EXHIBIT 99.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into November 11,
2005, effective as of November 7, 2005 (the "Effective Date"), among PRG-SCHULTZ
USA, INC., a Georgia corporation (the "Company"), PRG-SCHULTZ INTERNATIONAL,
INC., a Georgia corporation that owns all of the capital stock of the Company
("PRGX"), and PETER LIMERI ("Executive").
The parties agree as follows:
1. Certain Definitions. Certain words or phrases with initial capital
letters not otherwise defined herein are to have the meanings set forth in
paragraph 8.
2. Employment. The Company shall employ Executive, and Executive accepts
employment with the Company, as of the Effective Date, upon the terms and
conditions set forth in this Agreement for the period beginning on the Effective
Date and ending as provided in paragraph 5 (the "Employment Period").
3. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Chief
Restructuring Officer of the Company and is to have the normal duties,
responsibilities and authority of an executive serving in such position, subject
to the power of the Chief Executive Officer of the Company, the Chief Executive
Officer of PRGX, the board of directors of the Company (the "Company Board") and
the board of directors of PRGX (the "PRGX Board") to provide oversight and
direction with respect to such duties, responsibilities and authority, either
generally or in specific instances and consistent with such position.
(b) Executive shall report to the Chief Executive Officer of the Company
and the Chief Executive Officer of PRGX.
(c) During the Employment Period, Executive shall devote Executive's best
efforts and Executive's full professional time and attention (except for
permitted vacation periods and reasonable periods of illness or other
incapacity) to the Business and affairs of the Company, PRGX, and their
subsidiaries and affiliates. Executive shall perform Executive's duties and
responsibilities to the best of Executive's abilities in a diligent,
trustworthy, business-like and efficient manner. During the Employment Period,
Executive shall not serve as a director or a principal of another company or any
charitable or civic organization without the PRGX Board's prior consent.
(d) Executive shall perform Executive's duties and responsibilities
principally in the Atlanta, Georgia metropolitan area.
(e) Executive shall acquire, through purchase on the open market, that
number of shares of PRGX's common stock as is required by any PRGX
Board-approved share ownership program applicable to all of the Company's senior
executives as may be in effect from time to time. Executive shall maintain this
minimum ownership requirement at all times during the Employment Period in
accordance with the provisions of the share ownership program.
(f) Within one hundred twenty (120) days after the Effective Date, the PRGX
Board shall appoint Executive to serve as Executive Vice President-Finance,
Chief Financial Officer and Treasurer of PRGX. Executive shall serve as the
Executive Vice President-Finance, Chief Financial Officer and Treasurer of PRGX,
with no additional remuneration payable to Executive for that service. Upon the
Date of Termination, Executive shall, at the PRGX Board's request, resign from
the position of Executive Vice President-Finance, Chief Financial Offer and
Treasurer of PRGX.
4. Compensation and Benefits.
(a) Salary. The Company agrees to pay Executive a salary during the
Employment Period in installments based on the Company's payroll practices as
may be in effect from time to time. The Company shall set Executive's initial
salary at the rate of Two Hundred Twenty Thousand Dollars ($220,000) per year
("Base Salary"). The Compensation Committee of the PRGX Board shall review
Executive's Base Salary from time to time. The Compensation Committee of the
PRGX Board may, in its sole discretion, increase Executive's Base Salary, but
may decrease Executive's Base Salary only to the extent that the Company
institutes a salary reduction generally and ratably applicable to all senior
executives of the Company. If the Company modifies the Base Salary as defined,
"Base Salary" in this Agreement is to refer to the modified Base Salary.
(b) Annual Bonus.
(i) For fiscal year 2005, Executive is entitled to receive a bonus
equal to 40% of Base Salary, prorated based on the number of days actually
employed during fiscal year 2005, payable to Executive in a lump sum after
the end of the fiscal year.
(ii) For each fiscal year following fiscal year 2005 during the
Employment Period, Executive shall be eligible to receive an annual bonus,
with the annual bonus potential to be between 40% of Base Salary (i.e., 40%
upon achievement of annual "target" performance goals) and a maximum of 80%
of Base Salary (i.e., 80% upon achievement of annual "maximum" performance
goals), with the "target" and "maximum" performance goals and bonus
criteria to be defined and approved by the Compensation Committee of the
PRGX Board in advance for each fiscal year. The Company shall pay any such
annual bonus earned to Executive in a lump sum after the end of the fiscal
year.
(c) Stock Options. As soon as practicable upon Executive's entering into
employment with the Company, PRGX shall grant Executive a stock option with
respect to 500,000 shares of the common stock of PRGX, in accordance with a
stock option agreement in the form attached hereto as Exhibit A.
(d) Expense Reimbursement. The Company will reimburse Executive for all
reasonable expenses incurred by Executive during the Employment Period in the
course of performing Executive's duties under this Agreement in accordance with
the Company's policies in effect from time to time with respect to travel,
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entertainment and other business expenses, and subject to the Company's
requirements applicable generally with respect to reporting and documentation of
such expenses.
(e) Standard Executive Benefits Package. Executive is entitled during the
Employment Period to participate, on the same basis as the Company's other
senior executives, in the Company's Standard Executive Benefits Package. A
summary of such benefits as in effect on the date of this Agreement is attached
hereto as Exhibit B.
(f) Vacation; Holidays. Executive is entitled to four weeks of paid
vacation, without carryover for unused vacation, as well as paid holidays in
accordance with the Company's policies in effect from time to time.
(g) Indemnification. Contemporaneously with this Agreement, PRGX and
Executive shall execute PRGX's standard form of Indemnification Agreement, in
the form attached hereto as Exhibit C.
(h) Additional Compensation/Benefits. The Compensation Committee of the
PRGX Board, in its sole discretion, will determine any compensation or benefits
to be provided to Executive during the Employment Period other than as set forth
in this Agreement, including, without limitation, any future grant of stock
options or other equity awards.
(i) Disgorgement of Compensation. If PRGX is required to prepare an
accounting restatement due to its material noncompliance, as a result of
misconduct, with any financial reporting requirement under the federal
securities laws, to the extent required by law, Executive will reimburse the
Company for (i) any bonus or other incentive-based or equity-based compensation
received by Executive from the Company (including such compensation payable in
accordance with this paragraph 4 and paragraph 6) during the 12-month period
following the first public issuance or filing with the Securities and Exchange
Commission (whichever first occurs) of the financial document embodying that
financial reporting requirement; and (ii) any profits realized by Executive from
the sale of PRGX's securities during that 12-month period.
(j) COBRA Reimbursement. Until the expiration of any applicable waiting
periods necessary for Executive to commence participation in the Company's
healthcare plans, the Company shall reimburse to Executive, upon Executive's
written requests therefor from time to time, the amounts paid on account of
premiums to Blue Cross Blue Shield of Georgia, Fortis and ExcuCare by Executive
in connection with Executive's rights under COBRA (as defined below) to maintain
the healthcare benefits provided to Executive under Executive's former
employer's healthcare plans.
