Document:

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of January 8, 2009,
to be effective January 21, 2009 (the “Effective Date”), by and between PRG-Schultz International,
Inc., a Georgia corporation (the “Company”), and Romil Bahl (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company considers the availability of the Executive’s services to be important to
the management and conduct of the Company’s business and desires to secure the availability of the
Executive’s services; and

     WHEREAS, the Executive is willing to make the Executive’s services available to the Company on
the terms and subject to the conditions set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
hereinafter set forth and intending to be legally bound, the Company and the Executive agree as
follows:

     1. Employment and Duties.

          (a) Position. The Company hereby employs the Executive, and the Executive hereby
accepts such employment, as the Chief Executive Officer and President of the Company, effective as
of the Effective Date, on the terms and subject to the conditions of this Agreement. The Executive
agrees to perform such duties and responsibilities as are customarily performed by persons acting
in such capacity or as are assigned to Executive from time to time by the Board of Directors of the
Company or its designees. The Executive acknowledges and agrees that from time to time the Company
may assign Executive additional positions with the Company or the Company’s subsidiaries, with such
title, duties and responsibilities as shall be determined by the Company. The Executive agrees to
serve in any and all such positions without additional compensation. The Executive will report
directly to the Board of Directors of the Company.

          (b) Duties. The Executive shall devote the Executive’s best efforts and full
professional time and attention to the business and affairs of the Company and the Company’s
subsidiaries. During the Term, Executive shall not serve as a director or principal of any other
company or charitable, religious or civic organization without the prior written consent of the
Board of Directors of the Company. The principal place of employment of the Executive shall be the
Company’s executive offices in Atlanta, Georgia, subject to reasonable travel on the business of
the Company or the Company’s subsidiaries. The Executive shall be expected to follow and be bound
by the terms of the Company’s Code of Conduct and Code of Ethics for Senior Financial Officers and
any other applicable policies as the Company from time to time may adopt.

     2. Term. The term of this Agreement is effective as of the Effective Date, and will
continue through the fourth anniversary of the Effective Date, unless terminated or extended as
hereinafter provided. This Agreement shall be extended for successive one-year periods following
the original term (through each subsequent anniversary thereafter) unless any party notifies the
other in writing at least 90 days prior to the end of the original term, or the end of any
additional

 

 

one-year renewal term, that the Agreement shall not be extended beyond its then current term.
The term of this Agreement, 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
$600,000. The annual base salary shall be paid to the Executive in accordance with the established
payroll practices of the Company (but no less frequently than monthly) subject to ordinary and
lawful deductions. The Compensation Committee of the Company will review the Executive’s base
salary from time to time, not less frequently than annually, to consider whether any increase
should be made. The base salary during the 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 in
an annual incentive bonus plan that will establish measurable criteria and incentive compensation
levels payable to the Executive for performance in relation to defined targets established by the
Compensation Committee of the Company’s Board of Directors, after consultation with management, and
consistent with the Company’s business plans and objectives. To the extent the targeted
performance levels are exceeded, the incentive bonus plan will provide a means by which the annual
bonus will be increased. Similarly, the incentive plan will provide a means by which the annual
bonus will be decreased or eliminated if the targeted performance levels are not achieved. In
connection with such annual incentive bonus plan, subject to the corresponding performance levels
being achieved, the Executive shall be eligible for an annual target bonus equal to 100 percent of
the Executive’s annual base salary and an annual maximum bonus equal to 150 percent of the
Executive’s annual base salary, subject to pro-ration for 2009 based on the number of days that
Executive is actually employed by the Company during 2009 (beginning with the Effective Date). Any
bonus payments due hereunder shall be payable to the Executive no later than the 15th
day of the third month following the end of the applicable year to which the incentive bonus
relates. The Executive’s annual incentive bonus for calendar year 2009 will be no less than 100%
of Executive’s annual base salary, subject to the Executive’s continued employment through December
31, 2009, and subject to pro-ration based on the number of days that Executive is actually employed
by the Company during 2009 (beginning with the Effective Date).

          (c) One-Time Bonus. The Executive also will be eligible to receive an additional
one-time bonus in the aggregate amount of $1 million payable on the last regular payroll date in
July 2010, subject to the Executive’s continued employment until such time.

          (d) Stock Compensation.

               (i) The Company shall grant to the Executive, effective on commencement of his employment with
the Company, as an initial equity award, nonqualified stock options covering 111,111 shares of the
common stock, no par value per share, of the Company, with an exercise price equal to the fair
market value of the common stock on the date of grant, and a term of seven years (the “Initial
Options”), and restricted stock covering 233,334 shares of such common stock (the “Initial
Restricted Stock”). The Initial Options and Initial Restricted Stock will vest and become
non-forfeitable as follows:

2

 

               (1) The Initial Options will be time vested options, having a term of seven years, and vesting
25% on each of the first, second, third and fourth anniversaries of the date of grant subject to
the Executive’s continued employment through such date(s).

               (2) The Initial Restricted Stock will be time-vested restricted stock, vesting 25% on each of
the first, second, third and fourth anniversaries of the date of grant subject to the Executive’s
continued employment through such date(s).

          (ii) The Company also shall grant to the Executive, effective on commencement of his
employment with the Company, as an additional one-time equity award, nonqualified stock options
covering 185,185 shares of the common stock, no par value per share, of the Company, with an
exercise price equal to the fair market value of the common stock on the date of grant, and a term
of seven years (the “One-Time Options”), and restricted stock covering 111,111 shares of such
common stock (the “One-Time Restricted Stock”). The One-Time Options and One-Time Restricted Stock
will vest and become nonforfeitable as follows:

               (1) The One-Time Options will be time-vested options, having a term of seven years, and
vesting 50% on each of the second and fourth anniversaries of the date of grant subject to the
Executive’s continued employment through such date(s).

               (2) The One-Time Restricted Stock will be time-vested restricted stock, vesting 50% on each of
the second and fourth anniversaries of the date of grant subject to the Executive’s continued
employment through such date(s).

          (iii) Beginning in 2009, the Executive shall be eligible to receive stock options, restricted
stock, stock appreciation rights and/or other equity awards under the Company’s applicable equity
plans on such basis as the Compensation Committee or the Board of Directors of the Company or their
designees, as the case may be, may determine on a basis not less favorable than that provided to
the class of employees that includes the Executive. Except as specifically set forth above,
however, nothing herein shall require the Company to make any equity grants or other awards to the
Executive in any specific year.

     4 Indemnity. The Company and the Executive will enter into the Company’s standard
indemnification 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 subsidiaries
provide to the class of employees that includes the Executive, on a basis not less favorable than
that provided to such class of employees, including, without limitation, group medical, disability
and life insurance, paid time off, and retirement plan, subject to the terms and conditions of such
plans, programs or forms of compensation or benefits.

          (b) Paid Time-Off. The Executive shall be entitled to five weeks of paid time-off, to
be accrued and used in accordance with the normal Company paid time-off policy.

3

 

     6. Reimbursement of Expenses.

          (a) Business Expenses. The Company shall reimburse the Executive, subject to
presentation of adequate substantiation, including receipts, for the reasonable travel,
entertainment, lodging and other business expenses incurred by the Executive in accordance with the
Company’s expense reimbursement policy in effect at the time such expenses are incurred. In no
event will such reimbursements, if any, be made later than the last day of the year following the
year in which the Executive incurs the expense.

