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EXHIBIT 10.32
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made this 26th day of August,
1996, effective as of January 1, 1996 (the "Effective Date"), by and between THE
PROFIT RECOVERY GROUP INTERNATIONAL I, INC., a Georgia corporation (the
"Company") and ▇▇▇▇ ▇. ▇▇▇▇▇, a resident of the State of Georgia (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to retain Employee to provide services to the
Company and its Affiliates (as defined in Section 23 below), and Employee
desires to provide his services to the Company pursuant to the terms and
conditions that follow;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
1. EMPLOYMENT. Employee shall serve as Senior Vice President -- Legal
Affairs of the Company. Employee agrees to apply Employee's full time efforts to
the position and to perform Employee's work at all times to the best of
Employee's ability and at the direction of the Chief Executive Officer of the
Company. Employee will render to the Company at regular intervals set by the
Company, reports and accounting of the status and progress of any work Employee
is performing. The services Employee will provide for the Company are more
particularly described on Exhibit A attached hereto.
2. TERM. The initial term of this Agreement shall commence on January 1,
1996, and shall continue until December 31, 1996, unless sooner terminated as
hereinafter provided. Unless otherwise terminated pursuant to Section 14 hereof,
this Agreement shall automatically renew on a year-to-year basis at the end of
the initial term and each subsequent renewal term unless either party gives
written notice of non-renewal to the other at least ninety (90) days prior to
the end of the initial term or a renewal term. The initial term of this
Agreement and any subsequent one-year renewal period shall be deemed a "Term
Year."
3. SCOPE OF THE COMPANY'S ACTIVITIES. Employee acknowledges and agrees
that the Company conducts the following business in the following territories:
(a) Scope of the Company's Business. The Company is engaged in the
business of auditing accounts payable, paid ▇▇▇▇ files, promotional and
demonstrator agreements, personal property, real estate, sales and use tax
and other taxes, common area maintenance charges, telephone and other
utilities, sales promotion, advertising and cosmetic wage/commission
agreements of its Clients, as hereinafter defined, to identify and document
for subsequent charge back or credit over-payments and/or under deductions
(collectively, the "Audit Activities") and rendering management counseling
services associated with the Audit Activities (collectively, the "Business
of the Company").
(b) Location of the Company's Business. The Company actively conducts
business with its clients (herein referred to as "Clients") throughout the
United States, Australia, Belgium, Canada, France, Germany, Great Britain,
Hong Kong, Indonesia, Malaysia, Mexico, the Netherlands, New Zealand,
Singapore, Taiwan, and Thailand. The address of the Company's principal
office in Atlanta, Georgia where Employee provides substantially all of his
services on behalf of the Company is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, Georgia 30339-8426 (the "Principal Office").
4. COMPENSATION. For services rendered by Employee under this Agreement
during the term hereof, Employee shall be entitled to receive the compensation
and benefits set forth in Sections 10, 11 or 12 hereof and in that certain
Compensation Agreement by and between Employee and the Company (the
"Compensation Agreement") which provides in part that as of the Effective Date
Employee's Base Salary (as defined therein) is One Hundred Fifty Thousand and
No/100 ($150,000.00) Dollars, subject to any future amendment of the
Compensation Agreement.
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5. STOCK OPTION. Employee and The Profit Recovery Group International,
Inc., a Georgia corporation ("PRGX") are party to one or more separate stock
option agreements in accordance with which Employee has been granted
non-qualified options to purchase Eighty Thousand (80,000) shares of PRGX Common
Stock under the 1996 Stock Option Plan (the "Plan").
6. SPECIFIC ACKNOWLEDGMENTS. Employee acknowledges that the Company has
expended and will continue to expend substantial time, money, effort and other
resources to develop its goodwill, clients, business sources and relationships
and that the Company has a legitimate business interest in protecting same. In
connection with Employee's employment by the Company as herein provided, the
Company will introduce Employee to its Clients, business sources and
relationships and will expend considerable time, effort and capital to train
Employee in the business of the Company. Employee further acknowledges that, by
virtue of Employee's employment with the Company, Employee will be in a position
of substantial responsibility and authority and will have frequent and
substantial contact with certain of the Company's Clients and business sources
and relationships. Employee further acknowledges that in Employee's capacity,
Employee will be privy to certain confidential information, Company secrets and
proprietary information not generally known or available to the Company's
competitors or the general public.
