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EXHIBIT 10.1
CONTRACT FOR THE MANDATE
OF THE PRESIDENT OF THE DIRECTORATE
BETWEEN THE UNDERSIGNED:
XXXX INTERVENTION, a Societe Anonyme with a Supervisory Board (Conseil de
Surveillance) and Directorate (Directoire), having its registered office at
Domaine des Bois d'Houlbec, Houlbec Cocherel, 27120 Pacy s/ Xxxx, registered at
the Companies Registry of Evreux under number B 339 602 195, represented by Mr
Xxxx Xxxx, Chairman of the Supervisory Board, duly empowered for these purposes,
hereinafter referred to as "XXXX",
ON ONE HAND,
AND
XX XXXX XXXXXXXXX, born 9 April 1955 in Xxxxx, 00000, of French nationality,
residing at 00, xxx Xxxxxxxxxxx, 00000 Xxxxx.
ON THE OTHER HAND.
IT HAS BEEN AGREED AND DECIDED AS FOLLOWS:
1. MANDATE
The Supervisory Board of XXXX has appointed Xx Xxxx Xxxxxxxxx as member
and President of the Directorate for a mandate of five years, unless
sooner terminated in accordance with the terms hereof.
Xx Xxxx Xxxxxxxxx will perform the duties incumbent upon the "President
of the Directorate" of XXXX as from the date of his appointment,
according to the terms and conditions set forth below.
2. MANAGERIAL DUTIES
Xx Xxxx Xxxxxxxxx will be mandated to exercise all powers necessary for
the management of the company's assets and will be empowered, for this
purpose, to carry out all acts and enter into any and all contracts of
any kind or form involving XXXX within the limit of ALMA's object and
interest and within the limits of this agreement.
Subject to the terms and conditions of this agreement, Xx Xxxx
Xxxxxxxxx will have complete discretionary control of XXXX signature
and will be empowered within the limit of the objects of XXXX and on
behalf of XXXX, to enter into any contract, assume any obligation, make
any waiver, sign any comprise ("compromis") and act in
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every circumstance on behalf of XXXX, without having to produce
authorization or power of attorney specifically granted powers for any
of the above purposes.
Xx Xxxx Xxxxxxxxx will devote all of his time and efforts for the
proper performance of his contractual duties. It is, however, expressly
agreed that Xx Xxxx Xxxxxxxxx shall be able to engage and pursue other
non-competitive activities so long as such activities do not interfere
with his duties hereunder.
3. SPECIAL AUTHORIZATIONS
3.1 SPECIFIC DECISIONS REQUIRING COUNTERSIGNATURE
The parties agree, in accordance with XXXX Memorandum and Articles of
Association ("Statuts") that Xx Xxxx Xxxxxxxxx will be required to
secure, for any transaction (or series of related transactions)
involving an amount exceeding FRF 1,000,000, the signature of another
Member of the Directorate; similarly, for any transaction (or series of
related transactions) involving a sum in excess of FRF 2,000,000, Xx
Xxxx Xxxxxxxxx must secure prior authorization from the Chairman of the
Supervisory Board in addition to the signature of another member of the
Directorate.
