Document:

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                                                                    Exhibit 10.3

[PRG LOGO]
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www.prg.com  2300 Windy Ridge Parkway, Suite 100 North, Atlanta, GA 30339-8426
                         Office 770.779.3900  Fax 770.779.3133

December 20, 2001

Andrew Schultz
9241 LBJ Freeway
Dallas, TX 75243

Dear Andy:

I am pleased to extend this offer of full time employment with The Profit
Recovery Group USA, Inc. ("PRG") as an executive officer. This offer is
conditioned upon the closing of the acquisition of Howard Schultz & Associates
International, Inc. ("HSA-Texas") and related companies (the "Closing") and your
signing the attached Employee Agreement. The terms of this offer when accepted
by you, together with the Employee Agreement you have signed, will replace and
supersede the terms of employment that you have with HSA-Texas, effective upon
the Closing. We are very excited about your joining our organization and the
opportunities for our mutual success.

Enclosed is our new hire package, which includes the forms to be completed and
returned to my attention at the Atlanta office. Both this offer letter and
Employee Agreement must be signed prior to the Closing.

The following confirms our offer:

         1.       Base Salary. Your base salary will be at the rate of $240,000
                  per annum, paid $9,230.77 every two weeks and pro-rated for
                  partial years.

         2.       Bonus. You will be eligible for an incentive bonus plan, which
                  will include payout potentials of 35% of your base pay for
                  achievement of annual target performance goals and pay out
                  potentials of 70% of your base pay for achievement of annual
                  max performance goals, in accordance with PRGX's incentive
                  bonus plan, prorated for 2002 if the Closing occurs after
                  January 2002. See Addendum A for more details about the
                  performance goals and bonus opportunity for 2002. Your bonus
                  for 2002 will be no less than $60,000, prorated for the number
                  of months in 2002 after the Closing occurs.

         3.       Term. The term of your employment shall commence on the date
                  of the Closing ("Closing Date"), and shall continue until the
                  second anniversary of the Closing Date, unless sooner
                  terminated as hereinafter provided.

         4.       Employee Benefits. You will be eligible for participation in
                  PRG's Employee Benefits Plan, which currently offers medical,
                  dental, life, short term and long term disability insurance,
                  flexible spending accounts, 401(k) Savings Plan and Employee
                  Stock Purchase Program. The effective dates for your coverage
                  and participation in these plans have previously been
                  communicated to you under separate cover and with respect to
                  all insured plans, will be subject to your eligibility for
                  coverage at standard rates.

         5.       Termination.

         (a)      This Agreement may be terminated by PRG for "cause" upon
                  delivery to you of notice of termination. As used herein,
                  "cause" shall mean (i) fraud, material dishonesty, gross
                  negligence, willful misconduct, commission of a felony or an
                  act of moral turpitude, or (ii) engaging in activities
                  prohibited by Sections 3, 4, 5, 6, 7 or 9 of the Employee
                  Agreement signed by you and dated as of date

        Recovery Services - Expense Containment - Knowledge Application

<PAGE>
                                                                 Andrew Schultz
                                                              December 20, 2001
                                                                         Page 2

         hereof, or any other material breach of this Agreement.

     (b) You may, without cause, terminate this Agreement by giving PRG
         thirty (30) days' written notice in the manner specified in
         Section 7 hereof and such termination will be effective on the
         thirtieth (30th) day following the date of such notice or such
         earlier date as PRG specifies.

     (c) In the event of your Disability, physical or mental, PRG will
         have the right, subject to all applicable laws, including without
         limitation, the Americans with Disabilities Act ("ADA"), to
         terminate your employment immediately. For purposes of this
         Agreement, the term "Disability" shall mean your inability or
         expected inability (or a combination of both) to perform the
         services required of you hereunder due to illness, accident or
         any other physical or mental incapacity for an aggregate of
         ninety (90) days within any period of one hundred eighty (180)
         consecutive days during which this Agreement is in effect, as
         agreed by the parties or as determined pursuant to the next
         sentence. If there is a dispute between you and PRG as to whether
         a Disability exists, then such issue shall be decided by a
         medical doctor selected by PRG and a medical doctor selected
         by you and your legal representative (or, in the event that such
         doctors fail to agree, then in the majority opinion of such
         doctors and a third medical doctor chosen by such doctors). Each
         party shall pay all costs associated with engaging the medical
         doctor selected by such party and the parties shall each pay one-
         half (1/2) of the costs associated with engaging any third medical
         doctor.

