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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made as of the 17th day of
October, 1997, effective as of January 1, 1997 (the "Effective Date"), by and
between THE PROFIT RECOVERY GROUP INTERNATIONAL I, INC., a Georgia corporation
(the "Company") and XXXXXXX X. XXXXXX, a resident of the State of Georgia (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to retain Employee to provide services to
the Company and its Affiliates (as defined in Section 23 below), and Employee
desires to provide his services to the Company pursuant to the terms and
conditions that follow;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
1. EMPLOYMENT. Employee shall serve as President of the Company.
Employee agrees to apply Employee's full time efforts to the position and to
perform Employee's work at all times to the best of Employee's ability and at
the direction of the Chief Executive Officer of the Company. Employee will
render to the Company at regular intervals set by the Company, reports and
accounting of the status and progress of any work Employee is performing.
2. TERM. The initial term of this Agreement shall commence on January
1, 1997, and shall continue until December 31, 1997, unless sooner terminated as
hereinafter provided. Unless otherwise terminated pursuant to Section 14 hereof,
this Agreement shall automatically renew on a year-to-year basis at the end of
the initial term and each subsequent renewal term unless either party gives
written notice of non-renewal to the other at least ninety (90) days prior to
the end of the initial term or a renewal term. The initial term of this
Agreement and any subsequent one-year renewal period shall be deemed a "Term
Year."
3. SCOPE OF THE COMPANY'S ACTIVITIES. Employee acknowledges and agrees
that the Company conducts the following business in the following territories:
(a) Scope of the Company's Business. The Company is engaged in
the business of auditing accounts payable, paid xxxx files, promotional and
demonstrator agreements, personal property, real estate, sales and use tax and
other taxes, common area maintenance charges, telephone and other utilities,
sales promotion, advertising and cosmetic wage/commission agreements of its
Clients, as hereinafter defined, to identify and document for subsequent charge
back or credit over-payments and/or under deductions (collectively, the "Audit
Activities"), and rendering management counseling services associated with the
Audit Activities (collectively, the "Business of the Company").
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(b) Location of the Company's Business. The Company actively
conducts business with its clients (herein referred to as "Clients") throughout
the United States, Australia, Belgium, Canada, France, Germany, Great Britain,
Hong Kong, Indonesia, Malaysia, Mexico, the Netherlands, New Zealand, Singapore,
South Africa, Taiwan, and Thailand. The address of the Company's principal
office in Atlanta, Georgia where Employee provides substantially all of his
services on behalf of the Company is 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx, Xxxx Xxxxxx, Georgia 30339-8426 (the "Principal Office").
4. COMPENSATION. For services rendered by Employee under this Agreement
during the term hereof, Employee shall be entitled to receive the compensation
and benefits set forth in Sections 10, 11 and 12 hereof and in that certain
Compensation Agreement by and between Employee and the Company (the
"Compensation Agreement"), which provides in part that as of the Effective Date
Employee's Base Salary (as defined therein) is Two Hundred Forty-Five Thousand
and No/100 ($245,000.00) Dollars), exclusive of Twenty Thousand and No/100
($20,000.00) Dollars of salary to be deferred in accordance therewith, subject
to any future amendment of the Compensation Agreement.
5. STOCK OPTION. Employee and The Profit Recovery Group International,
Inc., a Georgia corporation ("PRGX"), are party to one or more separate stock
option agreements in accordance with which Employee has been granted
non-qualified options to purchase One Hundred Eleven Thousand Five Hundred
(111,500) shares of PRGX Common Stock under the 1996 Stock Option Plan (the
"Plan"). Additionally, the Company will grant Employee 37,500 stock options if
the Company's earnings per share ("EPS") for 1997 increases by at least
thirty-five (35%) percent over 1996 EPS. If EPS for 1997 increases by more than
forty (40%) percent over 1996 EPS, the total stock option awarded will be
increased to 75,000 stock options. The Company shall have the right to revise
the 1997 EPS targets stated above to reflect business and organizational changes
occurring during 1997 that are outside of the ordinary course of PRGX's
business, including adjustments to exclude extraordinary charges incurred in
connection with PRGX's acquisition of Groupe Xxxx. Any stock options so granted
which relate to increases in 1997 EPS over 1996 EPS will (i) vest ratably and
proportionately over four (4) years and be reflected in the form of The Profit
Recovery Group International, Inc. Non-Qualified Stock Option Agreement
previously adopted and approved by the Company's Compensation Committee, (ii) be
granted at fair market value as of December 31, 1997; and (iii) relate to and be
part of Employee's compensation package for 1997, notwithstanding that KPMG Peat
Marwick will need additional time after the end of 1997 to complete its audit in
order to make a final determination of whether the earnings per share goals were
achieved.
