein with the SEC. Investors of PRG and HS&A are urged
to read the joint proxy statement/prospectus when it becomes available and any
other relevant documents filed with the SEC because they will contain important
information. You will be able to obtain the documents free of charge at the
website maintained by the SEC at www.sec.gov. In addition, you may obtain
documents filed with the SEC by PRG free of charge by requesting them in writing
from Leslie H. Kratcoski, Director, Investor Relations, The Profit Recovery
Group International, Inc., 2300 Windy Ridge Parkway, Suite 100N, Atlanta, GA
30339 or by telephone at 770-779-3900.
PRG and HS&A, and their respective directors and executive officers, and certain
of their employees, may be deemed to be participants in the solicitation of
proxies from the stockholders of PRG and HS&A in connection with the
acquisition. These participants may have interests in the acquisition, including
interests resulting from holding options or shares of PRG and HS&A common stock.
Information about the interests of directors and executive officers of PRG and
HS&A and their ownership of securities of PRG and HS&A will be set forth in the
joint proxy statement/prospectus.
Investors should read the joint proxy statement/prospectus carefully when it
becomes available before making any voting or investment decisions.
Statements made in these materials which look forward in time involve risks and
uncertainties and are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such risks and uncertainties
include the possibilities that (i) PRG's announced divestitures may require a
longer time to accomplish than PRG anticipates, and PRG may incur additional
losses if, upon disposal, it does not receive the prices it anticipates for such
businesses and may incur unanticipated further charges as a result of
divestiture initiatives, (ii) the announced intention by PRG to dispose of the
discontinued operations may result in the loss of key personnel and diminished
operating results in such operations, (iii) PRG may not achieve anticipated
expense savings, (iv) PRG's past and future investments in technology and
e-commerce may not benefit its business, (v) PRG's Accounts Payable and French
Taxation Services businesses may not grow as expected, (vi) PRG's international
expansion may prove unprofitable and (vii), PRG may not be able to successfully
complete the acquisition of HS&A or successfully integrate such firm and achieve
the substantial planned post-acquisition synergy cost savings even if the
acquisition is completed. If the acquisition of HS& is not completed, PRG will
incur a substantial charge to operations for cumulative out-of-pocket business
combination costs incurred. Other risks and uncertainties that may affect PRG's
business include (i) its ability to effectively manage during the divestitures,
(ii) the possibility of an adverse judgment in pending securities litigation,
(iii) the impact of certain accounting pronouncements by the Financial
Accounting Standards Board or the United States Securities and Exchange
Commission, (iv) potential timing issues that could delay revenue recognition,
(v) the effect of strikes, (vi) future weakness in the currencies of countries
in which PRG transacts business, (vii) changes in economic cycles, (viii)
competition from other companies, (ix) the effect of bankruptcies of larger
clients, (x) changes in governmental regulations applicable to PRG, and other
risk factors, detailed in PRG's Securities and Exchange Commission filings,
including PRG's Form 10-K filed March 27, 2001. PRG disclaims any obligation or
duty to update or modify these forward-looking statements.
[Letter to HS&A-only Clients]
July 26, 2001
[Name]
[Contact Information]
Dear [Name]:
Bringing together the world's most knowledgeable and accomplished professionals,
Howard Schultz & Associates (HS&A) and The Profit Recovery Group International,
Inc. (PRG) today announced an agreement to combine our companies, creating the
world's leading recovery audit services firm, with the power to provide the most
comprehensive accounts payable recovery auditing services to our clients.
In the past decade, each firm has worked hard at identifying new audit
opportunities, furthering software application systems and hiring talented audit
associates to serve our clients. The combination of our businesses will enable
us to pool our best practices, consolidate our research and development efforts,
and leverage our unique areas of specialization to better serve our clients.
There will be no change in the service you receive from our firm. Until the
necessary approvals are obtained, we will continue with business as usual,
operating as two distinct, companies. Once the transaction receives the
appropriate regulatory, bank and shareholder approvals, we fully anticipate that
we'll simply get better at meeting your business objectives.
In closing, thank you for your continued business -- the challenge to exceed
your expectations on a daily basis is our privilege and our pleasure. Our
clients have always been the foundation of our success, no more so than today,
as you are an instrumental force in our future success. In the next few days, a
representative from your client team will be contacting you to request an
in-person meeting to provide additional information about this exciting
development. If you have questions, feel free to ask your client representative,
or contact me directly.
Together, we will endeavor to seize the opportunity ahead -- with singular
focus, unmatched dedication, and the integrity of our leadership.
Sincerely,
Howard Schultz
Howard Schultz & Associates International, Inc.
[Letter to PRG - only Clients]
July 26, 2001
[Name]
[Contact Information]
Dear [Name]:
Bringing together the world's most knowledgeable and accomplished professionals,
The Profit Recovery Group International, Inc. (PRG) and Howard Schultz &
Associates International, Inc. (HS&A) today announced an agreement to combine
our companies, creating the world's leading recovery audit service provider,
with the power to provide the most comprehensive accounts payable recovery
auditing services to our clients.
In the past decade, each firm has worked hard at identifying new audit
opportunities, furthering software application systems and hiring talented audit
associates to serve our clients. The combination of our businesses will enable
us to pool our best practices, consolidate our research and development efforts,
and leverage our unique areas of specialization to better serve our clients.
There will be no change in the service you receive from our firm. Until the
necessary approvals are obtained, we will continue with business as usual,
operating as two distinct companies. Once the transaction receives the necessary
approvals, we fully anticipate that we'll simply get better at meeting your
business objectives.
In closing, thank you for your continued business -- the challenge to exceed
your expectations on a daily basis is our privilege and our pleasure. Our
clients have always been the foundation of our success, no more so than today,
as you are an instrumental force in our future success. In the next few days, a
representative from your client team will be contacting you to request an
in-person meeting to provide additional information about this exciting
development. If you have questions, feel free to ask your client representative,
or contact me directly.
Together, we will endeavor to seize the opportunity ahead -- with singular
focus, unmatched dedication, and the integrity of our leadership.
Sincerely,
John Cook
The Profit Recovery Group International, Inc.
[Letter to Shared Clients]
July 26, 2001
[Name]
[Contact Information]
Dear [Name]:
Bringing together the world's most knowledgeable and accomplished professionals,
The Profit Recovery Group International, Inc. (PRG) and Howard Schultz &
Associates International, Inc. (HS&A) today announced an agreement to combine
our companies. The combination of our businesses will enable us to pool our best
practices, consolidate our research and development efforts, and leverage our
unique areas of specialization, creating the world's leading recovery services
firm, with the power to provide the most comprehensive accounts payable recovery
auditing services to our clients.
There will be no change in the services you receive from our companies. There
should be no interruption in your service, no change in your audit cycle timing.
Until the necessary approvals are obtained, we will continue with business as
usual, operating as two distinct companies.
