Document:

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

EXHIBIT 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (this “Agreement”) is entered into as
of December 17, 2007 (the “Effective Date”) between PRG-SCHULTZ INTERNATIONAL, INC., a
Georgia corporation (the “Company”), and JAMES B. MCCURRY (“Executive”). This
Agreement amends, restates and supersedes the Employment Agreement among the Company, PRG-SCHULTZ
USA, INC. (“PRG-USA”) and Executive dated as of July 25, 2005.

     The parties agree as follows:

     1. Certain Definitions. Certain words or phrases with initial capital letters not
otherwise defined herein are to have the meanings set forth in paragraph 8.

     2. Employment. The Company shall employ Executive, and Executive accepts employment
with the Company, upon the terms and conditions set forth in this Agreement for the period
beginning on the Effective Date and ending as provided in paragraph 5 (the “Employment
Period”).

     3. Position and Duties.

          (a) During the Employment Period, Executive shall serve as the President, Chairman and Chief
Executive Officer of the Company and is to have the normal duties, responsibilities and authority
of an executive serving in such position, subject to the power of the board of directors of the
Company (the “Company Board”) to provide oversight and direction with respect to such
duties, responsibilities and authority, either generally or in specific instances and consistent
with such position.

          (b) During the Employment Period, the Company Board shall nominate Executive to serve as a
member of the Company Board. Subject, as required, to reelection by the Company’s shareholders,
Executive shall serve as Chairman of the Company Board, with no additional remuneration payable to
Executive for that service. Upon the Date of Termination, Executive shall, at the Company Board’s
request, resign from the Company Board.

          (c) During the Employment Period, Executive acknowledges and agrees that from time to time the
Company Board may assign Executive additional positions with the Company or the Company’s
subsidiaries, or request that Executive serve on the board of directors of the Company’s
subsidiaries, with such title, duties and responsibilities as shall be determined by the Company
Board. Executive agrees to serve in any and all such positions without additional compensation.
Upon the Date of Termination, Executive shall, at the Company Board’s request, resign from all such
positions.

          (d) Executive shall report to the Company Board.

          (e) During the Employment Period, Executive shall devote Executive’s best efforts and
Executive’s full professional time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the Business and affairs of the

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Company, its subsidiaries and affiliates. Executive shall perform Executive’s duties and
responsibilities to the best of Executive’s abilities in a diligent, trustworthy, business-like and
efficient manner. During the Employment Period, Executive shall not serve as a director or a
principal of another company or any charitable or civic organization without the Company Board’s
prior consent, except that the Company Board hereby approves and consents to Executive’s continued
service on the board of directors of Interstate Hotels and Resorts, Inc. (or its successors).

          (f) Executive shall perform Executive’s duties and responsibilities principally in the
Atlanta, Georgia metropolitan area.

          (g) Executive shall acquire and own that number of shares of the Company’s common stock as is
required by any Company Board-approved share ownership program applicable to all of the Company’s
senior executives as may be in effect from time to time. Executive shall maintain this minimum
ownership requirement at all times during the Employment Period in accordance with the provisions
of the share ownership program.

     4. Compensation and Benefits.

          (a) Salary. The Company agrees to pay (directly or through a subsidiary) Executive a
salary during the Employment Period in installments (not less frequently than monthly) based on the
payroll practices as are applicable from time to time with respect to the Company’s senior
executive officers generally. The Company shall set Executive’s initial salary at the rate of
$500,000 per year (“Base Salary”). The Compensation Committee of the Company Board shall
review Executive’s Base Salary from time to time. The Compensation Committee of the Company Board
may, in its sole discretion, increase Executive’s Base Salary, but may decrease Executive’s Base
Salary only to the extent that the Company institutes a salary reduction generally and ratably
applicable to all senior executives of the Company. If the Company modifies the Base Salary as
defined, “Base Salary” in this Agreement is to refer to the modified Base Salary.

          (b) Annual Bonus. During the Employment Period, Executive shall be eligible to
receive an annual bonus, with the annual bonus potential to be between 70% of Base Salary (i.e.,
70% upon achievement of annual “target” performance goals) and a maximum of 140% of Base Salary
(i.e., 140% upon achievement of annual “maximum” performance goals), with the “target” and
“maximum” performance goals and bonus criteria to be defined and approved by the Compensation
Committee of the Company Board in advance for each fiscal year. The Company or its designee shall
pay any such annual bonus earned to Executive in a lump sum not later than the 15th day
of the third month after the end of the fiscal year to which the annual bonus relates.

          (c) Stock Compensation. During the Employment Period, Executive shall be eligible to
receive stock options, restricted stock, restricted stock units, stock appreciation rights,
performance units and/or other equity awards under the Company’s applicable equity plans on such
basis as the Compensation Committee or the Company Board, as the case may be, may determine on a
basis not less favorable than that provided to the Company’s other senior executives. Nothing in
this Agreement shall adversely affect any of the awards granted to

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Executive on September 29, 2006 under the Company’s Amended and Restated 2006 Management
Incentive Plan; all such awards will continue to be governed by the terms and conditions set forth
therein.

          (d) Expense Reimbursement. The Company will reimburse (directly or through a
subsidiary) Executive for all reasonable expenses incurred by Executive during the Employment
Period in the course of performing Executive’s duties under this Agreement in accordance with the
Company’s policies in effect from time to time with respect to travel, entertainment and other
business expenses, and subject to the Company’s requirements applicable generally with respect to
reporting and documentation of such expenses. Such reimbursements will be made promptly after
Executive reports and documents such expenses but in no event will any such reimbursements be made
later than the last day of the year following the year in which Executive incurs the expense.

          (e) Standard Executive Benefits Package. Executive is entitled during the Employment
Period to participate, on the same basis as the Company’s other senior executives, in the Company’s
Standard Executive Benefits Package. A summary of such benefits as in effect on the date of this
Agreement is attached hereto as Exhibit A.

          (f) Vacation; Holidays. Executive is entitled to four (4) weeks of paid vacation,
without carryover for unused vacation, as well as paid holidays in accordance with the Company’s
policies in effect from time to time.

          (g) Indemnification. The Company and Executive previously executed the Company’s
standard form of Indemnification Agreement, in the form attached hereto as Exhibit B, and
it shall remain in full force and effect in accordance with its terms.

          (h) Professional Fees. Promptly following receipt of invoices therefor, the Company
will reimburse (directly or through a subsidiary) Executive for Executive’s reasonable professional
fees and costs (and related disbursements) incurred in connection with Executive’s negotiation and
execution of this Agreement, in an amount not to exceed $15,000.

          (i) Additional Compensation/Benefits. The Compensation Committee of the Company
Board, in its sole discretion, will determine any compensation or benefits to be provided to
Executive during the Employment Period other than as set forth in this Agreement, including,
without limitation, any future grant of stock options or other equity awards.

          (j) Disgorgement of Compensation. If the Company is required to prepare an accounting
restatement due to its material noncompliance, as a result of misconduct, with any financial
reporting requirement under the federal securities laws, to the extent required by law, Executive
will reimburse the Company for (i) any bonus or other incentive-based or equity-based compensation
received by Executive from the Company (including such compensation payable in accordance with this
paragraph 4 and paragraph 6) during the 12-month period following the first public issuance or
filing with the Securities and Exchange Commission (whichever first occurs) of the financial
document embodying that financial reporting requirement; and (ii) any profits realized by Executive
from the sale of the Company’s securities during that 12-month period.

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          (k) Management Incentive Plan. Executive shall be allowed to change the payout
schedule with respect to the payment of his performance units granted under the Company’s Amended
and Restated 2006 Management Incentive Plan to specify a different payment time provided that the
change (i) is permitted by the terms of such plan or as it may be amended, (ii) is consistent with
Section 409A of the Code, (iii) is made by written amendment to the applicable performance unit
agreement no later than December 31, 2007 and (iv) does not accelerate into 2007 any amounts that
would be payable after that time or defer later than 2007 any payments that otherwise would be
payable in 2007.