5. Employment Period.
(a) Subject to subparagraph 5(b), the Employment Period will commence on
the Effective Date and will continue until, and will end upon, the second
anniversary of the Effective Date; except that on the second anniversary of the
Effective Date, unless either party shall have given the other 30-days' written
notice otherwise, the Employment Period will be extended automatically for one
additional year; and, further provided that if the Employment Period has been
extended for one additional one-year period, then on the third anniversary of
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the Effective Date, unless either party shall have given the other 30-days'
written notice otherwise, the Employment Period will again be extended
automatically for one additional year.
(b) The Employment Period will end upon the first to occur of any of the
following events: (i) Executive's death; (ii) the Company's termination of
Executive's employment on account of Disability; (iii) the Company's termination
of Executive's employment for Cause (a "Termination for Cause"); (iv) the
Company's termination of Executive's employment without Cause (a "Termination
without Cause"); (v) Executive's termination of Executive's employment for Good
Reason (a "Termination for Good Reason"); or (vi) Executive's termination of
Executive's employment for any reason other than Good Reason (a "Voluntary
Termination").
(c) Any termination of Executive's employment under subparagraph 5(b) must
be communicated by a Notice of Termination delivered by the Company or
Executive, as the case may be, to the other party.
(d) Executive will be deemed to have waived any right to a Termination for
Good Reason based on the occurrence or existence of a particular event or
circumstance constituting Good Reason unless Executive delivers a Notice of
Termination within 90 days from the date Executive first became aware of the
event or circumstance.
6. Post-Employment Period Payments.
(a) At the Date of Termination, regardless of the reason for termination of
employment, Executive will be entitled to (i) any Base Salary that has accrued
but is unpaid, any annual bonus that has been earned but is unpaid, any
reimbursable expenses that have been incurred but are unpaid, and any unexpired
vacation days that have accrued under the Company's vacation policy but are
unused, as of the end of the Employment Period, (ii) any plan benefits that by
their terms extend beyond termination of Executive's employment (but only to the
extent provided in any such benefit plan in which Executive has participated as
a Company employee and excluding, except as hereinafter provided in paragraph 6,
any Company severance pay program or policy) and (iii) reimbursement for any
benefits to which Executive is entitled and has paid in accordance with Part 6
of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974,
as amended ("COBRA") (such reimbursement to be made upon Executive's written
requests therefor from time to time). Except as specifically described in this
subparagraph 6(a) and in the succeeding subparagraphs of this paragraph 6 (under
the circumstances described in those succeeding subparagraphs), from and after
the Date of Termination Executive shall cease to have any rights to salary,
bonus, expense reimbursements or other benefits from the Company.
(b) If the Employment Period ends in accordance with paragraph 5 on account
of Executive's death, Disability, Voluntary Termination or Termination for
Cause, the Company will make no further payments to Executive except as
contemplated in subparagraph 6(a).
(c) Subject to subparagraph 6(d), if the Employment Period ends in
accordance with paragraph 5 on account of a Termination without Cause or a
Termination for Good Reason, Executive shall be entitled to the following:
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(1) (A) if the Date of Termination occurs within the first 120 days of
Executive's employment with the Company, severance payments equal to fifty
percent (50%) of Executive's Base Salary for the then-current fiscal year,
payable bi-weekly in installments based on the company's payroll practices
as in effect on the Date of Termination (provided, however, that if the
Termination without Cause or Termination for Good Reason occurs after a
Change in Control, then the amount of the payments shall be equal to the
amount provided in subclause (1)(B) of this subparagraph (c)
notwithstanding the date the Employment Period ends); or (B) if the Date of
Termination occurs more than 120 days after Executive is first employed by
the Company, severance payments equal to one hundred percent (100%) of
Executive's Base Salary for the then-current fiscal year, payable bi-weekly
in installments based on the Company's payroll practices as in effect on
the Date of Termination; plus
(2) an additional amount equal to the bi-weekly employer's subsidy payment made
by the Company for Executive's health benefits in effect as of the Date of
Termination (the "Health Reimbursement"), payable bi-weekly together with
the installment payments made pursuant to clause (1) of this subparagraph
6(c), which Health Reimbursement payments shall only continue until the
earlier of (i) Executive's eligibility for any such coverage under another
employer's or any other medical or dental insurance plans sponsored by a
subsequent employer of Executive or (ii) the first anniversary of the Date
of Termination.
(d) The Company shall make no payments in accordance with subparagraph 6(a)
if Executive declines to sign and return a Release Agreement or revokes the
Release Agreement within the time provided in the Release Agreement.
(e) Executive is not required to mitigate the amount of any payment or
benefit provided for in this Agreement by seeking other employment or otherwise.
7. Competitive Activity; Confidentiality; Non-solicitation.
(a) Acknowledgements and Agreements. Executive acknowledges and agrees that
in the performance of Executive's duties to the Company during the Employment
Period, Executive will be brought into frequent contact, either in person, by
telephone or through the mails, with the Company's existing and potential
customers and employees. Executive also agrees that any Trade Secrets and
Confidential Information of the Company gained by Executive during Executive's
association with the Company have been developed by the Company through
substantial expenditures of time, effort and money and constitute the Company's
valuable and unique property. Executive further understands and agrees that the
foregoing makes it necessary, for the protection of the Business, that Executive
not compete with the Company during the Employment Period and not compete with
the Company for a reasonable period thereafter, as further provided in the
following subparagraphs.
(b) Confidentiality. During and after the Employment Period, Executive
shall treat as confidential and shall not, without the Company's prior written
approval, use (other than in the performance of Executive's designated duties
for the Company) or disclose any Trade Secrets or Confidential Information.
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(c) Records. All records, notes, files, recordings, tapes, disks,
memoranda, reports, price lists, client lists, drawings, plans, sketches,
documents, equipment, apparatus, and like items, and all copies thereof,
relating to the Business or any Trade Secrets or Confidential Information that
may be prepared by Executive or that may be disclosed to or that may come into
the possession of Executive during the Employment Period, are to be and remain
the Company's sole and exclusive property. Executive shall promptly deliver to
the Company the originals and all copies of any of the foregoing that are in
Executive's possession, custody or control, at any time upon request from the
Company.
(d) Executive Inventions.
(i) All Works are to be the Company's sole and absolute property,
including all patent, copyright, trade secret, or other rights in respect
thereof. Executive shall assign to Company all right, title, and interest
in and to any and all Works, including all worldwide copyrights, patent
rights, and all trade secret information embodied therein, in all media and
including all rights to create derivative works thereof. Executive waives
any and all rights Executive may have in any Works, including but not
limited to the right to acknowledgement as author or moral rights.
Executive shall not use or include in Works any patented, copyrighted,
restricted or protected code, specifications, concepts, or trade secrets of
any third party or any other information that Executive would be prohibited
from using by any confidentiality, non-disclosure or other agreement with
any third party. Executive shall fully and promptly disclose in writing to
the Company any such Works as such Works may arise from time to time.