6. SPECIFIC ACKNOWLEDGMENTS. Employee acknowledges that the Company has
expended and will continue to expend substantial time, money, effort and other
resources to develop its goodwill, clients, business sources and relationships
and that the Company has a legitimate business interest in protecting same. In
connection with Employee's employment by the Company as herein provided, the
Company will introduce Employee to its Clients, business sources and
relationships and will expend considerable time, effort and capital to train
Employee in the business of the Company. Employee further acknowledges that, by
virtue of Employee's employment with the Company, Employee will be in a position
of substantial responsibility and authority and will have frequent and
substantial contact with certain of the Company's Clients and business sources
and relationships. Employee further acknowledges that in Employee's capacity,
Employee will be privy to certain confidential information, Company secrets
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and proprietary information not generally known or available to the Company's
competitors or the general public.
(a) Agreement Not to Compete - Competing Businesses. Employee
covenants and agrees that during Employee's employment by the Company and for a
period of eighteen (18) months after the termination of Employee's employment
for any reason whatsoever, of such employment, he will not, without the prior
written consent of the Company signed by the President of the Company, directly
or indirectly, (i) for himself or (ii) as a consultant, management, supervisory
or executive employee or owner of a Competing Business, as hereinafter defined,
or (iii) as an independent contractor for a Competing Business, engage in any
business, within a radius of thirty (30) miles of the Principal Office, for
which Employee provides services which are the same or substantially similar to
his duties as Employee as herein described.
(b) Agreement Not to Solicit Clients. Employee covenants and
agrees that during Employee's employment by the Company and for a period of
eighteen (18) months after termination of Employee's employment for any reason
whatsoever, Employee will not, without the prior written consent of the Company
signed by the President of the Company, directly or indirectly, on Employee's
behalf or on behalf of a Competing Business, as hereinafter defined, solicit,
divert or appropriate, or attempt to solicit, divert or appropriate any of the
Company's Clients for whom Employee performed services or otherwise had direct
contact, influence and/or responsibility during the twenty-four (24) month
period immediately preceding the termination of Employee's employment with the
Company (or such shorter period if Employee is employed for less than 24 months)
for the purpose of providing services of the type identified in Section 3 (a)
hereof. Employee's covenants pursuant to this subsection (b) shall also apply to
prospective customers of the Company with respect to which Employee participated
in soliciting on behalf of the Company during the twenty-four (24) month period
immediately preceding the termination of Employee's employment with the Company
(or such shorter period if Employee is employed for less than 24 months).
(c) Agreement Not to Solicit Employees or Contractors.
Employee covenants and agrees that during Employee's employment by the Company
and for a period of eighteen (18) months after termination of Employee's
employment for any reason whatsoever, Employee will not, without the prior
written consent of the Company signed by the President of the Company, directly
or indirectly, on Employee's behalf or on behalf of others, solicit, entice,
persuade or induce, or attempt to solicit, entice, persuade or induce any person
who is actively employed by, or is performing services as an independent
contractor for, the Company and (i) who was employed by, or was performing
services as an independent contractor for, the Company at any time during which
Employee was employed by the Company and (ii) who reported to Employee or was
within Employee's chain of responsibility, or (iii) who had regular contact with
Employee, to terminate his or her employment or contractual arrangement with the
Company or to become employed or engaged by any person, firm or entity other
than the Company, or approach any such person for any of the foregoing purposes
or authorize or assist in the taking of any such action by any third party.