          (b) Relocation Expenses. The Company shall provide the Executive with relocation
benefits in accordance with the Company’s Relocation Guidelines in connection with the Executive’s
relocation to Atlanta, Georgia, limited to total reimbursements of $75,000 unless otherwise
approved in advance in writing by the Senior Vice President – Human Resources. Such
reimbursements, if any, will be made after the Effective Date and no later than December 31, 2009.
The Executive agrees to relocate his primary residence to the Atlanta metropolitan area no later
than June 30, 2009.

     7. Termination of Employment.

          (a) Death or Incapacity. The Executive’s employment under this Agreement shall
terminate 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 employment
and this Agreement. “Incapacity” shall mean the inability of the Executive to perform the
essential functions of the Executive’s job, with or without reasonable accommodation, for a period
of 90 days in the aggregate in any rolling 180-day period.

          (b) Termination by Company For Cause. The Company may terminate the Executive’s
employment 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 the
performance of the Executive’s duties which the Board of Directors of the Company believes
does 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 the
Company or any of its subsidiaries;

          (iii) the Executive’s fraud or dishonesty with respect to the Company or any of its
subsidiaries;

          (iv) the Executive’s conviction of, indictment for (or its procedural equivalent), or
entering of a guilty plea or plea of no contest with respect to any felony or any other
crime involving moral turpitude or dishonesty; or

          (v) the Executive’s breach of a material term of this Agreement, or violation in any
material respect of any code or standard of behavior generally applicable to officers of the
Company (including, without, limitation the Company’s Code of Conduct, Code of Ethics for
Senior Financial Officers and any other applicable policies as the Company from time to time
may adopt), after being advised in writing of such breach or

4

 

violation and being given 30 days to remedy such breach or violation, to the extent
that such breach or violation can be cured;

          (vi) the Executive’s breach of fiduciary duties owed to the Company or any of its
subsidiaries;

          (vii) the Executive’s engagement in habitual insobriety or the use of illegal drugs or
substances; or

          (viii) the Executive’s willful failure to cooperate, or willful failure to cause and
direct persons under the Executive’s management or direction, or employed by, or consultants
or agents to, the Company or its subsidiaries to cooperate, with all corporate
investigations or independent investigations by the Board of Directors of the Company or its
subsidiaries, all governmental investigations of the Company or its subsidiaries or orders
involving the Executive, the Company or the Company’s subsidiaries entered by a court of
competent jurisdiction.

Notwithstanding the above, and without limitation, the Executive shall not be deemed to have been
terminated for Cause unless and until there has been delivered to the Executive (i) a letter from
the Board of Directors of the Company finding that the Executive has engaged in the conduct set
forth in any of the preceding clauses and specifying the particulars thereof in detail and (ii) a
copy of a resolution duly adopted by the affirmative vote of the majority of the members of the
Board of Directors of the Company who are not officers of the Company at a meeting of the Board of
Directors called and held for such purpose or such other appropriate written consent (after
reasonable notice to the Executive and an opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board of Directors of the Company), finding that the
Executive has engaged in such conduct and specifying the particulars thereof in detail.

          (c) Termination by Executive for Good Reason. The Executive may terminate the
Executive’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 reduction in the Executive’s
authority, duties or responsibilities (except that any 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 another publicly traded entity will not, in either event and
standing alone, constitute a substantial reduction in the Executive’s authority, duties or
responsibilities), including any requirement that the Executive report directly to anyone
other than the Board of Directors of the Company;

          (ii) the assignment to the Executive of duties that are materially inconsistent with
Executive’s authority, duties or responsibilities;

          (iii) any material decrease in the Executive’s base salary or annual bonus opportunity
or 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 reduction
generally applicable to all executives of the Company other than in contemplation of or
after a Change in Control;

5

 

          (iv) the relocation of the Executive to any primary place of employment other than as
specified in Section 1(b) above which might require the Executive to move the Executive’s
residence which, for this purpose, means any reassignment to a place of employment 50 miles
or more from the place (or, if applicable, all places) of employment set forth in Section
1(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 the
Executive 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’s
base salary, annual bonus or other benefits within 10 days after the date the same is due;
or

          (vi) the Company’s failure to nominate Executive to serve as a member of the Board of
Directors of the Company (other than on and after the Company has reason to terminate the
Executive’s employment for Cause), or the removal of the Executive from the Board of
Directors of the Company, by action of the Board of Directors, other than for Cause; or

          (vii) 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 resignation
by the Executive where Cause for the Executive’s termination by the Company exists and the Company
then follows the procedures described above. The Executive must give the Company notice of any
event or condition that would constitute “Good Reason” within 30 days of the event or condition
which would constitute “Good Reason,” and upon the receipt of such notice the Company shall have 30
days to remedy such event or condition. If such event or condition is not remedied within such
30-day period, any termination of employment by the Executive for “Good Reason” must occur within
30 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 without
Cause, and Executive may terminate the Executive’s employment for other than Good Reason, upon 60
days’ written notice. The Company may elect to pay the Executive during any applicable notice
period (in accordance with the established payroll practices of the Company, no less frequently
than monthly) and remove him from active service.

          (e) Termination by Executive on Failure to Renew. The Executive may terminate the
Executive’s employment at any time on or before the expiration of the Term of the Agreement, upon
30 days’ written notice, if the Company notifies the Executive that the Term of the Agreement shall
not be extended as provided in Section 2 above.

     8. Obligations of the Company Upon Termination.

          (a) Without Cause; Good Reason; Non-Renewal (No 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 with
Section 7(c) hereof, or the Executive terminates the Executive’s employment upon

6

 

the Company’s
failure to renew the Agreement in accordance with Section 7(e) hereof, other than
within two years after 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 the
date of the Executive’s termination of employment (or, if greater, the Executive’s annual
base salary in effect immediately preceding any action by the Company described in Section
7(c)(iii) above for which the Executive has terminated the Executive’s employment for Good
Reason), for the period equal to the greater of 18 months or the sum of four weeks for each
full year of continuous service the Executive has with the Company and its subsidiaries at
the time of termination of employment, beginning immediately following termination of
employment (the “Severance Period”), payable in accordance with the established payroll
practices of the Company (but no less frequently than monthly), beginning on the first
payroll date following 30 days after termination of employment, with the Executive to
receive at that time a lump sum payment with respect to any installments the Executive was
entitled to receive during the first 30 days following termination of employment, and the
remaining payments made as if they had commenced immediately following termination of
employment;

          (ii) payment of an amount equal to the Executive’s actual earned full-year bonus for
the year in which the termination of Executive’s employment occurs, prorated based on the
number of days the Executive was employed for the year, payable at the time the Executive’s
annual 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 spending
account, provided to the Executive and the Executive’s spouse and dependents at the date of
termination for the Severance Period, on a monthly or more frequent basis, on the same basis
and at the same cost to the Executive as available to similarly-situated active employees
during such Severance Period, provided that such continued participation is possible under
the general terms and provisions of such plans and programs and provided that such continued
coverage by the Company shall terminate in the event Executive becomes eligible for any such
coverage under another employer’s plans. If the Company reasonably determines that
maintaining such coverage for the Executive or the Executive’s spouse or dependents is not
feasible under the terms and provisions of such plans and programs (or where such
continuation would adversely affect the tax status of the plan pursuant to which the
coverage is provided), the Company shall pay the Executive cash equal to the estimated cost
of the expected Company contribution therefor for such same period of time, with such
payments to be made in accordance with the established payroll practices of the Company (not
less frequently than monthly) for the period during which such cash payments are to be
provided;