     5. Employment Period.

          (a) Subject to subparagraph 5(b), the Employment Period begins on the Effective Date and will
continue until, and will end upon, the third anniversary of the Effective Date.

          (b) The Employment Period will end upon the first to occur of any of the following events: (i)
Executive’s death; (ii) the Company’s termination of Executive’s employment on account of
Disability; (iii) the Company’s termination of Executive’s employment for Cause (a “Termination
for Cause”); (iv) the Company’s termination of Executive’s employment without Cause (a
“Termination without Cause”); (v) Executive’s termination of Executive’s employment for
Good Reason (a “Termination for Good Reason”); or (vi) Executive’s termination of
Executive’s employment for any reason other than Good Reason (a “Voluntary Termination”).

          (c) Any termination of Executive’s employment under subparagraph 5(b) must be communicated by
a Notice of Termination delivered by the Company or Executive, as the case may be, to the other
party.

          (d) Executive will be deemed to have waived any right to a Termination for Good Reason based
on the occurrence or existence of a particular event or circumstance constituting Good Reason
unless Executive delivers a Notice of Termination within 90 days from the date Executive first
became aware of the event or circumstance.

     6. Post-Employment Period Payments.

          (a) At the Date of Termination, regardless of the reason for termination of employment,
Executive will be entitled to (i) any Base Salary that has accrued but is unpaid, any annual bonus
that has been earned but is unpaid, any reimbursable expenses that have been incurred but are
unpaid, and any unexpired vacation days that have accrued under the Company’s vacation policy but
are unused, as of the end of the Employment Period and (ii) any plan benefits that by their terms
extend beyond termination of Executive’s employment (but only to the extent provided in any such
benefit plan in which Executive has participated as a Company employee and excluding, except as
hereinafter provided in paragraph 6, any Company severance pay program or policy). Except as
specifically described in this subparagraph 6(a) and in the succeeding subparagraphs of this
paragraph 6 (under the circumstances described in those succeeding subparagraphs), from and after
the Date of Termination, Executive shall cease to have any rights to salary, bonus, expense
reimbursements or other benefits from the Company.

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The Company will pay (directly or through a subsidiary) the amounts set forth in (i) above to
Executive in a lump sum as soon as administratively practicable after Executive’s Date of
Termination; provided, however, that if payment of any such amount at such time would result in a
prohibited acceleration under Section 409A of the Code, then such amount shall be paid at the time
the amount would have been paid under the applicable plan, policy, program or arrangement relating
to such amount absent such prohibited acceleration.

          (b) If the Employment Period ends in accordance with paragraph 5 on account of Executive’s
death, Disability, Voluntary Termination or Termination for Cause, the Company will make no further
payments to Executive except as contemplated in subparagraph 6(a) or as provided in the following
sentence. Subject to paragraphs 11 and 20, if the Employment Period ends in accordance with
paragraph 5 on account of Executive’s death or Disability, Executive shall be entitled to a lump
sum payment on the first business day that occurs following thirty (30) days after the Date of
Termination in an amount equal to Executive’s Average Annual Compensation (as defined below), if
the Date of Termination on account of Executive’s death or Disability occurs before all stock
options, restricted stock, restricted stock units, stock appreciation rights, performance units or
other equity awards that have been first granted to Executive after the Effective Date are not all
fully vested and nonforfeitable (not counting as a forfeiture for this purpose any stated
expiration date for the awards); in other words, if Executive dies or incurs a Disability before
all such awards that have been first granted to Executive after the Effective Date are not all
fully vested and nonforfeitable, Executive shall be entitled to the lump sum payment described
herein.

          (c) Subject to subparagraph (2) and paragraphs 11 and 20, if the Employment Period ends in
accordance with paragraph 5 on account of a Termination without Cause or a Termination for Good
Reason, Executive shall be entitled to the following:

	 	(1)	 	a lump sum payment on the first business day that occurs
following thirty (30) days after the Date of Termination in an amount equal to
two (2) times Executive’s Average Annual Compensation (for purposes hereof,
“Average Annual Compensation” means (x) the average of Executive’s Base
Salary in effect for the final two fiscal years in the Employment Period
(including the fiscal year in which the Date of Termination occurs), plus (y),
the average of the actual annual bonuses paid or payable in respect of the two
(2) full fiscal years immediately preceding the fiscal year in which the Date
of Termination occurs); and
	 
	 	(2)	 	continued participation in the Company’s medical and dental
plans, on the same basis (including cost) as active employees participate in
such plans, until the earlier of (i) Executive’s eligibility for any such
coverage under another employer’s or any other medical or dental insurance
plans sponsored by a subsequent employer of Executive or (ii) the second
anniversary of the Date of Termination; except that in the event that
participation in any such plan is barred or would adversely affect the tax
status of the plan pursuant to which the coverage is provided, the Company
shall pay Executive on a monthly basis an amount that, following withholding
for the application or imposition of any income or employment taxes, is equal
to the amount of any premiums

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	 	 	 	paid by Executive to obtain benefits (for Executive and his dependents)
equivalent to the benefits he is entitled to receive under the Company’s benefit
plans.

          (d) The Company shall make no payments in accordance with subparagraphs 6(c) or (c) if
Executive or Executive’s legal representative declines to sign and return a Release Agreement or
revokes the Release Agreement within the time provided in the Release Agreement. Executive or
Executive’s legal representative must sign and return the Release Agreement for the applicable
revocation period to expire and the Release to be effective before the 30th day
following the Date of Termination. Notwithstanding the foregoing, nothing in the Release Agreement
will require Executive to release any vested claims or rights he has against the Company, or
Company’s obligations to Executive, arising out of or relating to any vested employee benefits,
including vested equity awards, to which Executive is entitled and that exist prior to the signing
of the Release Agreement. This limitation in the Release Agreement includes, but is not limited
to, Executive’s vested rights regarding stock options, restricted stock units, stock appreciation
rights, shares of stock previously awarded to Executive, equity incentives, 401(k) retirement plan
or other benefits, including without limitation health, medical, life, disability and other
insurance plans or programs or fringe benefits.

          (e) Executive is not required to mitigate the amount of any payment or benefit provided for in
this Agreement by seeking other employment or otherwise, nor will any profits, income, earnings or
other benefits from any source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of Executive hereunder or otherwise.

     7. Competitive Activity; Confidentiality; Non-solicitation.

          (a) Acknowledgements and Agreements. Executive acknowledges and agrees that in the
performance of Executive’s duties to the Company during the Employment Period, Executive will be
brought into frequent contact, either in person, by telephone or through the mails, with the
Company’s existing and potential customers and employees. Executive also agrees that any Trade
Secrets and Confidential Information of the Company gained by Executive during Executive’s
association with the Company have been developed by the Company through substantial expenditures of
time, effort and money and constitute the Company’s valuable and unique property. Executive
further understands and agrees that the foregoing makes it necessary, for the protection of the
Business, that Executive not compete with the Company during the Employment Period and not compete
with the Company for a reasonable period thereafter, as further provided in the following
subparagraphs.

          (b) Confidentiality. During and for a period of five (5) years after the Employment
Period, Executive shall treat as confidential and shall not, without the Company’s prior written
approval, use (other than in the performance of Executive’s designated duties for the Company) or
disclose any Trade Secrets or Confidential Information; provided, however, that Executive’s
obligations hereunder with respect to Trade Secrets shall continue for so long as such information
and materials remain Trade Secrets under applicable law.

          (c) Records. All records, notes, files, recordings, tapes, disks, memoranda, reports,
price lists, client lists, drawings, plans, sketches, documents, equipment, apparatus, and

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like items, and all copies thereof, relating to the Business or any Trade Secrets or
Confidential Information that may be prepared by Executive or that may be disclosed to or that may
come into the possession of Executive during the Employment Period, are to be and remain the
Company’s sole and exclusive property. Executive shall promptly deliver to the Company the
originals and all copies of any of the foregoing that are in Executive’s possession, custody or
control, at any time upon request from the Company.