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(d) Proprietary Information. All Proprietary Information, as
hereinafter defined, and all physical embodiments thereof received or developed
by Employee or disclosed to Employee while employed by the Company is
confidential to and is and will remain the sole and exclusive property of the
Company. Except to the extent necessary to perform the duties assigned to
Employee by the Company, Employee will hold such Proprietary Information in
trust and in the strictest confidence, and will not use, reproduce, distribute,
disclose or otherwise disseminate the Proprietary Information or any physical
embodiments thereof and may in no event take any action causing or fail to take
the action necessary in order to prevent any Proprietary Information disclosed
to or developed by Employee to lose its character or cease to qualify as
Proprietary Information. The confidentiality requirements and use restrictions
contained in this subsection shall survive any termination of Employee's
employment with the Company but shall not apply (i) to any information that
falls into the public domain through no fault of Employee, or (ii) to
Proprietary Information which is not Trade Secrets, as hereinafter defined, when
a period of five (5) years has expired following the termination of Employee's
employment with Company. Upon request by the Company, and in any event upon
termination of Employee's employment with the Company for any reason, Employee
will promptly deliver to the Company all property belonging to the Company,
including without limitation all Proprietary Information (and all physical
embodiments thereof) then in Employee's custody, control, or possession.
(e) Contracts or Other Agreements with Former Employer or
Business. Employee agrees that Employee will provide to the Company, upon the
execution of this Agreement, a copy of the pertinent portions of any employment
agreement or similar document executed by Employee with a former employer or any
other business. Employee warrants and represents that (i) the execution and
delivery of this Agreement by Employee and the performance of the obligations,
covenants and agreements contained herein, do not and will not conflict with or
result in any breach or violation of any of the terms and provisions of any
agreement, judgment, order, statute or other instrument or restriction of any
kind with respect to which Employee is bound, and (ii) Employee is not subject
to any restrictive covenant agreement, covenant not to compete, nonsolicitation
agreement or other agreement that would prohibit Employee from carrying out
Employee's duties hereunder.
(f) Definitions.
- "Competing Business" means any business
organization of whatever form engaged, either directly or indirectly, in any
business or enterprise which is the same as, or substantially the same as, the
Business of the Company, as defined in Section 2(a) hereof.
- "Proprietary Information" means information
related to the Company or its Affiliates or clients (i) which derives economic
value, actual or potential, from not being generally known to or readily
ascertainable by other persons who can obtain economic value from its disclosure
or use; and (ii) which is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. Such Proprietary Information shall
include information in any form or media and shall not necessarily be in
writing. Proprietary Information also includes information which has been
disclosed to the Company or its Affiliates by a third party and which the
Company or its Affiliates are obligated to treat as confidential. Trade Secrets
means Proprietary Information which meets the foregoing criteria and which is
also deemed to be a "Trade Secret" as that term is defined in the Georgia Trade
Secrets Act of 1990, O.C.G.A. ss. 10-1-760, et. seq., including but not limited
to technical and nontechnical data, formulas,
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patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, and lists of actual
or potential customers and suppliers. Proprietary Information may or may not be
marked by the Company or its Affiliates as "proprietary" or "secret" or with
other words or markings of similar meaning, and the failure of the Company to
make such notations upon the physical embodiments of any Proprietary Information
shall not affect the status of such information as Proprietary Information.
7. OWNERSHIP BY COMPANY. All software, computer diskettes, CDs, video
tapes, literature, cassettes, photographs, prints, slides, records, notes,
files, memoranda, reports, audit reports, price lists, client lists, documents,
and all copies thereof, equipment, and apparatus and like items relating to the
business of the Company, Proprietary Information or Trade Secrets which shall be
prepared by Employee or which shall be disclosed to or which shall come into
Employee's possession shall be and remain the sole and exclusive property of the
Company. Employee agrees that, upon the termination of employment with the
Company for any reason whatsoever, or at any other time upon request, Employee
will promptly deliver to the Company the originals and all copies of any of the
foregoing that are in Employee's possession, custody or control, and any other
property belonging to the Company.