          (iv) payment of any Accrued Obligations. For purposes of this Agreement, “Accrued
Obligations” shall mean the sum of (A) the Executive’s annual base salary through
Executive’s termination of employment which remains unpaid, (B) the amount, if any, of any
incentive or bonus compensation earned for any completed fiscal year of the Company which
has not yet been paid, (C) any reimbursements for expenses incurred

7

 

but not yet paid, and
(D) any benefits or other amounts, including both cash and stock components, which pursuant
to the terms of any plans, policies or programs have been
earned or become payable, but which have not yet been paid to the Executive, including
payment for any unused paid time-off (but not including amounts that previously had been
deferred at the Executive’s request, which amounts will be paid in accordance with the
Executive’s existing directions). The Accrued Obligations will be paid to the Executive in
a lump sum as soon as administratively feasible after the Executive’s termination of
employment, which for purposes of any incentive or bonus compensation described in (B) above
shall mean at the same time such annual bonus would otherwise have been paid;

          (v) vesting (i) of the Executive’s outstanding unvested Initial Options, Initial
Restricted Stock, One-Time Options and One-Time Restricted Stock that would have vested
based solely on the continued employment of the Executive through the next anniversary date
of the commencement of the Executive’s employment with the Company immediately following the
termination of the Executive’s employment and (ii) in full of the Executive’s other
outstanding unvested options, restricted stock, and other equity-based awards that would
have vested based solely on the continued employment of the Executive. Additionally, all of
Executive’s outstanding stock options shall remain outstanding until the earlier of (i) one
year after the date of termination of the Executive’s employment or (ii) the original
expiration date of the options (disregarding any earlier expiration date provided for in any
other agreement, including without limitation any related grant agreement, based solely on
the termination of the Executive’s employment);

          (vi) payment of one year of outplacement services from Executrack or an outplacement
service provider of the Executive’s choice, limited to $20,000 in total. This outplacement
services benefit will be forfeited if the Executive does not begin using such services
within 60 days after the termination of the Executive’s employment; and

          (vii) payment of an amount equal to $1 million multiplied by a fraction, the numerator
of which is the number of days between the Effective Date and the date of termination of the
Executive’s employment and the denominator of which is the number of days between the
Effective Date and July 30, 2010, payable in a lump sum payment on the first payroll date
following 30 days after termination of the Executive’s employment, provided the Executive’s
termination of employment occurs before July 30, 2010 and before the payment of the one-time
bonus in accordance with Section 3(c) above.

          (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 with
Section 7(c) hereof, or the Executive terminates the Executive’s employment upon the Company’s
failure to renew the Agreement in accordance with Section 7(e) hereof, within two years after 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 the
date of the Executive’s termination of employment (or, if greater, the Executive’s annual
base salary in effect immediately preceding any action by the Company described in Section
7(c)(iii) above for which the Executive has terminated the Executive’s

8

 

employment for Good
Reason), for the period equal to the greater of two years or the sum of four weeks for each
full year of continuous service the Executive has with the Company and its subsidiaries at
the time of termination of employment, beginning immediately following termination of
employment (the “Change in Control Severance Period”), payable in
accordance with the established payable practices of the Company (but no less
frequently than monthly), beginning on the first payroll date following 30 days after
termination of employment, with the Executive to receive at that time a lump sum payment
with respect to any installments the Executive was entitled to receive during the first 30
days following termination of employment;

          (ii) payment of an amount equal to the Executive’s actual earned full-year bonus for
the year in which the termination of Executive’s employment occurs, prorated based on the
number of days the Executive was employed for the year, payable at the time the Executive’s
annual 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 spending
account, provided to the Executive and the Executive’s spouse and dependents at the date of
termination for the Change in Control Severance Period, on a monthly or more frequent basis,
on the same basis and at the same cost to the Executive as available to similarly-situated
active employees during such Change in Control Severance Period, provided that such
continued participation is possible under the general terms and provisions of such plans and
programs and provided that such continued contribution by the Company shall terminate in the
event Executive becomes eligible for any such coverage under another employer’s plans. If
the Company reasonably determines that maintaining such coverage for the Executive or the
Executive’s spouse or dependents is not feasible under the terms and provisions of such
plans and programs (or where such continuation would adversely affect the tax status of the
plan pursuant to which the coverage is provided), the Company shall pay the Executive cash
equal to the estimated cost of the expected Company contribution therefor for such same
period of time, with such payments to be made in accordance with the established payroll
practices of the Company (not less frequently than monthly) for the period during which such
cash payments are to be provided;

          (iv) payment of any Accrued Obligations in a lump sum as soon as administratively
feasible after the Executive’s termination of employment, which for purposes of any
incentive or bonus compensation described in Section 8(a)(iv)(B) above shall mean at the
same time such annual bonus would otherwise have been paid;

          (v) vesting (i) of the Executive’s outstanding unvested Initial Options, Initial
Restricted Stock, One-Time Options and One-Time Restricted Stock that would have vested
based solely on the continued employment of the Executive through the next anniversary date
of the commencement of the Executive’s employment with the Company immediately following the
termination of the Executive’s employment and (ii) in full of the Executive’s other
outstanding unvested options, restricted stock, and other equity-based awards that would
have vested based solely on the continued employment of the Executive. Additionally, all of
the Executive’s outstanding stock options shall remain outstanding until the earlier of (i)
one year after the date of termination of the Executive’s employment or (ii)

9

 

the original
expiration date of the options (disregarding any earlier expiration date provided for in any
other agreement, including without limitation any related grant agreement, based solely on
the termination of the Executive’s employment);

          (vi) payment of one year of outplacement services from Executrack or an outplacement
service provider of the Executive’s choice, limited to $20,000 in total. This outplacement
services benefit will be forfeited if the Executive does not begin using such services
within 60 days after the termination of the Executive’s employment; and

          (vii) payment of an amount equal to $1 million multiplied by a fraction, the numerator
of which is the number of days between the Effective Date and the date of termination of the
Executive’s employment and the denominator of which is the number of days between the
Effective Date and July 30, 2010, payable in a lump sum payment on the first payroll date
following 30 days after termination of the Executive’s employment, provided the Executive’s
termination of employment occurs before July 30, 2010 and before the payment of the one-time
bonus in accordance with Section 3(c) above.