(ii) Executive shall, without charge to the Company other than for
reimbursement of Executive's reasonable out-of-pocket expenses, execute and
deliver all such further documents and instruments, including applications
for patents and copyrights, and perform such acts, at any time during or
after the term of this Agreement as may be necessary or desirable, to
obtain, maintain, and defend patents, copyrights, or other proprietary
rights in respect of the Works or to vest title to the Works in the
Company, its successors, assigns, or designees. Without limiting the
generality of the foregoing, Executive shall give all lawful testimony,
during or after the term of Executive's employment, that may be required in
connection with any proceedings involving any Works so assigned by
Executive. Executive shall keep and maintain adequate and complete records
(in the form of notes, laboratory notebooks, sketches, drawings, optical
drives, hard drives and as may otherwise be specified by the Company) of
all inventions and original works of authorship made by Executive (solely
or jointly with others) in the course of employment with Company, with the
Company's time, on the Company's premises, or using the Company's resources
or equipment, which records are to be available to and remain the Company's
sole property at all times.
(e) Cooperation. Executive shall cooperate at all times to the extent and
in the manner requested by the Company and at the Company's expense, in the
prosecution or defense of any claims, litigation or other proceeding involving
the Works, the Company's property or the Trade Secrets or Confidential
Information. Executive shall comply with regulations, policies, and procedures
established by the Company, including, without limitation, all regulations,
policies, and procedures established for the purpose of protecting Trade Secrets
and Confidential Information.
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(f) Agreement Not to Compete. During the Employment Period and for a period
of two years from the Date of Termination, regardless of the reason for
termination of employment, Executive shall not, without the Company's prior
written consent, within the Restricted Territory, for Executive or on behalf of
another, directly or indirectly, engage in any business for which Executive
provides services that are the same or substantially similar to Executive's
services for the Company (as described in paragraph 3) to or on behalf of a
Competing Business. Executive acknowledges and agrees that Restricted Territory
is the geographic area within which Executive performs services for the Company.
(g) Agreement Not to Solicit Customers. During the Employment Period and
for a period of two years from the Date of Termination, regardless of the reason
for termination of employment, Executive shall not, without the Company's prior
written consent, directly or indirectly, on Executive's own behalf or in the
service or on behalf of others, (i) solicit or attempt to divert or appropriate
to a Competing Business any customer or actual prospect of the Company with whom
Executive dealt on the Company's behalf at any time during the 12-month period
immediately preceding the Date of Termination, or (ii) solicit or attempt to
divert or appropriate to a Competing Business, any customer or actual prospect
of the Company with whom an employee that was directly supervised by Executive
dealt on the Company's behalf at any time during the 12-month period immediately
preceding the Date of Termination.
(h) Agreement Not to Solicit Employees. During the Employment Period and
for a period of two years from the Date of Termination, regardless of the reason
for termination of employment, Executive shall not, without the Company's prior
consent, directly or indirectly, on Executive's own behalf or in the service or
on behalf of others, solicit, divert or recruit any Company employee to leave
such employment, whether such employment is by written contract or at will.
(i) Remedies.
(i) By virtue of the duties and responsibilities attendant to
Executive's employment by the Company and the special knowledge of the
Company's affairs, Business, clients, and operations that Executive has and
will have as a consequence of Executive's employment, Executive
acknowledges and agrees that irreparable loss and damage will be suffered
by the Company if Executive should breach or violate any of the covenants
and agreements contained in this paragraph 7. Therefore, in addition to any
other remedies available to the Company, Executive acknowledges and agrees
that the Company shall be entitled to an injunction to prevent a breach or
contemplated breach by Executive of any of the covenants or agreements
contained in this paragraph 7.
(ii) The existence of any claim, demand, action or cause of action of
Executive against the Company, whether predicated upon this Agreement or
otherwise, is not to constitute a defense to the Company's enforcement of
any of the covenants or agreements contained in this paragraph 7. The
Company's rights under this Agreement are in addition to, and not in lieu
of, all other rights the Company may have at law or in equity to protect
its confidential information, trade secrets and other proprietary
interests.
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(j) Indirect Competition. Executive will be in violation of this paragraph
7 if Executive engages in any or all of the activities set forth in this
paragraph 7 directly as an individual on Executive's own account, or indirectly
as a partner, joint venturer, employee, agent, salesperson, consultant, officer
and/or director of any firm, association, partnership, corporation or other
entity, or as a shareholder of any corporation or the owner of the interests in
any other entity, in which Executive or Executive's spouse, child or parent
owns, directly or indirectly, individually or in the aggregate, more than 5% of
the outstanding stock or other ownership interests. Ownership of a lesser
percentage in any such entity, in and of itself, will not constitute a violation
of this paragraph 7, so long as Executive does not engage in action prohibited
in this paragraph 7 with regard to such entity.
(k) Definition of "Company". For purposes of this paragraph 7, the
"Company" includes any direct and indirect subsidiary, parent, affiliate, or
related company of the Company.
8. Definitions.
(a) "Business" means, with respect to the Company and PRGX, (i) audit
services (A) to identify and recover lost profits or, in the case of
governmental agencies or programs, overpayments or erroneous or wrongful
payments or reimbursements, from any source, including, without limitation,
payment errors, missed or inaccurate discounts, allowances, or rebates, vendor
pricing errors, or duplicate payments, or any other services substantially
similar to or readily suitable for any such described services and (B) to
identify expense containment opportunities; (ii) development and use of
technology to provide such services; and (iii) provision of related consulting
services, as further described in any and all Company marketing and sales
manuals and materials as the same may be altered, amended, supplemented or
otherwise changed from time to time.
(b) "Cause" means, as determined by the PRGX Board in good faith: (i) a
material breach of the duties and responsibilities of Executive or any written
policies or directives of PRGX or the Company (other than as a result of
Disability) that is (A) willful or involves gross negligence, and (B) not
remedied within 30 days after receipt of written notice from the Company that
specifically identifies the manner in which such breach has occurred; (ii)
Executive's commission of any felony that causes damage to the property,
business or reputation of PRGX or the Company; (iii) Executive's engagement in a
fraudulent or dishonest act; (iv) Executive's engagement in habitual insobriety
or the use of illegal drugs or substances; (v) Executive's breach of Executive's
fiduciary duties to PRGX or the Company; (vi) Executive's willful failure to
cooperate, or willful failure to cause and direct the persons under Executive's
management or direction, or employed by, or consultants or agents to, the
Company or PRGX to cooperate, with all corporate investigations or independent
investigations by the PRGX Board or the Company Board, all governmental
investigations of the Company or PRGX and all orders involving Executive, the
Company or PRGX entered by a court of competent jurisdiction; (vii) Executive's
violation in any material respect of PRGX's Code of Conduct or PRGX's Code of
Ethics for Senior Financial Officers or any successor codes; or (viii)
Executive's engagement in activities prohibited by paragraph 7. Notwithstanding
the foregoing, however, Executive shall not be deemed to have been terminated
for Cause unless and until there shall have been delivered to Executive (i) a
letter from the PRGX Board finding that, in the good faith opinion of the PRGX
Board, Executive was guilty of the conduct set forth in any of the clauses of
the preceding sentence and specifying the particulars thereof in detail and (ii)
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a copy of a resolution duly adopted by the affirmative vote of the members of
the PRGX Board who are not officers of the Company at a meeting of the PRGX
Board called and held for such purpose (after reasonable notice to Executive and
an opportunity for Executive, together with Executive's counsel, to be heard
before the PRGX Board), finding, in the good faith opinion of the PRGX Board,
that Executive was guilty of such conduct and specifying the particulars thereof
in detail.