8. INVENTIONS. Employee agrees that, during the term of this Agreement,
Employee has a continuing duty to disclose to the Company any invention,
improvement, discovery, process, formula, code, program, system or method
(collectively, "Inventions") developed or being developed by Employee any time
during the term of Employee's employment, either solely by Employee or jointly
with others, whether or not such Inventions are assignable to the Company as set
forth below. Any Invention which Employee has conceived or made or may conceive
or make at any time while employed by the Company, either solely by Employee or
jointly with others, (a) which relate in any way to the actual Business of the
Company, or (b) which relate in any way to the actual or anticipated research or
development of the Company, or (c) which are suggested by or result from any
task assigned to Employee on behalf of the Company, shall be the sole and
exclusive property of the Company, and Employee hereby assigns to the Company
any right, title or interest Employee may have to such Invention. Furthermore,
any such Invention shall constitute Proprietary Information as set forth above.
At the request and expense of the Company, Employee will execute and deliver all
documents and will do such other acts as may be in the Company's opinion
necessary or desirable to secure to the Company or its nominee all right, title
and interest in and to any such Invention. The provisions of this Section shall
be binding upon Employee's heirs, legal representatives, successors and assigns.
9. COPYRIGHTS. Employee understands that any original works of
authorship fixed in tangible form, including, without limitation, computer
software and manuals, advertising material, and training material, prepared by
Employee, either solely or jointly with others, within the scope of Employee's
employment by the Company, constitute works made for hire as provided by law, so
that such works are owned by the Company. If, for any reason, a work of
authorship by Employee created during the term of Employee's employment by the
Company and related to the Business of the Company is considered other than a
work for hire, then Employee hereby assigns all Employee's right, title and
interest in copyrights to such works of authorship to the Company.
10. INSURANCE AND BENEFITS.
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(a) Subject to Employee being insurable at standard rates as
of the commencement of employment (or when coverage is applied for, as
applicable) and to the availability of such coverage from the Company's
customary insurance providers, the Company shall (i) obtain on Employee's behalf
life, disability, hospitalization and medical insurance coverage in accordance
with the Company's standard group coverage, (ii) pay the premiums, or reimburse
Employee for premiums paid, to obtain, coverage as described below in addition
to the Company's standard group coverage in accordance with the Company's
standard policies and procedures: (A) basic term life insurance policy at the
best available rates for a fifteen (15) year level term type product, but not
higher than standard nonsmoker rates, in an amount of coverage equal to One
Million ($1,000,000) Dollars, and (B) disability income insurance coverage,
which, when added to the standard group coverages, will provide a monthly
benefit of sixty (60%) percent of the sum of (x) Employee's current Base Salary,
(y) any amount of Bonus (as defined in the Compensation Agreement) payable to
Employee, without adjustment or deduction for any Bonus amount the payment of
which was deferred pursuant to this Agreement, for the Term Year preceding the
Term Year in which the disability occurs, and (z) any amount of salary for the
Term Year in which the Disability occurs the payment of which is deferred
pursuant to this Agreement, and (iii) share the cost of Employee's health
insurance premiums in accordance with the Company's standard employee policies
and procedures. The Company will reimburse Employee for any amount incurred in
connection with an annual physical examination not covered by insurance.
(b) Employee shall be provided an annual automobile allowance
of Twelve Thousand and No/100 ($12,000.00) Dollars, payable in accordance with
the Company's customary procedures, which amount shall be reviewed annually and
may be modified in writing prior to the commencement of any Term Year.
(c) The Company will pay for an executive financial program
for Employee as provided by Advisory Services, Ltd.
(d) Employee shall be entitled to participate in any 401(k)
Plan of the Company generally available to other employees of the Company,
except as may be limited by applicable law or regulation.
(e) The Company shall pay Employee's reasonable travel and
business expenses (including air travel at coach rate), subject to Employee's
submission of receipts therefor in accordance with the Company's normal
practices and procedures.