(a) Agreement Not to Compete -- Competing Businesses. Employee covenants
and agrees that during Employee's employment by the Company and for a period of
eighteen (18) months after the termination of Employee's employment for any
reason whatsoever, of such employment, he will not, without the prior written
consent of the Company signed by the President of the Company, directly or
indirectly, (i) for himself or (ii) as a consultant, management, supervisory or
executive employee or owner of a Competing Business, as hereinafter defined, or
(iii) as an independent contractor for a Competing Business, engage in any
business, within a radius of thirty (30) miles of the Principal Office, for
which Employee provides services which are the same or substantially similar to
his duties as Employee as herein described.
(b) Agreement Not to Solicit Clients. Employee covenants and agrees that
during Employee's employment by the Company and for a period of eighteen (18)
months after termination of Employee's employment for any reason whatsoever,
Employee will not, without the prior written consent of the Company signed by
the President of the Company, directly or indirectly, on Employee's behalf or on
behalf of a Competing Business, as hereinafter defined, solicit, divert or
appropriate, or attempt to solicit, divert or appropriate any of the Company's
Clients for whom Employee performed services or otherwise had direct contact,
influence and/or responsibility during the twenty-four (24) month period
immediately preceding the termination of Employee's employment with the Company
(or such shorter period if Employee is employed for less than 24 months) for the
purpose of providing services of the type identified in Section 3 (a) hereof.
Employee's covenants pursuant to this subsection (b) shall also apply to
prospective customers of the Company with respect to which Employee participated
in soliciting on behalf of the Company during the twenty-four (24) month period
immediately preceding the termination of Employee's employment with the Company
(or such shorter period if Employee is employed for less than 24 months).
(c) Agreement Not to Solicit Employees or Contractors. Employee covenants
and agrees that during Employee's employment by the Company and for a period of
eighteen (18) months after termination of Employee's employment for any reason
whatsoever, Employee will not, without the prior written consent of the Company
signed by the President of the Company, directly or indirectly, on Employee's
behalf or on behalf of others, solicit, entice, persuade or induce, or attempt
to solicit, entice, persuade or induce any person who is actively employed by,
or is performing services as an independent contractor for, the Company and (i)
who was employed by, or was performing services as an independent contractor
for, the Company at any time during which Employee was employed by the Company
and (ii) who reported to Employee or was within Employee's chain of
responsibility, or (iii) who had regular contact with Employee, to terminate his
or her employment or contractual arrangement with the Company or to become
employed or engaged by any person, firm or entity other than the Company, or
approach any such person for any of the foregoing purposes or authorize or
assist in the taking of any such action by any third party.
(d) Proprietary Information. All Proprietary Information, as hereinafter
defined, and all physical embodiments thereof received or developed by Employee
or disclosed to Employee while employed by the
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Company is confidential to and is and will remain the sole and exclusive
property of the Company. Except to the extent necessary to perform the duties
assigned to Employee by the Company, Employee will hold such Proprietary
Information in trust and in the strictest confidence, and will not use,
reproduce, distribute, disclose or otherwise disseminate the Proprietary
Information or any physical embodiments thereof and may in no event take any
action causing or fail to take the action necessary in order to prevent any
Proprietary Information disclosed to or developed by Employee to lose its
character or cease to qualify as Proprietary Information. The confidentiality
requirements and use restrictions contained in this subsection shall survive any
termination of Employee's employment with the Company but shall not apply (i) to
any information that falls into the public domain through no fault of Employee,
or (ii) to Proprietary Information which is not Trade Secrets, as hereinafter
defined, when a period of five (5) years has expired following the termination
of Employee's employment with Company. Upon request by the Company, and in any
event upon termination of Employee's employment with the Company for any reason,
Employee will promptly deliver to the Company all property belonging to the
Company, including without limitation all Proprietary Information (and all
physical embodiments thereof) then in Employee's custody, control, or
possession.
