term, that the Agreement shall not be extended beyond its then current term. The term of thisAgreement, including any renewal term, is referred to herein as the “Term.”     3. **Compensation**.          (a) **Base Salary**. The Company shall pay the Executive an annual base salary of$220,000. The annual base salary shall be paid to the Executive in accordance with the establishedpayroll practices of the Company (but no less frequently than monthly) subject to ordinary andlawful deductions. The Compensation Committee of the Company will review the Executive’s basesalary from time to time to consider whether any increase should be made. The base salary duringthe Term will not be less than that in effect at any time during the Term.          (b) **Annual Bonus**. During the Term, the Executive will be eligible to participate inan annual incentive bonus plan that will establish measurable criteria and incentive compensationlevels payable to the Executive for performance in relation to defined targets established by theCompensation Committee of the Company’s Board of Directors, after consultation with management, andconsistent with the Company’s business plans and objectives. To the extent the targetedperformance levels are exceeded, the incentive bonus plan will provide a means by which the annualbonus will be increased. Similarly, the incentive plan will provide a means by which the annualbonus will be decreased or eliminated if the targeted performance levels are not achieved. Inconnection with such annual incentive bonus plan, subject to the corresponding performance levelsbeing achieved, the Executive shall be eligible for an annual target bonus equal to 50 percent ofthe Executive’s annual base salary and an annual maximum bonus equal to 100 percent of theExecutive’s annual base salary. Any bonus payments due hereunder shall be payable to the Executiveno later than the 15th day of the third month following the end of the applicable yearto which the incentive bonus relates. The Executive’s annual incentive bonus for calendar year 2009shall be subject to pro-ration based on the number of days that Executive is actually employed bythe Company during 2009 (beginning with the Effective Date).          (c) **Stock Compensation**. The Executive also shall be eligible to receive stockoptions, restricted stock, stock appreciation rights and/or other equity awards under the Company’sapplicable equity plans on such basis as the Compensation Committee or the Board of Directors ofthe Company or their designees, as the case may be, may determine on a basis not less favorablethan that provided to the class of employees that includes the Executive. Except as specificallyset forth above, however, nothing herein shall require the Company to make any equity grants orother awards to the Executive in any specific year.     4 **Indemnity.** The Company and the Executive will enter into the Company’s standardindemnification agreement for executive officers.     5. **Benefits**.          (a) **Benefit Programs**. The Executive shall be eligible to participate in any plans,programs or forms of compensation or benefits that the Company or the Company’s subsidiariesprovide to the class of employees that includes the Executive, on a basis not less favorable thanthat provided to such class of employees, including, without limitation, group medical, disabilityand life insurance, paid time-off, and retirement plan, subject to the terms and conditions of suchplans, programs or forms of compensation or benefits.
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          (b) **Paid Time-Off**. The Executive shall be entitled to five weeks of paid time-off, tobe accrued and used in accordance with the normal Company paid time-off policy.          (c) **Additional Terms, Compensation and Benefits****.**The additional terms, compensationand benefits, if any, listed on Exhibit A attached hereto, shall also apply to theExecutive’s employment for the duration specified therein.     6*. ***Reimbursement of Expenses**. The Company shall reimburse the Executive, subject topresentation of adequate substantiation, including receipts, for the reasonable travel,entertainment, lodging and other business expenses incurred by the Executive in accordance with theCompany’s expense reimbursement policy in effect at the time such expenses are incurred. In noevent will such reimbursements, if any, be made later than the last day of the year following theyear in which the Executive incurs the expense.     7. **Termination of Employment**.          (a) **Death or Incapacity**. The Executive’s employment under this Agreement shallterminate automatically upon the Executive’s death. If the Company determines that the Incapacity,as hereinafter defined, of the Executive has occurred, it may terminate the Executive’s employmentand this Agreement. “Incapacity” shall mean the inability of the Executive to perform theessential functions of the Executive’s job, with or without reasonable accommodation, for a periodof 90 days in the aggregate in any rolling 180-day period.          (b) **Termination by Company For Cause**. The Company may terminate the Executive’semployment during the Term of this Agreement for Cause. For purposes of this Agreement, “Cause”shall mean, as determined by the Board of Directors of the Company in good faith, the following:          (i) the Executive’s willful misconduct or gross negligence in connection with theperformance of the Executive’s duties which the Board of Directors of the Company believesdoes or is likely to result in material harm to the Company or any of its subsidiaries;          (ii) the Executive’s misappropriation or embezzlement of funds or property of theCompany or any of its subsidiaries;          (iii) the Executive’s fraud or dishonesty with respect to the Company or any of itssubsidiaries;          (iv) the Executive’s conviction of, indictment for (or its procedural equivalent), orentering of a guilty plea or plea of no contest with respect to any felony or any othercrime involving moral turpitude or dishonesty; or          (v) the Executive’s breach of a material term of this Agreement, or violation in anymaterial respect of any code or standard of behavior generally applicable to officers of theCompany (including, without, limitation the Company’s Code of Conduct, Code of Ethics forSenior Financial Officers and any other applicable policies as the Company from time to timemay adopt), after being advised in writing of such breach or violation and being given 30days to remedy such breach or violation, to the extent that such breach or violation can becured;