          (d) Executive Inventions.

               (i) All Works are to be the Company’s sole and absolute property, including all patent,
copyright, trade secret, or other rights in respect thereof. Executive shall assign to Company all
right, title, and interest in and to any and all Works, including all worldwide copyrights, patent
rights, and all trade secret information embodied therein, in all media and including all rights to
create derivative works thereof. Executive waives any and all rights Executive may have in any
Works, including but not limited to the right to acknowledgement as author or moral rights.
Executive shall not use or include in Works any patented, copyrighted, restricted or protected
code, specifications, concepts, or trade secrets of any third party or any other information that
Executive would be prohibited from using by any confidentiality, non-disclosure or other agreement
with any third party. Executive shall fully and promptly disclose in writing to the Company any
such Works as such Works may arise from time to time.

               (ii) Executive shall, without charge to the Company other than for reimbursement of
Executive’s reasonable out-of-pocket expenses, execute and deliver all such further documents and
instruments, including applications for patents and copyrights, and perform such acts, at any time
during or after the term of this Agreement as may be necessary or desirable, to obtain, maintain,
and defend patents, copyrights, or other proprietary rights in respect of the Works or to vest
title to the Works in the Company, its successors, assigns, or designees. Without limiting the
generality of the foregoing, Executive shall give all lawful testimony, during or after the term of
Executive’s employment, that may be required in connection with any proceedings involving any Works
so assigned by Executive. Executive shall keep and maintain adequate and complete records (in the
form of notes, laboratory notebooks, sketches, drawings, optical drives, hard drives and as may
otherwise be specified by the Company) of all inventions and original works of authorship made by
Executive (solely or jointly with others) in the course of employment with Company, with the
Company’s time, on the Company’s premises, or using the Company’s resources or equipment, which
records are to be available to and remain the Company’s sole property at all times.

          (e) Cooperation. Executive shall cooperate at all times to the extent and in the
manner requested by the Company and at the Company’s expense, in the prosecution or defense of any
claims, litigation or other proceeding involving the Works, the Company’s property or the Trade
Secrets or Confidential Information. Executive shall comply with regulations, policies, and
procedures established by the Company, including, without limitation, all regulations, policies,
and procedures established for the purpose of protecting Trade Secrets and Confidential
Information.

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          (f) Agreement Not to Compete. During the Employment Period and for a period of two
years from the Date of Termination, regardless of the reason for termination of employment,
Executive shall not, directly or indirectly, on his own behalf or on behalf of others, provide
services which are the same as or substantially similar to Executive’s services for the Company (as
described in paragraph 3) on behalf of a Competing Business; provided, however, that this agreement
not to compete shall apply only in the Restricted Territory.

          (g) Agreement Not to Solicit Customers. During the Employment Period and for a period
of two years from the Date of Termination, regardless of the reason for termination of employment,
Executive shall not, without the Company’s prior written consent, directly or indirectly, on
Executive’s own behalf or in the service or on behalf of others, (i) solicit or attempt to divert
or appropriate to a Competing Business any customer or actual prospect of the Company with whom
Executive dealt on the Company’s behalf at any time during the 12-month period immediately
preceding the Date of Termination, or (ii) solicit or attempt to divert or appropriate to a
Competing Business, any customer or actual prospect of the Company with whom an employee who
reports directly to Executive dealt on the Company’s behalf at any time during the 12-month period
immediately preceding the Date of Termination.

          (h) Agreement Not to Solicit Employees. During the Employment Period and for a period
of two years from the Date of Termination, regardless of the reason for termination of employment,
Executive shall not, without the Company’s prior consent, directly or indirectly, on Executive’s
own behalf or in the service or on behalf of others, solicit, divert or recruit any Company
employee to leave such employment, whether such employment is by written contract or at will.

          (i) Remedies.

               (i) By virtue of the duties and responsibilities attendant to Executive’s employment by the
Company and the special knowledge of the Company’s affairs, Business, clients, and operations that
Executive has and will have as a consequence of Executive’s employment, Executive acknowledges and
agrees that irreparable loss and damage will be suffered by the Company if Executive should breach
or violate any of the covenants and agreements contained in this paragraph 7. Therefore, in
addition to any other remedies available to the Company, Executive acknowledges and agrees that the
Company shall be entitled to an injunction to prevent a breach or contemplated breach by Executive
of any of the covenants or agreements contained in this paragraph 7.

               (ii) The existence of any claim, demand, action or cause of action of Executive against the
Company, whether predicated upon this Agreement or otherwise, is not to constitute a defense to the
Company’s enforcement of any of the covenants or agreements contained in paragraph 7. The
Company’s rights under this Agreement are in addition to, and not in lieu of, all other rights the
Company may have at law or in equity to protect its confidential information, trade secrets and
other proprietary interests.

          (j) Definition of “Company”. For purposes of this paragraph 7 and paragraphs 8(a) and
(d), the “Company” includes any direct and indirect subsidiary, parent, affiliate, or related
company of the Company.

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     8. Definitions.

          (a) “Business” means, with respect to the Company, (i) audit services (A) to identify
and recover lost profits or, in the case of governmental agencies or programs, overpayments or
erroneous or wrongful payments or reimbursements, from any source and/or (B) to identify expense
containment opportunities; and/or (ii) development and use of technology to provide such services;
and/or (iii) consulting services related to (i) and/or (ii).

          (b) “Cause” means, as determined by the Company Board in good faith: (i) a material
breach of the duties and responsibilities of Executive or any written policies or directives of the
Company (other than as a result of Disability) that is (A) willful or involves gross negligence,
and (B) not remedied within 30 days after receipt of written notice from the Company that
specifically identifies the manner in which such breach has occurred; (ii) Executive’s commission
of any felony that causes damage to the property, business or reputation of the Company; (iii)
Executive’s engagement in a fraudulent or dishonest act; (iv) Executive’s engagement in habitual
insobriety or the use of illegal drugs or substances; (v) Executive’s breach of Executive’s
fiduciary duties to the Company; (vi) Executive’s willful failure to cooperate, or willful failure
to cause and direct the persons under Executive’s management or direction, or employed by, or
consultants or agents to, the Company to cooperate, with all corporate investigations or
independent investigations by the Company Board, all governmental investigations of the Company and
all orders involving Executive or the Company entered by a court of competent jurisdiction; (vii)
Executive’s violation in any material respect of the Company’s Code of Conduct or the Company’s
Code of Ethics for Senior Financial Officers or any successor codes; or (viii) Executive’s
engagement in activities prohibited by paragraph 7. Notwithstanding the foregoing, however,
Executive shall not be deemed to have been terminated for Cause unless and until there shall have
been delivered to Executive (i) a letter from the Company Board finding that, in the good faith
opinion of the Company Board, Executive was guilty of the conduct set forth in any of the clauses
of the preceding sentence and specifying the particulars thereof in detail and (ii) a copy of a
resolution duly adopted by the affirmative vote of the members of the Company Board who are not
officers of the Company at a meeting of the Company Board called and held for such purpose (after
reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel,
to be heard before the Company Board), finding, in the good faith opinion of the Company Board,
that Executive was guilty of such conduct and specifying the particulars thereof in detail.