(e) Contracts or Other Agreements with Former Employer or
Business. Employee agrees that Employee will provide to the Company, upon the
execution of this Agreement, a copy of the pertinent portions of any employment
agreement or similar document executed by Employee with a former employer or any
other business. Employee warrants and represents that (i) the execution and
delivery of this Agreement by Employee and the performance of the obligations,
covenants and agreements contained herein, do not and will not conflict with or
result in any breach or violation of any of the terms and provisions of any
agreement, judgment, order, statute or other instrument or restriction of any
kind with respect to which Employee is bound, and (ii) Employee is not subject
to any restrictive covenant agreement, covenant not to compete, nonsolicitation
agreement or other agreement that would prohibit Employee from carrying out
Employee's duties hereunder.
(f) Definitions. - "Competing Business" means any business organization of
whatever form engaged, either directly or indirectly, in any business or
enterprise which is the same as, or substantially the same as, the Business of
the Company, as defined in Section 2(a) hereof.
- "Proprietary Information" means information related to the Company or its
Affiliates or clients (i) which derives economic value, actual or potential,
from not being generally known to or readily ascertainable by other persons who
can obtain economic value from its disclosure or use; and (ii) which is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy. Such Proprietary Information shall include information in any form or
media and shall not necessarily be in writing. Proprietary Information also
includes information which has been disclosed to the Company or its Affiliates
by a third party and which the Company or its Affiliates are obligated to treat
as confidential. Trade Secrets means Proprietary Information which meets the
foregoing criteria and which is also deemed to be a "Trade Secret" as that term
is defined in the Georgia Trade Secrets Act of 1990, O.C.G.A. sec. 10-1-760, et.
seq., including but not limited to technical and nontechnical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, and lists of actual
or potential customers and suppliers. Proprietary Information may or may not be
marked by the Company or its Affiliates as "proprietary" or "secret" or with
other words or markings of similar meaning, and the failure of the Company to
make such notations upon the physical embodiments of any Proprietary Information
shall not affect the status of such information as Proprietary Information.
7. OWNERSHIP BY COMPANY. All software, computer diskettes, CDs, video
tapes, literature, cassettes, photographs, prints, slides, records, notes,
files, memoranda, reports, audit reports, price lists, client lists, documents,
and all copies thereof, equipment, and apparatus and like items relating to the
business of the Company, Proprietary Information or Trade Secrets which shall be
prepared by Employee or which shall be disclosed to or which shall come into
Employee's possession shall be and remain the sole and exclusive property of the
Company. Employee agrees that, upon the termination of employment with the
Company for any reason whatsoever, or at any other time upon request, Employee
will promptly deliver to the Company the originals and all copies of any of the
foregoing that are in Employee's possession, custody or control, and any other
property belonging to the Company.
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8. INVENTIONS. Employee agrees that, during the term of this Agreement,
Employee has a continuing duty to disclose to the Company any invention,
improvement, discovery, process, formula, code, program, system or method
(collectively, "Inventions") developed or being developed by Employee any time
during the term of Employee's employment, either solely by Employee or jointly
with others, whether or not such Inventions are assignable to the Company as set
forth below. Any Invention which Employee has conceived or made or may conceive
or make at any time while employed by the Company, either solely by Employee or
jointly with others, (a) which relate in any way to the actual Business of the
Company, or (b) which relate in any way to the actual or anticipated research or
development of the Company, or (c) which are suggested by or result from any
task assigned to Employee on behalf of the Company, shall be the sole and
exclusive property of the Company, and Employee hereby assigns to the Company
any right, title or interest Employee may have to such Invention. Furthermore,
any such Invention shall constitute Proprietary Information as set forth above.
At the request and expense of the Company, Employee will execute and deliver all
documents and will do such other acts as may be in the Company's opinion
necessary or desirable to secure to the Company or its nominee all right, title
and interest in and to any such Invention. The provisions of this Section shall
be binding upon Employee's heirs, legal representatives, successors and assigns.
9. COPYRIGHTS. Employee understands that any original works of authorship
fixed in tangible form, including, without limitation, computer software and
manuals, advertising material, and training material, prepared by Employee,
either solely or jointly with others, within the scope of Employee's employment
by the Company, constitute works made for hire as provided by law, so that such
works are owned by the Company. If, for any reason, a work of authorship by
Employee created during the term of Employee's employment by the Company and
related to the Business of the Company is considered other than a work for hire,
then Employee hereby assigns all Employee's right, title and interest in
copyrights to such works of authorship to the Company.