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          (vi) the Executive’s breach of fiduciary duties owed to the Company or any of itssubsidiaries;          (vii) the Executive’s engagement in habitual insobriety or the use of illegal drugs orsubstances; or          (viii) the Executive’s willful failure to cooperate, or willful failure to cause anddirect persons under the Executive’s management or direction, or employed by, or consultantsor agents to, the Company or its subsidiaries to cooperate, with all corporateinvestigations or independent investigations by the Board of Directors of the Company or itssubsidiaries, all governmental investigations of the Company or its subsidiaries or ordersinvolving the Executive, the Company or the Company’s subsidiaries entered by a court ofcompetent jurisdiction.Notwithstanding the above, and without limitation, the Executive shall not be deemed to have beenterminated for Cause unless and until there has been delivered to the Executive (i) a letter fromthe Board of Directors of the Company finding that the Executive has engaged in the conduct setforth in any of the preceding clauses and specifying the particulars thereof in detail and (ii) acopy of a resolution duly adopted by the affirmative vote of the majority of the members of theBoard of Directors of the Company who are not officers of the Company at a meeting of the Board ofDirectors called and held for such purpose or such other appropriate written consent (afterreasonable notice to the Executive and an opportunity for the Executive, together with theExecutive’s counsel, to be heard before the Board of Directors of the Company), finding that theExecutive has engaged in such conduct and specifying the particulars thereof in detail.          (c) **Termination by Executive for Good Reason**. The Executive may terminate theExecutive’s employment for Good Reason. For purposes of this Agreement, “Good Reason” shall mean,without the Executive’s consent, the following:          (i) any action taken by the Company which results in a material reduction in theExecutive’s authority, duties or responsibilities (except that any change in the foregoingthat results solely from (A) the Company ceasing to be a publicly traded entity or from theCompany becoming a wholly-owned subsidiary of another publicly traded entity or (B) anychange in the geographic scope of the Executive’s authority, duties or responsibilities willnot, in any event and standing alone, constitute a substantial reduction in the Executive’sauthority, duties or responsibilities), including any requirement that the Executive reportdirectly to anyone other than the Chief Executive Officer of the Company;          (ii) the assignment to the Executive of duties that are materially inconsistent withExecutive’s authority, duties or responsibilities;          (iii) any material decrease in the Executive’s base salary or annual bonus opportunityor the benefits generally available to the class of employees that includes the Executive,except to the extent the Company has instituted a salary, bonus or benefits reductiongenerally applicable to all executives of the Company other than in contemplation of orafter a Change in Control;
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          (iv) the relocation of the Executive to any primary place of employment other than asspecified in Section 1(b) above which might require the Executive to move the Executive’sresidence which, for this purpose, means any reassignment to a place of employment 50 milesor more from the place (or, if applicable, all places) of employment set forth in Section1(b), without the Executive’s express written consent to such relocation; provided, however,this subsection (iv) shall not apply in the case of business travel which requires theExecutive to relocate temporarily for periods of 90 days or less;          (v) the failure by the Company to pay to the Executive any portion of the Executive’sbase salary, annual bonus or other benefits within 10 days after the date the same is due;or          (vi) any material failure by the Company to comply with the terms of this Agreement.Notwithstanding the above, and without limitation, “Good Reason” shall not include any resignationby the Executive where Cause for the Executive’s termination by the Company exists and the Companythen follows the procedures described above. The Executive must give the Company notice of anyevent or condition that would constitute “Good Reason” within 30 days of the event or conditionwhich would constitute “Good Reason,” and upon the receipt of such notice the Company shall have 30days to remedy such event or condition. If such event or condition is not remedied within such30-day period, any termination of employment by the Executive for “Good Reason” must occur within30 days after the period for remedying such condition or event has expired.          (d) **Termination by Company Without Cause or by Executive Other than For Good Reason**.The Company may terminate the Executive’s employment during the Term of this Agreement withoutCause, and Executive may terminate the Executive’s employment for other than Good Reason, upon 30days’ written notice. The Company may elect to pay the Executive during any applicable noticeperiod (in accordance with the established payroll practices of the Company, no less frequentlythan monthly) and remove him from active service.          (e) **Termination by Executive on Failure to Renew**. The Executive may terminate theExecutive’s employment at any time on or before the expiration of the Term of the Agreement, if theCompany notifies the Executive that the Term of the Agreement shall not be extended as provided inSection 2 above.     8. **Obligations of the Company Upon Termination**.          (a) **Without Cause; Good Reason; Non-Renewal (No Change in Control)**. If, during theTerm, the Company terminates the Executive’s employment without Cause in accordance with Section7(d) hereof, the Executive terminates the Executive’s employment for Good Reason in accordance withSection 7(c) hereof, or the Executive terminates the Executive’s employment upon the Company’sfailure to renew the Agreement in accordance with Section 7(e) hereof, other than within two yearsafter a Change in Control, subject to Section 20 below, the Executive shall be entitled to receive:          (i) payment of the Executive’s annual base salary in effect immediately preceding thedate of the Executive’s termination of employment (or, if greater, the