We understand that you'll have questions about what will happen when the
transaction closes. When the transaction closes, your client team will work with
you to develop a specific business plan to ensure that as a combined
organization, we are fully prepared to provide the most comprehensive,
customized accounts payable recovery audit service to meet your business needs.
If you have any questions in the meantime, please do not hesitate to contact any
member of our teams.
In closing, thank you for your continued business -- the challenge to exceed
your expectations on a daily basis is our privilege and our pleasure. Our
clients have always been the foundation of our success, no more so than today,
as you are an instrumental force in our future success.
Together, we will endeavor to seize the opportunity ahead -- with singular
focus, unmatched dedication, and the integrity of our leadership.
Sincerely,
John Cook Howard Schultz
The Profit Recovery Group Howard Schultz &
International, Inc. Associates International, Inc.
[Letter to HS&A Employees & Associates]
July 26, 2001
To All HS&A Employees and Associates:
Howard Schultz & Associates International, Inc. (HS&A) and The Profit Recovery
Group International, Inc. (PRG) today announced an agreement to bring our two
companies together. By combining the world's most knowledgeable and accomplished
professionals, together we create the world's leading accounts payable recovery
audit firm, with the power to provide more skill, experience, talent and
technology than any company in our industry.
We know that ultimately our success comes down to our people. You are the reason
that our companies have earned reputations for quality service and performance.
We are eager to ensure that the environment at each of our companies continues
to foster great achievement. It is our mutual hope and desire that the talented
professionals with HS&A will see the great potential this combination brings,
and will remain with the new organization--an organization that combines the
best talent, people and ideas in our business.
This is a monumental event in both of our companies' histories, and over the
next few months you may experience some uncertainty. We ask that everyone remain
focused on maintaining the highest level of service to our clients. If you have
a question, don't let the rumor mill get out of control -- ASK! During the next
few weeks and months, we will continue to keep you informed about the status of
the necessary approvals, the close of the transaction, and the integration of
our two organizations - and we're committed to doing so in the most candid and
timely manner possible.
Attached for your information is an overview of our two companies, the
announcement distributed today, the business operating guidelines, and a
question & answer document that we believe addresses many of your initial
questions. We also invite you to listen-in to a conference call we recorded
exclusively for our employees and associates. The call-in number is 800-945-7247
in the U.S., 402-220-3564 if calling from outside of the U.S.
The company will also be hosting separate live conference calls later today, and
these calls will include question and answer sessions. Associates are invited to
join Charlie Schembri at 11AM CT, and the call-in number is 877-917-3406 in the
U.S., 773-756-4622 if calling from outside of the U.S. You will need to provide
the leader's name (Charlie Schembri), and the passcode "Schultz."
Employees are invited to join Andy Schultz at 4PM CT, and the call-in number is
888-577-8994 in the U.S., 630-395-0073 if calling from outside of the U.S. You
will need to provide the leader's name (Andy Schultz) and passcode "Schultz."
There will likely be more questions, and we encourage you to either ask your
supervisor, or submit your questions to the Employee and Associate Infoline
either via fax 972-644-4276, phone 972-246-2316, or via e-mail:
hsaquestions@hsadallas.com. The communications team will respond to your
questions within 48 hours.
Should you receive any questions from the media or the financial community,
please refer them to Michelle Duncan, PRG Corporate Communications
(770-779-3295), or Leslie Kratcoski, PRG Investor Relations, (770-779-3099).
Until the necessary regulatory, bank and shareholder approvals are obtained, we
are required to continue to operate as two separate companies. There will be no
immediate changes in how we deliver service to our clients. It's important that
we continue to operate separately until we receive the appropriate approvals --
for more information, see the business operating guidelines included with this
letter.
In closing, thank you for your continued support -- every one of our employees
and associates accept the daily challenge to exceed our clients' expectations,
with pleasure. Our people remain the driving force behind our success, no more
so than today, as you are instrumental in making this combination a continuation
of our successes.
Together, we will endeavor to seize the opportunity ahead -- with singular
focus, unmatched dedication, and the integrity of our leadership.
Sincerely,
Howard Schultz John Cook
Howard Schultz & Associates. The Profit Recovery Group
International, Inc. International, Inc.
[Letter to PRG Employees]
July 26, 2001
To All PRG Employees:
The Profit Recovery Group International, Inc. (PRG) and Howard Schultz &
Associates International, Inc. (HS&A) today announced an agreement to bring our
two companies together. By combining the world's most knowledgeable and
accomplished professionals, together we create the world's leading accounts
payable recovery audit firm, with the power to provide more skill, experience,
talent and technology than any company in our industry.
This is a monumental event in both of our companies' histories, and over the
next few months you may experience some uncertainty. We ask that everyone remain
focused on maintaining the highest level of service to our clients. If you have
a question, don't let the rumor mill get out of control -- ASK! During the next
few weeks and months, we will continue to keep you informed about the status of
the necessary approvals, the close of the transaction, and the integration of
our two organizations - and we're committed to doing so in the most candid and
timely manner possible.
Meanwhile, attached for your information is an overview of our two companies,
the announcement distributed today, the business operating guidelines, and a
question & answer document that we believe addresses many of your initial
questions. We also invite you to listen-in to a conference call we recorded
exclusively for our employees and associates. The call-in number is 800-945-7249
in the U.S., 402-220-3565 if calling from outside of the U.S.
There will be more questions, and again, we encourage you to either ask your
supervisor, or submit your questions to the Employee and Associate Infoline
either via fax (770) 779-3042, phone (770) 779-3386, or via e-mail:
justask@prgx.com. The communications team will find the answers and respond to
your questions within 48 hours. Should you receive any questions from the media
or the financial community, please refer them to Michelle Duncan, PRG Corporate
Communications (770-779-3295), or Leslie Kratcoski, PRG Investor Relations,
(770-779-3099).
Until the necessary regulatory, bank and shareholder approvals are obtained, we
are required to continue to operate as two distinct companies. There will be no
immediate changes in how we deliver service to our clients. It's important that
we continue to operate separately until we receive the appropriate approvals --
for more information, see the business operating guidelines included with this
letter.
In closing, thank you for your continued support -- every one of our employees
and associates accept the daily challenge to exceed our clients' expectations,
with pleasure. Our people remain the driving force behind our success, no more
so than today, as you are instrumental in making this combination a continuation
of our successes.
Together, we will endeavor to seize the opportunity ahead -- with singular
focus, unmatched dedication, and the integrity of our leadership.
Sincerely,
John Cook Howard Schultz
The Profit Recovery Group Howard Schultz & Associates
International Inc. International, Inc.
[Business Operating Guidelines - Distributed to Employees
and Associates of Both PRG & HS&A]
BUSINESS OPERATING GUIDELINES
PRG and HS&A management recently made the exciting announcement that our
companies will combine to become the world's leading recovery services firm. Due
to the nature of the transaction, the transaction is still subject to the
regulatory, bank and shareholder approvals. The transaction is expected to close
in the fourth quarter of 2001, and we will have to limit our joint activities
until we receive full regulatory, bank and shareholder approval.