10. INSURANCE AND BENEFITS. (a) Subject to Employee being insurable at
standard rates as of the commencement of employment (or when coverage is applied
for, as applicable) and to the availability of such coverage from the Company's
customary insurance providers, the Company shall (i) obtain on Employee's behalf
life, disability, hospitalization and medical insurance coverage in accordance
with the Company's standard group coverage, (ii) pay the premiums, or reimburse
Employee for premiums paid, to obtain coverage as described below in addition to
the Company's standard group coverage in accordance with the Company's standard
policies and procedures: (A) basic term life insurance policy at the best
available rates for a fifteen (5) year level term type product, but not higher
than standard nonsmoker rates, in an amount of coverage equal to One Million
($1,000,000) Dollars, and (B) disability income insurance coverage, which, when
added to the standard group coverages, will provide a monthly benefit of sixty
(60%) of the sum of (x) Employee's current Base Salary, (y) any amount of Bonus
(as defined in the Compensation Agreement) payable to Employee, without
adjustment or deduction for any Bonus amount the payment of which was deferred
pursuant to this Agreement, for the Term Year preceding the Term Year in which
the disability occurs and (z) any amount of salary for the Term Year in which
the disability occurs the payment of which is deferred pursuant to this
Agreement, and (iii) share the cost of Employee's health insurance premiums in
accordance with the Company's standard employee policies and procedures. The
Company will reimburse Employee for any amount incurred in connection with an
annual physical examination not covered by insurance.
(b) Employee shall be provided an annual automobile allowance of Thirteen
Thousand and No/100 ($13,000.00) Dollars (the "Auto Allowance"), payable in
accordance with the Company's customary procedures, which amount shall be
reviewed annually and may be modified in writing prior to the commencement of
any Term Year beginning on or after January 1, 1997.
(c) Employee shall be entitled to participate in any 401(k) Plan of the
Company generally available to other employees of the Company, except as may be
limited by applicable law or regulation.
(d) The Company shall pay Employee's reasonable travel and business
expenses (including air travel at coach rate), subject to Employee's submission
of receipts therefor in accordance with the Company's normal
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practices and procedures. The Company shall also pay or reimburse Employee for
reasonable cellular phone usage for business purposes in such amounts as
Employee and the Company mutually agree.
(e) Any amounts the Company pays for insurance coverage or fringe benefits
that are supplemental or in addition to the Company's standard insurance
coverage or benefits shall be compensation in addition to Base Salary (but not
included within the definition of Base Salary) and shall be reflected on
Employee's W-2.
(f) The Company shall pay or reimburse Employee for all licenses, dues and
fees to professional organizations, including but not limited to the State Bar
of Georgia, the American Bar Association and special sections of the foregoing,
subject to Employee's submission of receipts therefor. The Company shall also
pay or reimburse Employee for books and subscriptions to professional journals,
and all costs and expenses in connection with professional seminars, meetings
and continuing legal education, including but not limited to tuition and
registration fees, subject to Employee's submission of receipts therefor;
provided, however, that the Company shall only be responsible for the costs of
air travel, lodging and food for professional seminars, meetings and continuing
legal education held outside of the metropolitan Atlanta area upon obtaining the
prior approval of the Company.
11. PAYMENT OF COMPENSATION UPON TERMINATION. Employee shall receive the
following compensation upon the termination of Employee's employment hereunder:
(a) In the event Employee's employment hereunder is terminated for
cause or if Employee voluntarily resigns, Employee shall be entitled to
receive Employee's Base Salary prorated through the date of termination,
payable within sixty (60) days after termination and Employee shall not be
entitled to receive any Bonus or any other amount in respect of the Term
Year in which termination occurs or in respect of any subsequent years,
provided, however, that if Employee voluntarily resigns (including giving
notice of non-renewal to the Company pursuant to Section 2 hereof at
anytime after (i) ▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇") ceases to serve as President and
the chief executive officer of the Company, or (ii) ▇▇▇▇ (either directly
or together with his spouse and children) no longer owns a majority of all
of the issued and outstanding shares of stock in PRGX, in addition to
Employee's prorated Base Salary, Employee shall be entitled to receive a
Bonus for the Term Year in which such termination occurs prorated through
the effective date of such termination. The prorated Base Salary shall be
payable in a lump sum within 60 days after termination and the prorated
Bonus shall be payable in a lump sum within 90 days after the end of the
Term Year to which it relates.