(c) "Change in Control" means the occurrence of any of the following
events: (i) the acquisition of beneficial ownership of a majority of the
outstanding voting stock of PRGX by any person (other than PRGX, a subsidiary of
PRGX or any person that, on the Effective Date, beneficially owned not less than
four million shares of the common stock of PRGX) or any two or more persons
(other than persons that, on the Effective Date, beneficially owned not less
than four million shares of the common stock of PRGX) acting as a partnership,
limited partnership, syndicate or other group, entity or association acting in
concert for the purpose of voting, acquiring, holding, or disposing of voting
stock of PRGX; (ii) at any time during any period of two consecutive years (not
including any period prior to the Effective Date), individuals who at the
beginning of such period constituted the PRGX Board, and any new directors,
whose election by the PRGX Board or nomination for election by the holders of
the voting stock of PRGX was approved by a vote of at least two-thirds of the
directors of PRGX then still in office who either were directors of PRGX at the
beginning of the period or whose election or nomination for election was
previously so approved (the "Current Directors"), cease for any reason to
constitute a majority thereof, (iii) a merger or a consolidation of PRGX with or
into another corporation or entity, other than (A) a merger or consolidation
with a subsidiary of PRGX, or (B) a merger or consolidation in which the holders
of voting stock of PRGX immediately before the merger hold as a class
immediately after the merger at least a majority of all outstanding voting power
of the surviving or resulting corporation or its parent, the Current Directors
constitute at least a majority of the board of directors of such surviving or
resulting corporation or its parent, and such surviving or resulting corporation
or its parent expressly assume and agree to perform the obligations of the
Company and PRGX under this Agreement; (iv) a statutory exchange of shares of
one or more classes or series of outstanding voting stock of PRGX for cash,
securities, or other property, other than an exchange in which the holders of
voting stock of PRGX immediately before the exchange hold as a class immediately
after the exchange at least a majority of all outstanding voting power of the
entity with which PRGX stock is being exchanged, the Current Directors
constitute at least a majority of the board of directors of such entity, and
such entity expressly assumes and agrees to perform the obligations of the
Company and PRGX under this Agreement; (v) the sale or other disposition of all
or substantially all of the assets of PRGX, in one transaction or a series of
transactions, other than a sale or disposition in which the holders of voting
stock of PRGX immediately before the sale or disposition hold as a class
immediately after the exchange at least a majority of all outstanding voting
power of the entity to which the assets of PRGX are being sold, the Current
Directors constitute at least a majority of the board of directors of such
entity, and such entity expressly assumes and agrees to perform the obligations
of the Company and PRGX under this Agreement; or (vi) the liquidation or
dissolution of PRGX.
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(d) "Competing Business" means any business engaging in the same or
substantially similar business as the Business.
(e) "Confidential Information" means any confidential or proprietary
information relating to the Company or its customers that is not a Trade Secret,
except for information that (i) was generally known prior to the Effective Date;
(ii) was in Executive's possession prior to the Effective Date (other than
information supplied to him by the Company or its agents), to the extent
Executive has written record of possessing such information prior to the
Effective Date; (iii) becomes generally known through no act or omission by
Executive; (iv) is supplied to Executive subsequent to the Effective Date by a
third party not under an obligation of confidentiality with respect to such
information; (v) was independently developed by Executive without reference to
or knowledge of any information, data, or disclosures received from the Company;
or (vi) is required to be disclosed pursuant to an order of a court or other
governmental agency of competent jurisdiction.
(f) "Date of Termination" means (i) if Executive's employment is terminated
by the Company for Disability, 30 days after the Company gives Notice of
Termination to Executive (provided that Executive has not returned to the
performance of Executive's duties on a full-time basis during this 30-day
period), (ii) if Executive's employment is terminated by Executive for Good
Reason, the date specified in the Notice of Termination, and (iii) if
Executive's employment is terminated by the Company for any other reason, the
date specified in the Notice of Termination(or, if no termination date is
specified therein, the date on which such Notice of Termination is given).
(g) "Disability" means Executive's inability or expected inability (or a
combination of both) to perform the services required of Executive under this
Agreement due to illness, accident or any other physical or mental incapacity
for an aggregate of 90 days within any period of 180 consecutive days during
which this Agreement is in effect, as agreed by the parties or as determined in
accordance with the next sentence. If there is a dispute between Executive and
the Company in the determination of Disability as to whether an illness,
accident or any other physical or mental incapacity exists or existed during the
applicable period, then such dispute is to be decided by a medical doctor
selected by the Company and a medical doctor selected by Executive and
Executive's legal representative (or, in the event that these doctors fail to
agree, then in the majority opinion of these doctors and a third medical doctor
chosen by these doctors). Each party shall pay all costs associated with
engaging the medical doctor selected by such party and the parties shall each
pay one-half of the costs associated with engaging any third medical doctor.
(h) "Good Reason" means, subject to the next sentence, any of the
following: (i) the Company's demotion of Executive to a lesser position than the
position that he is serving in prior to the demotion; (ii) the assignment to
Executive of duties materially inconsistent with his position or material
reduction of Executive's duties, responsibilities or authority (as described in
paragraph 3), in either case without Executive's prior written consent; except
that a change in the foregoing that results solely from PRGX ceasing to be a
publicly traded entity or from PRGX becoming a wholly owned subsidiary of a
publicly traded entity will not, in either event and standing alone, constitute
grounds for "Good Reason"; (iii) any decrease in Executive's Base Salary or
annual bonus or benefits under the Standard Executive Benefits Package, except
to the extent that the Company has instituted a salary, bonuses or benefits
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reduction generally and ratably applicable to all senior executives of the
Company and so long as such reduction does not occur in contemplation of a
Change in Control; (iv) unless agreed to by Executive, the relocation of
Executive's principal place of business outside of the metropolitan area of
Atlanta, Georgia; or (v) the failure by the Company, without Executive's
consent, to pay to Executive any portion of Executive's Base Salary, annual
bonus or other benefits within ten business days after the date the same is due,
in each case not remedied by the Company within 30 days after receipt by the
Company of written notification from Executive to the Company that specifically
identifies the Good Reason. During the one-year period following a Change in
Control, however, (i) no Good Reason for termination can occur under this
Agreement because of any change in Executive's title or reporting relationship
as a consequence of the Change in Control and any determination of Good Reason,
if the determination relates to Executive's title or reporting relationship, is
to be made by reference to Executive's title or reporting relationship that
exists as a consequence of the Change in Control; and (ii) without limiting the
occurrence of Good Reason as defined in the preceding sentence other than
because of a change in, or by reference to, Executive's title or reporting
relationship as specified in clause (i) of this sentence, Good Reason for
termination can also occur under this Agreement upon: (A) the failure by the
Company to continue to provide Executive with benefits at least as favorable in
the aggregate to those enjoyed by Executive under the Standard Executive
Benefits Package in which Executive was participating at the time of the Change
in Control, (B) the taking of any action by the Company that would directly or
indirectly materially reduce any such benefits or deprive Executive of any
material fringe benefit (including equity-based benefits) enjoyed at the time of
the Change in Control, or (C) the Company's failure to provide Executive with
the number of paid vacation days to which Executive is entitled at the time of
the Change in Control; it is understood that excluded from subclauses (A) - (C)
is any failure or action by the Company that is not taken in bad faith and that
is remedied by the Company promptly after receipt of notice thereof from
Executive.