          (c) “Change in Control” means the occurrence of any of the following events: (i) the
acquisition of beneficial ownership of a majority of the outstanding voting stock of the Company by
any person (other than the Company, a subsidiary of the Company or any person that, on July 25,
2005, beneficially owned not less than four million shares of the common stock of the Company) or
any two or more persons (other than persons that, on July 25, 2005, beneficially owned not less
than four million shares of the common stock of the Company) acting as a partnership, limited
partnership, syndicate or other group, entity or association acting in concert for the purpose of
voting, acquiring, holding, or disposing of voting stock of the Company; (ii) at any time during
any period of two consecutive years (not including any period prior to July 25, 2005), individuals
who at the beginning of such period constituted the Company Board, and any new directors, whose
election by the Company Board or nomination for election by the holders of the voting stock of the
Company was approved by a vote of at least two-thirds

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of the directors of the Company then still in office who either were directors of the Company
at the beginning of the period or whose election or nomination for election was previously so
approved (the “Current Directors”), cease for any reason to constitute a majority thereof,
(iii) a merger or a consolidation of the Company with or into another corporation or entity, other
than (A) a merger or consolidation with a subsidiary of the Company, or (B) a merger or
consolidation in which the holders of voting stock of the Company immediately before the merger
hold as a class immediately after the merger at least a majority of all outstanding voting power of
the surviving or resulting corporation or its parent, the Current Directors constitute at least a
majority of the board of directors of such surviving or resulting corporation or its parent, and
such surviving or resulting corporation or its parent expressly assume and agree to perform the
obligations of the Company under this Agreement; (iv) a statutory exchange of shares of one or more
classes or series of outstanding voting stock of the Company for cash, securities, or other
property, other than an exchange in which the holders of voting stock of the Company immediately
before the exchange hold as a class immediately after the exchange at least a majority of all
outstanding voting power of the entity with which the Company stock is being exchanged, the Current
Directors constitute at least a majority of the board of directors of such entity, and such entity
expressly assumes and agrees to perform the obligations of the Company under this Agreement; (v)
the sale or other disposition of all or substantially all of the assets of the Company, in one
transaction or a series of transactions, other than a sale or disposition in which the holders of
voting stock of the Company immediately before the sale or disposition hold as a class immediately
after the exchange at least a majority of all outstanding voting power of the entity to which the
assets of the Company are being sold, the Current Directors constitute at least a majority of the
board of directors of such entity, and such entity expressly assumes and agrees to perform the
obligations of the Company under this Agreement; or (vi) the liquidation or dissolution of the
Company.

          (d) “Competing Business” means any person or entity other than the Company engaging in
the Business, but does not include discreet subdivisions of an entity which do not engage in the
Business.

          (e) “Confidential Information” means any confidential or proprietary information
relating to the Company or its customers that is not a Trade Secret, except for information that
(i) was generally known prior to the Effective Date; (ii) was in Executive’s possession prior to
the Effective Date (other than information supplied to him by the Company or its agents), to the
extent Executive has written record of possessing such information prior to the Effective Date;
(iii) becomes generally known through no act or omission by Executive; (iv) is supplied to
Executive subsequent to the Effective Date by a third party not under an obligation of
confidentiality with respect to such information; (v) was independently developed by Executive
without reference to or knowledge of any information, data, or disclosures received from the
Company; or (vi) is required to be publicly disclosed pursuant to an order of a court or other
governmental agency of competent jurisdiction.

          (f) “Date of Termination” means (i) if Executive’s employment is terminated by the
Company for Disability, 30 days after the Company gives Notice of Termination to Executive
(provided that Executive has not returned to the performance of Executive’s duties on a full-time
basis during this 30-day period), (ii) if Executive’s employment is terminated by Executive for
Good Reason, the date specified in the Notice of Termination, and (iii) if

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Executive’s employment is terminated by the Company for any other reason, the date on which a
Notice of Termination is given.

          (g) “Disability” means Executive’s inability or expected inability (or a combination
of both) to perform the services required of Executive under this Agreement due to illness,
accident or any other physical or mental incapacity for an aggregate of 90 days within any period
of 180 consecutive days during which this Agreement is in effect, as agreed by the parties or as
determined in accordance with the next sentence. If there is a dispute between Executive and the
Company in the determination of Disability as to whether an illness, accident or any other physical
or mental incapacity exists or existed during the applicable period, then such dispute is to be
decided by a medical doctor selected by the Company and a medical doctor selected by Executive and
Executive’s legal representative (or, in the event that these doctors fail to agree, then in the
majority opinion of these doctors and a third medical doctor chosen by these doctors). Each party
shall pay all costs associated with engaging the medical doctor selected by such party and the
parties shall each pay one-half of the costs associated with engaging any third medical doctor.

          (h) “Good Reason” means, subject to the next sentence, any of the following: (i) the
Company’s demotion of Executive to a lesser position than the position that he is serving in prior
to the demotion; (ii) the assignment to Executive of duties materially inconsistent with his
position or material reduction of Executive’s duties, responsibilities or authority (as described
in paragraph 3), in either case without Executive’s prior written consent; except that a change in
the foregoing that results solely from the Company ceasing to be a publicly traded entity or from
the Company becoming a wholly owned subsidiary of a publicly traded entity will not, in either
event and standing alone, constitute grounds for “Good Reason”; (iii) any decrease in Executive’s
Base Salary or annual bonus or benefits under the Standard Executive Benefits Package, except to
the extent that the Company has instituted a salary, bonuses or benefits reduction generally and
ratably applicable to all senior executives of the Company and PRG-USA and so long as such
reduction does not occur in contemplation of, or as the result of, a Change in Control; (iv) unless
agreed to by Executive, the relocation of Executive’s principal place of business outside of the
metropolitan area of Atlanta, Georgia; (v) the Company Board’s failure to nominate Executive to
serve as a member of the Company Board, the failure of the shareholders to re-elect Executive to
serve as a member of the Company Board or the removal of Executive from the Company Board other
than for Cause (after which removal for Cause this (v) shall no longer be effective); (vi) the
failure by the Company, without Executive’s consent, to pay to Executive any portion of Executive’s
Base Salary, annual bonus or other benefits within ten business days after the date the same is
due, in each case not remedied by the Company within 30 days after receipt by the Company of
written notification from Executive to the Company that specifically identifies the Good Reason or
(vii) the failure of the Company to offer to renew, extend or replace this Agreement at least six
(6) months before the third anniversary of the Effective Date, on terms that are no less favorable
in the aggregate to Executive, unless the Employment Period has previously been terminated pursuant
to this Agreement before such time. During the one-year period following a Change in Control,
however, (i) no Good Reason for termination can occur under this Agreement because of any change in
Executive’s title or reporting relationship as a consequence of the Change in Control and any
determination of Good Reason, if the determination relates to Executive’s title or reporting
relationship, is to be made by reference to Executive’s title or reporting relationship that exists
as a consequence of the

11

 

Change in Control; and (ii) without limiting the occurrence of Good Reason as defined in the
preceding sentence other than because of a change in, or by reference to, Executive’s title or
reporting relationship as specified in clause (i) of this sentence, Good Reason for termination can
also occur under this Agreement upon: (A) the failure by the Company to continue to provide
Executive with benefits at least as favorable in the aggregate to those enjoyed by Executive under
the Standard Executive Benefits Package in which Executive was participating at the time of the
Change in Control, (B) the taking of any action by the Company that would directly or indirectly
materially reduce any such benefits or deprive Executive of any material fringe benefit (including
equity-based benefits) enjoyed at the time of the Change in Control, or (C) the Company’s failure
to provide Executive with the number of paid vacation days to which Executive is entitled at the
time of the Change in Control, excluding in subclauses (A) — (C), any failure or action by the
Company that is not taken in bad faith and that is remedied by the Company promptly after receipt
of notice thereof from Executive.

          (i) “Notice of Termination” means a written notice that indicates those specific
termination provisions in this Agreement relied upon and that sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Executive’s employment under
the provision so indicated. For purposes of this Agreement, no purported termination by either
party is to be effective without a Notice of Termination.

          (j) “Release Agreement” means an agreement, substantially in the form attached hereto
as Exhibit C, approved by the Company, pursuant to which Executive releases all current or
future claims, known or unknown, arising on or before the date of the release against the Company
or any direct and indirect subsidiary, parent, affiliated, or related company of the Company, or
their respective officers and directors, except as described in subparagraph 6(d) above.

          (k) “Restricted Territory” means, and is limited to, the geographic area described in
Exhibit D. Executive acknowledges and agrees that these are areas in which the Company
does Business at the time of execution of this Agreement, and in which Executive will have
responsibility, at a minimum, on behalf of the Company.