          (c) Death or Incapacity. If the Executive’s employment is terminated by reason of
death or Incapacity in accordance with Section 7(a) hereof, the Executive shall be entitled to
receive:

          (i) payment of an amount equal to the actual full-year bonus earned for the year that
includes Executive’s death or Incapacity, prorated based on the number of days the Executive
is employed for the year, payable at the same time such annual bonus would otherwise have
been paid had the Executive continued employment; and

          (ii) payment of any Accrued Obligations in a lump sum as soon as administratively
feasible after the Executive’s termination of employment, which for purposes of any
incentive or bonus compensation described in Section 8(a)(iv)(B) above shall mean at the
same time such annual bonus would otherwise have been paid; and

          (iii) vesting of the Executive’s outstanding unvested Initial Options, Initial
Restricted Stock, One-Time Options and One-Time Restricted Stock that would have vested
based solely on the continued employment of the Executive through the next anniversary date
of the commencement of the Executive’s employment with the Company immediately following the
Executive’s death. Additionally, all of the Executive’s outstanding Initial Options and
One-Time Options shall remain outstanding until the earlier of (i) one year after the
Executive’s death or (ii) the original expiration date of the options (disregarding any
earlier expiration date provided for in any other agreement, including without limitation
any related grant agreement, based solely on the termination of the Executive’s employment).

          (d) Cause; Other Than for Good Reason. If the Company terminates the Executive’s
employment for Cause in accordance with Section 7(b) hereof, or the Executive terminates the
Executive’s employment other than for Good Reason in accordance with Section 7(d) hereof, this
Agreement shall terminate without any further obligation to the Executive other than to pay the
Accrued Obligations (except that any incentive or bonus compensation earned for any completed
fiscal year of the Company which has not yet been paid shall not be paid if the Company

10

 

terminates
the Executive’s employment for Cause in accordance with Section 7(b) hereof) as soon as
administratively feasible after the Executive’s termination of employment.

          (e) Release and Waiver. Notwithstanding any other provision of this Agreement, the
Executive’s right to receive any payments or benefits under Sections 8(a)(i), (ii), (iii), (v),
(vi) and (vii) and 8(b)(i), (ii), (iii), (v), (vi) and (vii) of this Agreement upon the termination
of the Executive’s employment by the Company without Cause, by the Executive for
Good Reason, or by the Executive upon the Company’s failure to renew the Agreement is
contingent upon and subject to the Executive signing and delivering to the Company a separation
agreement and complete general release of all claims in a form acceptable to Company, and allowing
the applicable revocation period required by law to expire without revoking or causing revocation
of same, within 30 days following the date of termination of Executive’s employment.

          (f) Change in Control. For purposes of this Agreement, Change of Control means the
occurrence of any of the following events:

          (i) The accumulation in any number of related or unrelated transactions by any person
of beneficial ownership (as such term is used in Rule 13d-3, promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of 50 percent or more of
the combined total voting power of the Company’s voting stock; provided that for purposes of
this subsection (a), a Change in Control will not be deemed to have incurred if the
accumulation of 50 percent or more of the voting power of the Company’s voting stock results
from 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’s
subsidiaries, or (iii) by any person pursuant to a merger, consolidation, reorganization or
other transaction (a “Business Combination”) that would not cause a Change in Control under
subsection (ii) below; or

          (ii) A consummation of a Business Combination, unless, immediately following that
Business Combination, substantially all the persons who were the beneficial owners of the
voting 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 stock
of the entity resulting from that Business Combination (including, without limitation, an
entity that as a result of that transaction owns the Company, or all or substantially all of
the Company assets, either directly or through one or more subsidiaries) in substantially
the same proportions relative to each other as the ownership, immediately prior to that
Business Combination, of the voting stock of the Company;

          (iii) A sale or other disposition of all or substantially all of the assets of the
Company except pursuant to a Business Combination that would not cause a Change in Control
under subsection (ii) above;

          (iv) At any time less than a majority of the members of the Board of Directors of the
Company or any entity resulting from any Business Combination are Incumbent Board Members.

11

 

          (v) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company, except pursuant to a Business Combination that would not cause a
Change in Control under subsection (ii) above; or

          (vi) Any other transaction or event that the Board of Directors of the Company
identifies as a Change in Control for purposes of this Agreement.

          (vii) For purposes of this Agreement, an “Incumbent Board Member” shall mean any
individual who either is (a) a member of the Company Board of Directors as of the effective
date of this Agreement or (b) a member who becomes a member of the Company’s Board of
Directors subsequent to the date of this Agreement, whose election or
nomination by the Company’s shareholders, was approved by a vote of at least a majority
of the then Incumbent Board Members (either by specific vote or by approval of a proxy
statement of the Company in which that person is named as a nominee for director, without
objection to that nomination), but excluding, for that purpose, any individual whose initial
assumption of office occurs as a result of an actual or threatened election contest (within
the meaning of Rule 14A-11 of the Exchange Act) with respect to the election or removal of
directors or other actual threatened solicitation or proxies or consents by or on behalf of
the person other than a board of directors. For purposes of this Agreement, a person means
any individual, corporation, partnership, limited liability company, joint venture,
incorporated or unincorporated association, joint-stock company, trusts, unincorporated
organization or any other entity of any kind.

     9. Business Protection Agreements.

          (a) Definitions. For purposes of this Agreement, the following terms shall have the
following meanings:

          (i) “Business of the Company” means services to (A) identify clients’ erroneous or
improper payments, (B) assist clients in the recovery of monies owed to them as a result of
overpayments and overlooked discounts, rebates, allowances and credits, and (C) assist
clients in the improvement and execution of their procurement and payment processes.

          (ii) “Confidential Information” means any information about the Company or the
Company’s subsidiaries and their employees, customers and/or suppliers which is not
generally known outside of the Company or the Company’s subsidiaries, which Executive learns
of in connection with Executive’s employment with the Company, and which would be useful to
competitors or the disclosure of which would be damaging to the Company or the Company’s
subsidiaries. Confidential Information includes, but is not limited to: (A) business and
employment policies, marketing methods and the targets of those methods, finances, business
plans, promotional materials and price lists; (B) the terms upon which the Company or the
Company’s subsidiaries obtains products from their suppliers and sells services and products
to customers; (C) the nature, origin, composition 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 and services to their customers.

12

 

          (iii) “Material Contact” means contact in person, by telephone, or by paper or
electronic correspondence in furtherance of the Business of the Company.

          (iv) “Restricted Territory” means, and is limited to, the geographic area described in
Exhibit A attached hereto. Executive acknowledges and agrees that this is the area
in which the Company and its subsidiaries does business at the time of the execution of this
Agreement, and in which the Executive will have responsibility, at a minimum, on behalf of
the Company and the Company’s subsidiaries.

          (v) “Trade Secrets” means the trade secrets of the Company or the Company’s
subsidiaries as defined under applicable law.

          (b) Confidentiality. Executive agrees that the Executive will not (other than in the
performance of Executive’s duties hereunder), directly or indirectly, use, copy, disclose or
otherwise distribute to any other person or entity: (a) any Confidential Information during the
period 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 applicable
law. Upon the termination of Executive’s employment with the Company (or upon the earlier request
of the Company), Executive shall promptly return to the Company all documents and items in the
Executive’s possession or under the Executive’s control which contain any Confidential Information
or Trade Secrets.

          (c) Non-Competition. Executive agrees that during the Executive’s employment with the
Company and for a period of two years thereafter, Executive will not, either for himself or on
behalf of any other person or entity, compete with the Business of the Company within the
Restricted Territory by performing activities which are the same as or similar to those performed
by Executive for the Company or the Company’s subsidiaries.