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Executive’s annual base salary in effect immediately preceding any action by theCompany described in Section 7(c)(iii) above for which the Executive has terminated theExecutive’s employment for Good Reason), for the period equal to the greater of one year orthe sum of four weeks for each full year of continuous service the Executive has with theCompany and its subsidiaries at the time of termination of employment, beginning immediatelyfollowing termination of employment (the “Severance Period”), payable in accordance with theestablished payroll practices of the Company (but no less frequently than monthly),beginning on the first payroll date following 30 days after termination of employment, withthe Executive to receive at that time a lump sum payment with respect to any installmentsthe Executive was entitled to receive during the first 30 days following termination ofemployment, and the remaining payments made as if they had commenced immediately followingtermination of employment;          (ii) payment of an amount equal to the Executive’s actual earned full-year bonus forthe year in which the termination of Executive’s employment occurs, prorated based on thenumber of days the Executive was employed for the year, payable at the time the Executive’sannual bonus for the year otherwise would be paid had the Executive continued employment;          (iii) continuation after the date of termination of employment of any health care(medical, dental and vision) plan coverage, other than that under a flexible spendingaccount, provided to the Executive and the Executive’s spouse and dependents at the date oftermination for the Severance Period, on a monthly or more frequent basis, on the same basisand at the same cost to the Executive as available to similarly-situated active employeesduring such Severance Period, provided that such continued participation is possible underthe general terms and provisions of such plans and programs and provided that such continuedcoverage by the Company shall terminate in the event Executive becomes eligible for any suchcoverage under another employer’s plans. If the Company reasonably determines thatmaintaining such coverage for the Executive or the Executive’s spouse or dependents is notfeasible under the terms and provisions of such plans and programs (or where suchcontinuation would adversely affect the tax status of the plan pursuant to which thecoverage is provided), the Company shall pay the Executive cash equal to the estimated costof the expected Company contribution therefor for such same period of time, with suchpayments to be made in accordance with the established payroll practices of the Company (notless frequently than monthly) for the period during which such cash payments are to beprovided;          (iv) payment of any Accrued Obligations. For purposes of this Agreement, “AccruedObligations” shall mean the sum of (A) the Executive’s annual base salary throughExecutive’s termination of employment which remains unpaid, (B) the amount, if any, of anyincentive or bonus compensation earned for any completed fiscal year of the Company whichhas not yet been paid, (C) any reimbursements for expenses incurred but not yet paid, and(D) any benefits or other amounts, including both cash and stock components, which pursuantto the terms of any plans, policies or programs have been earned or become payable, butwhich have not yet been paid to the Executive, including payment for any unused paidtime-off (but not including amounts that previously had been deferred at the Executive’srequest, which amounts will be paid in accordance with the Executive’s existing directions).The Accrued Obligations will be paid to the Executive in a
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lump sum as soon as administratively feasible after the Executive’s termination ofemployment, which for purposes of any incentive or bonus compensation described in (B) aboveshall mean at the same time such annual bonus would otherwise have been paid;          (v) vesting in full of the Executive’s outstanding unvested options, restricted stockand other equity-based awards that would have vested based solely on the continuedemployment of the Executive. Additionally, all of Executive’s outstanding stock optionsshall remain outstanding until the earlier of (i) one year after the date of termination ofthe Executive’s employment or (ii) the original expiration date of the options (disregardingany earlier expiration date provided for in any other agreement, including withoutlimitation any related grant agreement, based solely on the termination of the Executive’semployment); and          (vi) payment of one year of outplacement services from Executrack or an outplacementservice provider of the Executive’s choice, limited to $20,000 in total. This outplacementservices benefit will be forfeited if the Executive does not begin using such serviceswithin 60 days after the termination of the Executive’s employment.          (b) **Without Cause; Good Reason; Non-Renewal (Change in Control)**. If, during the Term,the Company terminates the Executive’s employment without Cause in accordance with Section 7(d)hereof, the Executive terminates the Executive’s employment for Good Reason in accordance withSection 7(c) hereof, or the Executive terminates the Executive’s employment upon the Company’sfailure to renew the Agreement in accordance with Section 7(e) hereof, within two years after aChange in Control, subject to Section 20 below, the Executive shall be entitled to receive:          (i) payment of the Executive’s annual base salary in effect immediately preceding thedate of the Executive’s termination of employment (or, if greater, the Executive’s annualbase salary in effect immediately preceding any action by the Company described in Section7(c)(iii) above for which the Executive has terminated the Executive’s employment for GoodReason), for the period equal to the greater of 18 months or the sum of four weeks for eachfull year of continuous service the Executive has with the Company and its subsidiaries atthe time of termination of employment, beginning immediately following termination ofemployment (the “Change in Control Severance Period”), payable in accordance with theestablished payable practices of the Company (but no less frequently than monthly),beginning on the first payroll date following 30 days after termination of employment, withthe Executive to receive at that time a lump sum payment with respect to any installmentsthe Executive was entitled to receive during the first 30 days following termination ofemployment;          (ii) payment of an amount equal to the Executive’s actual earned full-year bonus forthe year in which the termination of Executive’s employment occurs, prorated based on thenumber of days the Executive was employed for the year, payable at the time the Executive’sannual bonus for the year otherwise would be paid had the Executive continued employment;          (iii) continuation after the date of termination of employment of any health care(medical, dental and vision) plan coverage, other than that under a flexible