          (l) “Standard Executive Benefits Package” means those benefits (including retirement,
insurance and other welfare benefits, but excluding, except as provided in paragraph 6, any
severance pay program or policy of the Company) for which substantially all of the Company’s senior
executives are from time to time generally eligible, as determined from time to time by the
Compensation Committee of the Company Board.

          (m) “Trade Secrets” means information of the Company or its subsidiaries without
regard to form, including, but not limited to, technical or non-technical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing, a design, a process,
financial data, financial plans, product plans, or a list of actual or potential customers or
suppliers that is not commonly known by or available to the public and which information: (a)
derives economic value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic value from its
disclosure or use, and (b) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.

12

 

          (n) “Works” means any work of authorship, code, invention, improvement, discovery,
process, formula, code algorithm, program, system, method, visual work, or work product, whether or
not patentable or eligible for copyright, and in whatever form or medium and all derivative works
thereof, that may be created, made, developed, or conceived by Executive in the course of
employment with the Company, with the Company’s time, on the Company’s premises, using the
Company’s resources or equipment, or relating to the Business.

     9. Executive Representations. Executive represents to the Company that (a) the
execution, delivery and performance of this Agreement by Executive does not and will not conflict
with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment
or decree to which Executive is a party or by which Executive is bound, (b) Executive is not a
party to or bound by any employment agreement, noncompete agreement or confidentiality agreement
with any other person or entity and (c) upon the execution and delivery of this Agreement by the
Company, this Agreement will be the valid and binding obligation of Executive, enforceable in
accordance with its terms.

     10. Withholding of Taxes. The Company shall withhold from any amounts payable under
this Agreement all federal, state, city or other taxes that the Company is required to withhold
under any applicable law, regulation or ruling.

     11. Deferred Compensation Omnibus Provision. Notwithstanding any other provision of
this Agreement, it is intended that any payment or benefit which is provided pursuant to or in
connection with this Agreement which is considered to be deferred compensation subject to Section
409A of the Code shall be provided and paid in a manner, and at such time, including without
limitation payment and provision of benefits only in connection with the occurrence of a
permissible payment event contained in Section 409A (e.g., death, disability, separation from
service from the Company and its subsidiaries as defined for purposes of Section 409A of the Code)
and in such form as complies with the applicable requirements of Section 409A of the Code, to avoid
the unfavorable tax consequences provided therein for noncompliance. For purposes of this
Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a
series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code.
Notwithstanding any other provision of this Agreement, if the Executive is a key employee (as
defined in Section 416(i) of the Code without regard to paragraph 5 thereof) and any of the
Company’s stock is publicly traded on an established securities market, then payment of any amount
or provision of any benefit under this Agreement which is considered deferred compensation subject
to Section 409A of the Code shall be deferred for six (6) months after “separation from service” 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 in installments or periodically during the 409A Deferral
Period, the payments which would otherwise have been made in the 409A Deferral Period shall be
accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of the
payments shall be made as otherwise scheduled. In the event benefits are required to be deferred,
any such benefit may be provided during the 409A Deferral Period at Executive’s expense, with
Executive having a right to reimbursement from the Company once the 409A Deferral Period ends, and
the balance of the benefits shall be provided as otherwise scheduled. For purposes of this
Agreement, termination of employment shall mean a “separation from service” from the Company and
all related subsidiaries and entities within the meaning of Section 409A of the Code where it is
reasonably

13

 

anticipated that no further services will be performed after such date or that the level of
bona fide services Executive will perform after that date (whether as an employee or independent
contractor) would permanently decrease to no more than twenty (20) percent of the average level of
bona fide services performed by Executive over the immediately preceding thirty-six (36)-month
period.

     12. Successors and Assigns. This Agreement is to bind and inure to the benefit of and
be enforceable by Executive, the Company and their respective heirs, executors, personal
representatives, successors and assigns, except that neither party may assign any rights or
delegate any obligations hereunder without the prior written consent of the other party. Executive
hereby consents to the assignment by the Company of all of its rights and obligations under this
Agreement to any successor to the Company by merger or consolidation or purchase of all or
substantially all of the Company’s assets, provided that the transferee or successor assumes the
obligations of the Company under this Agreement.

     13. Survival. Subject to any limits on applicability contained therein, paragraph 7
will survive and continue in full force in accordance with its terms notwithstanding any
termination of the Employment Period.

     14. Choice of Law. This Agreement is to be governed by the internal law, and not the
laws of conflicts, of the State of Georgia.

     15. Severability. Whenever possible, each provision of this Agreement is to be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, that invalidity, illegality or unenforceability is not
to affect any other provision or any other jurisdiction, and this Agreement is to be reformed,
construed and enforced in the jurisdiction as if the invalid, illegal or unenforceable provision
had never been contained herein.

     16. Notices. Any notice provided for in this Agreement is to be in writing and is to
be either personally delivered, sent by reputable overnight carrier or mailed by first class mail,
return receipt requested, to the recipient at the address indicated as follows:

          Notices to Executive:

James B. McCurry

45 Finch Forest Trail, N.W.

Atlanta, Georgia 30327

With Notice also to his Counsel:

Rogge E. Dunn, Esq.

Clouse Dunn Khoshbin LLP

1201 Elm Street, Suite 5200

Dallas, Texas 35270-2142

Fax: (214) 220-3833

14

 

          Notices to the Company:

PRG Schultz International, Inc.

600 Galleria Parkway

Suite 100

Atlanta, Georgia 30339

Attn: General Counsel

or any other address or to the attention of any other person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement is to be
deemed to have been given when so delivered, sent or mailed.

     17. Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of the Company and Executive, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement is to affect the validity, binding
effect or enforceability of this Agreement.

     18. Complete Agreement. This Agreement embodies the complete agreement and
understanding between the parties with respect to the subject matter hereof and effective as of its
date supersedes and preempts any prior understandings, agreements or representations by or between
the parties, written or oral, that may have related to the subject matter hereof in any way, except
for the Company’s Amended and Restated 2006 Management Incentive Plan and any awards granted
thereunder which are not being preempted.

     19. Counterparts. This Agreement may be executed in separate counterparts, each of
which are to be deemed to be an original and both of which taken together are to constitute one and
the same agreement.

     20. Mandatory Reduction of Payments in Certain Events. Anything in this Agreement to
the contrary notwithstanding, in the event it shall be determined that any payment or distribution
by the Company to or for the benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject
to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, then, prior to the making
of any Payment to Executive, a calculation shall be made comparing (i) the net benefit to Executive
of the Payment after payment of the Excise Tax to (ii) the net benefit to Executive if the Payment
had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount
calculated under (i) above is less than the amount calculated under (ii) above, then the Payment
shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced
Amount”). In that event, cash payments shall be modified or reduced first and then any other
benefits. The determination of whether an Excise Tax would be imposed, the amount of such Excise
Tax, and the calculation of the amounts referred to in clauses (i) and (ii) of the foregoing
sentence shall be made by an independent accounting firm selected by Company and reasonably
acceptable to Executive, at the Company’s expense (the “Accounting Firm”), and the Accounting Firm
shall provide detailed supporting calculations. Any determination by the Accounting Firm shall be
binding upon the Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Payments which

15

 

Executive was entitled to, but did not receive pursuant to this Section 20, could have been
made without the imposition of the Excise Tax (“Underpayment”). In such event, the Accounting Firm
as soon as administratively practicable shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of
the Executive.

[ SIGNATURE PAGE TO FOLLOW ]

16

 

     The parties are signing this Agreement as of the date stated in the introductory clause.