(i) "Notice of Termination" means a written notice that indicates those
specific termination provisions in this Agreement relied upon and that sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated. For purposes of this Agreement, no purported termination by either
party is to be effective without a Notice of Termination.
(j) "Release Agreement" means the Company's standard form of agreement
pursuant to which Executive releases all current or future claims, known or
unknown, arising on or before the date of the release against the Company or any
direct and indirect subsidiary, parent, affiliated, or related company of the
Company, or their respective officers and directors.
(k) "Restricted Territory" means, and is limited to, Fulton County,
Georgia.
(l) "Standard Executive Benefits Package" means those benefits (including
retirement, insurance and other welfare benefits, but excluding, except as
provided in paragraph 6, any severance pay program or policy of the Company) for
which substantially all of the Company's senior executives are from time to time
generally eligible, as determined from time to time by the PRGX Board.
11
(m) "Trade Secrets" means information of the Company without regard to
form, including, but not limited to, technical or non-technical data, a formula,
a pattern, a compilation, a program, a device, a method, a technique, a drawing,
a design, a process, financial data, financial plans, product plans, or a list
of actual or potential customers or suppliers that is not commonly known by or
available to the public and which information: (a) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
(n) "Works" means any work of authorship, code, invention, improvement,
discovery, process, formula, code algorithm, program, system, method, visual
work, or work product, whether or not patentable or eligible for copyright, and
in whatever form or medium and all derivative works thereof, that may be
created, made, developed, or conceived by Executive in the course of employment
with the Company, with the Company's time, on the Company's premises, using the
Company's resources or equipment, or relating to the Business.
9. Executive Representations. Executive represents to the Company that (a)
the execution, delivery and performance of this Agreement by Executive does not
and will not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which Executive is
a party or by which Executive is bound, (b) Executive is not a party to or bound
by any employment agreement, noncompete agreement or confidentiality agreement
with any other person or entity and (c) upon the execution and delivery of this
Agreement by the Company, this Agreement will be the valid and binding
obligation of Executive, enforceable in accordance with its terms.
10. Withholding of Taxes. The Company shall withhold from any amounts
payable under this Agreement all federal, state, city or other taxes that the
Company is required to withhold under any applicable law, regulation or ruling.
11. Expenses. Promptly following receipt of invoices therefor, the Company
will reimburse (a) Executive's reasonable attorney's fees and costs (and related
disbursements) incurred in connection with Executive's negotiation and execution
of this Agreement, in an amount not to exceed $10,000. Except as provided in the
immediately preceding sentence, each party to this Agreement shall bear its own
costs and expenses in connection with the negotiation and execution of this
Agreement.
12. Successors and Assigns. This Agreement is to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
heirs, executors, personal representatives, successors and assigns, except that
neither party may assign any rights or delegate any obligations hereunder
without the prior written consent of the other party. Executive hereby consents
to the assignment by the Company of all of its rights and obligations under this
Agreement to any successor to the Company by merger or consolidation or purchase
of all or substantially all of the Company's assets, provided that the
transferee or successor assumes the obligations of the Company and PRGX under
this Agreement.
12
13. Survival. Subject to any limits on applicability contained therein,
paragraph 7 will survive and continue in full force in accordance with its terms
notwithstanding any termination of the Employment Period.
14. Choice of Law. This Agreement is to be governed by the internal law,
and not the laws of conflicts, of the State of Georgia.
15. Severability. Whenever possible, each provision of this Agreement is to
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, that invalidity, illegality or unenforceability is not to affect
any other provision or any other jurisdiction, and this Agreement is to be
reformed, construed and enforced in the jurisdiction as if the invalid, illegal
or unenforceable provision had never been contained herein.
16. Notices. Any notice provided for in this Agreement is to be in writing
and is to be either personally delivered, sent by reputable overnight carrier or
mailed by first class mail, return receipt requested, to the recipient at the
address indicated as follows:
Notices to Executive:
Peter Limeri
2651 Redding Road
Atlanta, GA 30319
Notices to the Company or to PRGX:
PRG-Schultz USA, Inc.
600 Galleria Parkway
Suite 100
Atlanta, Georgia 30339
Attn: General Counsel
or any other address or to the attention of any other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement is to be deemed to have been given when so
delivered, sent or mailed.
17. Amendment and Waiver. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company and Executive, and
no course of conduct or failure or delay in enforcing the provisions of this
Agreement is to affect the validity, binding effect or enforceability of this
Agreement.
18. Complete Agreement. This Agreement embodies the complete agreement and
understanding between the parties with respect to the subject matter hereof and
effective as of its date supersedes and preempts any prior understandings,
agreements or representations by or between the parties, written or oral, that
may have related to the subject matter hereof in any way.
13
19. Counterparts. This Agreement may be executed in separate counterparts,
each of which are to be deemed to be an original and both of which taken
together are to constitute one and the same agreement.
[ SIGNATURE PAGE TO FOLLOW ]
14
The parties are signing this Agreement as of the date stated in the
introductory clause.
PRG-SCHULTZ USA, INC.
By: /s/ Clinton McKellar, Jr.
-------------------------------------
Name: Clinton McKellar, Jr.
Title: General Counsel
PRG-SCHULTZ INTERNATIONAL, INC.
By: /s/ Clinton McKellar, Jr.
-------------------------------------
Name: Clinton McKellar, Jr.
Title: General Counsel
/s/ Peter Limeri
-------------------------------------
PETER LIMERI
[ Signature Page to Employment Agreement ]
EXHIBIT A
OPTION AGREEMENT
OPTION AGREEMENT
This Option Agreement (this "Option Agreement") is entered into as of
November 11, 2005, between PRG-SCHULTZ INTERNATIONAL, INC., a Georgia
corporation ("PRGX") and PETER LIMERI ("Executive").
PRGX, Executive and PRG-Schultz USA, Inc., a Georgia corporation and wholly
owned subsidiary of PRGX (the "Company"), are parties to an employment agreement
dated of even date herewith (the "Employment Agreement").
In accordance with paragraph 4(d) of the Employment Agreement, in
connection with Executive's entering into employment with the Company, Executive
is to receive a stock option grant with respect to 500,000 shares of the common
stock, no par value per share, of PRGX (the "Common Stock").
Therefore, the parties agree as follows:
1. Grant of Non-Qualified Stock Option. PRGX hereby grants to Executive the
right and option to purchase from PRGX, on the terms and subject to the
conditions set forth in this Option Agreement, 500,000 shares of Common Stock
(such shares, the "Option Shares"; such option, the "Option"). The date of grant
of the Option (the "Grant Date") is November 11, 2005. THE OPTION IS NOT TO
CONSTITUTE AN INCENTIVE STOCK OPTION WITHIN THE MEANING OF SECTION 422 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED. Of the 500,000 Option Shares, 125,000
Option Shares are time-vested Option Shares (the "Time-Vested Option Shares")
and 375,000 Option Shares are performance-based Option Shares (the
"Performance-Based Option Shares").
2. Exercise Price of the Option. The exercise price for the Option Shares
is $.28 per share, the closing price of the Common Stock on the NASDAQ National
Market on the Grant Date (the "Exercise Price").