During this important transition time, both companies must follow pre-close
antitrust guidelines. If we don't follow these guidelines, we could negatively
impact the transaction. Antitrust laws are concerned with the exchange of
information between competing companies that might inappropriately lessen
competition. In general, exchange of information that is not competitively
significant is permissible. See the attached chart to see what is considered
competitive information.
We will keep you posted on the status of the transaction and when it will be
appropriate to share the information that is restricted in these guidelines. In
the meantime, we have provided answers to a few questions you might have at this
point. Again, these are general guidelines. If you have any doubts, please
contact the PRG Information Hotline at justask@prgx.com, (770-779-3385, phone or
770-779-3042 fax).
------------------------------------------- ------------------------------------
Can be shared Cannot be shared
(competitively sensitive)
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
|X| General information regarding |X| Current or future pricing plans,
current products or services and e.g., rebate information,
business activities discounts, sales, strategies,
conditions of sales, specific
prices or profit margins
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
|X| General information regarding data |X| Current or future marketing
processing systems strategies
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
|X| General information regarding existing |X| Customer lists, prospective
joint ventures or similar relationships bidding plans or pending bids
with third parties (pay attention to
confidentiality agreements)
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
|X| Information regarding organization of |X| Detailed cost information for
operations, management and personnel each service
------------------------------------------- ------------------------------------
------------------------------------------- ------------------------------------
|X| Information that is in the public |X| Profit margins by service
domain or that is regularly disclosed
------------------------------------------- ------------------------------------
Questions & Answers
Q: What should I do if I am not sure if something is competitively sensitive?
A: If there is any question at all, inquire with the PRG Information Hotline:
justask@prgx.com, phone: 770-779-3385, or fax: 770-779-3042.
Q: When can I share competitively information?
A: We will let you know as soon as the transaction is completed. Until then,
if you think you need to share this information, but are unsure if it is
competitively sensitive, seek counsel-- inquire with the PRG Information
Hotline: justask@prgx.com, phone: 770-779-3385, or fax: 770-779-3042.
Q: What if my client asks for a joint bid?
A: Until the transaction is complete, it is inappropriate and unlawful to give
a joint bid.
Q: What information can I get from the other companies' employees and or
associates?
A: These rules apply to both companies so it is inappropriate to ask employees
or associates of either company for competitive information.
[PRG Employee Hotline Greeting Script]
Hello, and welcome to the PRG Employee Hotline--a two-way communication vehicle
designed to help Employees communicate with Management in an open, honest and
timely manner. The purpose of the Information Hotline is two-fold: 1.) to
provide employees with as much information as possible, whether for yourself, or
to better prepare you to answer your clients' questions, and 2.) to gather
information and concerns from Employees to better understand issues that may
affect our organizations.
Your comments are important, and will remain confidential unless you request a
response.
This is the week of Monday, July 23rd.
PRG and HS&A recently announced an agreement to bring our two companies
together. By combining the world's most knowledgeable and accomplished
professionals, together we create the world's leading recovery audit services
provider, with the power to provide more skill, experience and talent than any
company in our industry.
Until the necessary approvals are received, we will continue to operate as two
distinct companies. There will be no change in how we deliver service to our
clients.
Your feedback and participation is vital to our new organization, and all
employees and associates are asked to provide ideas, feedback, and input to
truly make this a combination of the best talent, people, and ideas in the
business.
We understand that you have many questions regarding this transaction and how it
affects you. Many questions are likely top-of-mind for an employee, associate or
client. We encourage you to ask questions, and seek out answers. The
communications team commits to finding the answers, and will report back in a
timely, candid and honest manner. Please leave a message and let us know what's
on your mind. If you leave your contact information, we will respond within 48
hours.
Remember, your comments are important, and will remain confidential unless you
choose to request a response. Thank you for calling.
[HS&A Employee and Associate Hotline Greeting Script]
Hello, and welcome to the Employee and Associate Hotline--a two-way
communication vehicle designed to help Employees and Associates communicate with
Management in an open, honest and timely manner. The purpose of the Information
Hotline is two-fold: 1.) to provide employees and associates with as much
information as possible, whether for yourself, or to better prepare you to
answer your clients' questions, and 2.) to gather information and concerns from
Employees and Associates to better understand issues that may affect our
organizations.
Your comments are important, and will remain confidential unless you request a
response.
This is the week of Monday, July 23rd.
HS&A and PRG recently announced an agreement to bring our two companies
together. By combining the world's most knowledgeable and accomplished
professionals, together we create the world's leading accounts payable recovery
audit services provider, with the power to provide more skill, experience and
talent than any company in our industry.
Until the necessary approvals are received, we will continue to operate as two
distinct companies. There will be no changes in how we deliver service to our
clients.
Your feedback and participation is vital to our new organization, and all
employees and associates are asked to provide ideas, feedback, and input to
truly make this a combination of the best talent, people, and ideas in the
business.
We understand that you have many questions regarding this transaction and how it
affects you. Many questions are likely top-of-mind for an employee, associate or
client. We encourage you to ask questions, and seek out answers. The
communications team commits to finding the answers, and will report back in a
timely, candid and honest manner. Please leave a message and let us know what's
on your mind. If you leave your contact information, we will respond within 48
hours. Remember, your comments are important, and will remain confidential
unless you choose to request a response. Thank you for calling.
[HS&A Employee & Associate Q&A]
Howard Schultz & Associates (HS&A)-
The Profit Recovery Group International (PRG):
Questions and Answers
GENERAL
Who is PRG? Headquartered in Atlanta, Ga., The Profit Recovery Group
International, Inc. (PRG) is one of the world's leading providers of recovery
audit services. PRG's Accounts Payable organization employs over 2,500 employees
in 34 countries providing more than 2,500 clients with insightful value to
optimize and expertly manage their business transactions. PRG's clients
represent a variety of industries including retailing, wholesale distribution,
government, high-tech and healthcare organizations. PRG was founded in 1990 and
became a publicly traded company in 1996. Shares of PRG are traded on the NASDAQ
National Market under the symbol PRGX. For additional information visit our web
site at www.prgx.com.
Who is HS&A? Founded in 1970, Howard Schultz & Associates International, Inc.
(HS&A) is an industry pioneer and a world leader in recovery audit services.
HS&A's core business is accounts payable recovery auditing, and the company has
an extensive, global client base. HS&A also audits occupancy costs, vendor
statements and direct store delivery records to recover overpayments that are a
result of missed credits, duplicate payments, overlooked allowances, incorrect
invoices and other discrepancies. With its headquarters in Dallas, Tx., HS&A has
more than 1,000 auditors serving 1,500 clients in 17 countries.
What did the two companies exactly announce today?
The companies announced an agreement to combine our companies through PRG's
purchase of substantially all of the assets of HS&A and substantially all of the
equity of certain of its affiliates in exchange for PRGX common stock. The
companies will join in a continuing effort to offer the best in talent and
resources to provide clients with the most comprehensive recovery audit service.