	 	 	 	 	 
	 	PRG-SCHULTZ INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Victor A. Allums
 	 
	 	 	Name:  	Victor A. Allums 	 
	 	 	Title:  	Senior Vice President & General
 Counsel 	 
	 
	 	 	 
	 	                                                  /s/ James B. McCurry
 	 
	 	James B. McCurry 	 
	 	 	 
	 

17EX-10.1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT dated as of this 17th day of December, 2007 between Veramark
Technologies, Inc., a Delaware corporation with its principal office located at 3750 Monroe Avenue,
Pittsford, New York 14534 (the “Company”), and Anthony C. Mazzullo, an individual residing at [*],
Fairport, New York 14450 (“Executive”).

     WHEREAS, the Company desires to employ Executive as President and Chief Executive Officer of
the Company upon the terms and conditions hereinafter set forth, and

     WHEREAS, Executive desires to serve in such capacity upon the terms and conditions hereinafter
set forth;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
intending to be bound, the parties agree as follows:

1. Employment — Duties.

     (a) The Company hereby agrees to employ Executive as President and Chief Executive of the
Company, and Executive hereby accepts such employment by the Company. Executive shall report to,
and be under the direction of the Company’s Board of Directors (the “Board”) or a duly authorized
committee of the Board, and shall have such duties as may be specified by the Board that are
consistent with Executive’s positions as President and Chief Executive Officer. Executive’s duties
may be changed from time to time by the Board; provided, however, that Executive’s position,
authority, duties and responsibilities shall be no less senior and executive in nature than those
customarily performed by a president and chief executive officer. Executive shall perform his
duties for the Company principally at the offices of the Company, provided, however, that Executive
acknowledges and agrees that travel in furtherance of the Company’s business is required in
connection with the performance of Executive’s duties hereunder. Executive agrees to devote his
best efforts and all his business time, skills and attention exclusively to the business and the
best interests of the Company. During the term of this Employment Agreement, Executive shall not
engage in any other business activity; provided, however, that Executive may continue to manage the
current real estate rental properties owned by him in Monroe County, New York, so long as doing so
does not materially interfere in the reasonable opinion of the Board with the rendering by him of
his services to the Company as contemplated in this Agreement.

     During the term of this Employment Agreement, Executive shall be nominated for election as a
director commencing with the first annual meeting of stockholders to be held following the
Commencement Date and at each annual meeting of stockholders following thereafter.

 
 

[*] Denotes expurgated information

- 1 -

 

2. Term.

     (a) Unless sooner terminated as provided in Section 5 of this Employment Agreement, the
initial term of this Employment Agreement (the “Initial Term”) shall commence on January 1, 2008
(“Commencement Date”) and end on December 31, 2010. On January 1, 2009, and each anniversary
thereafter, the term of this Employment Agreement will be automatically extended beyond the Initial
Term for additional successive one-year periods unless either party notifies the other in writing
not less than ninety (90) days prior to each anniversary of the Commencement Date that this
Employment Agreement will not be extended.

     (b) The termination of this Employment Agreement, however arising, shall not affect any of the
provisions hereof as are expressed to operate or have effect after the termination of Executive’s
employment.

3. Compensation.

     (a) Base Salary. From the Commencement Date, as compensation for Executive’s
services, the Company shall pay to Executive a salary at the rate of Two Hundred Twenty-five
Thousand Dollars ($225,000)) per annum (the “Salary”). The Salary shall be reviewed six (6) months
from the Commencements Date (on or about July 1, 2008), twelve (12) months from the Commencement
Date (on or about January 1, 2009) and annually thereafter, and may be increased (but not
decreased) from period to period, based on reviews of Executive’s performance and as determined by
the Board of Directors in its sole discretion. Any increase authorized by the Board shall be
effective as of a date determined by the Board in its sole discretion.

     The Salary shall be payable in accordance with the executive payroll schedule in effect from
time to time at the Company (currently on a bi-weekly basis), but in no event less frequently than
monthly.

     (b) Bonus.

          (i) Annual Performance Bonus. As additional compensation for Executive’s services
hereunder, Executive shall be eligible for an annual performance bonus (the “Performance Bonus”).
Annually, and prior to the commencement of each calendar year, the Board or an authorized committee
shall establish annual targets and objectives (the “Targets”), including total revenues and
operating income performance targets (the “Financial Targets”) for Executive; provided, however,
that the Targets for calendar 2008 shall be established on or before March 1, 2008. If the Targets
are achieved for the applicable calendar year, Executive shall be entitled to a Performance Bonus
payment of Sixty Thousand Dollars ($60,000). Should some, but less than all, of the Targets be
achieved, Executive shall be entitled to a Performance Bonus payment established by the Board but
in no event less than $20,000. In the event that both of the Financial Targets are exceeded,
Executive shall receive an additional Performance Bonus payment of Twenty Thousand Dollars
($20,000)

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for each ten percent (10%) that both the Targets are exceeded up to a maximum additional
Performance Bonus payment of Sixty Thousand Dollars ($60,000) [at one hundred thirty percent (130%)
of both of the Targets], for a maximum Performance Bonus award in any given calendar year of One
Hundred Twenty Thousand Dollars ($120,000). The calculation of the Performance Bonus shall be
determined by the Board in its sole discretion within thirty (30) days of the completion of the
Company annual audit, which determination shall be final and binding, and paid within thirty (30)
days of such calculation.

          (ii) Restricted Stock Award. Executive shall be eligible for an award of Two Hundred
Thousand (200,000) restricted shares (“Restricted Shares”) of the Common Stock of the Company
subject to the terms and conditions of the Company’s 1998 Long-Term Incentive Plan (the “Plan”).
The Restricted Shares are performance based and Executive shall be deemed to earn the such shares
ratably over a three (3) year period upon the achievement of total revenue, operating profit, stock
price and product development goals which shall be determined by the Board on or before March 31,
2008. Should Executive earn any of the Restricted Shares based on the goals established, the
Company, at the request of Executive, agrees to purchase from the Executive up to fifty percent
(50%) of the Restricted Shares earned in any calendar year. Any such purchase shall be at the
option of the Executive upon written notice to the Company from the Executive within one year of
the date such Restricted Shares are deemed earned. The purchase price for each such Restricted
Shares shall be the fair market value of the Company’s common stock on the date such Restricted
Shares were deemed earned, as determined by the Board, consistent with prior practice. Payment for
such Restricted Shares shall be made within fifteen (15) days of receipt of the aforementioned
notice and receipt of the certificate(s) representing the Restricted Shares duly endorsed by the
Executive.

4. Benefit Plans, Vacations, Expenses.

     (a) During the term of this Employment Agreement, Executive shall be eligible to participate
in all medical, disability, bonus, stock option, 401(k) or other benefit plans or arrangements
generally made available by the Company to its executive employees, and other perquisites generally
afforded from time to time to other executive employees of the Company. Without limiting the
foregoing:

          (i) Company shall reimburse Executive for the payment by Executive of monthly dues in a
country club and in a health club of Executive’s choosing up to an annual cost of Twelve Thousand
Dollars ($12,000); and

          (ii) Executive shall be entitled to receive four (4) weeks of paid vacation in each full
calendar year of this Employment Agreement.

          (iii) The Company shall reimburse Executive for reasonable expenses incurred by Executive in
connection with performing services hereunder for the Company in accordance with the Company’s
policies in effect from time to time for all executive officers of the Company; provided that such
expenses are necessary and appropriate to Executive’s employment hereunder; and further provided
that Executive submits to the Company written, itemized expense accounts and such additional
substantiation and justification as the Company

- 3 -

 

may reasonably request.

5. Termination.

     (a) Death. Executive’s employment hereunder shall terminate upon Executive’s death.