3.2 AUTHORIZATION OF THE SUPERVISORY BOARD
Xx Xxxx Xxxxxxxxx is required to obtain the express agreement of the
Supervisory Board prior to the implementation of the following
decisions:
- any issuing of shares or securities of any nature, including,
particularly, those issued in fulfillment of a promise or in
payment of dividends;
- any change in the Statuts or any decisions that would be
designed to or result in any change in the Statuts;
- the establishment, acquisition or transfer of any subsidiary,
branch or office or the holding of any securities or deeds of
any third company, with the exception of securities XXXX may
hold it being understood that the Chairman of the Supervisory
Board will be entitled to determine the types of investments
that are made by Xxxx;
- the signature of any loan agreement involving a sum in excess
of FRF 2,000,000;
- the granting or concession of any charge over ALMA's assets in
order to guarantee a sum greater than FRF 2,000,000;
- the concession or granting of any pledge, security or
guarantee, other than the guarantees or pledges provided for
in the preceding subparagraph, involving a sum exceeding the
total annual ceiling authorized by the Supervisory Board, but
only as regards securities intended to guarantee a good
provision of services ("la bonne fin") provided by XXXX to its
clients within the scope of its present activity;
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- the drawing-up of accounts following each financial year as
well as the allocation of earnings and, especially, the
decision to pay dividends;
- the ceasing of any core activity of XXXX;
- the commencement of a new core activity which would not be a
logical continuation of ALMA's present business;
- appointment of Auditors;
- the signing or termination of any contract involving (i) a
term in excess of three years, or (ii) yearly expenses for
XXXX in excess of FRF 1,000,000, with the following
exceptions:
a) contracts signed with clients of XXXX;
b) agreements signed with attorneys or with other
brokers or agents in the normal course of company
activity whose compensation does not exceed 10% of
the amounts invoiced by XXXX in connection with a
given file;
- the acquisition or transfer of any assets with a value in
excess of FRF 1,500,000;
- the signing of any new collective agreement with the
employees;
- the hiring of any person whose base salary could exceed FRF
1,000,000 and whose total earnings could exceed FRF 2,000,000
or whose contractual termination compensation could equal or
exceed six months of salary;
- any amendment or modification of Xxxx Xxxxxxxxx'x employment
contract;
- any change in the employment contract of any employee which
would increase the employee's total remuneration in excess of
FRF 2,000,000 or diminish any non-competition covenants;
- the termination of any employee or representative whose total
annual salary exceeds FRF 1,000,000, with the exception of any
termination for serious and gross misconduct (faute lourde ou
faute grave);
- any additional remuneration or benefits to or for the benefit
of Xx Xxxx Xxxxxxxxx.
In the event of the Supervisory Board's refusal to authorize any of the
above actions listed above, Xx Xxxx Xxxxxxxxx can, should he deem it
useful, convene an Extraordinary General Assembly.
3.3 QUARTERLY REPORT TO THE SUPERVISORY BOARD
In addition to reports reasonably requested by the Supervisory Board or
required by law, every quarter a report on new litigation or legal
proceedings initiated by XXXX and exceeding an initial risk threshold
of FRF 400,000 will be submitted to the Supervisory Board, with the
exception of accounts collection proceedings.
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Failure by the Supervisory Board to approve such litigation will
require the Directorate to put an end to such litigation or legal
proceeding as expedioustly as possible.
Failure to comply with the provisions of this article 3 will constitute
just grounds for terminating Xx Xxxx Xxxxxxxxx'x appointment as
President of the Directorate.
4. SALARY
Xx Xxxx Xxxxxxxxx will earn, by virtue of this agreement, a gross fixed
annual salary of FRF 975,000.
In addition, from and including, the fiscal year 1 January 1998 - 31
December 1998, Xx Xxxx Xxxxxxxxx is entitled to a variable sum
determined in accordance with ALMA's success in meeting performance
goals as defined in article 10 below. This variable sum will be
calculated according to the scale below:
- meeting threshold: 20% of the fixed salary;
- meeting target: 44% of the fixed salary;
- meeting stretch: 67% of the fixed salary.
The variable sum will be paid to Xx Xxxx Xxxxxxxxx during the month
following the certification of the accounts of the relevant year under
US GAAP by the joint Auditors and at the latest by 31 March following
the end of said fiscal year.
In order to be eligible to receive the variable sum referred to above
for any fiscal year, Xx Xxxx Xxxxxxxxx must be providing services to
XXXX pursuant to this agreement at the end of such fiscal year. If Xx
Xxxx Xxxxxxxxx resigns or his appointment is terminated for any reason
whatsoever, he shall not be entitled to any variable sum for the fiscal
year in which such resignation or termination occurs or thereafter
provided that if Xx Xxxx Xxxxxxxxx'x appointment hereunder is
terminated by Xxxx other than for faute grave or lourde or breach of
the non competition clauses in article 8 below after 30 June in any
calendar year, Xx Xxxx Xxxxxxxxx will be entitled to the variable sum
for such year on a prorata basis.
5. STOCK OPTION
In the event that XXXX meets the target level of performance set out in
Article 10 below for the annual period ended 31 December 1998, he will
automatically become party to a separate Stock Option Agreement in
substantially the form attached hereto as Annex 1 ("STOCK OPTION
AGREEMENT") in accordance with which Xx Xxxx Xxxxxxxxx will be granted
non-qualified options ("OPTIONS") to purchase 50,000 shares of PRG's no
par Common Stock under The Profit Recovery Group International, Inc.