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spending account, provided to the Executive and the Executive’s spouse and dependentsat the date of termination for the Change in Control Severance Period, on a monthly or morefrequent basis, on the same basis and at the same cost to the Executive as available tosimilarly-situated active employees during such Change in Control Severance Period, providedthat such continued participation is possible under the general terms and provisions of suchplans and programs and provided that such continued contribution by the Company shallterminate in the event Executive becomes eligible for any such coverage under anotheremployer’s plans. If the Company reasonably determines that maintaining such coverage forthe Executive or the Executive’s spouse or dependents is not feasible under the terms andprovisions of such plans and programs (or where such continuation would adversely affect thetax status of the plan pursuant to which the coverage is provided), the Company shall paythe Executive cash equal to the estimated cost of the expected Company contribution thereforfor such same period of time, with such payments to be made in accordance with theestablished payroll practices of the Company (not less frequently than monthly) for theperiod during which such cash payments are to be provided;          (iv) payment of any Accrued Obligations in a lump sum as soon as administrativelyfeasible after the Executive’s termination of employment, which for purposes of anyincentive or bonus compensation described in Section 8(a)(iv)(B) above shall mean at thesame time such annual bonus would otherwise have been paid;          (v) vesting in full of the Executive’s outstanding unvested options, restricted stockand other equity-based awards that would have vested based solely on the continuedemployment of the Executive. Additionally, all of the Executive’s outstanding stock optionsshall remain outstanding until the earlier of (i) one year after the date of termination ofthe Executive’s employment or (ii) the original expiration date of the options (disregardingany earlier expiration date provided for in any other agreement, including withoutlimitation any related grant agreement, based solely on the termination of the Executive’semployment); and          (vi) payment of one year of outplacement services from Executrack or an outplacementservice provider of the Executive’s choice, limited to $20,000 in total. This outplacementservices benefit will be forfeited if the Executive does not begin using such serviceswithin 60 days after the termination of the Executive’s employment.          (c) **Death or Incapacity**. If the Executive’s employment is terminated by reason ofdeath or Incapacity in accordance with Section 7(a) hereof, the Executive shall be entitled toreceive:          (i) payment of an amount equal to the actual full-year bonus earned for the year thatincludes Executive’s death or Incapacity, prorated based on the number of days the Executiveis employed for the year, payable at the same time such annual bonus would otherwise havebeen paid had the Executive continued employment; and          (ii) payment of any Accrued Obligations in a lump sum as soon as administrativelyfeasible after the Executive’s termination of employment, which for purposes of anyincentive or bonus compensation described in Section 8(a)(iv)(B) above shall mean at thesame time such annual bonus would otherwise have been paid.
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          (d) **Cause; Other Than for Good Reason**. If the Company terminates the Executive’semployment for Cause in accordance with Section 7(b) hereof, or the Executive terminates theExecutive’s employment other than for Good Reason in accordance with Section 7(d) hereof, thisAgreement shall terminate without any further obligation to the Executive other than to pay theAccrued Obligations (except that any incentive or bonus compensation earned for any completedfiscal year of the Company which has not yet been paid shall not be paid if the Company terminatesthe Executive’s employment for Cause in accordance with Section 7(b) hereof) as soon asadministratively feasible after the Executive’s termination of employment.          (e) **Release and Waiver**. Notwithstanding any other provision of this Agreement, theExecutive’s right to receive any payments or benefits under Sections 8(a)(i), (ii), (iii), (v) and(vi) and 8(b)(i), (ii), (iii), (v) and (vi) of this Agreement upon the termination of theExecutive’s employment by the Company without Cause, by the Executive for Good Reason, or by theExecutive upon the Company’s failure to renew the Agreement is contingent upon and subject to theExecutive signing and delivering to the Company a separation agreement and complete general releaseof all claims in a form acceptable to Company, and allowing the applicable revocation periodrequired by law to expire without revoking or causing revocation of same, within 30 days followingthe date of termination of Executive’s employment.          (f) **Change in Control**. For purposes of this Agreement, Change of Control means theoccurrence of any of the following events:          (i) The accumulation in any number of related or unrelated transactions by any personof beneficial ownership (as such term is used in Rule 13d-3, promulgated under theSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) of 50 percent or more ofthe combined total voting power of the Company’s voting stock; provided that for purposes ofthis subsection (a), a Change in Control will not be deemed to have incurred if theaccumulation of 50 percent or more of the voting power of the Company’s voting stock resultsfrom any acquisition of voting stock (i) by the Company, (ii) by any employee benefit plan(or related trust) sponsored or maintained by the Company or any of the Company’ssubsidiaries, or (iii) by any person pursuant to a merger, consolidation, reorganization orother transaction (a “Business Combination”) that would not cause a Change in Control undersubsection (ii) below; or          (ii) A consummation of a Business Combination, unless, immediately following thatBusiness Combination, substantially all the persons who were the beneficial owners of thevoting stock of the Company immediately prior to that Business Combination beneficially own,directly or indirectly, at least 50 percent of the combined voting power of the voting stockof the entity resulting from that Business Combination (including, without limitation, anentity that as a result of that transaction owns the Company, or all or substantially all ofthe Company assets, either directly or through one or more subsidiaries) in substantiallythe same proportions relative to each other as the ownership, immediately prior to thatBusiness Combination, of the voting stock of the Company;          (iii) A sale or other disposition of all or substantially all of the assets of theCompany except pursuant to a Business Combination that would not cause a Change in Controlunder subsection (ii) above;