In order to accomplish this, PRG and HS&A plan to merge their services into one
combined recovery services resource.
When will the deal be complete?
The transaction is subject to regulatory and bank approvals as well as approvals
from both companies' shareholders. Once these approvals are received, full
integration of the organizations can begin. In the meanwhile, both companies
will continue to operate as separate companies. Subject to obtaining required
approvals, the deal is expected to close in the fourth quarter of 2001, and the
full integration will begin shortly thereafter.
Who will lead the integration once the deal is complete?
To ensure a smooth transition, John Cook and Howard Schultz will be personally
driving the integration process through day-to-day involvement in the business,
specifically by directing the efforts of the Integration Program Office. Mr.
Cook and Mr. Schultz have appointed a broad integration team of experienced
specialists from both companies, led by Andy Schultz (HS&A) and Brad Roos (PRG),
and we've enlisted the assistance of Bain & Company, a well-respected management
consulting firm with expertise in this area.
Who will lead the new organization?
Howard Schultz will become Chairman of the new organization, and John Cook will
be President and Chief Executive Officer. The Chairman and the CEO will work as
a team to jointly manage the new organization.
What will the new organization be called?
The new company will be called PRG-Schultz, to represent the combination of our
two organizations into the world's leading provider of accounts payable recovery
audit services.
Will there be a new logo?
When the transaction closes, we will also launch a new identity for our combined
company. We'll keep you posted on how the roll-out will work, once the new
identity is ready to launch.
How many employees and associates will be a part of the new organization?
PRG has approximately 2,500 employees, serving 2,500 clients in over 34
countries. HS&A has over 1,000 audit associates serving 1,500 clients in 17
countries. The new organization will have approximately 3,500 employees, serving
approximately 3,950 unique clients in 35 countries.
EMPLOYEE/ASSOCIATE
Have other associates/employees been notified?
Yes. Simultaneously today, members of the management teams in both companies are
holding meetings with employees and associates where possible. Other employees
and associates are participating in conference calls with management and all
employees and associates should receive an electronic packet of information in
regard to today's news.
Will I report to someone new?
During the next few months PRG and HS&A will begin to examine what the combined
management team will look like. This will likely result in some changes in
reporting relationships. However, there will be no changes until the transaction
receives the appropriate regulatory, bank and shareholder approvals.
Will anyone lose his or her jobs?
We all know that the nature of a business combination is, by design, a strategic
option to gain efficiencies. Once all necessary approvals are received, John
Cook, Howard Schultz, and their management teams will review the resources
necessary to support and grow the new organization, which may mean some changes.
It is important to remember that no immediate changes will be made at this time.
In order to achieve continued success, both organizations rely on the knowledge
and resources of everyone at HS&A and PRG.
Will job responsibilities and status levels change?
Again, the combination may bring about some change in how the new company will
be organized. But those details have not yet been determined. Remember, no
immediate changes will be made at this time.
Will my compensation and benefits plan change? Will I have to become an employee
of the new organization?
As with any change of this magnitude, we will look at all aspects of the
organization to ensure consistency of our compensation plans. It's an open
secret at HS&A that we've been working through a compensation plan to convert
our HS&A associates to employees, as PRG's professionals are already. For good,
solid business reasons totally unrelated to this announcement, we were
developing this compensation plan. To help us expedite the process of bringing
our two organizations together both culturally and structurally, we plan to
convert HS&A associates to employees. You'll have many questions on the subject,
and you'll be hearing many more details shortly. For now, suffice it to say that
we're confident that the conversion plan - like this announcement itself - will
be good for our clients, good for the firm ... and good for our associates as
well.
Do I have to relocate?
It is important to remember that there will be no immediate changes made at this
time. We simply will not know these details until the transaction is complete.
The combined client base of both companies might provide a greater opportunity
for some auditors to work closer to home.
Will offices be merged together?
Until the transaction is complete, no immediate changes will be made. Once all
the necessary approvals are received, the integration team will make
recommendations about combining space, where appropriate.
What about paychecks? Benefits? Business cards and other details?
Until further notice all administrative procedures remain in place. Until the
completion of the transaction, all employees and associates are part of their
separate, respective companies. This means that there will be no changes in when
and how you receive your paycheck, or your medical, dental or other benefit
coverage.
If I'm a HS&A associate or employee with stock options in HS&A, what happens
now?
In most cases, your stock options in HS&A will be converted into options to
purchase PRGX common stock. (See below for more information).
What will happen to the HSA-Texas stock options outstanding at closing?
At closing, each outstanding HSA-Texas option held by employees, associates or
directors of HSA-Texas who become employees or directors of PRG will be assumed
by PRG and thereafter deemed to constitute an option to acquire PRG common
stock, at terms equivalent to those of the HSA-Texas stock option in accordance
with the 1999 Howard Schultz & Associates Stock Option Plan (the "Plan"). The
exercise price and the number of shares subject to each of these HSA-Texas stock
options will be adjusted to give effect to the proposed acquisition of HSA-Texas
and all of these options will automatically vest and have a term of five years
following the closing.
What will the terms of the substituted options be?
The terms of the substituted options will be identical to the terms of the
corresponding HSA-Texas options except that the number of shares of PRG common
stock underlying each option and the exercise price will be adjusted as
discussed below. Effective upon closing, PRG will adopt a stock option plan
providing substantially the same terms as the Plan. The Non-Qualified Stock
Option Agreement entered into by each option holder with HSA-Texas will remain
in effect after the closing. The substituted options will be fully vested and
exercisable upon closing. Immediately prior to closing, HSA-Texas will amend the
Plan, in order to extend the expiration date of the HSA-Texas options following
the proposed acquisitions to a date five years after the closing.
How will the exercise price of the assumed options and the number of shares
underlying outstanding HSA-Texas options be adjusted?
HSA-Texas option holders currently own HSA-Texas options at one of two exercise
prices per share, $8.16 and $9.06. As an example, an HSA-Texas option to
purchase 1000 shares of HSA-Texas common stock at an exercise price of $8.16 per
share would be converted into an option to purchase 1,487 shares of PRG common
stock at an exercise price of $5.49 per share. An HSA-Texas option to purchase
1000 shares of HSA-Texas common stock at an exercise price of $9.06 per share
would be converted into an option to purchase 1,487 shares of PRG common stock
at an exercise price of $6.09 per share. The closing price of PRG common stock
on July 24, 2001 was $10.65.
The exercise price and number of shares underlying options set forth above
assume that the number of shares of outstanding HSA-Texas common stock remain
constant and that the expenses of effecting the liquidation of HSA-Texas,
including the payment of outstanding liabilities, do not exceed its cash on
hand.
Please note that PRG and HSA-Texas have not yet signed a definitive asset
acquisition agreement and the treatment of options in the acquisition is subject
to change based upon ongoing negotiations.
How will this announcement impact business projects and decisions that are
currently in-process?