1996 Stock Option Plan at a purchase price equal to the closing price
per share of PRG's Common Stock as reported by NASDAQ on the date of
such grant, or if such date is not a date on which PRG's Common Stock
trades, then the closing price per share on the next preceding trading
day.
The Options granted to Xx Xxxx Xxxxxxxxx pursuant hereto shall vest
over a five (5) year period from the date of grant at the rate of
twenty (20%) per cent per year.
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Unvested portions of the Option's shall terminate upon the death or
disability of Xx Xxxx Xxxxxxxxx, or termination of his appointment
hereunder.
Xx Xxxx Xxxxxxxxx will be eligible for additional stock options during
the term hereof at the sole discretion of PRG's Compensation Committee
in recognition of his contribution to the success of PRG and XXXX.
0. PAYMENT OF COMPENSATION UPON TERMINATION
In the event of the termination, other than for one or more of the five
conditions specified below, of Xx Xxxx Xxxxxxxxx'x mandate by XXXX, the
parties agree that a special compensation will be paid to Xx Xxxx
Xxxxxxxxx.
This compensation payment upon termination is granted in recognition of
the following:
- Xx Xxxx Xxxxxxxxx'x ratifying the non-competition clause;
- services rendered in the interest of XXXX by Xx Xxxx
Xxxxxxxxx;
- the moral damage resulting from his termination.
It is expressly agreed between the parties that this compensation is
unseverable and that each of the above conditions is sufficient in and
of itself to justify payment of the termination compensation.
In the event that this compensation is demanded pursuant to the
provisions of this agreement, it shall be considered by the parties to
be an irrevocable and uncontestable, except as expressly provided for
herein.
This sum of this termination compensation is set at the equivalent
amount in French Francs of USD 1,000,000 (one million US dollars).
However, this termination compensation will not be due should the
termination result from one or any of the conditions set forth below:
1. Grave or gross misconduct (faute grave or faute lourde) in
accordance with the definition of these terms under French
jurisprudence by Xx Xxxx Xxxxxxxxx.
2. In the event Xx Xxxx Xxxxxxxxx violates the terms of the
non-competition clause set forth in article 8 below, or the
restrictions set forth in clause 10 of the Sales Agreement of
this date.
3. In the event that XXXX fails to meet its threshold levels of
performance set out in article 10, for a period of two
consecutive term years it being understood that the decision
to terminate Xx Xxxx Xxxxxxxxx'x mandate will have to be made
within the period of three months from the date where the
General Assembly recorded the failure to meet ALMA's threshold
performance level.
4. In the event of Xx Xxxx Xxxxxxxxx'x resignation, the death of
Xx Xxxx Xxxxxxxxx or of his Total Disability, as defined
below.
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5. Xx Xxxx Xxxxxxxxx'x failure or refusal to comply with the
provisions of article 3 where such failure constitutes faute
grave or faute lourde.
In the event Xx Xxxx Xxxxxxxxx is unable due to illness, accident or
any other physical or mental incapacity to perform the services
required of him hereunder for NINETY (90) days within any ONE HUNDRED
EIGHTY (180) day period, or such earlier date as the law permits, the
Chairman of the Supervisory Board may appoint another person (the
"INTERIM PRESIDENT") to serve in Xx Xxxx Xxxxxxxxx'x place and stead as
a member and President of the Directorate.
The appointment of such Interim President shall not be deemed a
termination of Xx Xxxx Xxxxxxxxx'x appointment hereunder and shall not
entitle Xx Xxxx Xxxxxxxxx to any termination compensation. The Interim
President may continue to serve in Xx Xxxx Xxxxxxxxx'x place and stead
until the earlier of (i) such time as Xx Xxxx Xxxxxxxxx'x condition has
resolved such that he is able and willing to resume his duties
hereunder, or (ii) the expiration of the five year term of this
agreement.
If there is any dispute as to whether Xx Xxxx Xxxxxxxxx is able to
resume his duties hereunder, the issue shall be determined by medical
doctor(s) as provided in section (ii) of the paragraph immediately
below.