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          (iv) At any time less than a majority of the members of the Board of Directors of theCompany or any entity resulting from any Business Combination are Incumbent Board Members.          (v) Approval by the shareholders of the Company of a complete liquidation ordissolution of the Company, except pursuant to a Business Combination that would not cause aChange in Control under subsection (ii) above; or          (vi) Any other transaction or event that the Board of Directors of the Companyidentifies as a Change in Control for purposes of this Agreement.          (vii) For purposes of this Agreement, an “Incumbent Board Member” shall mean anyindividual who either is (a) a member of the Company Board of Directors as of the EffectiveDate or (b) a member who becomes a member of the Company’s Board of Directors subsequent tothe Effective Date of this Agreement, whose election or nomination by the Company’sshareholders, was approved by a vote of at least a majority of the then Incumbent BoardMembers (either by specific vote or by approval of a proxy statement of the Company in whichthat person is named as a nominee for director, without objection to that nomination), butexcluding, for that purpose, any individual whose initial assumption of office occurs as aresult of an actual or threatened election contest (within the meaning of Rule 14A-11 of theExchange Act) with respect to the election or removal of directors or other actualthreatened solicitation or proxies or consents by or on behalf of the person other than aboard of directors. For purposes of this Agreement, a person means any individual,corporation, partnership, limited liability company, joint venture, incorporated orunincorporated association, joint-stock company, trusts, unincorporated organization or anyother entity of any kind.     9. **Business Protection Agreements**.          (a) **Definitions**. For purposes of this Agreement, the following terms shall have thefollowing meanings:          (i) “Business of the Company” means services to (A) identify clients’ erroneous orimproper payments, (B) assist clients in the recovery of monies owed to them as a result ofoverpayments and overlooked discounts, rebates, allowances and credits, and (C) assistclients in the improvement and execution of their procurement and payment processes.          (ii) “Confidential Information” means any information about the Company or theCompany’s subsidiaries and their employees, customers and/or suppliers which is notgenerally known outside of the Company or the Company’s subsidiaries, which Executive learnsof in connection with Executive’s employment with the Company, and which would be useful tocompetitors or the disclosure of which would be damaging to the Company or the Company’ssubsidiaries. Confidential Information includes, but is not limited to: (A) business andemployment policies, marketing methods and the targets of those methods, finances, businessplans, promotional materials and price lists; (B) the terms upon which the Company or theCompany’s subsidiaries obtains products from their suppliers and sells services and productsto customers; (C) the nature, origin, composition
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and development of the Company or the Company’s subsidiaries’ services and products;and (D) the manner in which the Company or the Company’s subsidiaries provide products andservices to their customers.          (iii) “Material Contact” means contact in person, by telephone, or by paper orelectronic correspondence in furtherance of the Business of the Company.          (iv) “Restricted Territory” means, and is limited to, the geographic area described inExhibit B attached hereto. Executive acknowledges and agrees that this is the areain which the Company and its subsidiaries does business at the time of the execution of thisAgreement, and in which the Executive will have responsibility, at a minimum, on behalf ofthe Company and the Company’s subsidiaries. Executive acknowledges and agrees that if thegeographic area in which Executive has responsibility should change while employed underthis Agreement, Executive will execute an amendment to the definition of “RestrictedTerritory” to reflect such change. This duty shall be part of the consideration provided byExecutive for Executive’s employment hereunder.          (v) “Trade Secrets” means the trade secrets of the Company or the Company’ssubsidiaries as defined under applicable law.          (b) **Confidentiality**. Executive agrees that the Executive will not (other than in theperformance of Executive’s duties hereunder), directly or indirectly, use, copy, disclose orotherwise distribute to any other person or entity: (a) any Confidential Information during theperiod of time the Executive is employed by the Company and for a period of five years thereafter;or (b) any Trade Secret at any time such information constitutes a trade secret under applicablelaw. Upon the termination of Executive’s employment with the Company (or upon the earlier requestof the Company), Executive shall promptly return to the Company all documents and items in theExecutive’s possession or under the Executive’s control which contain any Confidential Informationor Trade Secrets.          (c) **Non-Competition**. Executive agrees that during the Executive’s employment with theCompany and for a period of two years thereafter, Executive will not, either for himself or onbehalf of any other person or entity, compete with the Business of the Company within theRestricted Territory by performing activities which are the same as or similar to those performedby Executive for the Company or the Company’s subsidiaries.          (d) **Non-Solicitation of Customers**. Executive agrees that during Executive’semployment with the Company and for a period of two years thereafter, Executive shall not, directlyor indirectly, solicit any actual or prospective customers of the Company or the Company’ssubsidiaries with whom Executive had Material Contact, for the purpose of selling any products orservices which compete with the Business of the Company          (e) **Non-Recruitment of Employees or Contractors**. Executive agrees that during theExecutive’s employment with the Company and for a period of two years thereafter, Executive willnot, directly or indirectly, solicit or attempt to solicit any employee or contractor of theCompany or the Company’s subsidiaries with whom Executive had Material Contact, to terminate orlessen such employment or contract.