Until the transaction is complete, business will run as usual, which means
decisions currently in-process will follow the same approval and measurement
process as before. You should continue working on your projects. If you have a
question about a specific project you're working on, ask your manager for
further clarification.
What will happen to the HS&A mission statement, vision and values?
PRG and HS&A are complementary organizations, and we share more than just a
business model. We share the common objective to deliver unmatched results and
services to our customers in the most professional spirit; we both believe in
developing our associates to the fullest; and we share a vision of advancing the
state of technologies and methodologies for our business practices. That said,
each of our companies is unique, and it will be those differences that will be
the key to our success together. It takes many different viewpoints to make an
organization successful. During the integration process, we will review our
cultures, their missions, values, attitudes and standards to establish the best
qualities of each, and examine how the new organization will adopt these.
CLIENT
How will the announcement impact our clients?
The purpose of the transaction is to enable our companies to better serve our
clients. By focusing our combined talent, technology and resources on our
clients' businesses, we will be better positioned to deliver the most
comprehensive accounts payable recovery auditing service in the world. While the
transaction is undergoing the necessary approvals, there will be no change to
the way each of our companies deliver service to our clients.
Once the transaction is final, client management teams will be designated to
work with our PRG-HS&A (shared clients) to define specific business plans to
employ post-close. By seeking our clients' input on their specific needs, we
will be better able to help our clients successfully manage their business.
How are our clients being notified about the announcement?
We are asking all appropriate employees and associates with client
responsibility to personally and proactively call their clients to inform them
of the news, and let them know that a letter is being delivered to them. For
shared clients, we have adopted a specific protocol for a coordinated approach
(see below). Be sure to work with your manager to coordinate your approach. Your
manager has a Client Briefing Kit, which includes a copy of the client letters
and client speaking points for you to refer to when notifying your clients.
What if we share a client? How should we approach the client?
We are asking employees and associates on shared business to continue to
approach the client separately, but to coordinate the contact, so as to provide
minimal disruption to our clients' business. For our North and South American
businesses, the Client managers on the Primary will contact the client first,
between 8:00AM and 2:00PM (local time). Client managers on the Secondary may
begin with contacting the client after 2:00PM (local time). In the UK, the
Primary may contact the client at 11:15AM, the Secondary may begin 2:15PM (local
time). For Central Europe, the Primary may begin at 10:15AM, the Secondary at
1:15AM. In Australia, the Primary will begin contacting the client at 8AM
(Friday), the Secondary may approach the client at 11AM (Friday). Again, please
be sure to work with your manager to coordinate your approach.
What should I tell my clients?
It is important for our clients to know these six things:
1. It's business as usual for now, there should be no interruption of
their services, no change in audit cycle timing.
2. We are committed to providing them the same level of service as
before. After the transaction is complete, we expect to be able to
provide them with the most comprehensive accounts payable recovery
audit service available in the industry.
3. We expect this to be a transition driven by their specific needs,
better enabling the new organization to identify new audit
opportunities, further software application systems and find talented
audit associates to serve our clients.
4. The combination of our businesses will enable us to pool our best
practices, consolidate our research and development efforts, and
leverage our unique areas of specialization to better serve our
clients.
5. Just as before, if they experience any problems or want to talk about
their account, they should call their sales representative, account
manager or other client contact.
6. Again, until the transaction is complete, we will continue to operate
as two separate companies. We will keep them up-to-date. As soon as
there is information for us to disclose, we will.
What if PRG and HS&A are the primary/secondary on a client account? What will
happen?
There will be no immediate change in the clients' service. Until the transaction
receives the appropriate approvals, we will continue with business as usual,
operating as two separate companies. Once the transaction is final, designated
client teams will be working with these clients to determine what their specific
business needs are, and how the combined organization can bring the most
comprehensive accounts payable recovery audit service to our valued clients.
[Please see above for coordinating your approach on a shared client.]
What if my client asks me...
Below are a few of the questions your client might ask, as well as the
appropriate responses. If your client has a question that you cannot answer, or
need additional help in responding to, contact the Information Hotline (fax:
972-644-4276; phone: 972-246-2316; e-mail: hsaquestions@hsadallas.com). Someone
will respond to your inquiry within 48 hours.
What is going to happen to my key client contacts (sales people and auditors),
now and after the transaction closes?
It's business as usual for now, there should be no interruption of our services,
no change in audit cycle timing, and you'll still have the same great people
working on your business. Once the transaction closes, we will meet with you to
understand your needs, and we'll determine the best service delivery method for
your audit, including the appropriate staffing levels needed to maximize the
recovery opportunity. When our recommended service model has been completed, we
will meet with you to gain additional input and ensure that our recommended
service model satisfies your needs.
Will the client have two sales people calling on me or one point of contact?
Our transaction is subject to regulatory, bank and shareholder approvals, and
our firms must continue to operate as two independent firms until those
approvals are received and the transaction is finalized. Because we are under a
legal obligation to operate separately, we are not able to provide one single
point of contact representing the two organizations.
When your audit is complete and your contract is up for renewal, we will work
with you to provide an audit service delivery model that will satisfy your
unique audit needs.
How will this transaction affect my audit? Can you assure me/guarantee me that
the total recoveries between primary and secondary will equal what they are now?
Will there be delays in completing my audit from the original time frame?
It's business as usual for now. Our objective is to minimize disruption to your
current audit cycle while ensuring the timely, accurate, and continuous
realization of your recoveries. Please remember, the nature of our business
inherently provides incentives for our auditors to maximize your recoveries in
an efficient manner. Each of our firms are pay-for-performance organizations,
sharing in the success or failure of your audit, and we want to see it succeed.
Once this transaction is complete, we will come to you with a recommended
service delivery model that will meet your account's specific business
objectives in the future.
We still want the assurance of a watchdog. How can you continue in that role?
This transaction is subject to regulatory, bank, and shareholder approvals, and
our firms must continue to operate as two independent firms until those
approvals are received and the transaction is finalized. Our objective is to
minimize disruption to your current audit cycle while ensuring the timely,
accurate, and continuous realization of your recoveries.
As two separate firms, we will continue to operate in our respective contracted
roles. In our respective roles, we are bound by law and ethics, to not collude
with our counterparts, thereby continuing to provide the "watchdog" role that we
understand is important to your business.
If you are going to maintain your current positions, how will you ensure an
independent secondary audit?
This transaction is subject to regulatory, bank and shareholder approvals, and
prior to the closing, our firms must continue to operate as two independent
firms until those approvals are received and the transaction is finalized. Our
objective is to minimize disruption to your current audit cycle while ensuring
the timely, accurate, and continuous realization of your recoveries.
As two separate firms, we will continue to operate in our respective contracted
roles. In our respective roles, we are bound by law and ethics, to not collude
with our counterparts, thereby continuing to provide the "watchdog" role that we
understand is important to your business.
Which position does the new company want? Please choose either primary or
secondary.