(b) In the event Employee's employment hereunder is terminated by the
Company without cause, Employee shall be entitled to receive Base Salary
and Bonus for the Term Year in which such termination occurs prorated
through the date of such termination, plus a severance payment equal to
twelve (12) months of Base Salary at the rate then in effect if such
termination occurs on or before December 31, 1996, and nine (9) months of
Base Salary at the rate then in effect if such termination occurs after
December 31, 1996, and shall not be entitled to receive any other amount in
respect of the Term Year in which termination occurs or in respect of any
subsequent years. The prorated Base Salary shall be payable in a lump sum
within sixty (60) days after termination, the prorated Bonus shall be
payable in a lump sum within ninety (90) days after the end of the Term
Year to which it relates, and the severance payment shall be payable in
nine (9) or twelve (12), as appropriate equal monthly installments
commencing on the last day of the first month following termination. If the
Company gives Employee notice of non-renewal pursuant to Section 2 hereof,
it shall be deemed to be termination of Employee's employment by the
Company without cause and you shall be entitled to compensation and
benefits pursuant to this Section 11(b).
(c) In the event Employee's employment hereunder is terminated by
Employee's death, Employee's legal representative shall be entitled to
receive Base Salary and Bonus for the Term Year in which such termination
occurs prorated through the date of such termination and any other payments
specifically provided for herein in respect of death and shall not be
entitled to receive any other amount in respect of the Term Year in which
termination occurs or in respect of any subsequent years. The prorated Base
Salary shall be payable in a lump sum within sixty (60) days after
termination and the prorated
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Bonus shall be payable in a lump sum within ninety (90) days after the end
of the Term Year to which it relates.
(d) In the event Employee's employment hereunder is terminated for
Disability, Employee or Employee's legal representative shall be entitled
to receive (A) Base Salary and Bonus for the Term Year in which such
termination occurs prorated through the date of such termination, with the
prorated Base Salary and payable in a lump sum within sixty (60) days after
termination and the prorated Bonus payable in a lump sum within ninety (90)
days after the end of the Term Year to which it relates; and (B) Base
Salary at the rates in effect upon the date of such termination payable in
accordance with the Company's normal payroll procedure until the disability
payments provided for under any of the Company's standard group disability
insurance coverage provided pursuant to Section 10(a) hereof are scheduled
to commence (but in no event longer than ninety (90) days after the date of
Employee's termination) and shall not be entitled to receive any other
amount in respect of the Term Year in which termination occurs or in
respect of any subsequent years.
(e) Upon expiration or sooner termination of this Agreement for any
reason other than termination by the Company for cause the Company shall
continue to pay Employee's Auto Allowance in accordance with Section 2(b)
hereof and shall pay the premiums for COBRA coverage under the Company's
group health and major medical policy for the same period in which Employee
is entitled to receive severance payment hereunder.
(f) If Employee's employment hereunder terminates for any reason
during a Term Year, Employee will be paid within sixty (60) days of
termination for all unused vacation time accrued up to the date of
termination.
12. REMEDIES. (a) Employee acknowledges and agrees that, by virtue of the
duties and responsibilities attendant to Employee's employment by the Company
and the special knowledge of the Company's affairs, business, clients and
operations that Employee has and will have as a consequence of such employment,
irreparable loss and damage will be suffered by the Company if Employee should
breach or violate any of the covenants and agreements contained in Sections 6,
7, 8, or 9 hereof; and Employee further acknowledges and agrees that each of
such covenants is reasonably necessary to protect and preserve the Company.
Employee, therefore, agrees and consents that, in addition to any other remedies
available to it, the Company shall be entitled to specific performance by
temporary as well as permanent injunction to prevent a breach or contemplated
breach by Employee of any of the covenants or agreements contained in such
Sections.
(b) The existence of any claim, demand, action or cause of action that
Employee may have against the Company, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
any of the covenants contained in Sections 6, 7, 8, or 9 hereof.
(c) Nothing contained in this Agreement shall limit, abridge or modify the
rights of the parties under applicable trade secret, trademark, copyright or
patent law or under the laws of unfair competition.