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          (f) **Obligations of the Company**. The Company agrees to provide Executive withConfidential Information in order to enable Executive to perform Executive’s duties hereunder. Thecovenants of Executive contained in the covenants of Confidentiality, Non-Competition,Non-Solicitation of Customers and Non-Recruitment of Employees or Contractors set forth inSubsections 9(b) — 9(e) above (“Protective Covenants”) are made by Executive in consideration forthe Company’s agreement to provide Confidential Information to Executive, and intended to protectCompany’s Confidential Information and the investments the Company makes in training Executive anddeveloping customer goodwill.          (g) **Acknowledgments**. Executive hereby acknowledges and agrees that the covenantscontained in (b) through (e) of this Section 9 and Section 10 hereof are reasonable as to time,scope and territory given the Company and the Company’s subsidiaries’ need to protect theirbusiness, customer relationships, personnel, Trade Secrets and Confidential Information. Executiveacknowledges and represents that Executive has substantial experience and knowledge such thatExecutive can readily obtain subsequent employment which does not violate this Agreement.          (h) **Specific Performance**. Executive acknowledges and agrees that any breach of any ofthe Protective Covenants or the provisions of Section 10 by him will cause irreparable damage tothe Company or the Company’s subsidiaries, the exact amount of which will be difficult todetermine, and that the remedies at law for any such breach will be inadequate. Accordingly,Executive agrees that, in addition to any other remedy that may be available at law, in equity, orhereunder, the Company shall be entitled to specific performance and injunctive relief, withoutposting bond or other security, to enforce or prevent any violation of any of the ProtectiveCovenants by him.     10. **Ownership of Work Product**.          (a) **Assignment of Inventions**. Executive will make full written disclosure to theCompany, and hold in trust for the sole right and benefit of the Company, and hereby assigns to theCompany, or its designees, all of the Executive’s right, title, and interest in and to any and allinventions, original works of authorship, developments, concepts, improvements or trade secrets,whether or not patentable or registrable under copyright or similar laws, which the Executive maysolely or jointly conceive or develop or reduce to practice, or cause to be conceived or developedor reduced to practice, during the period of time the Executive is engaged as an employee of theCompany (collectively referred to as “Inventions”) and which (i) are developed using the equipment,supplies, facilities or Confidential Information or Trade Secrets of the Company or the Company’ssubsidiaries, (ii) result from or are suggested by work performed by Executive for the Company orthe Company’s subsidiaries, or (iii) relate at the time of conception or reduction to practice tothe business as conducted by the Company or the Company’s subsidiaries, or to the actual ordemonstrably anticipated research or development of the Company or the Company’s subsidiaries, willbe the sole and exclusive property of the Company or the Company’s subsidiaries, and Executive willand hereby does assign all of the Executive’s right, title and interest in such Inventions to theCompany and the Company’s subsidiaries. Executive further acknowledge that all original works ofauthorship which are made by him (solely or jointly with others) within the scope of and during theperiod of the Executive’s employment arrangement with the Company and which are protectible bycopyright are “works made for hire,” as that term is defined in the United States Copyright Act.