During any such disability, Xx Xxxx Xxxxxxxxx shall be entitled to
receive salary or other remuneration hereunder to the extent that Xxxx
receives reimbursement from the French government in respect of such
salary or other remuneration and is obliged by law to top up such
reimbursement.
For purposes of this agreement, Xx Xxxx Xxxxxxxxx shall be deemed
Totally Disabled if (i) it is determined that he is totally disabled by
the standards established by health insurance medical experts, or (ii)
in the judgement of both a medical doctor selected by the Chairman of
the Supervisory Board and a medical doctor selected by Xx Xxxx
Xxxxxxxxx, or his legal representative (or, in the event such doctors
fail to agree, then in the majority opinion of such doctors and a third
medical doctor chosen by such doctors) that Xx Xxxx Xxxxxxxxx'x
disability is such that he is unable due to illness, accident or any
other physical or mental incapacity to perform the services required of
him hereunder in substantially the same manner as he was as of the
commencement of the term of this agreement, and that such condition is
not likely to resolve within the then remaining period of this
agreement.
In the event Xx Xxxx Xxxxxxxxx disputes the validity of his termination
pursuant to paragraph 1 or 5 above and of legal proceedings in respect
of this special termination compensation are undertaken, this
compensation will be placed in escrow by XXXX, in a CARPA account
designated by XXXX, within 15 days from the date of notification of
dispute.
This sum will only be paid to Xx Xxxx Xxxxxxxxx provided that a
definitive court decision confirms that the grounds for witholding
payment of the special termination compensation are invalid.
In the contrary case, said sum will be reimbursed to XXXX from the
escrow account.
Accrued interest on the amount held in escrow will be paid to the
beneficiary of the sum awarded by a court.
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In the event that The Profit Recovery Group International Inc. ("PRG"),
would transfer directly or indirectly, control of XXXX to a third party
during the initial five year period defined by this agreement, the
special compensation described above will be payable to Xx Xxxx
Xxxxxxxxx, even pursuant to his resignation, within such five year
period, provided at the time of such resignation none of the five
conditions of termination set forth above exist.
This agreement having been contractually established for a period of
five years, it is expressly agreed between the parties that the
termination compensation provided for will not be payable by XXXX after
the expiration of this first term.
7. NOTICE OF TERMINATION
Xx Xxxx Xxxxxxxxx'x appointment pursuant to this agreement may be
terminated by Xx Xxxxxxxxx by giving XXXX thirty days prior written
notice, which notice however may be waived by XXXX.
0. NON-COMPETITION
Xx Xxxx Xxxxxxxxx undertakes not to solicit or hire, directly or
indirectly, any persons who are or becomes employees, independent
contractors or agents of XXXX or any of its subsidiaries (the "XXXX
GROUP"), PRG or any of its affiliates in whatever capacity, even in the
case of activities not in direct competition with those of the XXXX
Group or PRG or any of its affiliates.
The non-solicitation of employees and independent contractors contained
in the previous paragraph of this article 8 excludes the solicitation
or hiring of independent contractors other than those who provide
substantially all of their services to XXXX, so long as it is for a
non-competitive business and the contractor agrees not to solicit other
employees or contractors on behalf of Xx Xxxx Xxxxxxxxx.
He further undertakes not to solicit or serve any of the customers of
the XXXX Group or PRG or any of its affiliates, directly or indirectly,
on his own behalf or on behalf of others for any purpose whatsover.
He further undertakes not to take any interest, direct or indirect
(with the exception of interests not exceeding 5% of a company whose
shares are quoted on a Stock Exchange) in companies or groups which are
in competition with the business of the XXXX Group or PRG or any of its
affiliates, on French territory or in any other country where the XXXX
Group or PRG or any of its affiliates conducts their business at the
date of termination of this agreement.
He undertakes to abstain from providing any services, directly or
indirectly, which are in competition with the business of the XXXX
Group or of PRG or any of its affiliates, on French territory or in any
other country where the XXXX Group or PRG or any of its affiliates
could conduct their business as carried on at the date of termination
of this agreement.