          (d) Non-Solicitation of Customers. Executive agrees that during Executive’s
employment with the Company and for a period of two years thereafter, Executive shall not, directly
or indirectly, solicit any actual or prospective customers of the Company or the Company’s
subsidiaries with whom Executive had Material Contact, for the purpose of selling any products or
services which compete with the Business of the Company

          (e) Non-Recruitment of Employees or Contractors. Executive agrees that during the
Executive’s employment with the Company and for a period of two years thereafter, Executive will
not, directly or indirectly, solicit or attempt to solicit any employee or contractor of the
Company or the Company’s subsidiaries with whom Executive had Material Contact, to terminate or
lessen such employment or contract.

          (f) Obligations of the Company. The Company agrees to provide Executive with
Confidential Information in order to enable Executive to perform Executive’s duties hereunder. The
covenants of Executive contained in the covenants of Confidentiality, Non-Competition,
Non-Solicitation of Customers and Non-Recruitment of Employees or Contractors set forth in
Subsections 9(b) — 9(e) above (“Protective Covenants”) are made by Executive in consideration for
the Company’s agreement to provide Confidential Information to Executive, and intended to protect
Company’s Confidential Information and the investments the Company makes in training Executive and
developing customer goodwill.

13

 

          (g) Acknowledgments. Executive hereby acknowledges and agrees that the covenants
contained 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 their
business, customer relationships, personnel, Trade Secrets and Confidential Information. Executive
acknowledges and represents that Executive has substantial experience and knowledge such that
Executive can readily obtain subsequent employment which does not violate this Agreement.

          (h) Specific Performance. Executive acknowledges and agrees that any breach of any of
the Protective Covenants or the provisions of Section 10 by him will cause irreparable damage to
the Company or the Company’s subsidiaries, the exact amount of which will be difficult to
determine, 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, or hereunder, the Company shall be entitled to specific performance and injunctive relief,
without posting bond or other security, to enforce or prevent any violation of any of the
Protective Covenants by him.

     10. Ownership of Work Product.

          (a) Assignment of Inventions. Executive will make full written disclosure to the
Company, and hold in trust for the sole right and benefit of the Company, and hereby assigns to the
Company, or its designees, all of the Executive’s right, title, and interest in and to any and all
inventions, original works of authorship, developments, concepts, improvements or trade secrets,
whether or not patentable or registrable under copyright or similar laws, which the Executive may
solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed
or reduced to practice, during the period of time the Executive is engaged as an employee of the
Company (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’s
subsidiaries, (ii) result from or are suggested by work performed by Executive for the Company or
the Company’s subsidiaries, or (iii) relate at the time of conception or reduction to practice to
the business as conducted by the Company or the Company’s subsidiaries, or to the actual or
demonstrably anticipated research or development of the Company or the Company’s subsidiaries, will
be the sole and exclusive property of the Company or the Company’s subsidiaries, and Executive will
and hereby does assign all of the Executive’s right, title and interest in such Inventions to the
Company and the Company’s subsidiaries. Executive further acknowledge that all original works of
authorship which are made by him (solely or jointly with others) within the scope of and during the
period of the Executive’s employment arrangement with the Company and which are protectible by
copyright are “works made for hire,” as that term is defined in the United States Copyright Act.

          (b) Patent and Copyright Registrations. Executive agrees to assist the Company and
the 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 the
Inventions and any copyrights, patents, mask work rights or other intellectual property rights
relating thereto in any and all countries, including the disclosure to the Company and the
Company’s subsidiaries of all pertinent information and data with respect thereto, the execution of
all applications, specifications, oaths, assignments and all other instruments which the Company or
the Company’s subsidiaries shall deem necessary in order to apply for and obtain such rights and in
order to assign and convey to the Company and its subsidiaries, and their successors, assigns, and

14

 

nominees the sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, 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 it
is in the Executive’s power to do so, any such instrument or papers shall continue after the
termination of this Agreement.

          (c) Inventions Retained and Licensed. There are no inventions, original works of
authorship, developments, improvements, and trade secrets which were made by Executive prior to the
Executive’s employment with the Company (collectively referred to as “Prior Inventions”), which
belong to Executive, which relate to the Company’s or the Company’s subsidiaries’ proposed
business, products or research and development, and which are not assigned to the Company or
the Company’s subsidiaries hereunder.

          (d) Return of Company Property and Information. The Executive agrees not to remove
any property of the Company or the Company’s subsidiaries or information from the premises of the
Company or the Company’s subsidiaries, except when authorized by the Company or the Company’s
subsidiaries. Executive agrees to return all such property and information within seven days
following the cessation of Executive’s employment for any reason. Such property includes, but is
not limited to, the original and any copy (regardless of the manner in which it is recorded) of all
information provided by the Company or the Company’s subsidiaries to the Executive or which the
Executive has developed or collected in the scope of the Executive’s employment, as well as all
issued equipment, supplies, accessories, vehicles, keys, instruments, tools, devices, computers,
cell phones, materials, documents, plans, records, notebooks, drawings, or papers. Upon request by
the Company, the Executive shall certify in writing that all copies of information subject to this
Agreement located on the Executive’s computers or other electronic storage devices have been
permanently deleted. Provided, however, the Executive may retain copies of documents relating to
any employee benefit plans applicable to the Executive and income records to the extent necessary
for the Executive to prepare the Executive’s individual tax returns.

     11. Mitigation. The Executive shall not be required to mitigate the amount of any
payment 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 to
the health care continuation benefit, the amount of any payment provided for in Section 8 shall not
be reduced, offset or subject to recovery by the Company by reason of any compensation earned by
the Executive as the result of employment by another employer after the Date of Termination, or
otherwise.

     12. Withholding of Taxes. The Company shall withhold from any amounts or benefits
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.

     13. Modification and Severability. The terms of this Agreement shall be presumed to be
enforceable, and any reading causing unenforceability shall yield to a construction permitting
enforcement. If any single covenant or provision in this Agreement shall be found unenforceable, it
shall be severed and the remaining covenants and provisions enforced in accordance with the tenor
of the Agreement. In the event a court should determine not to enforce a covenant as written due
to overbreadth, the parties specifically agree that said covenant shall be enforced to the maximum
extent reasonable, whether said revisions be in time, territory, scope of prohibited activities, or
other respects.

15

 

     14. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia.

     15. Remedies and Forum. The parties agree that they will not file any action arising
out of this Agreement other than in the United States District Court for the Northern District of
Georgia or the State or Superior Courts of Cobb County, Georgia. Notwithstanding the pendency of
any proceeding, either party shall be entitled to injunctive relief in a state or federal court
located in Cobb County, Georgia upon a showing of irreparable injury. The parties consent to
personal jurisdiction and venue solely within these forums and solely in Cobb County, Georgia and
waive all
otherwise possible objections thereto. The prevailing party shall be entitled to recover its
costs and attorney’s fees from the non-prevailing party(ies) in any such proceeding no later than
90 days following the settlement or final resolution of any such proceeding. The existence of any
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 defense
to enforcement of said covenants by injunction.

     16. Notices. All written notices required by this Agreement shall be deemed given
when delivered personally or sent by registered or certified mail, return receipt requested, or by
a nationally-recognized overnight delivery service to the parties at their addresses set forth on
the signature page of this Agreement. Each party may, from time to time, designate a different
address to which notices should be sent.