(f) Any amounts the Company pays for insurance coverage or
fringe benefits that are supplemental or in addition to the Company's standard
insurance coverage or benefits shall be compensation in addition to Base Salary
(but not included within the definition of Base Salary) and shall be reflected
on Employee's W-2.
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11. PAYMENT OF COMPENSATION UPON TERMINATION.
In addition to any deferred compensation to which Employee might be
entitled pursuant to Section 12 hereof following Employee's termination of
employment, Employee shall receive the following compensation upon the
termination of Employee's employment under the Employment Agreement:
(a) In the event Employee's employment hereunder is terminated
for cause or if Employee voluntarily resigns, Employee shall be entitled to
receive Employee's Base Salary prorated through the date of termination, payable
within sixty (60) days after termination and Employee shall not be entitled to
receive any Bonus (as defined in the Compensation Agreement), or any other
amount in respect of the Term Year in which termination occurs or in respect of
any subsequent years.
(b) In the event Employee's employment hereunder is terminated
by the Company without cause, Employee shall be entitled to receive Base Salary
and Bonus for the Term Year in which such termination occurs prorated through
the date of such termination, plus a severance payment equal to six (6) months
of Base Salary at the rate then in effect and shall not be entitled to receive
any other amount in respect of the Term Year in which termination occurs or in
respect of any subsequent years. The prorated Base Salary shall be payable in a
lump sum within sixty (60) days after termination, the prorated Bonus shall be
payable in a lump sum within ninety (90) days after the end of the Term Year to
which it relates, and the severance payment shall be payable in six (6) equal
monthly installments commencing on the last day of the first month following
termination. If the Company gives Employee notice of non-renewal pursuant to
Section 2 of this Agreement, it shall be deemed to be a termination of
Employee's employment without cause and Employee shall be entitled to
compensation pursuant to this Section 11(b).
(c) In the event Employee's employment hereunder is terminated
by Employee's death, Employee's legal representative shall be entitled to
receive Base Salary and Bonus for the Term Year in which such termination occurs
prorated through the date of such termination and any other payments
specifically provided for herein in respect of death and shall not be entitled
to receive any other amount in respect of the Term Year in which termination
occurs or in respect of any subsequent years. The prorated Base Salary shall be
payable in a lump sum within sixty (60) days after termination and the prorated
Bonus shall be payable in a lump sum within ninety (90) days after the end of
the Term Year to which it relates.
(d) In the event Employee's employment hereunder is terminated
for Disability, Employee or Employee's legal representative shall be entitled to
receive (A) Base Salary and Bonus for the Term Year in which such termination
occurs prorated through the date of such termination, with the prorated Base
Salary payable to Employee payable in a lump sum within sixty (60) days after
termination and the prorated Bonus payable in a lump sum within ninety (90) days
after the end of the Term Year to which it relates; and (B) Base Salary at the
rates in effect upon the date of such termination payable in accordance with the
Company's normal payroll procedure until the disability payments provided for
under any of the Company's standard group disability insurance coverage provided
pursuant to Section 10(a) hereof are scheduled to commence (but in no event
longer than ninety (90) days after the date of Employee's termination) and shall
not be entitled to receive any other amount in respect of the Term Year in which
termination occurs or in respect of any subsequent years.
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(e) In the event this Agreement is not renewed due to the
Company giving Employee notice of non-renewal pursuant to Section 2 hereof,
Employee shall be entitled to receive such severance payment or any other amount
with respect to the Company's non-renewal of this Agreement as if such
non-renewal were termination without cause hereunder. Non-renewal by Employee
shall give rise to no right to receive any severance payment hereunder.
(f) If Employee's employment hereunder terminates for any
reason during a Term Year, Employee will be paid within sixty (60) days of
termination for all unused vacation time accrued up to the date of termination.