     (b) Cause. The Company reserves the right to terminate this Employment Agreement and
Executive’s employment with the Company for Cause. As used herein, “Cause” means:

          (i) Executive’s conviction for, or guilty plea or plea of nolo contendre with respect to, any
felony or any lesser crime involving moral turpitude, theft or fraud;

          (ii) Executive’s misconduct or gross negligence which has resulted or is likely to result in
material damage to the Company or its reputation and which is not cured within twenty (20) days
after written notice specifying such misconduct or gross negligence, provided that Executive shall
only be entitled to one (1) notice under this provision;

          (iii) Executive’s act of fraud, dishonesty, or theft in respect to the Company;

          (iv) Executive’s failure or refusal to perform any of his material duties or to carry out the
lawful instructions of the Board or the President, which is not cured within thirty (30) days after
written notice specifying the failure or refusal, provided that Executive shall only be entitled to
one (1) notice under this provision;

          (v) Executive’s serious misconduct, unrelated to the Company’s business and affairs, which, in
the reasonable opinion of the Board, will bring Executive or the Company into disrepute or
seriously and prejudicially affect the interests of the Company, or

          (vi) Executive’s breach of any covenant set forth in Section 7 of this Employment Agreement.

     Executive shall not be deemed to have been terminated for Cause unless and until there shall
have been delivered to Executive a Notice of Termination (as hereinafter defined in Section 5(e)
below) specifying the particulars thereof. Without limiting the foregoing, the Executive shall be
afforded the opportunity to meet with the Board or an authorized committee of the Board to discuss
and review the matters contained in the Notice of Termination.

     (c) Disability. The Company reserves the right to terminate this Employment Agreement
and Executive’s employment with the Company as a result of Executive’s Disability. As used herein
“Disability” means Executive’s physical or mental disability or illness which renders Executive
unable to perform the essential functions of Executive’s duties in a reasonably satisfactory manner
under this Employment Agreement for a period of six (6) consecutive months or One Hundred Eighty
(180) days within a twelve month (12) period.

- 4 -

 

     (d) Voluntary Termination. Executive and the Company reserve the right to terminate
this Employment Agreement and Executive’s employment with the Company by Voluntary Termination. As
used herein, “Voluntary Termination” shall mean termination by (i) Executive on Executive’s own
initiative or (ii) by the Company on the Company’s own initiative for reasons not specified under
Sections 5(a) through Section 5(c). Each party shall give the other at least ninety (90) days
prior written notice of any Voluntary Termination. If Executive gives a Notice of Termination
pursuant to this Section 5(d), the Company may, at its option, terminate the Employment Agreement
and Executive’s employment with the Company at any time during the 90-day notice period by written
notice to Executive.

     (e) Notice of Termination. Any termination of this Employment Agreement and
Executive’s employment by the Company shall be communicated by written Notice of Termination to
Executive. Any termination for Voluntary Termination by Executive shall be communicated by written
Notice of Termination to the Company. For purposes of this Employment Agreement, a “Notice of
Termination” shall mean a notice that indicates the specific termination provision in this
Employment Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s employment under the
provision so indicated.

     (f) Date of Termination. “Date of Termination” shall mean:

          (i) The date of expiration of the Initial Term or any extension period, unless this Employment
Agreement is extended pursuant to Section 2(a);

          (ii) If this Employment Agreement and Executive’s employment is terminated by his death, the
date of his death;

          (iii) If this Employment Agreement and Executive’s employment is terminated pursuant to
Section 5(b) or 5(c), the date of the Notice of Termination; and

          (iv) If Executive or the Company terminates this Employment Agreement and Executive’s
employment pursuant to 5(d), the last day of the 90-day notice period, unless the Company exercises
its option to terminate the Executive during the 90-day notice period, in which event the Date of
Termination shall be the date specified in the Company’s written notice of its exercise of such
option.

6. Compensation Upon Termination or During Incapacity.

     (a) If this Employment Agreement and Executive’s employment is terminated pursuant to Section
5(a) or by Executive pursuant to Section 5(d), or if this Employment Agreement and Executive’s
employment is terminated pursuant to Section 5(b), the Company shall pay to Executive, or to
Executive’s estate, the Salary payable to the Date of Termination and any accrued and unused
vacation for the year in which the termination occurs, pro rated to the Date of Termination;
provided that if the Company exercises its option under Section 5(d), it will pay Executive the
Salary for the remainder of the ninety-day notice period. In addition, the

- 5 -

 

Company shall maintain Executive’s medical insurance coverage through the Date of Termination.

     (b) During absence from work by reason of incapacity through ill health or injury, the Company
shall pay Executive the Salary for each day of absence until the Date of Termination as a result of
Executive’s Disability.

     (c) If this Employment Agreement and the Executive’s employment is terminated by the Company
pursuant to Section 5(d) and other than in connection with the Company’s exercise of its option to
terminate Executive’s employment during the 90-day notice period in connection with a Voluntary
Termination by Executive, then the Company shall pay to Executive the compensation payable pursuant
to Section 6(a). In addition, and subject to execution and delivery by Executive of a severance
agreement and release in form and substance satisfactory to the Company, (i) the Company shall
continue to pay Executive the Salary at the rate in effect on the Date of Termination for a period
equal to six (6) months from the Date of Termination, or (ii) in the case of such termination
within six (6) months from the effective date of a Change in Control, as that term is hereinafter
defined, the Company shall continue to pay Executive the Salary at the rate in effect on the Date
of Termination, for a period equal to twelve (12) months from the Date of Termination, plus in each
case an amount equal to that amount of the Performance Bonus paid to Executive for the prior
calendar year pro-rated to the Date of Termination. The Company shall continue Executive’s medical
coverage for the period during which it continues to pay the Salary pursuant to this Section 6(c),
unless Executive obtains medical coverage through other employment.

     (d) The provisions of this Section 6 shall be Executive’s sole and exclusive remedy in the
event of termination of this Employment Agreement and Executive’s employment hereunder.

     (e) For purposes of this Agreement, a “change in control” shall be deemed to have occurred if
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or a corporation owned, directly or
indirectly by the stockholders of the Company in substantially the same proportions, becomes after
the Commencement Date the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20% or more of the combined
voting power of the Company’s then outstanding securities; or (ii) the composition of the Board
changes, at any time after December 31, 2008, such that less than a majority of the members of the
Board are individuals who were (i) members of the Board at the beginning of the calendar year then
in effect or (ii) persons whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least three-fourths (3/4) of the directors then still in
office who either were directors at the beginning of the period or whose election or nomination for
election was previously so approved; or (iii) substantially all the assets of the Company are
disposed of by the Company pursuant to a merger, consolidation, partial or complete liquidation, a
sale of assets (including stock of a subsidiary) or otherwise, in a transaction or a series of
transactions whereby the holders of the Company’s common stock prior to the transaction do not
continue to hold at least fifty percent (50%) of the voting stock or similar equity of the Company
or the combined or acquired entity

- 6 -

 

upon the consummation of the transaction, but not including a reincorporation or similar
transaction resulting in a change only in the form of ownership of such assets.

7. Confidentiality and Restrictions.

     (a) Executive hereby recognizes that the value of the Confidential Information, as defined
below, of the Company and the Confidential Information to be disclosed to Executive by the Company
and its affiliates in the course of Executive’s employment with the Company is attributable
substantially to the fact that such Confidential Information has been and continues to be
maintained by the Company, its affiliates, and their respective licensors, suppliers, contractors,
customers, and prospects in the strictest confidentiality and secrecy and is unavailable to others
without the expenditure of substantial time, effort or money. Executive, therefore, covenants and
agrees to keep strictly secret and confidential the Confidential Information in accordance with the
following provisions of this Section 7(a). Executive covenants and agrees that, during the term of
this Employment Agreement, and at all times thereafter, Executive shall safeguard the Confidential
Information, and Executive shall not, directly or indirectly, use or disclose any such Confidential
Information except as required in the course of Executive’s employment with the Company. In
implementation of the foregoing, Executive shall not disclose any of the Confidential Information
to any employee or consultant except to the extent that such disclosure is necessary for the
effective performance of such employee’s or consultant’s responsibilities to the Company. The
obligations undertaken by Executive pursuant to this Section 7(a) shall not apply to any
Confidential Information which hereafter shall become published or otherwise generally available to
the public, except in consequence of a willful act or omission by Executive in contravention of the
obligations hereinabove set forth in this Section 7(a), and such obligations shall, as so limited,
survive expiration or termination of this Employment Agreement. As used in this Section 7,
“Confidential Information” means all information not in the public domain relating to the business
of the Company, its affiliates, and their respective customers, prospects, licensors, suppliers and
contractors, and the designs, products and programs developed and/or commercialized by any of the
foregoing, including, without limitation, information relating to inventions, ideas, designs,
discoveries, know-how, methods, research, engineering, data, databases, operations, techniques,
software, software codes, customer lists, prospect lists and other trade secrets.

