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EXHIBIT 10.33
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made this 23rd day of August,
1996, effective as of January 1, 1996 (the "Effective Date"), by and between THE
PROFIT RECOVERY GROUP INTERNATIONAL I, INC., a Georgia corporation (the
"Company") and XXXXX X. XXXXXXXXX, a resident of the State of Georgia (the
"Employee").
WITNESSETH:
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 Senior Vice President -- Human
Resources 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,
1996, and shall continue until December 31, 1996, unless sooner terminated as
hereinafter provided. Unless otherwise terminated pursuant to Section 11 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").
(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, Netherlands, New Zealand,
Singapore, 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 One Hundred Twenty Thousand and
No/100 ($120,000.00) Dollars exclusive of Ten Thousand and No/100 ($10,000.00)
Dollars of salary to be deferred in accordance therewith, subject to any future
amendment of the Compensation Agreement.
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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 PRGX Common Stock under the 1996 Stock Option
Plan (the "Plan").
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 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.
(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
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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. sec. 10-1-760, et.
seq., including but not limited to technical and nontechnical data, formulas,
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.
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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. (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 (5) 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 was 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 Eight
Thousand and No/100 ($8,000.00) 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.
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(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.
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 hereunder:
(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, 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.
(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.
(e) In the event the Employment 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.
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(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") shall be maintained on the books and records of
the Company for the purposes hereinafter provided. As of March 31, 1996, the
amount credited to Employee's Account, whether vested or unvested (the "Credit
Balance"), equals $2,534.73 (including $17.31 in accrued interest). As of the
end of each Term Year beginning with the Term Year ending December 31, 1996, 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) Ten Thousand and No/100
($10,000.00) 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 4(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 and
interest credited with respect thereto (as determined pursuant to Section 4(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 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), 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.
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(iv) No Further Credits. Upon Employee's termination of employment under
the Employment Agreement 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.
(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
sec.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.
(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.
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(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, 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: President
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
8
9
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. 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.
23. AFFILIATES. As used herein, "Affiliates" shall mean PRGX, The Profit
Recovery Group Asia, Inc., The Profit Recovery Group Australia, Inc., The Profit
Recovery Group Belgium, Inc., The Profit Recovery Group Canada, Inc., The Profit
Recovery Group France, Inc., The Profit Recovery Group Germany, Inc., The Profit
Recovery Group Mexico, Inc., The Profit Recovery Group Netherlands, Inc., The
Profit Recovery Group New Zealand, Inc., The Profit Recovery Group U.K., Inc.,
and all other entities, whether now or hereafter existing, fifty-one percent
(51%) or more of the outstanding capital stock of which is owned by any
combination of the Company and/or any of the foregoing entities and which are
engaged in substantially the same business as the Business of the Company 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: /s/ XXXX X. XXXX
------------------------------------
Xxxx X. Xxxx
Chief Executive Officer
EMPLOYEE:
/s/ XXXXX X. XXXXXXXXX (SEAL)
--------------------------------------
Xxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxxx Xxxxxxxx
Xxxxxxx, XX 00000
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COMPENSATION AGREEMENT
THIS COMPENSATION AGREEMENT ("Agreement") is made this 23rd day of
August, 1996 effective as of January 1, 1996 (the "Effective Date"), by and
between THE PROFIT RECOVERY GROUP INTERNATIONAL I, INC., a Georgia corporation
(the "Company") and XXXXX X. XXXXXXXXX, a resident of the State of Georgia (the
"Employee").
W I T N E S S E T H:
WHEREAS, the parties hereto are party to that certain Employment
Agreement, dated August __, 1996 and effective as of the Effective Date (the
"Employment Agreement") whereby the Company employs Employee as Senior Vice
President-Human Resources and Employee accepts such employment in accordance
with the terms thereof; and
WHEREAS, the Employment Agreement provides that the compensation
payable to Employee shall be as set forth herein (any terms capitalized but not
otherwise defined herein shall have the meanings ascribed to them in the
Employment Agreement).