12. DEFERRED COMPENSATION.
(a) Annual Deferred Compensation Credit. An account
("Employee's Account") has been maintained on the books and records of the
Company for the purposes hereinafter provided. As of December 31, 1996, the
amount credited to Employee's Account, whether vested or unvested (the "Credit
Balance"), equals $40,903.22 (including $903.18 in accrued interest). As of the
end of each Term Year beginning with the Term Year ending December 31, 1997, the
Credit Balance of Employee's Account shall be increased by an amount equal to
the sum of (i) the Salary Deferred Compensation Credit (as defined in the
Compensation Agreement) for such Term Year, and (ii) Twenty Thousand and No/100
($20,000.00) Dollars (the "Company Deferred Compensation Credit"). In the event
of the termination of Employee's employment hereunder for any reason prior to
the end of any Term Year, however, no credits shall be made to Employee's
Account with respect to a Company Deferred Compensation Credit for such Term
Year. Employee's Account shall also be credited from and after the date hereof
with an amount computed like interest on the credit balance of Employee's
Account at the Prime Rate (as hereinafter defined). For these purposes, the
Salary Deferred Compensation Credit and all interest so accrued on the credit
balance of Employee's Account shall be deemed to be credited to Employee's
Account as of the end of each month of each Term Year, and the Company Deferred
Compensation Credit shall be deemed to be credited to Employee's Account as of
December 31 of each Term Year, as provided in Section 12(b) hereof. As used in
this Agreement, the term "Prime Rate" means the rate publicly announced from
time to time by NationsBank, N.A. (South), Atlanta, Georgia, as its "prime
rate."
(b) Vesting. The provisions of this Section 12(b) shall
determine the portion of Employee's Account which is vested and eligible for
payment in accordance with Section 12(c) hereof.
(i) General Vesting Rule. Subject to the other
provisions of this Section 12(b), Employee shall in all events be immediately
vested in the portion of Employee's Account attributable to all Salary Deferred
Compensation Credits (as defined in the Compensation Agreement) and interest
credited with respect thereto (as determined pursuant to Section 12(a) hereof).
Subject to the other provisions of this Section 12(b), Employee's right to the
portion of Employee's Account attributable to each Company Deferred Compensation
Credit and all interest credited with respect thereto (as determined pursuant to
Section 12(a) hereof) will vest as follows: (A) Employee's rights shall be
immediately vested as of the end of the Term Year for which such amount is
credited with respect to that portion of the Company Deferred Compensation
Credit equal to the product of ten (10%) percent of the Company Deferred
Compensation Credit multiplied by the number of calendar years elapsed from the
end of the calendar year in respect of which any funds were first credited to
Employee's Account to the Term Year
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for which such amount is credited (except in the case of termination of
Employee's employment hereunder without cause, in which case vesting of the
product described in this sentence in respect to the Term Year in which
termination without cause occurs will be prorated through the date of
termination), and (B) thereafter, Employee's rights to the remainder of each
Term Year's Company Deferred Compensation Credit shall vest based on ten (10%)
percent of the Balance for each subsequent year until Employee is one hundred
(100%) percent vested in such Company Deferred Compensation Credit. As a result
of clause (A) and clause (B) above, all contributions shall be fully vested at
the end of ten (10) Term Years.
(ii) Termination Due to Death or Disability. In
the event of termination of Employee's employment hereunder due to death or
Disability, then notwithstanding anything to the contrary in Section 12(b)(i)
hereof, Employee, in the event of Disability, or Employee's Beneficiary, in the
event of Employee's death, shall be vested in the Credit Balance of Employee's
Account.
(iii) Termination for Gross Cause. Upon the
termination of Employee's employment hereunder for Gross Cause, notwithstanding
anything to the contrary in Section 12(b)(i) hereof, Employee shall be vested in
the Salary Deferred Compensation Credit in Employee's Account as of the end of
the month preceding such termination or resignation but shall not be vested in
any portion of the Company Deferred Compensation Credit, regardless of whether
or not previously vested, or any interest accrued thereon.
(iv) No Further Credits. Upon Employee's
termination of employment hereunder for any reason, no further increase in the
Credit Balance shall be made to Employee's Account.
(c) Payments Following Termination of Employment.
(i) Termination. In the event of termination of
Employee's employment hereunder for any reason, Employee (or, in the event of
Employee's death, Employee's Beneficiary) shall receive a payment equal to the
portion of the Credit Balance of Employee's Account which is vested in
accordance with Section 12(b) hereof within sixty (60) days after the earlier to
occur of (A) Employee's death, or (B) such termination of Employee's employment.