Based on PRG's experience with previous transactions, most of our clients have
agreed that the best course of action is to complete the entire current audit
cycle in each firm's respective roles. Our objective is to minimize disruption
to your business and ensure the continuous realization of your recoveries.
Why did you do this transaction, your salespeople kept saying that your firm was
different from your competitor - what happened?
We are different firms, and it's our differences that make this a compelling
combination. We both have unique strengths and weaknesses. We intend to build on
our strengths to create a unique organization -- one that's designed to provide
the most comprehensive services in our industry. We will be able to leverage
additional investments in technology, share best practices and provide our
clients with the foremost industry specialists.
If both firms request the same information from me, can I just respond to one
and assume that you will "pass it on"?
Unfortunately, no. This transaction is subject to regulatory, bank and
shareholder approvals, and our firms must continue to operate as two independent
firms until those approvals are received and the transaction is finalized. That
means we cannot share auditors or information between the primary or secondary
audits.
So, we ask that you still communicate with us in your usual manner as two
separate, distinct organizations.
Can we streamline/standardize audit guidelines and/or the claims approval
process? Also, since you will soon only have to convert data once, can we get a
break in the rate to account for that synergy?
This transaction is subject to regulatory, bank and shareholder approvals, and
our firms must continue to operate as two independent firms until those
approvals are received and the transaction is finalized.
After the transaction closes, we hope to meet with you to discuss all of the
synergy opportunities of the combination, and recommend a service delivery model
that is appropriate for your business needs.
How will this impact my vendors? Can we coordinate the primary and secondary
contacts?
Again, our objective is to minimize disruption to your current audit cycle while
ensuring the timely, accurate, and continuous realization of your recoveries.
This means the transaction should have no impact on your vendors. While we are
in the process of closing this transaction, it's business as usual. We will
continue to work closely with your vendors to quickly realize your recoveries.
Since we are obligated to operate as two independent firms until after the
close, we will not be able to coordinate vendor contacts between both firms at
this time.
Does my current audit contract have to be redone? Do I need a new contract
post-close?
There will be no immediate change to your current contract. Both firms are
operating just as before, separate legal entities.
When are you going to expand your services?
One of the key client benefits of this combination is our ability to provide you
with complimentary services. However, our transaction is subject to regulatory,
bank and shareholder approvals, and our firms must continue to operate as two
independent firms until close. We will be able to offer you additional services
from the other firm when the transaction closes.
How do we answer our client's additional questions about this?
Tell your clients that they should experience no change in service during this
time. We are committed to providing our clients with the exceptional level of
service they have come to expect from our companies. Your manager has a full
Client Briefing Kit with additional speaking points and client letters for you
to review when speaking with your clients.
If your client has a question that you cannot answer, or need additional help in
responding to, contact the Information Hotline (fax: 972-644-4276; phone:
972-246-2316; e-mail: hsaquestions@hsadallas.com). Someone will respond to your
inquiry within 48 hours.
[PRG Employee Q&A]
The Profit Recovery Group International, Inc. (PRG) and
Howard Schultz & Associates International, Inc. (HS&A)
Questions and Answers
GENERAL
Who is HS&A?
Founded in 1970, Howard Schultz & Associates International, Inc. (HS&A) is an
industry pioneer and a world leader in recovery audit services. HS&A's core
business is accounts payable recovery auditing and the company has an extensive,
global client base. HS&A also audits occupancy costs, vendor statements and
direct store delivery records to recover overpayments that are a result of
missed credits, duplicate payments, overlooked allowances, incorrect invoices
and other discrepancies. With its headquarters in Dallas, Tx., HS&A has more
than 1,000 auditors serving 1,500 clients in 17 countries.
Who is PRG?
Headquartered in Atlanta, Ga., The Profit Recovery Group International, Inc.
(PRG) is one of the world's leading providers of recovery audit services. PRG's
Accounts Payable organization employs over 2,500 employees in 34 countries
providing more than 2,500 clients with insightful value to optimize and expertly
manage their business transactions. PRG's clients represent a variety of
industries including retailing, wholesale distribution, government, high-tech
and healthcare organizations. PRG was founded in 1990 and became a publicly
traded company in 1996. Shares of PRG are traded on the NASDAQ National Market
under the symbol PRGX. For additional information visit our web site at
www.prgx.com.
What did the two companies exactly announce today?
The companies announced an agreement to combine our companies through PRG's
purchase of substantially all of the assets of HS&A and substantially all of the
equity of certain of its affiliates in exchange for PRGX common stock. The
companies will join in a continuing effort to offer the best in talent and
resources to provide clients with the most comprehensive recovery audit service.
In order to accomplish this, PRG and HS&A plan to merge their services into one
combined recovery services resource.
When will the deal be complete?
The transaction is subject to regulatory and bank approvals as well as approvals
from both companies' shareholders. Once these approvals are received, full
integration of the organizations can begin. In the meanwhile, both companies
will continue to operate as separate companies. Subject to obtaining the
required approvals, the deal is expected to close in the fourth quarter of 2001,
and the full integration will begin shortly thereafter.
Who will lead the integration once the deal is complete?
To ensure a smooth transition, John Cook and Howard Schultz will be personally
driving the integration process through day-to-day involvement in the business,
specifically by directing the efforts of the Integration Program Office. John
Cook and Howard Schultz have appointed a broad integration team of experienced
specialists from both companies, led by Andy Schultz (HS&A) and Brad Roos (PRG),
and we've enlisted the assistance of Bain & Company, a well-respected management
consulting firm with expertise in this area.
Who will lead new organization?
Howard Schultz will become Chairman of the new organization, and John Cook will
be President and Chief Executive Officer. The Chairman and the CEO will work as
a team to jointly manage the new organization.
What will the new organization be called?
The new company will be called PRG-Schultz, to represent the combination of our
two organizations into the indisputable industry leader.
Will there be a new logo?
When the transaction closes, we will also launch a new identity for our combined
company. We'll keep you posted on how the rollout will work, once the new
identity is ready to launch.
How many employees and associates will be a part of the new organization?
PRG has approximately 2,500 employees, serving 2,500 clients in over 34
countries. HS&A has over 1,000 audit associates serving 1,500 clients in 17
countries. The new organization will have approximately 3,500 employees, serving
approximately 3,950 unique clients in 35 countries.
EMPLOYEE/ASSOCIATE
Have other associates/employees been notified?
Yes. Simultaneously today, members of the management teams in both companies are
holding meetings with employees and associates where possible. Other employees
and associates are participating in conference calls with management and all
employees and associates should receive an electronic packet of information in
regard to today's news.
Will I report to someone new?
During the next few months PRG and HS&A will begin to examine what the combined
management team will look like. This will likely result in some changes in
reporting relationships. However, there will be no changes until the transaction
receives the appropriate regulatory, bank and shareholder approvals.
Will anyone lose his or her jobs?