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. COMPENSATION. For services rendered by Employee under the
Employment Agreement during the term thereof, Employee shall be entitled to
receive the following compensation (subject to following sections), provided
that such compensation and Performance Goals (as defined below) may be reviewed
annually and modified by the Compensation Committee of the Board of Directors
of the Company (the "Committee") in writing prior to the commencement of any
Term Year.
(a) Base Salary. One Hundred Twenty Thousand and No/100
($120,000.00) Dollars on an annual basis ("Base Salary") shall be payable in
accordance with the Company's customary payroll procedures. For purposes of
this Agreement, the term "Adjusted Base Salary" shall mean and refer to the sum
of Employee's Base Salary and Ten Thousand and No/100 ($10,000.00) Dollars
(such Ten Thousand and No/100 ($10,000.00) Dollars, together with interest
accrued thereon as hereinafter provided, is hereinafter referred to as the
"Salary Deferred Compensation Credit"). Employee's Salary Deferred Compensation
Credit shall not be paid to Employee but such amount shall instead be deferred
and credited to Employee's Account (as defined in Section 12(a) of the
Employment Agreement) as deferred compensation in accordance with Section 12(a)
of the Employment Agreement. In the event of termination of Employee's
employment under the Employment Agreement for any reason during any Term Year,
no portion of the Salary Deferred Compensation Credit shall be credited to
Employee's Account in respect of the month in which such termination occurs or
any subsequent period.
11
(b) Bonus. An annual bonus ("Bonus") in an amount determined as provided
herein for each Term Year during the term of the Employment Agreement, payable
in a lump sum within ninety (90) days following the end of each Term Year. The
maximum potential Bonus shall be established from time to time by mutual
consent of the parties hereto, but, assuming no decrease in Base Salary, shall
not be less than Sixty-Five Thousand and No/100 ($65,000.00) Dollars per Term
Year without Employee's consent, provided, however, that Employee shall be
entitled to a Bonus if and only if certain objective and subjective Performance
Goals (as hereinafter defined) are met by Employee and the Company. The amount
of any Bonus will depend on which level of Performance Goals Employee and the
Company have met. Schedule 1 attached hereto contains the Performance Goals
agreed to between the Company and Employee and an illustration of how a Bonus
may be achieved based on the Performance Goals.
(i) The "Performance Goals" shall consist of the
following:
A) "Company Profit Goals" - based on the
achievement of operating profit thresholds
of the Company and its Affiliates (before
interest, taxes and amortization of
intangible assets) for the applicable Term
Year agreed upon by Employee and the
Committee; and
B) "Company Accrued Revenue" - based on accrued
annual revenues of the Company and its
Affiliates for the applicable Term Year; and
C) "Individual Performance Goals" - based on
factors to be agreed upon by Employee and
the Committee.
(ii) The levels of the Performance Goals are as follows:
A) "Threshold" - the minimum Performance Goal
to be achieved to receive any Bonus (15% of
Adjusted Base Salary for each Term Year);
B) "Target" - the Performance Goal that
Employee and the Committee agree is
realistically attainable (35% of Adjusted
Base Salary for each Term Year); and
C) "Stretch" - the Performance Goal that will
provide the maximum Bonus (50% of Adjusted
Base Salary for each Term Year).
(iii) Whether or not the Individual Performance Goals
have been achieved shall be solely in the judgment
of the Committee. The relative weight given to each
Performance Goal in calculating the Bonus shall be
reflected on Schedule 1 attached hereto or as
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12
otherwise mutually agreed to in writing by Employee
and the Committee.
(iv) Compliance with the Performance Goals described in
subsection (i) above and Schedule 1 attached hereto
for any Term Year shall be determined without
regard to the financial contribution of any merger
or acquisition which may be consummated by the
Company or its Affiliates subsequent to the date of
this Agreement; provided, however, that if any such
merger or acquisition should materially increase
Employee's duties or responsibilities, Employee and
the Committee shall in good faith consider an
appropriate modification to the Performance Goals
to equitably reflect Employee's additional duties
or responsibilities; provided further, however,
that the terms of this Agreement shall continue to
govern and control unless and until the parties
hereto execute and deliver an amendment to this
Agreement.