(ii) Forfeiture of Balance of Employee's Account.
The portion of the Credit Balance of Employee's Account which is not vested in
accordance with Section 12(b) hereof following termination of Employee's
employment hereunder shall be forfeited and Employee shall not be entitled to
any payment with respect thereto.
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(d) Beneficiary. Employee shall have the right to designate a
beneficiary ("Beneficiary") under this Agreement who shall succeed to Employee's
right to receive payments with respect to this Section 12 hereof in the event of
Employee's death. In the event Employee fails to designate a Beneficiary or a
Beneficiary dies without Employee's designation of a successor Beneficiary, then
for all purposes hereunder the Beneficiary shall be Employee's estate. No
designation of Beneficiary shall be valid unless in writing signed by Employee,
dated and delivered to the Company. Beneficiaries may be changed by Employee
without the consent of any prior Beneficiary.
(e) Rights Unsecured; Unfunded Plan; ERISA.
(i) The Company's obligations arising under this
Section 12 hereof to pay benefits to Employee or Employee's Beneficiary
constitute a mere promise by the Company to make payments in the future in
accordance with the terms hereof and Employee and Employee's Beneficiary have
the status of a general unsecured creditor of the Company. Neither Employee nor
Employee's Beneficiary shall have any rights in or against any specific assets
of the Company.
(ii) It is the intention of the Company and
Employee that the Company's obligations under this Section 12 hereof be unfunded
for income tax purposes and for purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
(iii) The Company and Employee shall treat its
obligations under this Section 12 hereof as maintained for a select group of
management or highly compensated employees exempt from Parts 2, 3 and 4 of Title
I of ERISA. The Company shall comply with the reporting and disclosure
requirements of Part 1 of Title I of ERISA in accordance with U.S. Department of
Labor Regulation ss.2520.104-23.
(f) Nonassignability. The rights Employee and Employee's
Beneficiary to payments pursuant to this Section 12 hereof are not subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance attachment, or garnishment by creditors of Employee or Employee's
Beneficiary.
13. REMEDIES.
(a) Employee acknowledges and agrees that, by virtue of the
duties and responsibilities attendant to Employee's employment by the Company
and the special knowledge of the Company's affairs, business, clients and
operations that Employee has and will have as a consequence of such employment,
irreparable loss and damage will be suffered by the Company if Employee should
breach or violate any of the covenants and agreements contained in Sections 6,
7, 8, or 9 hereof; and Employee further acknowledges and agrees that each of
such covenants is reasonably necessary to protect and preserve the Company.
Employee, therefore, agrees and consents that, in addition to any other remedies
available to it, the Company shall be entitled to specific performance by
temporary as well as permanent injunction to prevent a breach or contemplated
breach by Employee of any of the covenants or agreements contained in such
Sections.
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(b) The existence of any claim, demand, action or cause of
action that Employee may have against the Company, whether predicated upon this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of any of the covenants contained in Sections 6, 7, 8, or 9 hereof.
(c) Nothing contained in this Agreement shall limit, abridge
or modify the rights of the parties under applicable trade secret, trademark,
copyright or patent law or under the laws of unfair competition.
(d) In the event a court of competent jurisdiction determines
that Employee has breached any of the foregoing covenants contained in Sections
6, 7, 8, or 9 hereof, Employee shall pay all costs of enforcement of the
foregoing covenants, including, but not limited to, court costs and reasonable
attorney's fees.
14. TERMINATION.
(a) This Agreement may be terminated by the Company for
"cause" upon delivery of notice of termination to Employee. As used herein,
"cause" shall mean (i) fraud, dishonesty, gross negligence, willful misconduct,
commission of a felony or act of moral turpitude (e.g. theft, embezzlement and
the like), or (ii) engaging in activities prohibited by Sections 6, 7, 8, or 9
hereof, or any other material breach of this Agreement, and "Gross Cause" shall
refer to any item or items listed in subclause 14(a)(i) immediately above.