We all know that the nature of a business combination is, by design, a strategic
option to gain efficiencies. Once all the necessary approvals are received, John
Cook, Howard Schultz, and their management teams will review the resources
necessary to support and grow the new organization, which may mean some changes.
It is important to remember that no immediate changes will be made at this time.
In order to achieve continued success, both organizations rely on the knowledge
and resources of everyone at HS&A and PRG.
Will job responsibilities and status levels change?
Again, the combination may bring about some change in how the combined company
will be organized, but those details have not yet been determined. Remember, no
immediate changes will be made at this time.
Will HS&A associates have to become employees of the new organization?
Yes. HS&A has been undergoing a process of making their associates (currently
independent contractors) employees of their organization independent of this
announcement. When the transaction is complete, they will receive information
about becoming an employee of the new organization.
Do I have to relocate?
It is important to remember that there will be no immediate changes made at this
time. We simply will not know these details until the transaction is complete.
The combined client base of both companies might provide a greater opportunity
for some auditors to work closer to home.
Will offices be merged together?
Until the transaction is complete, no immediate changes will be made. Once all
the necessary approvals are received, the integration team will make
recommendations about combining space, where appropriate.
What about paychecks? Benefits? Business cards and other details?
Until further notice all administrative procedures remain in place. Until the
completion of the transaction, all employees and associates are part of their
separate, respective companies. This means that there will be no changes in when
and how you receive your paycheck, or your medical, dental or other benefit
coverage.
How will this announcement impact business projects and decisions that are
currently in-process?
Until the transaction is complete, business will run as usual, which means
decisions currently in-process will follow the same approval and measurement
process as before. You should continue working on your projects. If you have a
question about a specific project you're working on, ask your manager for
further clarification.
What will happen to the PRG mission statement, vision and values?
HS&A and PRG are complementary organizations, and we share more than just a
business model. We share the common objective to deliver unmatched results and
services to our customers in the most professional spirit; we both believe in
developing our associates to the fullest; and we share a vision of advancing the
state of technologies and methodologies for our business practices. That said,
each of our companies is unique, and it will be those differences that will be
the key to our success together. It takes many different viewpoints to make an
organization successful. During the integration process, we will review our
cultures, their missions, values, attitudes and standards to establish the best
qualities of each, and examine how the new organization will adopt these.
CLIENT
How will the announcement impact our clients?
The purpose of the transaction is to enable our companies to better serve our
clients. By focusing our combined talent, technology and resources on our
clients' businesses, we will be better positioned to deliver the most
comprehensive accounts payable recovery auditing service in the world. While the
transaction is undergoing the necessary approvals, there will be no change to
the way each of our companies deliver service to our clients.
Once the transaction is final, client management teams will be designated to
work with PRG-HS&A (shared) clients to define specific business plans to employ
post-close. By seeking our clients' input on their specific needs, we will be
better able to help our clients successfully manage their business.
How are our clients being notified about the announcement?
We are asking all appropriate employees and associates with client
responsibility to personally and proactively call their clients to inform them
of the news, and let them know that a letter will be delivered to them. For
shared clients, we have adopted a specific protocol for a coordinated approach
(see below). Be sure to work with your manager to coordinate your approach. Your
manager has a Client Briefing Kit, which includes a copy of the client letters
and client speaking points for you to refer to when notifying your clients.
What if we share a client? How should we approach the client?
We are asking employees and associates on shared business to continue to
approach the client separately, but to coordinate the contact, so as to provide
minimal disruption to our clients' business. For our North and South American
businesses, the Client managers on the Primary will contact the client first,
between 8:00AM and 2:00PM (local time). Client managers on the Secondary may
begin with contacting the client after 2:00PM (local time). In the UK, the
Primary may contact the client at 11:15AM, the Secondary may begin 2:15PM (local
time). For Central Europe, the Primary may begin at 10:15AM, the Secondary at
1:15AM. In Australia, the Primary will begin contacting the client at 8AM
(Friday), the Secondary may approach the client at 11AM (Friday). Again, please
be sure to work with your manager to coordinate your approach.
What should I tell my clients?
It is important for our clients to know these six things:
7. It's business as usual for now, there should be no interruption of
their services, no change in audit cycle timing.
8. We are committed to providing them the same level of service as
before. After the transaction is complete, we expect to be able to
provide them with the most comprehensive accounts payable recovery
audit service available in the industry.
9. We expect this to be a transition driven by their specific needs,
better enabling the new organization to identify new audit
opportunities, further software application systems and find talented
audit associates to serve our clients.
10. The combination of our businesses will enable us to pool our best
practices, consolidate our research and development efforts, and
leverage our unique areas of specialization to better serve our
clients.
11. Just as before, if they experience any problems or want to talk about
their account, they should call their sales representative, account
manager or other client contact.
12. Again, until the transaction is complete, we will continue to operate
as two separate companies. We will keep them up-to-date. As soon as
there is information for us to disclose, we will.
What if PRG and HS&A are the primary/secondary on a client account? What will
happen?
There will be no immediate change in the clients' service. Until the transaction
receives all necessary approvals, we will continue with business as usual,
operating as two separate companies. Once the transaction is final, designated
client teams will be working with these clients to determine what their specific
business needs are, and how the combined organization can bring the most
comprehensive recovery audit service to our valued clients. [Please see above
for coordinating your approach on a shared client.]
What if my client asks me...
Below are a few of the questions your client might ask, as well as the
appropriate responses. If your client has a question that you cannot answer, or
need additional help in responding to, contact the Information Hotline (fax:
770-779-3042; phone: 770-779-3386; e-mail: justask@prgx.com). Someone will
respond to your inquiry within 48 hours.
What is going to happen to my key client contacts (sales people and auditors),
now and after the transaction closes?
It's business as usual for now, there should be no interruption of our services,
no change in audit cycle timing, and you'll still have the same great people
working on your business. Once the transaction closes, we will meet with you to
understand your needs, and we'll determine the best service delivery method for
your audit, including the appropriate staffing levels needed to maximize the
recovery opportunity. When our recommended service model has been completed, we
will meet with you to gain additional input and ensure that our recommended
service model satisfies your needs.
Will the client have two sales people calling on me or one point of contact?
Our transaction is subject to regulatory, bank and shareholder approvals, and
our firms must continue to operate as two independent firms until those
approvals are received and the transaction is finalized. Because we are under a
legal obligation to operate separately, we are not able to provide one single
point of contact representing the two organizations.
When your audit is complete and your contract is up for renewal, we will work
with you to provide an audit service delivery model that will satisfy your
unique audit needs.
How will this transaction affect my audit? Can you assure me/guarantee me that
the total recoveries between primary and secondary will equal what they are now?
Will there be delays in completing my audit from the original time frame?
It's business as usual for now. Our objective is to minimize disruption to your
current audit cycle while ensuring the timely, accurate, and continuous
realization of your recoveries. Please remember, the nature of our business
inherently provides incentives for our auditors to maximize your recoveries in
an efficient manner. Each of our firms are pay-for-performance organizations,
sharing in the success or failure of your audit, and we want to see it succeed.