2. TERMINATION. This Agreement shall terminate effect upon the
termination of the Employment Agreement; provided, however, that all provisions
hereof relating to any actions, including payment, subsequent to termination
shall survive such termination.
3. INCORPORATION BY REFERENCE. The provisions of the Employment
Agreement are hereby incorporated herein by reference.
4. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
Employee. In the event that the Employment Agreement is assigned this Agreement
shall be assigned to the assignee thereof.
5. COUNTERPARTS. This Agreement may be executed in one or more counter
parts, each of which shall be deemed an original and together which shall
constitute one and the same instrument.
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13
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: /s/ Xxxx X. Xxxx
--------------------------------------
Xxxx X. Xxxx, Chief Executive Officer
EMPLOYEE:
/s/ Xxxxx X. Xxxxxxxxx (SEAL)
----------------------------------------
Xxxxx X. Xxxxxxxxx
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SCHEDULE 1
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15
1996 INCENTIVE PLAN - Xxxxx Xxxxxxxxx
Total
Corporate Corporate Incentive
Accrued Revenue Operating Profit MBO
(33.33% of Incentive) (33.33% of Incentive) (33.33% of Incentive)
Performance Cumulative Target Payout Target Payout Target Payout $
Level Percent
A1 B1 C1
Threshold 15.0% $6,500 $6,500 $6,500 $19,500
A2 B2 C2
Target 35.0% $15,166 $15,166 $15,168 $45,500
A3 B3 C3
Maximum 50.0% $21,666 $21,666 $21,668 $65,000
Revenue Operating Profit MBO
------- ---------------- ---
A1=$65.4mm B1=15.6% C1=TBD
A2=$72.6mm B2=17.7% C2=TBD
A3=$79.3mm B3=19.2% C3=TBD
16
DESCRIPTION OF 1998 COMPENSATION ARRANGEMENT BETWEEN
XX. XXXXX X. XXXXXXXXX AND REGISTRANT
The following describes certain compensation arrangements between the
Registrant and Xx. Xxxxxxxxx for calendar year 1998 which supplements the
Employment Agreement dated August 23, 1996 between Registrant and Xx. Xxxxxxxxx
and the Compensation Agreement dated August 23, 1996 between Registrant and Xx.
Xxxxxxxxx.
The Company has entered into an employment agreement with Xx. Xxxxxxxxx
that currently expires December 31, 1998. The employment agreement provides for
automatic one-year renewals upon the expiration of each year of employment,
subject to prior notice of nonrenewal by the Board of Directors. For 1998, the
Compensation Committee of the Board of Directors (the "Compensation Committee")
increased Xx. Xxxxxxxxx'x annual base salary to $152,000 (effective March 1,
1998). Pursuant to Xx. Xxxxxxxxx'x employment agreement, for 1998, he will
receive a bonus of up to 50% of his base salary based in part upon the Company's
performance for 1998. On January 27, 1998, the Compensation Committee granted
Xx. Xxxxxxxxx'x options to purchase 15,000 shares of Common Stock at a purchase
price of $15.75 per share, vesting over a five-year period at 20% per year. Xx.
Xxxxxxxxx has elected to reduce his annual base salary by $10,000 per year and
to contribute such amount to a deferred contribution program for him, which
amount vests immediately. In addition, the Company will make annual matching
contributions in the amount of $10,000 per year to a such deferred compensation
program, which amounts will vest over a ten-year period at 10% per year. Xx.
Xxxxxxxxx will be entitled to receive his deferred compensation upon termination
of his employment for any reason, other than for cause, including death or
disability. The Company has also agreed to provide Xx. Xxxxxxxxx with certain
other personal benefits. Upon termination, other than for cause or by voluntary
resignation, Xx. Xxxxxxxxx will receive severance payments equal to six months'
base salary. Xx. Xxxxxxxxx has agreed not to compete with the Company or to
solicit any clients or employees of the Company for a period of 18 months
following termination of his employment.
