EXHIBIT 10.2
[PRG LETTERHEAD]
December 20, 2001
Howard Schultz
9241 LBJ Freeway
Dallas, TX 75243
Dear Howard:
I am pleased to extend this offer of full time employment with The Profit
Recovery Group USA, Inc. ("PRG") as an executive officer. You will also serve
as Chairman of the Board of Directors of The Profit Recovery Group
International Inc. ("PRGX"), reporting to the Board of Directors of PRGX. This
offer is conditioned upon the closing of the acquisition of Howard Schultz &
Associates International, Inc. ("HSA-Texas") and related companies (the
"Closing") and your signing the attached Employee Agreement. The terms of this
offer when accepted by you, together with the Employee Agreement you have
signed, will replace and supersede the terms of employment that you have with
HSA-Texas, effective upon the Closing. We are very excited about your joining
our organization and the opportunities for our mutual success.
Enclosed is our new hire package, which includes the forms to be completed and
returned to my attention at the Atlanta office. Both this offer letter and
Employee Agreement must be signed prior to the Closing.
The following confirms our offer:
1. Base Salary. Your base salary will be at the rate of $400,000 per
annum, paid $15,384 every two weeks and pro-rated for partial years. No
bonus will be paid.
2. Term. The term of your employment shall commence on the date of the
Closing ("Closing Date"), and shall continue until the second
anniversary of the Closing Date, unless sooner terminated as
hereinafter provided.
3. Options. You will be granted a nonqualified option to purchase
250,000 shares of Common Stock of PRGX at the exercise price per share
equal to the closing sale price per share on the Closing Date as
published in The Wall Street Journal on the business day immediately
following the Closing Date, which option shall vest in the manner set
forth in a separate stock option agreement entered into on the Closing
Date between you and PRGX granted under the PRGX Stock Incentive Plan.
4. Employee Benefits. You will be eligible for participation in PRG's
Employee Benefits Plan, which currently offers medical, dental, life,
short term and long term disability insurance, flexible spending
accounts, 401(k) Savings Plan and Employee Stock Purchase Program. The
effective dates for your coverage and participation in these plans have
previously been communicated to you under separate cover and with
respect to all insured plans, will be subject to your eligibility for
coverage at standard rates.
Howard Schultz
December 20, 2001
Page 2
5. Termination.
(a) This Agreement may be terminated by PRG for "cause" upon delivery
to you of notice of termination. As used herein, "cause" shall mean
(i) fraud, material dishonesty, gross negligence, willful misconduct,
commission of a felony or an act of moral turpitude, or (ii) engaging
in activities prohibited by Sections 3, 4, 5, 6, 7 or 9 of the Employee
Agreement signed by you and dated as of date hereof, or any other
material breach of this Agreement.
(b) You may, without cause, terminate this Agreement by giving PRG thirty
(30) days' written notice in the manner specified in Section 7 hereof
and such termination will be effective on the thirtieth (30th) day
following the date of such notice or such earlier date as PRG
specifies.
(c) In the event of your Disability, physical or mental, PRG will have
the right, subject to all applicable laws, including without
limitation, the Americans with Disabilities Act ("ADA"), to
terminate your employment immediately. For purposes of this Agreement,
the term "Disability" shall mean your inability or expected inability
(or a combination of both) to perform the services required of you
hereunder due to illness, accident or any other physical or mental
incapacity for an aggregate of ninety (90) days within any period of
one hundred eighty (180) consecutive days during which this Agreement
is in effect, as agreed by the parties or as determined pursuant to the
next sentence. If there is a dispute between you and PRG as to whether
a Disability exists, then such issue shall be decided by a medical
doctor selected by PRG and a medical doctor selected by you and your
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). Each party shall pay all costs associated with
engaging the medical doctor selected by such party and the parties
shall each pay one-half (1/2) of the costs associated with engaging
any third medical doctor.
(d) In the event this Agreement is terminated, all provisions in this
Agreement or the Employee Agreement relating to any action, including
those of payment or compliance with covenants, subsequent to
termination shall survive such termination.
(e) If your employment with PRG is terminated by PRG for cause or if you
voluntarily resign, you will receive your base salary prorated through
the date of termination, payable in accordance with PRG's normal
payroll procedure.
(f) If your employment with PRG is terminated by your death or Retirement,
you (or your legal representative in the cause of death) will receive
base salary for the year in which such termination occurs prorated
through the date of such termination and you will not receive any other
amount in respect of the year in which termination occurs or in respect
of any subsequent years. The prorated base salary will be in accordance
with PRG's normal payroll procedure and the prorated bonus will be
paid in a lump sum within ninety (90) days after the end of the year
to which it relates.
(d) If your employment with PRG is terminated for Disability (as defined
herein), you or your legal representative will receive all unpaid base
salary for the year in which such termination occurs prorated through
the date of termination with such prorated base salary payable in
accordance with PRG's normal payroll procedure and the prorated bonus
payable in a lump sum within ninety (90) days after the end of the year
to which it relates.
Howard Schultz
December 20, 2001
Page 3
(h) If your employment is terminated for any reason, you will be
paid within sixty (60) days of termination for the value of
all unused vacation time which accrued during the calendar
year in which such termination occurs up to the date of
termination with the Company's policies.
6. Successors and Assigns. You may not assign this Agreement. This
Agreement may be assigned by PRG to any affiliate of PRG. The
provisions of this Agreement will be binding upon your heirs and legal
representatives.
7. 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, or as otherwise addressed as specified by
the parties by notice given in like manner:
<Table>
If to PRG: The Profit Recovery Group USA, Inc.
2300 Windy Ridge Parkway
Suite 100 North
Atlanta, Georgia 30339-8426
Attention: General Counsel
If to you: Howard Schultz
7141 Brookshire Drive
Dallas, TX 75230
</Table>
8. Withholdings. PRG will deduct or withhold from all amounts payable
to you pursuant to this Agreement such amount(s) as may be required
pursuant to applicable federal, state or local news.
9. Entire Agreement. This Agreement, the Employee Agreement and such
other documents as may be referenced by such documents (the "Referenced
Documents"), constitute our entire agreement with respect to the
subject matter hereof and, except as specifically provided herein or in
the Employee Agreement and the Referenced Documents, supersedes all of
our prior discussions, understandings and agreements. Any such prior
agreements shall be null and void. This 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. Time is of the essence of this Agreement and each
and every Section and subsection hereof.
3
Howard Schultz
December 20, 2001
Page 4
Please confirm your acceptance of this offer by signing and returning both this
letter to me at your earliest convenience but in any event on or before December
28, 2001.
Best wishes,
/s/ John M. Cook
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John M. Cook
Agreed:
/s/ Howard Schultz
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Howard Schultz