(d) In the event a court of competent jurisdiction determines that Employee
has breached any of the foregoing covenants contained in Sections 6, 7, 8, or 9
hereof, Employee shall pay all costs of enforcement of the foregoing covenants,
including, but not limited to, court costs and reasonable attorney's fees.
13. TERMINATION. (a) This Agreement may be terminated by the Company for
"cause" upon delivery of notice of termination to Employee. As used herein,
"cause" shall mean fraud, dishonesty, gross negligence, willful misconduct,
conviction of a felony or an act of moral turpitude (e.g., theft, embezzlement
and the like) or engaging in activities prohibited by Sections 6, 7, 8, or 9
hereof, or any other material breach of this Agreement. Notwithstanding anything
to the contrary contained in the immediately foregoing sentence, if the Company
asserts that Employee has committed a material breach of this Agreement which by
its nature is capable of being remedied, the Company shall not be entitled to
terminate Employee's employment for "cause" if Employee cures such breach within
30 days after receipt of written notice from the Company specifying in
reasonable detail the events or circumstances which constitute Employee's
failure to perform or other material breach and the steps deemed necessary by
the Company to cure same; provided, however, if the nature of the events or
circumstances which constitute such failure to perform or other material breach
are
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such that they cannot reasonably be cured within said 30 day period, the Company
shall not be entitled to terminate this Agreement for "cause" if Employee
commences to cure such events or circumstances within the aforesaid 30 day
period and diligently and continuously pursues same to completion but in any
event no later than 90 days after receipt of the written notice from the
Company.
(b) This Agreement may be terminated by the Company or Employee without
cause by giving the other party sixty (60) days prior written notice and such
termination shall be effective on the sixtieth (60th) day following receipt of
such notice or such earlier date as the parties shall mutually agree.
(c) In the event of Employee's Disability, physical or mental, the Company
shall have the right, subject to all applicable laws, including without
limitation, the Americans with Disabilities Act ("ADA"), to terminate Employee's
employment immediately. For purposes of this Agreement, the term "Disability"
shall mean Employee's inability, in the judgment in accordance with the ADA, of
both a medical doctor selected by the Company and a medical doctor selected by
Employee or Employee's legal representative (or, in the event that such doctors
fail to agree, then in the majority opinion of such doctors and a third medical
doctor chosen by such doctors) due to illness, accident or any other physical or
mental incapacity to perform the services required of Employee hereunder for an
aggregate of ninety (90) days within any period of one hundred eighty (180)
consecutive days during which this Agreement is in effect.
14. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
Employee. This Agreement may be assigned by the Company.
15. SEVERABILITY. In the event that one or more of the words, phrases,
sentences, clauses, sections, subdivisions or subparagraphs contained herein
shall be held invalid, this Agreement shall be construed as if such invalid
portion had not been inserted, and if such invalidity shall be caused by the
length of any period of time, the number or location of Clients, the size of any
area, or the description of the duties of Employee set forth in any part hereof,
such period of time, number or location of Clients, area, or description of
duties, or any combination thereof, shall be considered to be reduced to a
period, number, location, area or description which would cure such invalidity.
16. SUBMISSION TO JURISDICTION. This Agreement shall be governed by and
construed under the laws of the State of Georgia. Employee hereby agrees to
submit to the jurisdiction of the courts of the State of Georgia or the federal
courts within the State of Georgia and hereby appoints the Secretary of State of
the State of Georgia as agent for the purpose of receiving service of process in
respect of any proceeding in connection herewith. Time is of the essence of this
Agreement and each and every Section and subsection hereof.
17. NOTICES. Any notice to be given under this Agreement shall be given in
writing and may be effected by personal delivery or by placing such in the
United States certified mail, return receipt requested and addressed as set
forth below:
If to Company: The Profit Recovery Group International I, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
If to Employee: At the address specified below Employee's signature.
18. REQUIRED DEDUCTIONS OR WITHHOLDINGS. All amounts payable to Employee
pursuant to the Employment Agreement or the Compensation Agreement shall have
deducted or withheld therefrom by the Company such amount or amounts as may be
required to be so deducted or withheld pursuant to applicable federal, state or
local laws.