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          (b) **Patent and Copyright Registrations**. Executive agrees to assist the Company andthe Company’s subsidiaries, or their designees, at the Company or the Company’s subsidiaries’expense, in every proper way to secure the Company’s or the Company’s subsidiaries’ rights in theInventions and any copyrights, patents, mask work rights or other intellectual property rightsrelating thereto in any and all countries, including the disclosure to the Company and theCompany’s subsidiaries of all pertinent information and data with respect thereto, the execution ofall applications, specifications, oaths, assignments and all other instruments which the Company orthe Company’s subsidiaries shall deem necessary in order to apply for and obtain such rights and inorder to assign and convey to the Company and its subsidiaries, and their successors, assigns, andnominees the sole and exclusive rights, title and interest in and to such Inventions, and anycopyrights, patents, mask work rights or other intellectual property rights relating thereto.Executive further agree that the Executive’s obligation to execute or cause to be executed, when itis in the Executive’s power to do so, any such instrument or papers shall continue after thetermination of this Agreement.          (c) **Inventions Retained and Licensed**. There are no inventions, original works ofauthorship, developments, improvements, and trade secrets which were made by Executive prior to theExecutive’s employment with the Company (collectively referred to as “Prior Inventions”), whichbelong to Executive, which relate to the Company’s or the Company’s subsidiaries’ proposedbusiness, products or research and development, and which are not assigned to the Company or theCompany’s subsidiaries hereunder.          (d) **Return of Company Property and Information**. The Executive agrees not to removeany property of the Company or the Company’s subsidiaries or information from the premises of theCompany or the Company’s subsidiaries, except when authorized by the Company or the Company’ssubsidiaries. Executive agrees to return all such property and information within seven daysfollowing the cessation of Executive’s employment for any reason. Such property includes, but isnot limited to, the original and any copy (regardless of the manner in which it is recorded) of allinformation provided by the Company or the Company’s subsidiaries to the Executive or which theExecutive has developed or collected in the scope of the Executive’s employment, as well as allissued equipment, supplies, accessories, vehicles, keys, instruments, tools, devices, computers,cell phones, materials, documents, plans, records, notebooks, drawings, or papers. Upon request bythe Company, the Executive shall certify in writing that all copies of information subject to thisAgreement located on the Executive’s computers or other electronic storage devices have beenpermanently deleted. Provided, however, the Executive may retain copies of documents relating toany employee benefit plans applicable to the Executive and income records to the extent necessaryfor the Executive to prepare the Executive’s individual tax returns.     11. **Mitigation**. The Executive shall not be required to mitigate the amount of anypayment the Company becomes obligated to make to the Executive in connection with this Agreement,by seeking other employment or otherwise. Except as specifically provided above with respect tothe health care continuation benefit, the amount of any payment provided for in Section 8 shall notbe reduced, offset or subject to recovery by the Company by reason of any compensation earned bythe Executive as the result of employment by another employer after the Date of Termination, orotherwise.
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     12. **Withholding of Taxes****.**The Company shall withhold from any amounts or benefitspayable under this Agreement all federal, state, city or other taxes that the Company is requiredto withhold under any applicable law, regulation or ruling.     13. **Modification and Severability**. The terms of this Agreement shall be presumed to beenforceable, and any reading causing unenforceability shall yield to a construction permittingenforcement. If any single covenant or provision in this Agreement shall be found unenforceable, itshall be severed and the remaining covenants and provisions enforced in accordance with the tenorof the Agreement. In the event a court should determine not to enforce a covenant as written dueto overbreadth, the parties specifically agree that said covenant shall be enforced to the maximumextent reasonable, whether said revisions be in time, territory, scope of prohibited activities, orother respects.     14. **Governing Law**. This Agreement shall be governed by and construed in accordancewith the laws of the State of Georgia.     15. **Remedies and Forum**. The parties agree that they will not file any action arisingout of this Agreement other than in the United States District Court for the Northern District ofGeorgia or the State or Superior Courts of Cobb County, Georgia. Notwithstanding the pendency ofany proceeding, either party shall be entitled to injunctive relief in a state or federal courtlocated in Cobb County, Georgia upon a showing of irreparable injury. The parties consent topersonal jurisdiction and venue solely within these forums and solely in Cobb County, Georgia andwaive all otherwise possible objections thereto. The prevailing party shall be entitled to recoverits costs and attorney’s fees from the non-prevailing party(ies) in any such proceeding no laterthan 90 days following the settlement or final resolution of any such proceeding. The existence ofany claim or cause of action by the Executive against the Company or the Company’s subsidiaries,including any dispute relating to the termination of this Agreement, shall not constitute a defenseto enforcement of said covenants by injunction.     16. **Notices**. All written notices required by this Agreement shall be deemed givenwhen delivered personally or sent by registered or certified mail, return receipt requested, or bya nationally-recognized overnight delivery service to the parties at their addresses set forth onthe signature page of this Agreement. Each party may, from time to time, designate a differentaddress to which notices should be sent.     17. **Amendment**. This Agreement may not be varied, altered, modified or in any wayamended except by an instrument in writing executed by the parties hereto or their legalrepresentatives.     18. **Binding Effect**. This Agreement shall be binding on the Executive and the Companyand their respective successors and assigns effective on the Effective Date. Executive consents toany assignment of this Agreement by the Company, so long as the Company will require any successorto all or substantially all of the business and/or assets of the Company to assume expressly andagree to perform this Agreement in the same manner and to the same extent that the Company would berequired to perform it if no such succession had taken place. If the Executive dies beforereceiving all payments due under this Agreement, unless expressly otherwise provided hereunder orin a separate plan, program, arrangement or agreement, any remaining payments due after theExecutive’s death shall be made to the Executive’s beneficiary designated in