3. Vesting of the Option. Subject to the earlier expiration or termination
of this Option in accordance with its terms, the Option Shares granted under
this Option Agreement will be exercisable as follows:
(a) Time-Vested Option Shares. Subject to subparagraph 3(d), the
Time-Vested Option Shares will become exercisable ratably over four years, as
follows: 31,250 Time-Vested Option Shares shall vest on each of the first,
second, third and fourth anniversary dates of the Grant Date if Executive
remains in the continuous employ of the Company as of such anniversary date.
(b) Performance-Based Option Shares. Subject to subparagraphs 3(c) and
3(d), the Performance-Based Option Shares will become exercisable in three
Tiers, as follows:
(1) 125,000 Performance-Based Option Shares will become exercisable upon
attainment by PRGX, at any time following the first anniversary of the
Grant Date (but prior to termination or expiration of this Option pursuant
to Section 6), of a Market Price (as defined below) per share of the Common
Stock of not less than $4.50 per share for 45 consecutive trading days
("Tier 1");
(2) 125,000 Performance-Based Option Shares will become exercisable upon
attainment by PRGX, at any time following the second anniversary of the
Grant Date (but prior to termination or expiration of this Option pursuant
to Section 6), of a Market Price per share of the Common Stock of not less
than $6.50 per share for 45 consecutive trading days ("Tier 2"); and
(3) 125,000 Performance-Based Option Shares will become exercisable upon
attainment by PRGX, at any time following the third anniversary of the
Grant Date (but prior to termination or expiration of this Option pursuant
to Section 6), of a Market Price per share of the Common Stock of not less
than $8.00 per share for 45 consecutive trading days ("Tier 3"),
($4.50 per share, $6.50 per share and $8.00 per share being referred to herein
as the "Price Target" for Tier 1, Tier 2 and Tier 3, respectively). For purposes
of this Option Agreement, "Market Price" means with respect to shares of Common
Stock the daily closing price as reported by the NASDAQ National Market, or
national securities exchange on which shares of Common Stock are then listed
(or, if shares of Common Stock are not then quoted on the NASDAQ National Market
or listed on a national securities exchange, the daily closing price reported in
the over-the-counter market).
(c) Discretionary Acceleration of Exercisability. The Compensation
Committee of the Board of Directors of PRGX (the "Compensation Committee") may,
in its sole discretion except as provided in subparagraph 3(d), accelerate the
exercisability of all or a portion of Performance-Based Option Shares without
regard to whether the requirements for exercisability thereof in subparagraph
3(b) have been met.
(d) Mandatory Acceleration of Exercisability.
(i) Upon a Termination without Cause or a Termination for Good Reason
(each as defined in the Employment Agreement) occurring at any time on or
after the second anniversary date of your first day of employment with the
Company, the Option will automatically become exercisable with respect to
all unvested Time-Vested Option Shares.
(ii) Upon a Change in Control (as defined in the Employment Agreement)
or if PRGX ceases to be a public company with reporting obligations under
the Securities Exchange Act of 1934, as amended, (A) the Option will
automatically become exercisable with respect to all Time-Vested Option
Shares; (B) the Option will automatically become exercisable with respect
to all Performance-Based Option Shares included in a Tier for which the
applicable Price Target is exceeded by the Transaction Price; (C) if the
Transaction Price exceeds the Price Target for Tier 1 but is less than the
Price Target for Tier 2, the Option shall automatically become exercisable
for a number of shares included in Tier 2 equal to 125,000 multiplied by
the quotient of dividing (x) the result of subtracting 4.50 from the
2
Transaction Price by (y) 2; and (D) if the Transaction Price exceeds the
Price Target for Tier 2 but is less than the Price Target for Tier 3, the
Option shall automatically become exercisable for a number of shares
included in Tier 3 equal to 125,000 multiplied by the quotient of dividing
(x) the result of subtracting 6.50 from the Transaction Price by (y) 1.50.
For purpose hereof, "Transaction Price" means the per-share price
consideration for the Common Stock payable to the Company's public
shareholders in connection with the transaction resulting in, as
applicable, (i) the Change in Control or (ii) PRGX ceasing to be a public
company with reporting obligations under the Securities Exchange Act of
1934, as amended, or, in the case of clause (ii), if there is no
transaction, the Market Price on the last trading day preceding such event.
For purposes of determining the Transaction Price, any non-cash
consideration to be received by the Company's public shareholders will be
valued by the Compensation Committee, in good faith.
4. Method of Exercise of Option.
(a) To the extent then exercisable, Executive may exercise the Option in
whole or in part; except that no single exercise of the Option is to be for less
than 100 Option Shares, unless at the time of the exercise, the maximum number
of Option Shares available for purchase under the Option is less than 100 Option
Shares. In no event is the Option to be exercised for a fractional share of
Common Stock.
(b) To exercise the Option, Executive shall give written notice to PRGX
stating the number of shares for which the Option is being exercised and the
intended manner of payment. The date of this notice shall be the exercise date.
The notice must be accompanied by payment in full of the aggregate Exercise
Price, either by cash, check, note or any other instrument acceptable to the
Compensation Committee. Payment in full or in part may also be made in the form
of shares of Common Stock already owned by Executive based, in each case, on the
Market Price of the shares of Common Stock on the date the Option is exercised;
except that in no event is payment in full or in part for the exercise of an
Option to be made with any Option Shares that, as of the date of exercise of the
Option, have been owned by Executive less than six months. If the payment is in
the form of shares of Common Stock, then the certificate or certificates
representing the those shares must be duly executed in blank by Executive or
must be accompanied by a stock power duly executed in blank suitable for
purposes of transferring those shares to PRGX. Fractional shares of Common Stock
will not be accepted in payment of the purchase price of Option Shares. PRGX
shall not issue Option Shares until full payment for them has been made.
(c) As soon as practicable upon PRGX's receipt of Executive's notice of
exercise and payment, PRGX shall direct the due issuance of the shares so
purchased.
(d) As a further condition precedent to the exercise of this Option in
whole or in part, Executive shall comply with all regulations and the
requirements of any regulatory authority having control of, or supervision over,
the issuance of the shares of Common Stock and accordingly shall execute any
documents that the Board of Directors of PRGX (the "PRGX Board"), in its sole
discretion, deems necessary or advisable to effect such compliance.
(e) In the case of Executive's death, the Option, to the extent
exercisable, may be exercised by the executor or administrator of Executive's
estate or by any person or persons who have acquired the Option directly from
Executive by bequest or inheritance.
5. Non-Transferability of Options. Executive shall not assign or transfer
the Option, other than by will or the laws of descent and distribution. During
Executive's lifetime, only Executive (or, in the event of legal incapacity or
incompetency, Executive's guardian or legal representative) may exercise the
3
Option. Notwithstanding the foregoing, however, Executive, with the approval of
the Compensation Committee, may transfer the Option for no consideration to or
for the benefit of Executive's Immediate Family (including, without limitation,
to a trust for the benefit of Executive's Immediate Family or to a partnership
or limited liability company for one or more members of Executive's Immediate
Family, subject to such limits as the Compensation Committee may establish, and
the transferee(s) shall remain subject to all the terms and conditions
applicable to the Option prior to transfer. The term "Immediate Family" means
Executive's spouse, parents, children, stepchildren, adoptive relationships,
sisters, brothers and grandchildren (and, for this purpose, shall also include
Executive).