Once this transaction is complete, we will come to you with a recommended
service delivery model that will meet your account's specific business
objectives in the future.
We still want the assurance of a watchdog. How can you continue in that role?
This transaction is subject to regulatory, bank, and shareholder approvals, and
our firms must continue to operate as two independent firms until those
approvals are received and the transaction is finalized. Our objective is to
minimize disruption to your current audit cycle while ensuring the timely,
accurate, and continuous realization of your recoveries.
As two separate firms, we will continue to operate in our respective contracted
roles. In our respective roles, we are bound by law and ethics, to not collude
with our counterparts, thereby continuing to provide the "watchdog" role that we
understand is important to your business.
If you are going to maintain your current positions, how will you ensure an
independent secondary audit?
This transaction is subject to regulatory, bank and shareholder approvals, and
prior to the closing, our firms must continue to operate as two independent
firms until those approvals are received and the transaction is finalized. Our
objective is to minimize disruption to your current audit cycle while ensuring
the timely, accurate, and continuous realization of your recoveries.
As two separate firms, we will continue to operate in our respective contracted
roles. In our respective roles, we are bound by law and ethics, to not collude
with our counterparts, thereby continuing to provide the "watchdog" role that we
understand is important to your business.
Which position does the new company want? Please choose either primary or
secondary.
Based on PRG's experience with previous transactions, most of our clients have
agreed that the best course of action is to complete the entire current audit
cycle in each firm's respective roles. Our objective is to minimize disruption
to your business and ensure the continuous realization of your recoveries.
Why did you do this transaction, your salespeople kept saying that your firm was
different from your competitor - what happened?
We are different firms, and it's our differences that make this a compelling
combination. We both have unique strengths and weaknesses. We intend to build on
our strengths to create a unique organization -- one that's designed to provide
the most comprehensive services in our industry. We will be able to leverage
additional investments in technology, share best practices and provide our
clients with the foremost industry specialists.
If both firms request the same information from me, can I just respond to one
and assume that you will "pass it on"?
Unfortunately, no. This transaction is subject to regulatory, bank and
shareholder approvals, and our firms must continue to operate as two independent
firms until those approvals are received and the transaction is finalized. That
means we cannot share auditors or information between the primary or secondary
audits.
So, we ask that you still communicate with us in your usual manner as two
separate, distinct organizations.
Can we streamline/standardize audit guidelines and/or the claims approval
process? Also, since you will soon only have to convert data once, can we get a
break in the rate to account for that synergy?
This transaction is subject to regulatory, bank and shareholder approvals, and
our firms must continue to operate as two independent firms until those
approvals are received and the transaction is finalized.
After the transaction closes, we hope to meet with you to discuss all of the
synergy opportunities of the combination, and recommend a service delivery model
that is appropriate for your business needs.
How will this impact my vendors? Can we coordinate the primary and secondary
contacts?
Again, our objective is to minimize disruption to your current audit cycle while
ensuring the timely, accurate, and continuous realization of your recoveries.
This means the transaction should have no impact on your vendors. While we are
in the process of closing this transaction, it's business as usual. We will
continue to work closely with your vendors to quickly realize your recoveries.
Since we are obligated to operate as two independent firms until after the
close, we will not be able to coordinate vendor contacts between both firms at
this time.
Does my current audit contract have to be redone? Do I need a new contract
post-close?
There will be no immediate change to your current contract. Both firms are
operating just as before, separate legal entities.
When are you going to expand your services?
One of the key client benefits of this combination is our ability to provide you
with complimentary services. However, our transaction is subject to regulatory,
bank and shareholder approvals, and our firms must continue to operate as two
independent firms until close. We will be able to offer you additional services
from the other firm when the transaction closes.
How do we answer our client's questions about this?
Tell your clients that they should experience no change in service during this
time. We are committed to providing our clients with the exceptional level of
service they have come to expect from our companies. Your manager has a Client
Briefing Kit with additional speaking points and client letters for you to
review when speaking with your clients.
If your client has a question that you cannot answer, or need additional help in
responding to, contact the Information Hotline (fax: 770-779-3042; phone:
770-779-3386; e-mail: justask@prgx.com). Someone will respond to your inquiry
within 48 hours.
[Employee and Associate Fact Sheet]
The Profit Recovery Group and Howard Schultz & Associates
The World's Leading Accounts Payable Recovery Audit Services Company
The combination of PRG and HS&A will create the world's leading accounts payable
recovery audit services company, with the power to provide the most
comprehensive accounts payable recovery auditing services in the world. As
fellow pioneers in the recovery audit industry, PRG and HS&A come together with
common values, uncommon opportunities.
Common Values
|X| The shared belief in developing our associates to the fullest.
|X| The common objective to deliver unmatched results and services to our
clients in the most professional spirit.
|X| A common vision to advance the state of technologies and methodologies for
our business practices.
[X| Dedicated to providing the most comprehensive review possible -- the
best-in-class of talent, technologies, and services.
Uncommon Opportunities
During the past decade, each firm has worked hard to identify new audit
opportunities, furthering software application systems and hiring talented
audit associates to serve our clients. Specifically, as the world of
technology continues to evolve at a lightning-fast pace, and the sheer
volume of business transactions processed continues to grow, requiring
significant investments and resources to service our clients' businesses.
The combination of our businesses will enable us to
o Pool our best practices, particularly in audit methodology, IT,
and vendor relationships
o Leverage our combined industry expertise, technology expertise,
and the overall talent of our people
o Enhance our research and development efforts
o Leverage our complementary services such as DSD, and our joint
international strengths
o Capitalize on our combined financial and operational resources to
better serve our clients
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By combining the strengths of both companies, we intend to build an
organization truly empowered to better serve our clients with the most
comprehensive accounts payable recovery auditing services in the industry.
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The Profit Recovery Group International, Inc. (PRG)
Headquartered in Atlanta, Ga., PRG is one of the world's leading providers of
recovery auditing services. PRG's Accounts Payable organization employs over
2,500 employees in 34 countries providing more than 2,500 clients with
insightful value to optimize and expertly manage their business transactions.
PRG's clients represent a variety of industries including retailing, wholesale
distribution, government, high-tech and healthcare organizations. PRG was
founded in 1990 and became a publicly traded company in 1996. Shares of PRG are
traded on the NASDAQ National Market under the symbol PRGX. For additional
information visit our web site at www.prgx.com.
Howard Schultz & Associates International, Inc. (HS&A)
Founded in 1970, Dallas-based HS&A is one of the world's leading providers of
recovery auditing services to retailers, distributors, wholesalers, and other
transaction-intensive companies. HS&A, which derives its revenue strictly from a
percentage of the money it recovers for its clients, has recovered more than $6
billion in overpayments since its inception. HS&A has more than 1,000 associates
serving 1,500 clients in 17 countries on four continents. The company's Web site
address is www.hsanet.com.
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