     17. Amendment. This Agreement may not be varied, altered, modified or in any way
amended except by an instrument in writing executed by the parties hereto or their legal
representatives.

     18. Binding Effect. This Agreement shall be binding upon the Executive and on the
Company, and their successors and assigns effective on the date first above written. Executive
consents to any assignment of this Agreement by the Company, so long as the Company will require
any successor to all or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. If the Executive
dies before receiving all payments due under this Agreement, unless expressly otherwise provided
hereunder or in a separate plan, program, arrangement or agreement, any remaining payments due
after the Executive’s death shall be made to the Executive’s beneficiary designated in writing
(provided such writing is executed and dated by the Executive and delivered to the Company in a
form acceptable to the Company prior to the Executive’s death) and surviving the Executive or, if
none, to the Executive’s estate.

     19. No Construction Against Any Party. This Agreement is the product of informed
negotiations between the Executive and the Company. If any part of this Agreement is deemed to be
unclear or ambiguous, it shall be construed as if it were drafted jointly by all parties. The
Executive and the Company agree that none of the parties were in a superior bargaining position
regarding the substantive terms of this Agreement.

16

 

     20. 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. separation from service from the Company
and its affiliates 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 non-compliance. Notwithstanding any other provision of this
Agreement, the Company’s Compensation Committee or Board of Directors is authorized to amend this
Agreement, to amend or void any election made by the Executive under this Agreement and/or to delay
the payment of any monies and/or provision of any benefits in such manner as may be
determined by it to be necessary or appropriate to comply, or to evidence or further evidence
required compliance, with Section 409A of the Code (including any transition or grandfather rules
thereunder). 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. 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 or otherwise, 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 termination of Executive’s
employment 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 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 the Executive’s expense, with the 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” within the meaning of Section 409A of the Code
where it is reasonably anticipated that no further services would be performed after such date or
that the level of bona fide services Executive would perform after that date (whether as an
employee or independent contractor) would permanently decrease to no more than 20 percent of the
average level of bona fide services performed over the immediately preceding 36-month period (or,
if lesser, Executive’s period of service).

     21. 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

17

 

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 the 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 Executive was entitled to, but did not receive
pursuant 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 the
Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to
or for the benefit of the Executive.

     22. Professional Fees. The Company will pay on the Executive’s behalf, or reimburse
the Executive for, reasonable professional fees and costs associated with Executive’s negotiation
and execution of this Agreement, limited to $15,000 in total, which reimbursement shall be paid
during the 30 days after the Effective Date of this Agreement subject to prompt submission to the
Company before such time of adequate substantiation of the fees and costs incurred.

     23. Insurance. Notwithstanding the provisions of the Company’s standard
indemnification agreement described in Section 4 above, the Company will, at all times during the
Executive’s employment, maintain Errors & Omissions and Directors & Officers insurance covering
Executive in amounts customary for organizations of Company’s size and industry profile.

     24. Entire Agreement. Except as provided in the next sentence, this Agreement
constitutes the entire agreement of the parties with respect to the matters addressed herein and it
supersedes all other prior agreements and understandings, both written and oral, express or
implied, with respect to the subject matter of this Agreement. It is further specifically agreed
and acknowledged that, except as provided herein, the Executive shall not be entitled to severance
payments or benefits under any severance or similar plan, program, arrangement or agreement of or
with the Company for any termination of employment occurring while this Agreement is in effect.

[Signatures are on the following page.]

18

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written herein.

	 	 	 	 	 	 	 
	 	 	PRG-SCHULTZ INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Victor
A. Allums 	 
	 

	 	Its:
	 	Sr.
Vice President & General Counsel 	 
	 

	 	 	 	600 Galleria Parkway
	 	 
	 

	 	 	 	Suite 100	 	 
	 

	 	 	 	Atlanta, Georgia 30339	 	 
	 

	 	 	 	Attn: General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	/s/  Romil Bahl	 	 
	 	 	 	 	 
	 	 	Romil Bahl	 	 
	 	 	 	 	 

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

19

 

EXHIBIT A

RESTRICTED TERRITORY

“Restricted Territory” refers to all the geographic areas described in I. and II. below,
collectively.

     I. All of the following Metropolitan Statistical Areas in the U.S., collectively:

Baltimore-Towson, MD

Fayetteville-Springdale-Rogers, AR-MO

Danville, IL

Charlotte-Gastonia-Concord, NC-SC

Dallas-Fort Worth-Arlington, TX

Chicago-Naperville-Joliet, IL-IN-WI

Boise City-Nampa, ID

Minneapolis-Saint Paul-Bloomington, MN-WI

New York-Northern NJ-Long Island, NY-NJ-PA

Phoenix-Mesa-Scottsdale, AZ

Miami-Fort Lauderdale-Pompano Beach, FL

Waco, TX

Milwaukee-Waukesha-West Allis, WI

San Francisco-Oakland-Fremont, CA

Memphis, TN-MS-AR

Seattle-Tacoma-Bellvue, WA

Trenton-Ewing, NJ

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

Harrisburg-Carlisle, PA

Atlanta-Sandy Springs-Marietta, GA

Salt Lake City, UT

     II. All of the area within the city limits of the following cities and within 25
kilometers of the city limits of the following cities, collectively:

Barrie, Ontario, Canada

Brampton, Ontario, Canada

Cambridge, Ontario, Canada

Mississauga, Ontario, Canada

Toronto, Ontario, Canada

Boucherville, Quebec, Canada

Montreal, Quebec, Canada

Calgary, Alberta, Canada

Stellerton, Nova Scotia, Canada

Mexico City, Mexico

San Paulo, Brazil

Bristol, United Kingdom

Croydon, United Kingdom

Hemel Hempstead, United Kingdom

Hull, United Kingdom

Leicester, United Kingdom

Liverpool, United Kingdom

London, United Kingdom

Luton, United Kingdom

Manchester, United Kingdom

Mitcheldean, United Kingdom

Notingham, United Kingdom

Rochdale, United Kingdom

Swindon, United Kingdom

Wallington, United Kingdom

Lille, France

Lyon — Saint Etienne, France

Paris, France

Den Bosch, Noord -Brabant, Holland

Madrid, Spain

Senhora da Hora — Portugal

Stockholm, Sweden

Hong Kong, China

Shanghai, China

Bangkok, Thailand

Sydney, Australia

Auckland, New ZealandEX-10.2

Exhibit 10.2

NONQUALIFIED STOCK OPTION AGREEMENT

     This Nonqualified Stock Option Agreement (this “Option Agreement”) is entered into as of
January ___, 2009 by and between PRG-SCHULTZ INTERNATIONAL, INC., a Georgia corporation
(“PRGX”), and ROMIL BAHL (“Executive”).

W I T N E S S E T H:

     WHEREAS, PRGX and Executive are parties to an employment agreement effective as of even date
herewith (the “Employment Agreement”); and

     WHEREAS, in connection with Executive’s hiring by PRGX as its Chief Executive Officer, PRGX
agreed to grant certain inducement awards consisting of nonqualified stock options to purchase
296,296 shares of PRGX’s common stock, no par value per share; and

     WHEREAS, these inducement awards are being granted outside of any shareholder-approved equity
compensation plan of PRGX and have been approved by the Compensation Committee of PRGX’s Board of
Directors and granted as an inducement material to commencement of Executive’s employment with PRGX
in accordance with NASDAQ Marketplace Rule 4350(i)(1)(A)(iv); and

     WHEREAS, in accordance with Paragraph 3(d) of the Employment Agreement, in connection with
Executive’s commencement of employment with PRGX, Executive is to receive nonqualified stock
options with respect to 296,296 shares of the common stock, no par value per share, of PRGX (the
“Common Stock”).