19. ENTIRE AGREEMENT AND AMENDMENT. The Employment Agreement, the
Compensation Agreement and the Plan constitute the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior discussions, understandings and agreements among the parties hereto. Any
such prior agreements other than the Plan shall, from and after the effective
date hereof, be null and void. This
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Agreement may not be changed orally, but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
20. WAIVER. The waiver by one party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach of the same or any other provision by the other party.
21. AUTHORIZATION. The Company represents and warrants to Employee that
this Agreement has been authorized and approved by all necessary corporate
actions.
22. AFFILIATES. As used herein, "Affiliates" shall mean PRGX, The Profit
Recovery Group Asia, Inc., The Profit Recovery Group Australia, Inc., The Profit
Recovery Group Belgium, Inc., The Profit Recovery Group Canada, Inc., The Profit
Recovery Group France, Inc., The Profit Recovery Group, Germany, Inc., The
Profit Recovery Group Mexico, Inc., The Profit Recovery Group Netherlands, Inc.,
The Profit Recovery Group New Zealand, Inc., The Profit Recovery Group U.K.,
Inc., and all other entities, whether now or hereafter existing, fifty-one (51%)
percent or more of the outstanding capital stock of which is owned by any
combination of the Company and/or any of the foregoing entities and which are
engaged in substantially the same business as the Business of the Company and/or
which provide services or employees to the Company or any Affiliate in
connection with the operations thereof.
23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPANY:
THE PROFIT RECOVERY GROUP
INTERNATIONAL I, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇,
Chief Executive Officer
EMPLOYEE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
8
9
COMPENSATION AGREEMENT
THIS COMPENSATION AGREEMENT ("Agreement") is made this 26th day of
August, 1996 effective as of January 1, 1996 (the "Effective Date"), by and
between THE PROFIT RECOVERY GROUP INTERNATIONAL I, INC., a Georgia corporation
(the "Company") and ▇▇▇▇ ▇. ▇▇▇▇▇, a resident of the State of Georgia (the
"Employee").
W I T N E S S E T H:
WHEREAS, the parties hereto are party to that certain Employment
Agreement, dated August 26th, 1996 and effective as of the Effective Date (the
"Employment Agreement") whereby the Company employs Employee as Senior Vice
President-Legal Affairs and Employee accepts such employment in accordance with
the terms thereof; and
WHEREAS, the Employment Agreement provides that the compensation
payable to Employee shall be as set forth herein (any terms capitalized but not
otherwise defined herein shall have the meanings ascribed to them in the
Employment Agreement).
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. COMPENSATION. For services rendered by Employee under the Employment
Agreement during the term thereof, Employee shall be entitled to receive the
following compensation (subject to following sections), provided that such
compensation and Performance Goals (as defined below) may be reviewed annually
and modified by the Compensation Committee of the Board of Directors of the
Company (the "Committee") in writing prior to the commencement of any Term Year.
(a) Base Salary. One Hundred Fifty Thousand and No/100
($150,000.00) Dollars on an annual basis ("Base Salary") shall be payable in
accordance with the Company's customary payroll procedures.
(b) Bonus. An annual bonus ("Bonus") in an amount determined
as provided herein for each Term Year during the term of the Employment
Agreement, payable in a lump sum within ninety (90) days following the end of
each Term Year. The maximum potential Bonus shall be established from time to
time by mutual consent of the parties hereto, but, assuming no decrease in Base
Salary, shall not be less than Seventy-Five Thousand and No/100 ($75,000.00)
Dollars per Term Year without Employee's consent, provided, however, that
10
Employee shall be entitled to a Bonus if and only if certain objective and
subjective Performance Goals (as hereinafter defined) are met by Employee and
the Company. The amount of any Bonus will depend on which level of Performance
Goals Employee and the Company have met. Schedule 1 attached hereto contains the
Performance Goals agreed to between the Company and Employee and an illustration
of how a Bonus may be achieved based on the Performance Goals.
(i) The "Performance Goals" shall consist of the
following:
A) "Earnings Per Share Goals" - based on the
earnings per share of the Company and its
Affiliates as of the end of each calendar
year as determined by KPMG Peat Marwick, or
the independent accounting firm then serving
the Company, in accordance with generally
accepted accounting principles; such
calculation for the year ending December 31,
1996 shall be determined before giving
effect to any net deferred tax liability
resulting from termination of the Subchapter
S and partnership status of the Company and
its Affiliates in connection with the
reorganization which preceded the initial
public offering of PRGX.