     (b) On the termination of this Employment Agreement for any reason, Executive will deliver to
the Company all correspondence, documents, papers and other media containing information about the
Confidential Information together with all copies thereof in Executive’s possession or control.

     (c) During the term of this Employment Agreement and for a period equal to twelve (12) months
after the termination of this Employment Agreement for any reason whatsoever (except in the case of
termination of this Employment Agreement by the Company pursuant to Section 5(d) in which case the
applicable period above shall be reduced to six (6) months), Executive shall not engage (and shall
assure that none of Executive’s agents, affiliates or associates engages) in competition with, or
directly or indirectly, perform services (as employee, officer, manager, consultant, independent
contractor, advisor or otherwise) for or own any equity

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interest (other than an aggregate of not more than one percent (1%) of the stock issued by any
publicly held corporation) in any enterprise that engages in competition with the business
conducted by the Company or by any of its affiliates, anywhere in the world.

     (d) During the term of this Agreement and for a period equal to twelve (12) months after the
termination of this Employment Agreement for any reason whatsoever (except in the case of
termination of this Employment Agreement by the Company pursuant to Section 5(d) in which case the
applicable period above shall be reduced to six (6) months), Executive shall not, directly or
indirectly, solicit for employment, offer employment to, or employ for Executive’s own account or
for the account of another, any employee or consultant of the Company or any of its affiliates;
provided, however, that this section 7(d) shall not prohibit any such person from soliciting or
hiring anyone solely by means of a general solicitation that is not directed at the employees (or
any particular employee) of the Company.

     (e) During the term of this Agreement and for a period equal to twelve (12) months after the
termination of this Employment Agreement for any reason whatsoever (except in the case of
termination of this Employment Agreement by the Company pursuant to Section 5(d) in which case the
applicable period above shall be reduced to six (6) months), Executive shall not, directly or
indirectly, solicit, raid, entice or otherwise induce any customer and/or supplier of the Company
or any of its affiliates to cease doing business with the Company or any of its affiliates or to do
business with a competitor with respect to products and/or services that are competitive with the
products and/or services of the Company or any of its affiliates.

     (f) Executive shall not, during or after the term of this Agreement, make any statement nor do
any act which will disparage, defame or injure the goodwill or reputation of the Company.

     (g) Executive agrees that the restrictions in this Section 7 are reasonable and necessary to
protect the Confidential Information. Executive expressly agrees that, in addition to any other
rights or remedies which the Company may have, the Company shall be entitled to injunctive and
other equitable relief to prevent a breach of this Section 7 by Executive, including a temporary
restraining order or temporary injunction from any court of competent jurisdiction restraining any
threatened or actual violation, and Executive consents to the entry of such an order and injunctive
relief and waives the making of a bond or undertaking as a condition for obtaining such relief.

8. Intellectual Property.

     Executive acknowledges and agrees that the Company is and remains the sole owner of all the
fruits and proceeds of Executive’s services hereunder, including, but not limited to, all ideas,
designs, inventions, concepts, developments, discoveries, whether or not protectable, and other
properties which Executive may create or conceive in connection with Executive’s employment
hereunder during the term of this Employment Agreement, free and clear of any claims by Executive
(or any successor or assignee of Executive) of any kind or character whatsoever other than
Executive’s right to compensation hereunder. Executive further acknowledges and agrees that the
Company is and remains the sole owner of all ideas,

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inventions, concepts, developments, discoveries, whether or not protectable, and other
properties which Executive may create or conceive within twelve (12) months of the Date of
Termination and which are based, in whole or in part, on the Confidential Information, free and
clear of any claims by Executive (or any successor or assignee of Executive) of any kind or
character whatsoever other than Executive’s right to compensation hereunder. Executive agrees that
he shall, at the request of the Board, execute such assignments, certificates or other instruments
as the Board shall from time to time deem necessary or desirable to evidence, establish, maintain,
perfect, protect, enforce or defend the Company’s rights, title and interest in or to any
properties referred to in this Section 8.

9. Miscellaneous.

     (a) Entire Agreement. This Employment Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof, and all other prior or contemporaneous
agreements of the parties with respect to said subject matter are hereby merged into and superseded
by this Employment Agreement. This Employment Agreement may not be changed, modified or amended
other than by a further written agreement signed by both parties hereto.

     (b) No Waiver. The failure or omission of either party to insist, in any instance,
upon strict performance by the other party of any term or provision of this Employment Agreement or
to exercise any of such party’s rights hereunder shall not be deemed to be a modification of any
term hereof or a waiver or relinquishment of the future performance of any such term or provision
by such party, nor shall such failure or omission constitute a waiver of the right of such party to
insist upon future performance by the other party of any such term or provision.

     (c) Governing Law. This Employment Agreement shall be governed by, and shall be
construed and interpreted in accordance with, the laws of the State of New York, without giving
effect to any choice of law doctrine.

     (d) Notice. Any notice, request, demand, statement, authorization, approval or
consent made hereunder shall be addressed to the appropriate party at the address written above in
writing, and shall be hand-delivered or sent by Federal Express, or other reputable courier
service, or by postage prepaid certified mail, return receipt requested, or by facsimile or
electronic mail (copy by postage prepaid certified mail), and shall be deemed given when delivered
if hand delivered or sent by Federal Express or other reputable courier service, or when sent if
sent by certified mail, facsimile or electronic mail.

     Either party may change its address for the receipt of such notices by giving written notice
to the other party in the manner herein provided.

     (e) Assignment. This Employment Agreement shall inure to the benefit of, and bind,
the parties hereto and their respective successors and assigns, provided, however,
Executive shall not assign or transfer any of his rights under this Employment Agreement nor
delegate any of his duties hereunder without the prior written consent of the Board.

- 9 -

 

     (f) Severability. If, in any jurisdiction, any provision of this Agreement or its
application to any party or circumstance is restricted, prohibited or unenforceable, such provision
shall, as to such jurisdiction, be ineffective only to the extent of such restriction, prohibition
or unenforceability without invalidating the remaining provisions hereof and without affecting the
validity or enforceability of such provision in any other jurisdiction or its application to other
parties or circumstances. In addition, if any one or more of the provisions contained in this
Employment Agreement shall for any reason in any jurisdiction be held to be excessively broad as to
time, duration, geographical scope, activity or subject, it shall be construed, by limiting and
reducing it, so as to be enforceable to the extent compatible with the applicable law of such
jurisdiction as it shall then appear.

     (g) Key Employee Insurance. Company, in its sole discretion shall have the right at
its expense to purchase insurance on the life of Executive, in such amounts as it shall from time
to time determine, of which the Company shall be the beneficiary. Executive shall submit to such
physical examinations as may reasonably be required and shall otherwise cooperate with the Company
in obtaining such insurance.

     (h) Headings and Counterparts. Headings are inserted for reference purposes only and
shall not affect the interpretation or meaning of this Employment Agreement. This Agreement may be
executed in several counterparts, each of which shall be deemed to be an original but all of which,
together, will constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement, the Company by
its duly-authorized officer, as of the date set forth above.

	 	 	 	 	 
	 	VERAMARK TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Charles A. Constantino
 	 
	 	 	Charles A. Constantino, 	 
	 	 	Chairman, Compensation Committee 	 
	 
	 	 	 
	 	  	/s/  Anthony C. Mazzullo
 	 
	 	 	Anthony C. Mazzullo 	 

- 11 -

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