     Therefore, the parties agree as follows:

     1. Grant of Nonqualified Stock Option. PRGX hereby grants to Executive the right and
option to purchase from PRGX, on the terms and subject to the conditions set forth in this Option
Agreement, 296,296 shares of Common Stock (such shares, the
“Option Shares”; such option,
the “Option”). The date of grant of the Option (the
“Grant Date”) is January ___,
2009. Of the 296,296 Option Shares, the Options covering 111,111 Option Shares will vest and
become exercisable as set forth in subparagraph 3(a) below (the “Initial Options”) and the Options
covering 185,185 Option Shares will vest and become exercisable as set forth in subparagraph 3(b)
below (the “One-Time Options”).

     2. Exercise Price of the Option. The exercise price for the Option Shares is $_____
per share, the closing price of the Common Stock on the NASDAQ National Market on the Grant Date
(the “Exercise Price”).

     3. Vesting of the Option. Subject to the earlier expiration or termination of this
Option in accordance with its terms, the Options granted under this Option Agreement will be vested
and exercisable as follows:

          (a) 25% of the Initial Options will become vested and exercisable on the first, second, third
and fourth anniversaries of the Grant Date, until the Initial Options are vested and

 

 

exercisable in full, provided Executive remains in the continuous employ of PRGX through such
date(s).

          (b) 50% of the One-Time Options will become vested and exercisable on each of the second and
fourth anniversaries of the Grant Date, until the One-Time Options are vested and exercisable in
full, provided Executive remains in the continuous employ of PRGX through such date(s).

          (c) Notwithstanding the foregoing, 100% of all the outstanding unvested Options will become
vested and exercisable on a Change in Control (as defined in the Employment Agreement) to the
extent not previously vested and exercisable, provided Executive remains in the continuous employ
of PRGX until the Change in Control.

          (d) Upon a termination of Executive’s employment by PRGX without Cause, by Executive for Good
Reason, by Executive upon PRGX’s failure to renew the Employment Agreement or on Executive’s
Incapacity (as defined in the Employment Agreement) or death (as set forth in the Employment
Agreement), the outstanding unvested Options will become vested and exercisable upon such
termination to the extent such Options would have become vested and exercisable based solely on the
continued employment of Executive through the next anniversary of the Grant Date immediately
following the termination of Executive’s employment.

          (e) The Compensation Committee of the Board of Directors of PRGX (the “Compensation
Committee”) may, in its sole discretion, accelerate the vesting and exercisability of all or a
portion of the Options without regard to whether the requirements for vesting and exercisability
thereof in subparagraphs 3(a), (b), (c) or (d) have been met.

     4. Method of Exercise of Option.

          (a) To the extent then exercisable, Executive may exercise the Option in whole or in part;
except that no single exercise of the Option is to be for less than 100 Option Shares, unless at
the time of the exercise, the maximum number of Option Shares available for purchase under the
Option is less than 100 Option Shares. In no event is the Option to be exercised for a fractional
share of Common Stock.

          (b) To exercise the Option, Executive shall give written notice to PRGX stating the number of
shares for which the Option is being exercised and the intended manner of payment. The date of this
notice shall be the exercise date. The notice must be accompanied by payment in full of the
aggregate Exercise Price, either by cash, check, or such other medium of payment as the
Compensation Committee may permit. If the Compensation Committee so permits, payment in full or
part may also be made (i) by surrendering (actually or by attestation) shares of Common Stock to
PRGX that Executive already owns and, if necessary to avoid adverse accounting consequences, has
held for at least six months; (ii) by a cashless exercise through a broker; (iii) by means of a
“net exercise” procedure or (iv) by such other medium of payment as the Compensation Committee in
its discretion may authorize. If the payment is in the form of shares of Common Stock, then the
certificate or certificates representing those shares must be duly executed in blank by Executive
or must be accompanied by a stock power duly executed in blank suitable for purposes of
transferring those shares to PRGX. Fractional shares

2

 

of Common Stock will not be accepted in payment of the purchase price of Option Shares. PRGX
shall not issue the Option Shares until full payment for them has been made.

          (c) As soon as practicable upon PRGX’s receipt of Executive’s notice of exercise and payment,
PRGX shall direct the due issuance of the Option Shares so purchased.

          (d) As a further condition precedent to the exercise of this Option in whole or in part,
Executive shall comply with all regulations and the requirements of any regulatory authority having
control of, or supervision over, the issuance of the shares of Common Stock and accordingly shall
execute any documents that the Board of Directors of PRGX (the
“PRGX Board”), in its sole
discretion, deems necessary or advisable to effect such compliance.

          (e) In the case of Executive’s death, the Option, to the extent exercisable, may be exercised
by the executor or administrator of Executive’s estate or by any person or persons who have
acquired the Option directly from Executive by bequest or inheritance.

     5. Non-Transferability of Options. Executive shall not assign or transfer the Option,
other than by will or the laws of descent and distribution. During Executive’s lifetime, only
Executive (or, in the event of legal incapacity or incompetency, Executive’s guardian or legal
representative) may exercise the Option. Notwithstanding the foregoing, however, Executive, with
the approval of the Compensation Committee, may transfer the Option for no consideration to or for
the benefit of Executive’s Immediate Family (including, without limitation, to a trust for the
benefit of Executive’s Immediate Family or to a partnership or limited liability company for one or
more members of Executive’s Immediate Family), subject to such limits as the Compensation Committee
may establish, and the transferee(s) shall remain subject to all the terms and conditions
applicable to the Option prior to transfer. The term “Immediate Family” means Executive’s spouse,
parents, children, stepchildren, adoptive relationships, sisters, brothers and grandchildren (and,
for this purpose, shall also include Executive). No right or interest of Executive or any
transferee in this Option shall be subject to any lien or any obligation or liability of Executive
or any transferee.

     6. Termination of Option.

          (a) The portion of the Option that is not exercisable pursuant to subparagraphs 3(a), (b), (c)
or (d) as of the date of termination of Executive’s employment with PRGX will terminate
automatically at the close of business on that date (or if termination of Executive’s employment is
for Cause (as defined in the Employment Agreement), immediately upon such termination).

          (b) Except as otherwise set forth in Executive’s Employment Agreement, this Option Agreement
and any portion of the Option not either terminated pursuant to subparagraph 6(a) or already
exercised will terminate automatically and without further notice at the close of business (or in
case of (i) below, immediately upon termination) on the earliest of the following dates: (i) on the
date of termination of Executive’s employment with PRGX, if termination of Executive’s employment
is for Cause (as defined in the Employment Agreement); (ii) the one year anniversary following the
date of termination of Executive’s employment with PRGX, if termination of Executive’s employment
is for death or Incapacity (as defined in the Employment

3

 

Agreement) or retirement on or after Executive attains age 65; (iii) 90 calendar days
following the date of termination of Executive’s employment with PRGX, if termination of
Executive’s employment is for any reason other than death, Incapacity, retirement or for Cause; or
(iv) the seventh anniversary of the Grant Date.