(b) This Agreement may be terminated by the Company or
Employee without cause by giving the other party thirty (30) days prior written
notice and such termination shall be effective on the thirtieth (30th) day
following receipt of such notice or such earlier date as the parties shall
mutually agree.
(c) In the event of Employee's Disability, physical or mental,
the Company shall have the right, subject to all applicable laws, including
without limitation, the Americans with Disabilities Act ("ADA"), to terminate
Employee's employment immediately. For purposes of this Agreement, the term
"Disability" shall mean Employee's inability, in the judgment in accordance with
the ADA, of both a medical doctor selected by the Company and a medical doctor
selected by Employee or Employee's legal representative (or, in the event that
such doctors fail to agree, then in the majority opinion of such doctors and a
third medical doctor chosen by such doctors) due to illness, accident or any
other physical or mental incapacity to perform the services required of Employee
hereunder for an aggregate of ninety (90) days within any period of one hundred
eighty (180) consecutive days during which this Agreement is in effect.
15. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
Employee. This Agreement may be assigned by the Company.
16. SEVERABILITY. In the event that one or more of the words, phrases,
sentences, clauses, sections, subdivisions or subparagraphs contained herein
shall be held invalid, this Agreement shall be construed as if such invalid
portion had not been inserted, and if such invalidity shall be caused by the
length of any period of time, the number or location of Clients, the size of any
area, or the description of the duties of Employee set forth in any part hereof,
such period of time, number or location of Clients,
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area, or description of duties, or any combination thereof, shall be considered
to be reduced to a period, number, location, area or description which would
cure such invalidity.
17. SUBMISSION TO JURISDICTION. This Agreement shall be governed by and
construed under the laws of the State of Georgia. Employee hereby agrees to
submit to the jurisdiction of the courts of the State of Georgia or the federal
courts within the State of Georgia and hereby appoints the Secretary of State of
the State of Georgia as agent for the purpose of receiving service of process in
respect of any proceeding in connection herewith. Time is of the essence of this
Agreement and each and every Section and subsection hereof.
18. NOTICES. Any notice to be given under this Agreement shall be given
in writing and may be effected by personal delivery or by placing such in the
United States certified mail, return receipt requested and addressed as set
forth below:
If to Company: The Profit Recovery Group International I, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000, Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Chairman of the Board
If to Employee: At the address specified below Employee's signature.
19. REQUIRED DEDUCTIONS OR WITHHOLDINGS. All amounts payable to
Employee pursuant to the Employment Agreement or the Compensation Agreement
shall have deducted or withheld therefrom by the Company such amount or amounts
as may be required to be so deducted or withheld pursuant to applicable federal,
state or local laws.
20. ENTIRE AGREEMENT AND AMENDMENT. The Employment Agreement, the
Compensation Agreement and the Plan constitute the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior discussions, understandings and agreements among the parties hereto,
including, without limitation, that certain Employment Agreement dated November
27, 1996 and that certain Compensation Agreement also dated as of November 27,
1996. Any such prior agreements other than the Plan shall, from and after the
effective date hereof, 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.
21. WAIVER. The waiver by one party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach of the same or any other provision by the other party.
22. AUTHORIZATION. The Company represents and warrants to Employee that
this Agreement has been authorized and approved by all necessary corporate
actions.
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23. AFFILIATES. As used herein, "Affiliates" shall mean PRGX, and all
entities, whether now or hereafter existing, 51% or more of the outstanding
capital stock of which is owned by any combination of the Company and/or any
Affiliate and which are engaged in substantially the same business as the
Business of the Company regardless of the industry segment of its Clients and/or
which provide services or employees to the Company or any Affiliate in
connection with the operations thereof.
24. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
COMPANY:
THE PROFIT RECOVERY GROUP
INTERNATIONAL I, INC.
By:
-------------------------------------
Xxxx X. Xxxx, Chief Executive Officer
EMPLOYEE:
(SEAL)
----------------------------------------
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxx, X.X. #0X
Xxxxxxx, XX 00000
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