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writing (provided such writing is executed and dated by the Executive and delivered to theCompany in a form acceptable to the Company prior to the Executive’s death) and surviving theExecutive or, if none, to the Executive’s estate.     19. **No Construction Against Any Party**. This Agreement is the product of informednegotiations between the Executive and the Company. If any part of this Agreement is deemed to beunclear or ambiguous, it shall be construed as if it were drafted jointly by all parties. TheExecutive and the Company agree that none of the parties were in a superior bargaining positionregarding the substantive terms of this Agreement.     20. **Deferred Compensation Omnibus Provision**. Notwithstanding any other provision ofthis Agreement, it is intended that any payment or benefit which is provided pursuant to or inconnection with this Agreement which is considered to be deferred compensation subject to Section409A of the Code shall be provided and paid in a manner, and at such time, including withoutlimitation payment and provision of benefits only in connection with the occurrence of apermissible payment event contained in Section 409A (e.g. separation from service from the Companyand its affiliates as defined for purposes of Section 409A of the Code), and in such form, ascomplies with the applicable requirements of Section 409A of the Code to avoid the unfavorable taxconsequences provided therein for non-compliance. Notwithstanding any other provision of thisAgreement, the Company’s Compensation Committee or Board of Directors is authorized to amend thisAgreement, to amend or void any election made by the Executive under this Agreement and/or to delaythe payment of any monies and/or provision of any benefits in such manner as may be determined byit to be necessary or appropriate to comply, or to evidence or further evidence requiredcompliance, with Section 409A of the Code (including any transition or grandfather rulesthereunder). For purposes of this Agreement, all rights to payments and benefits hereunder shallbe treated as rights to receive a series of separate payments and benefits to the fullest extentallowed by Section 409A of the Code. If the Executive is a key employee (as defined in Section416(i) of the Code without regard to paragraph (5) thereof) and any of the Company’s stock ispublicly traded on an established securities market or otherwise, then payment of any amount orprovision of any benefit under this Agreement which is considered deferred compensation subject toSection 409A of the Code shall be deferred for six (6) months after termination of Executive’semployment or, if earlier, Executive’s death, as required by Section 409A(a)(2)(B)(i) of the Code(the “409A Deferral Period”). In the event such payments are otherwise due to be made ininstallments or periodically during the 409A Deferral Period, the payments which would otherwisehave been made in the 409A Deferral Period shall be accumulated and paid in a lump sum as soon asthe 409A Deferral Period ends, and the balance of the payments shall be made as otherwisescheduled. In the event benefits are required to be deferred, any such benefit may be providedduring the 409A Deferral Period at the Executive’s expense, with the Executive having a right toreimbursement from the Company once the 409A Deferral Period ends, and the balance of the benefitsshall be provided as otherwise scheduled. For purposes of this Agreement, termination ofemployment shall mean a “separation from service” within the meaning of Section 409A of the Codewhere it is reasonably anticipated that no further services would be performed after such date orthat the level of bona fide services Executive would perform after that date (whether as anemployee or independent contractor) would permanently decrease to no more than 20 percent of theaverage level of bona fide services performed over the immediately preceding 36-month period (or,if lesser, Executive’s period of service).
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     21. **Mandatory Reduction of Payments in Certain Events**. Anything in this Agreement tothe contrary notwithstanding, in the event it shall be determined that any payment or distributionby the Company to or for the benefit of Executive (whether paid or payable or distributed ordistributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subjectto the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, then, prior to the makingof any Payment to Executive, a calculation shall be made comparing (i) the net benefit to Executiveof the Payment after payment of the Excise Tax to (ii) the net benefit to Executive if the Paymenthad been limited to the extent necessary to avoid being subject to the Excise Tax. If the amountcalculated under (i) above is less than the amount calculated under (ii) above, then the Paymentshall be limited to the extent necessary to avoid being subject to the Excise Tax (the “ReducedAmount”). In that event, cash payments shall be modified or reduced first and then any otherbenefits. The determination of whether an Excise Tax would be imposed, the amount of such ExciseTax, and the calculation of the amounts referred to in clauses (i) and (ii) of the foregoingsentence shall be made by an independent accounting firm selected by Company and reasonablyacceptable to the Executive, at the Company’s expense (the “Accounting Firm”), and the AccountingFirm shall provide detailed supporting calculations. Any determination by the Accounting Firmshall be binding upon the Company and Executive. As a result of the uncertainty in the applicationof Section 4999 of the Code at the time of the initial determination by the Accounting Firmhereunder, it is possible that Payments which Executive was entitled to, but did not receivepursuant to this Section 21, could have been made without the imposition of the Excise Tax(“Underpayment”). In such event, the Accounting Firm shall determine the amount of theUnderpayment that has occurred and any such Underpayment shall be promptly paid by the Company toor for the benefit of the Executive.     22. **Entire Agreement**. Except as provided in the next sentence, this Agreementconstitutes the entire agreement of the parties with respect to the matters addressed herein and itsupersedes all other prior agreements and understandings, both written and oral, express orimplied, with respect to the subject matter of this Agreement. It is further specifically agreedand acknowledged that, except as provided herein, the Executive shall not be entitled to severancepayments or benefits under any severance or similar plan, program, arrangement or agreement of orwith the Company for any termination of employment occurring while this Agreement is in effect.**[Signatures are on the following page.]**
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     **IN WITNESS WHEREOF**, the parties hereto have executed this Agreement as of the date firstwritten herein.      **PRG-SCHULTZ INTERNATIONAL, INC.**