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All of the above undertakings provided for by this clause are to be
undertaken during the period of this agreement and for a period of five
years from the date of Xx Xxxx Xxxxxxxxx'x departure from XXXX for any
reason whatsoever. This period will however be reduced to three years
in the event of termination of Xx Xxxx Xxxxxxxxx by XXXX during the
initial five years of this agreement on whatever ground except for (i)
serious or gross misconduct (faute grave or lourde), (ii) violation of
the terms of the non-competition clause set forth in this article 8,
the confidentiality clause set forth in article 9 below or the
restrictions set forth in clause 10 of the Sales Agreement. The period
of five years, from Xx Xxxx Xxxxxxxxx'x departure from XXXX at any time
after the initial five years will be reduced to two years from such
departure in the event of termination of Xx Xxxx Xxxxxxxxx by XXXX on
whatever ground except for (i) serious or gross misconduct (faute grave
or lourde), or (ii) violation of the terms of the non-competition
clause set forth in this article 8, the confidentiality clause set
forth in article 9 below or restrictions set forth in clause 10 of the
Sales Agreement.
9. CONFIDENTIALITY
During the term of this agreement, and for a period of five years from
the date of Xx Xxxx Xxxxxxxxx'x departure from XXXX for any reason
whatsoever, Xx Xxxx Xxxxxxxxx will not divulge to any third party
whatsoever or use for his own or another's advantage any of the trade
secrets or confidential know-how or confidential financial or trading
information as to customers of the XXXX Group, PRG or its affiliates,
or in relation to the business, finances, dealings or affairs of the
XXXX Group, PRG or any of its affiliates except insofar as Xx Xxxx
Xxxxxxxxx may prove the same has become a matter of public knowledge
(otherwise than by a breach by him of this clause) or insofar as such
disclosure may be required by law.
Xx Xxxx Xxxxxxxxx undertakes to keep confidential any information not
intended release to the public, any know-how, any intellectual
property, any patents, etc, involving any aspect of ALMA's, or any
aspect of one its subsidiary's, business.
Xx Xxxx Xxxxxxxxx accepts and agrees that breach by him of this
confidentiality clause will constitute grave or gross misconduct (faute
grave or lourde) by him.
10. PERFORMANCE LEVELS
Xx Xxxx Xxxxxxxxx will deploy his best efforts to ensure that XXXX
meets performance levels set out below:
- for ALMA's fiscal year ending on 31 December 1998, the
threshold performance level, the target performance level and
the stretch performance level are, respectively, FRF
28,800,000, FRF 31,900,000 and FRF 38,300,000 of the net
result before taxation;
- for ALMA's subsequent fiscal years (established for a twelve
month period), the threshold performance level will be equal
to 120% of the net result before taxation on the books for the
previous year; and, should it be necessary, this threshold
performance level will be subject to redefinition by consensus
taking in account of any changes that may affect ALMA's
Business.
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It is further specified that, for the purposes of measuring ALMA's
achievement of the various levels of performance, the sum of any
payment made by the Principals in compensation for any loss sustained
by XXXX under the terms of the WARRANTY AGREEMENT signed on the date of
the transfer of control of XXXX to PRG to a party other than XXXX will
be included in the accountancy of the net result. Conversely, the
following items will not be included in the calculation of the net
result for the purposes of measuring ALMA's achievement of the various
levels of performance:
- the impact of any change of accounting methods imposed on
XXXX;
- the amount of any royalty payment or other management fee
levied by PRG or any other company within the PRG Group on
XXXX; provided, however, that direct charges of actual amounts
incurred by PRG or any other company within PRG for or on
behalf of XXXX, including but not limited to any compensation
or other remuneration paid to Xx Xxxx Xxxxxxxxx or Mr Xxxx
Xxxxxxxxx.
In the event that XXXX fails to meet its threshold performance level as
defined in article 10, for a period of two consecutive term years, this
will constitute valid grounds for revoking Xx Xxxx Xxxxxxxxx'x mandate,
provided however that such revocation will have to be decided upon
within three months from the preparation of the accounts of the
relevant financial year.
