Exhibit 10.3
[PRG LOGO]
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www.prg.com 2300 Windy Ridge Parkway, Suite 100 North, Atlanta, GA 30339-8426
Office 770.779.3900 Fax 770.779.3133
December 20, 2001
Andrew Schultz
9241 LBJ Freeway
Dallas, TX 75243
Dear Andy:
I am pleased to extend this offer of full time employment with The Profit
Recovery Group USA, Inc. ("PRG") as an executive officer. 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 $240,000
per annum, paid $9,230.77 every two weeks and pro-rated for
partial years.
2. Bonus. You will be eligible for an incentive bonus plan, which
will include payout potentials of 35% of your base pay for
achievement of annual target performance goals and pay out
potentials of 70% of your base pay for achievement of annual
max performance goals, in accordance with PRGX's incentive
bonus plan, prorated for 2002 if the Closing occurs after
January 2002. See Addendum A for more details about the
performance goals and bonus opportunity for 2002. Your bonus
for 2002 will be no less than $60,000, prorated for the number
of months in 2002 after the Closing occurs.
3. 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.
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.
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
Recovery Services - Expense Containment - Knowledge Application
Andrew Schultz
December 20, 2001
Page 2
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 case of death) will receive
base salary for the year in which such termination occurs prorated
through the date of 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 (90) days after the end of the year
to which it relates.
(g) If your employment with PRG is terminated by 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.
(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 in accordance
with the Company's policies.
Andrew Schultz
December 20, 2001
Page 3
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:
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: Andrew H. Schultz
11553 E. Ricks Circle
Dallas, TX 75230-3029
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.
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/ Andrew Schultz
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Andrew Schultz
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