B) "Individual Performance Goals" - based on
factors to be agreed upon by Employee and
the Committee.
(ii) The levels of the Performance Goals are as follows:
A) "Threshold" - the minimum Performance Goal
to be achieved to receive any Bonus (15% of
Base Salary for each Term Year);
B) "Target" - the Performance Goal that
Employee and the Company agree is
realistically attainable (35% of Base Salary
for each Term Year); and
C) "Stretch" - the Performance Goal that will
provide the maximum Bonus (50% of Base
Salary for each Term Year).
(iii) Whether or not the Individual Performance Goals
have been achieved shall be solely in the judgment
of the Committee. The relative weight given to each
Performance Goal in calculating the Bonus shall be
reflected on Schedule 1 attached hereto or as
otherwise mutually agreed to in writing by Employee
and the Committee.
-2-
11
2. TERMINATION. This Agreement shall terminate effect upon the
termination of the Employment Agreement; provided, however, that all provisions
hereof relating to any actions, including payment, subsequent to termination
shall survive such termination.
3. INCORPORATION BY REFERENCE. The provisions of the Employment
Agreement are hereby incorporated herein by reference.
4. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
Employee. In the event that the Employment Agreement is assigned this Agreement
shall be assigned to the assignee thereof.
5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
COMPANY:
THE PROFIT RECOVERY GROUP
INTERNATIONAL I, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer
EMPLOYEE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
-3-
12
SCHEDULE 1
-4-
13
1996 INCENTIVE PLAN - ▇▇▇▇ ▇▇▇▇▇
Total
Corporate Incentive
Earnings Per Share MBO
(80% of Incentive) (20% of Incentive)
Performance Cumulative Target Payout Target Payout $
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ 15.0% $18,000 $ 4,500 $22,500
A2 B2
Target 35.0% $42,000 $10,500 $52,500
A3 B3
Maximum 50.0% $60,000 $15,000 $75,000
EPS
A1=$.28/SHARE
A2=$.37/SHARE
A3=$.45/SHARE
MBO
B1=TBD
B2=TBD
B3=TBD
14
DESCRIPTION OF 1998 COMPENSATION ARRANGEMENT BETWEEN
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇ AND REGISTRANT
The following describes certain compensation arrangements between the
Registrant and ▇▇. ▇▇▇▇▇ for calendar year 1998 which supplements the Employment
Agreement dated August 26, 1996 between Registrant and ▇▇. ▇▇▇▇▇ and the
Compensation Agreement dated August 26, 1996 between Registrant and ▇▇. ▇▇▇▇▇.
The Company has entered into an employment agreement with ▇▇. ▇▇▇▇▇ that
currently expires December 31, 1998. The employment agreement provides for
automatic one-year renewals upon the expiration of each year of employment,
subject to prior notice of nonrenewal by the Board of Directors. For 1998, the
Compensation Committee of the Board of Directors (the "Compensation Committee")
increased ▇▇. ▇▇▇▇▇' annual base salary to $170,000 (effective March 1, 1998).
Pursuant to ▇▇. ▇▇▇▇▇' employment agreement, for 1998, he will receive a bonus
of up to 50% of his base salary based in part upon the Company's performance for
1998. On January 27, 1998, the Compensation Committee granted ▇▇. ▇▇▇▇▇ options
to purchase 15,000 shares of Common Stock at a purchase price of $15.75 per
share, vesting over a five-year period at 20% per year. Beginning in 1998, the
Compensation Committee has determined that the Company will make annual
contributions in the amount of $10,000 per year to a deferred compensation
program for ▇▇. ▇▇▇▇▇, which amounts will vest over a ten-year period at 10% per
year. ▇▇. ▇▇▇▇▇ will be entitled to receive his deferred compensation upon
termination of his employment for any reason, other than for cause, including
death or disability. The Company has also agreed to provide ▇▇. ▇▇▇▇▇ with
certain other personal benefits. Upon termination, other than for cause or by
voluntary resignation, ▇▇. ▇▇▇▇▇ will receive severance payments equal to nine
months' base salary and certain other personal benefits. ▇▇. ▇▇▇▇▇ has agreed
not to compete with the Company or to solicit any clients or employees of the
Company for a period of 18 months following termination of his employment.