11. PROTECTED INFORMATION
All software, computer diskettes, CDs, video tapes, files, audit
reports and other information in writing or in print or any other
presentation as well as all Technical Information and Trade Secrets
relating to the business of the XXXX Group to which Xx Xxxx Xxxxxxxxx
will have access under the terms and conditions of this agreement shall
be and remain the sole and exclusive property of XXXX. For this reason,
upon the termination of his agreement for whatever reason whatsoever,
Xx Xxxx Xxxxxxxxx will deliver the entirety of the foregoing that are
in his possession and that constitute property belonging to XXXX.
00. INVENTIONS
Xx Xxxx Xxxxxxxxx has the duty to disclose any product, service,
invention, improvement, discovery, process, formula, program, system or
method (collectively "INVENTIONS") that he develops that relate in any
way to this agreement or to the business of the XXXX Group and for the
term of his mandate.
These Inventions shall become the sole and exclusive property of XXXX
provided that they directly relate to the actual business of the XXXX
Group, that they coincide with actual or anticipated development of the
business of the XXXX Group and that these Inventions were made or
conceived by Xx Xxxx Xxxxxxxxx, either solely by Xx Xxxx Xxxxxxxxx or
jointly with others, in the exercise of his mandate.
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These Inventions shall constitute protected information for the purpose
of the preceding article.
Xx Xxxx Xxxxxxxxx promises to execute and deliver any document, and,
more generally do such other acts as necessary for securing all right,
title and interest of XXXX in and to any such Invention.
13. COPYRIGHTS
Xx Xxxx Xxxxxxxxx understands that any original works of authorship
fixed in tangible form that he shall develop during and according to
the terms of his mandate, either solely by Xx Xxxx Xxxxxxxxx or jointly
with others, will constitute property belonging to XXXX.
00. COMPANY CAR - BUSINESS EXPENSES - BENEFITS
XXXX shall place at the disposal of Xx Xxxx Xxxxxxxxx a motor car being
a BMW, ZI model or its equivalent, insured and maintained at the cost
of XXXX and the fuel and parking costs relating to the use of the car
will be paid by XXXX as well as petrol, toll and parking expenses
incurred.
In addition, Xx Xxxx Xxxxxxxxx shall continue to enjoy the benefit of a
professional residence, maintained according to the same terms and
under the same conditions as when he was Chairman of the Board of
Directors of XXXX.
All reasonable expenses of Xx Xxxx Xxxxxxxxx incurred in connection
with the exercise of his mandate will be reimbursed to him against
invoices and proof of expenditure.
Xx Xxxx Xxxxxxxxx will have the benefit of health insurance for
directors in accordance with the law during the term of his
appointment.
15. SUBMISSION TO JURISDICTION
This agreement shall be governed by and construed in accordance with
French Law and any litigation relating to its execution, to its
interpretation and to its termination will be governed by a court of
the jurisdiction of the Court of Appeals where XXXX is headquartered.
16. NOTICES
Any notice to be given under this Agreement shall be given in writing
by certified mail, return receipt requested, and addressed as set forth
below:
If to XXXX: 000, xxx Xxxxxxx
00000 Xxxxxxxxx Perret Cedex
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with copies to:
The Profit Recovery Group International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx XxXxxxxx, Xx
Senior Vice President and General Counsel
and to:
Ashurst Xxxxxx Xxxxx
00, xxx xx Xxxxxxxx
00000 Xxxxx
Attention: Xxxxxxxxxxx Xxxxxxxxxxx
If to Xx Xxxx Xxxxxxxxx: 00, xxx Xxxxxxxxxxx
00000 Xxxxx
The date of notice is the date of receipt of the letter, the return
receipt authenticating its receipt.
17. CHANGES TO THE AGREEMENT
Any modification of or change made to this agreement shall be done by
an additional agreement, executed, approved and signed by Xxxx Xxxx,
Chairman of the Supervisory Board (whilst in office) and thereafter by
the Chairman of the Supervisory Board, and Xx Xxxx Xxxxxxxxx.
18. SEVERABILITY
Any provision that may be declared null and void by a court of a given
jurisdiction, shall remain null and void within that jurisdiction.
However, the nullity of one provision shall not operate or be construed
as affecting any other provision nor as affecting the validity of the
overall agreement.
MADE ON 7 OCTOBER 1997,
AT LONDON.
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MR XXXX XXXX
FOR XXXX INTERVENTION
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XX XXXX XXXXXXXXX
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