6. Termination of Option.
(a) The portion of the Option that is not exercisable pursuant to paragraph
3 as of the Date of Termination (as defined in the Employment Agreement) will
terminate automatically as of that date.
(b) This Option Agreement and any portion of the Option not either
terminated pursuant to subparagraph 6(a) or already exercised will terminate
automatically and without further notice at the close of business on the
earliest of the following dates: (i) on the Date of Termination, if termination
of Executive's employment is for Cause (as defined in the Employment Agreement);
(ii) on the first anniversary of the Date of Termination, if termination of
Executive's employment is for death or Disability (as defined in the Employment
Agreement); (iii) 75 calendar days following the Date of Termination, if
termination of Executive's employment is for any reason other than death,
Disability or for Cause; or (iv) the fifth anniversary of the Grant Date.
(c) In no event may the Option be exercised, in whole or in part, after
termination pursuant to subparagraphs 6(a) and 6(b).
7. Investment Representations. PRGX may require Executive, as a condition
of exercising the Option, to give written assurances in substance and form
satisfactory to PRGX to the effect that Executive is acquiring the Option Shares
for Executive's own account for investment and not with any present intention of
selling or otherwise distributing them, and to such other effect as PRGX deems
necessary or appropriate in order to comply with applicable federal and state
securities laws.
8. Registration of Option and Option Shares. As soon as practicable after
the date hereof, PRGX shall file a registration statement on Form S-8 under the
Securities Act of 1934, as amended, to register the resale of the Option Shares.
4
9. Compliance with Law. The Option is subject to the requirement that, if
at any time counsel to PRGX determines that the listing, registration or
qualification of the Option Shares upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental or
regulatory body, is necessary as a condition of, or in connection with, the
issuance or purchase of the Option Shares, then the Option may not to be
exercised, in whole or in part, unless the listing, registration, qualification,
consent or approval has been effected or obtained on conditions acceptable to
the Compensation Committee. Nothing in this Option Agreement will be deemed to
require PRGX to apply for or to obtain the listing, registration, qualification,
consent or approval.
10. Recapitalization. If the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares or other securities
of PRGX by reason of any recapitalization, reclassification, stock split, stock
dividend, combination, subdivision or similar transaction, then, subject to any
required action by PRGX's shareholders, the number and kind of Option Shares and
the Exercise Price for the Option Shares are to be proportionately adjusted;
except that no fractional Option Shares are to be issued or made subject to the
Option in making the foregoing adjustments. All adjustments made by the
Compensation Committee under this paragraph 10 will be final, conclusive and
binding upon Executive.
11. Reorganization. If, while all or any portion of the Option remains
exercisable, PRGX proposes to merge or consolidate with another corporation,
whether or not PRGX is to be the surviving corporation, or if PRGX proposes to
liquidate or sell or otherwise dispose of substantially all of its assets or
substantially all of the outstanding shares of Common Stock are to be sold, then
the Compensation Committee may, in its sole discretion, either (i) make
appropriate provision for the protection of the Option by the substitution on an
equitable basis of (A) appropriate stock of the surviving corporation or its
parent in the merger or consolidation, or other reorganized corporation that
will be issuable in respect to the Option Shares then exercisable, or (B) any
alternative consideration as the Compensation Committee, in good faith, may
determine to be equitable in the circumstances; and, in either case, require in
connection therewith the surrender of the Option so replaced; or (ii) upon
written notice to Executive, provide that the unexercised (but exercisable)
portion of the Option must be exercised within a specified number of days of the
date of such notice or it will be terminated. In any such case, the Compensation
Committee may, in its discretion, accelerate the date on which the Option, in
whole or in part, becomes exercisable.
12. Rights as Shareholder. Neither Executive nor any executor,
administrator, distributee or legatee of Executive's estate will have any of the
rights or privileges of, a shareholder of PRGX in respect of any of the Option
Shares unless and until those Option Shares have been fully paid and
certificates representing those Option Shares have been endorsed, transferred
and delivered, and the name of Executive (or of Executive's personal
representative, administrator, distributee or legatee of Executive's estate) has
been entered as the shareholder of record on PRGX's books.
13. Withholding of Taxes. PRGX's obligation to deliver Options Shares upon
exercise of the Option is subject to Executive's satisfaction of any applicable
federal, state and local income and employment tax and withholding requirements
in a manner and form satisfactory to PRGX.
5
14. No Special Employment Rights. No provision in this Option Agreement
will be deemed to grant to Executive any right with respect to Executive's
continued employment with, or other engagement by, the Company or any
subsidiary, parent or affiliate or interfere in any way with the ability of the
Company or any subsidiary, parent or affiliate at any time to terminate
Executive's employment or other engagement or to increase or decrease
Executive's compensation from the rate in existence at the Grant Date.
15. Other Employee Benefits. The amount of any compensation deemed to be
received by Executive as a result of the exercise of the Option or the sale of
Option Shares received upon the exercise will not constitute "earnings" with
respect to which any other benefits of Executive are determined, including,
without limitation, benefits under any pension, profit sharing, life insurance
or salary continuation plan.
16. Interpretation of this Option Agreement. All decisions and
interpretations made by the PRGX Board or the Compensation Committee with regard
to any question arising under this Option Agreement will be binding and
conclusive on PRGX and Executive and any other person entitled to exercise the
Option as provided for in this Option Agreement.
17. Choice of Law. This Option Agreement is to be governed by the internal
law, and not the laws of conflicts, of the State of Georgia.
18. Successors and Assigns. Subject to paragraph 5, this Option Agreement
is to bind and inure to the benefit of and be enforceable by Executive, PRGX and
their respective heirs, executors, personal representatives, successors and
assigns.
19. Notices. Any notice provided for in this Option Agreement must be in
writing and is to be either personally delivered, sent by reputable overnight
carrier or mailed by first class mail, return receipt requested, to the
recipient at the address indicated as follows:
Notices to Executive:
Peter Limeri
2651 Redding Road
Atlanta, GA 30319
Notices to PRGX:
PRG-Schultz International, Inc.
600 Galleria Parkway
Suite 100
Atlanta, Georgia 30339
Attn: General Counsel
or any other address or to the attention of any other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Option Agreement will be deemed to have been given when so
delivered, sent or mailed.
6
20. Severability. Whenever possible, each provision of this Option
Agreement is to be interpreted in a manner as to be effective and valid under
applicable law, but if any provision of this Option Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any particular jurisdiction, that invalidity, illegality or
unenforceability is not to affect any other provision or any other jurisdiction,
and this Option Agreement shall be reformed, construed and enforced in the
particular jurisdiction as if the invalid, illegal or unenforceable provision
had never been contained herein.
21. Complete Agreement. This Option Agreement embodies the complete
agreement and understanding between the parties with respect to the subject
matter hereof and effective as of its date supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral, that may have related to the subject matter hereof in any way.