          (c) In no event may the Option be exercised, in whole or in part, after termination pursuant
to subparagraphs 6(a) or 6(b).

     7. Investment Representations. PRGX may require Executive, as a condition of
exercising the Option, to give written assurances in substance and form satisfactory to PRGX to the
effect that Executive is acquiring the Option Shares for Executive’s own account for investment and
not with any present intention of selling or otherwise distributing them, and to such other effect
as PRGX deems necessary or appropriate in order to comply with applicable federal and state
securities laws.

     8. Registration of Option and Option Shares. PRGX shall use its reasonable best
efforts to file, within one year of the date hereof, a registration statement on Form S-8 under the
Securities Act of 1934, as amended, to register the resale of the Option Shares.

     9. Compliance with Law. The Option is subject to the requirement that, if at any time
counsel to PRGX determines that the listing, registration or qualification of the Option Shares
upon any securities exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in connection with, the
issuance or purchase of the Option Shares, then the Option may not to be exercised, in whole or in
part, unless the listing, registration, qualification, consent or approval has been effected or
obtained on conditions acceptable to the Compensation Committee. Nothing in this Option Agreement
will be deemed to require PRGX to apply for or to obtain the listing, registration, qualification,
consent or approval.

     10. Recapitalization. If the outstanding shares of Common Stock are changed into or
exchanged for a different number or kind of shares or other securities of PRGX by reason of any
recapitalization, reclassification, stock split, stock dividend, combination, subdivision or
similar transaction, then, subject to any required action by PRGX’s shareholders, the number of
Option Shares, the kind of shares or other securities of PRGX subject to the Option and the
Exercise Price are to be proportionately adjusted; except that no fractional shares are to be
issued or made subject to the Option in making the foregoing adjustments. All adjustments made by
the Compensation Committee under this paragraph 10 will be final, conclusive and binding upon
Executive.

     11. Reorganization. If, while all or any portion of the Option remains exercisable,
PRGX proposes to merge or consolidate with another corporation, whether or not PRGX is to be the
surviving corporation, or if PRGX proposes to liquidate or sell or otherwise dispose of
substantially all of its assets or substantially all of the outstanding shares of Common Stock are
to be sold, or a Change in Control occurs (within the meaning of the Employment Agreement) then the
Compensation Committee may, in its sole discretion, either (i) make appropriate provision for the
protection of the Option by the substitution on an equitable basis of (A) appropriate stock of the
surviving corporation or its parent in the merger or consolidation, or

4

 

other reorganized corporation that will be issuable in respect to the Option Shares then
exercisable, or (B) any alternative consideration as the Compensation Committee, in good faith, may
determine to be equitable in the circumstances; and, in either case, require in connection
therewith the surrender of the Option so replaced; or (ii) in the case of a Change in Control, upon
written notice to Executive, provide that the unexercised (but exercisable or exercisable on the
Change in Control) portion of the Option must be exercised within a specified number of days of the
date of such notice or the Option will be terminated in its entirety (including the portion that is
not then exercisable). In any such case, the Compensation Committee may, in its discretion,
accelerate the date on which the Option, in whole or in part, becomes exercisable.

     12. Rights as Shareholder. Neither Executive nor any executor, administrator,
distributee or legatee of Executive’s estate will have any of the rights or privileges of a
shareholder of PRGX in respect of any of the Option Shares unless and until those Option Shares
have been fully paid and the name of Executive (or of Executive’s personal representative,
administrator, distributee or legatee of Executive’s estate) has been entered as the shareholder of
record on PRGX’s books.

     13. Withholding of Taxes. PRGX’s obligation to deliver Options Shares upon exercise of
the Option is subject to Executive’s satisfaction of any applicable federal, state and local income
and employment tax and withholding requirements in a manner and form satisfactory to PRGX. In
accordance with procedures that the Compensation Committee may establish, the Compensation
Committee, to the extent applicable law permits, may allow Executive to pay any such amounts (i) by
surrendering (actual or by attestation) shares of Common Stock that the Executive already owns and,
if necessary to avoid adverse accounting consequences, has held for at least six months (but only
for the minimum required withholding); (ii) by a cashless exercise though a broker, (iii) by means
of a “net exercise” procedure or (iv) by such other medium of payment as the Compensation
Committee in its discretion shall authorize.

     14. No Special Employment Rights. No provision in this Option Agreement will be deemed
to grant to Executive any right with respect to Executive’s continued employment with, or other
engagement by PRGX or interfere in any way with the ability of PRGX at any time to terminate
Executive’s employment or other engagement or to increase or decrease Executive’s compensation from
the rate in existence at the Grant Date.

     15. Other Employee Benefits. The amount of any compensation deemed to be received by
Executive as a result of the exercise of the Option or the sale of Option Shares received upon the
exercise will not constitute “earnings” with respect to which any other benefits of Executive are
determined, including, without limitation, benefits under any pension, profit sharing, life
insurance or salary continuation plan.

     16. Interpretation of this Option Agreement. All decisions and interpretations made by
the PRGX Board or the Compensation Committee with regard to any question arising under this Option
Agreement will be binding and conclusive on PRGX and Executive and any other person entitled to
exercise the Option as provided for in this Option Agreement.

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

5

 

     18. Successors and Assigns. Subject to paragraph 5, this Option Agreement is to bind
and inure to the benefit of and be enforceable by Executive, PRGX and their respective heirs,
executors, personal representatives, successors and assigns.

     19. Notices. Any notice provided for in this Option Agreement must 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:

Romil Bahl

            
             
             
             
            

            
             
             
             
            

Notices to PRGX:

PRG-Schultz International, Inc.

600 Galleria Parkway

Suite 100

Atlanta, Georgia 30339-8426

Attn: Senior Vice President and 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 Option Agreement will
be deemed to have been given when so delivered, sent or mailed.

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

     21. Complete Agreement. This Option 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.

     22. Amendment and Waiver. Subject to the next sentence, the provisions of this Option
Agreement may be amended or waived only with the prior written consent of PRGX and Executive, and
no course of conduct or failure or delay in enforcing the provisions of this Option Agreement is to
affect the validity, binding effect or enforceability of this Option Agreement. PRGX unilaterally
may waive any provision of this Option Agreement in writing to the extent that the waiver does not
adversely affect the interests of Executive under this Option Agreement,

6

 

but the waiver is not to operate as or be construed to-be a subsequent waiver of the same
provision or a waiver of any other provision of this Option Agreement.

     23. Section 409A. It is intended that this Option be exempt from the requirements
applicable to nonqualified deferred compensation subject to Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”). For purposes of this Option Agreement, any action taken
with respect to the Option shall be undertaken in a manner that will not negatively affect the
status of the Option as exempt from treatment as deferred compensation subject to Section 409A of
the Code unless such action otherwise complies with Section 409A of the Code to the extent
necessary to avoid noncompliance.

[SIGNATURE PAGE TO FOLLOW]

7

 

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

	 	 	 	 	 
	 	PRG-SCHULTZ INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	Romil Bahl 	 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}]]