22. Amendment and Waiver. Subject to the next sentence, the provisions of
this Option Agreement may be amended or waived only with the prior written
consent of PRGX and Executive, and no course of conduct or failure or delay in
enforcing the provisions of this Option Agreement is to affect the validity,
binding effect or enforceability of this Option Agreement. PRGX unilaterally may
waive any provision of this Option Agreement in writing to the extent that the
waiver does not adversely affect the interests of Executive under this Option
Agreement, but the waiver is not to operate as or be construed to be a
subsequent waiver of the same provision or a waiver of any other provision of
this Option Agreement.
[ SIGNATURE PAGE TO FOLLOW ]
7
The parties are signing this Option Agreement as of the date stated in the
introductory clause.
PRG-SCHULTZ INTERNATIONAL, INC.
By: /s/ Clinton McKellar, Jr.
-------------------------------------
Name: Clinton McKellar, Jr.
Title: General Counsel
/s/ Peter Limeri
-------------------------------------
Peter Limeri
[ Signature Page to Option Agreement ]
EXHIBIT B
STANDARD EXECUTIVE BENEFITS PACKAGE
2005 SUMMARY OF EMPLOYEE BENEFIT PLANS
COMPANY-PAID PLANS:
------------------
LIFE INSURANCE 2 x Earnings; to a maximum of $350,000
- -------------- $2,000 for spouse
$1,000 for eligible dependent children
SHORT-TERM DISABILITY 70% of weekly earnings to a maximum benefit of $1,500/week after a 14 day elimination
- --------------------- period is satisfied. Maximum benefit period is 26 weeks.
LONG-TERM DISABILITY 60% of monthly earnings to a maximum benefit of $20,000/month; begins when short-term
- -------------------- disability ends.
OPTIONAL PLANS:
--------------
MEDICAL/DENTAL/PRESCRIPTION DRUG CARD
The PRG-Schultz medical plans are administered by Cigna Healthcare and include:
2 OPEN ACCESS PLUS plans with different levels of coverage and an OUT-OF-AREA
(traditional indemnity) option in selected areas without networks.
There are two traditional dental plans offered with separate annual
maximums, including one with orthodontia coverage. Dental insurance is
administered by Cigna.
Bi-weekly Premiums:
PPO PRIMARY PPO PREMIER OUT OF AREA DENTAL PRIMARY DENTAL PREMIER
Employee $23.81 $42.73 $34.35 $5.02 $7.92
Emp/Spouse $102.36 $145.95 $110.75 $12.33 $19.45
Emp/Child(ren) $78.82 $113.16 $85.28 $12.52 $19.75
Family $141.96 $203.82 $153.60 $20.58 $32.48
FLEXIBLE SPENDING ACCOUNTS:
Flexible spending accounts provide associates the opportunity to set a side
pre-tax dollars to pay for expenses not covered under the medical plan or to
cover expenses for dependent care. The Health Care Spending Account annual
maximum is $2,000. The Dependent Care Spending Account annual maximum is $5,000.
The plans are administered by Cigna.
SUPPLEMENTAL LIFE INSURANCE:
In addition to the company paid life insurance, supplemental life insurance is
available for associates (up to $150,000), spouses (up to $50,000), and
dependent children ($5,000) at group rates. An associate must purchase
supplemental employee life insurance in order to be eligible for the
supplemental dependent life insurance. Hartford Life administers the plan.
401-K PLAN
This plan is a qualified retirement vehicle that provides diversified funds with
Fidelity Investments. PRG Schultz matches $.50 for each $1.00 on the first 6% of
pay to a maximum of $1,750 for 2005. Employees are eligible to participate in
salary deferrals on the first of the month following date of hire. Employees are
eligible to receive employer match on salary deferrals made after one year of
service.
EMPLOYEE STOCK PURCHASE PLAN
This plan offers PRG-Schultz employees the opportunity to purchase whole shares
of PRG stock at a 15% discounted rate through payroll deductions. Employees are
eligible to participate after 6 months of service.
EMPLOYEE ASSISTANCE PROGRAM
Free confidential counseling to employees and immediate family members.
Convenience referral services are also available.
This is only a summary of the plan provisions. Please refer to your plan
documents for further detail on each of these plans. If a discrepancy exists
between this summary and the plan document, the plan document will prevail.
2006 SUMMARY OF EMPLOYEE BENEFIT PLANS
COMPANY-PAID PLANS:
------------------
LIFE INSURANCE 2 x Earnings; to a maximum of $350,000
- -------------- $2,000 for spouse
$1,000 for eligible dependent children
SHORT-TERM DISABILITY 60% of weekly earnings to a maximum benefit of $1,200/week after a 14 day elimination
- --------------------- period is satisfied. Maximum benefit period is 26 weeks.
LONG-TERM DISABILITY 60% of monthly earnings to a maximum benefit of $10,000/month; begins when short-term
- -------------------- disability ends.
OPTIONAL PLANS:
--------------
MEDICAL/DENTAL/PRESCRIPTION DRUG PLAN
The PRG-Schultz medical plans are administered by Cigna Healthcare and include:
2 Open Access Plus plans with different levels of coverage and an Out-of-Area
(traditional indemnity) option in selected areas without networks.
There are two traditional dental plans offered with separate annual maximums,
including one with orthodontia coverage. Dental insurance is administered by
Cigna.
Bi-weekly Premiums:
OAP PRIMARY OAP PREMIER OUT OF AREA DENTAL PRIMARY DENTAL PREMIER
Employee $23.81 $46.14 $40.85 $5.02 $10.81
Emp/Spouse $102.36 $150.24 $138.90 $12.33 $24.19
Emp/Child(ren) $78.82 $116.01 $107.20 $12.52 $24.58
Family $141.96 $208.50 $190.74 $20.58 $40.40
VOLUNTARY VISION PLAN
The vision plan is provided by VSP. Pre-taxed contributions are 100% paid by
employees through regular biweekly deductions. Benefits include a comprehensive
eye exam every 12 months, prescription lenses every 12 months, frames every 24
months(up to $130), and contact lens care every 12 months(up to $120). There is
a $20 copay for both the eye exam and prescription glasses.
Bi-weekly Premiums:
Employee: $3.56
Emp/Spouse: $5.48
Emp/Child(ren: $5.60
Family: $9.03
FLEXIBLE SPENDING ACCOUNTS:
Flexible spending accounts provide associates the opportunity to set a side
pre-tax dollars to pay for expenses not covered under the medical plan or to
cover expenses for dependent care. The Health Care Spending Account annual
maximum is $2,000. The Dependent Care Spending Account annual maximum is $5,000.
The plans are administered by Flexible Corporate Plans.
SUPPLEMENTAL LIFE INSURANCE:
In addition to the company paid life insurance, supplemental life insurance is
available for associates (up to $150,000), spouses (up to $50,000), and
dependent children ($5,000) at group rates. An associate must purchase
supplemental employee life insurance in order to be eligible for the
supplemental dependent life insurance. Hartford Life administers the plan.
EMPLOYEE ASSISTANCE PROGRAM
Free confidential counseling to employees and immediate family members.
Convenience referral services are also available.
This is only a summary of the plan provisions. Please refer to your plan
documents for further detail on each of these plans. If a discrepancy exists
between this summary and the plan document, the plan document will prevail.
EXHIBIT C
INDEMNIFICATION AGREEMENT