     (d) In the event this Agreement is terminated, all provisions in this
         Agreement or the Employee Agreement relating to any action, including
         those of payment or compliance with covenants, subsequent to
         termination shall survive such termination.

     (e) If your employment with PRG is terminated by PRG for cause or if you
         voluntarily resign, you will receive your base salary prorated through
         the date of termination, payable in accordance with PRG's normal
         payroll procedure.

     (f) If your employment with PRG is terminated by your death or Retirement,
         you (or your legal representative in the case of death) will receive
         base salary for the year in which such termination occurs prorated
         through the date of termination and you will not receive any other
         amount in respect of the year in which termination occurs or in respect
         of any subsequent years. The prorated base salary will be in
         accordance with PRG's normal payroll procedure and the prorated bonus
         will be paid in a lump sum within (90) days after the end of the year
         to which it relates.

     (g) If your employment with PRG is terminated by Disability (as defined
         herein), you or your legal representative will receive all unpaid
         base salary for the year in which such termination occurs prorated
         through the date of termination with such prorated base salary payable
         in accordance with PRG's normal payroll procedure and the prorated
         bonus payable in a lump sum within ninety (90) days after the end of
         the year to which it relates.

     (h) If your employment is terminated for any reason, you will be paid
         within sixty (60) days of termination for the value of all unused
         vacation time which accrued during the calendar year in which
         such termination occurs up to the date of termination in accordance
         with the Company's policies.
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                                                                  Andrew Schultz
                                                               December 20, 2001
                                                                          Page 3

         6.       Successors and Assigns. You may not assign this Agreement.
                  This Agreement may be assigned by PRG to any affiliate of PRG.
                  The provisions of this Agreement will be binding upon your
                  heirs and legal representatives.

         7.       Notices. Any notice to be given under this Agreement shall be
                  given in writing and may be effected by personal delivery or
                  by placing such in the United States certified mail, return
                  receipt requested and addressed as set forth below, or as
                  otherwise addressed as specified by the parties by notice
                  given in like manner:

                           If to PRG:        The Profit Recovery Group USA, Inc.
                                             2300 Windy Ridge Parkway
                                             Suite 100 North
                                             Atlanta, Georgia 30339-8426
                                             Attention: General Counsel

                            If to you:       Andrew H. Schultz
                                             11553 E. Ricks Circle
                                             Dallas, TX 75230-3029

         8.       Withholdings. PRG will deduct or withhold from all amounts
                  payable to you pursuant to this Agreement such amount(s) as
                  may be required pursuant to applicable federal, state or local
                  news.

         9.       Entire Agreement. This Agreement, the Employee Agreement and
                  such other documents as may be referenced by such documents
                  (the "Referenced Documents"), constitute our entire agreement
                  with respect to the subject matter hereof and, except as
                  specifically provided herein or in the Employee Agreement and
                  the Referenced Documents, supersedes all of our prior
                  discussions, understandings and agreements. Any such prior
                  agreements shall be null and void. This Agreement may not be
                  changed orally, but only by an agreement in writing signed by
                  the party against whom enforcement of any waiver, change,
                  modification, extension or discharge is sought. Time is of the
                  essence of this Agreement and each and every Section and
                  subsection hereof.

         Please confirm your acceptance of this offer by signing and returning
         both this letter to me at your earliest convenience but in any event on
         or before December 28, 2001.

                                             Best wishes,

                                             /s/ John M. Cook
                                             ------------------
                                             John M. Cook

Agreed:

/s/ Andrew Schultz
---------------------
Andrew Schultz

                                                                               3<PAGE>
                       THE PRG-SCHULTZ INTERNATIONAL, INC.
                              STOCK INCENTIVE PLAN

SECTION 1. PURPOSE.

         The purpose of The PRG-Schultz International, Inc. Stock Incentive Plan
(the "Plan") is to enable PRG-Schultz International, Inc. (the "Company") to
attract, retain and reward directors, officers and other employees of, and
consultants and advisors to, the Company, and any Subsidiaries, Parent or
Affiliates thereof, and strengthen the mutuality of interests between such
persons and the Company's shareholders, by offering such persons performance
based stock incentives and/or other equity interests or equity-based incentives
in the Company.

SECTION 2. DEFINITIONS.

         For purposes of the Plan, the following terms shall be defined as set
forth below:

         (a)      "Affiliate" means any corporation, partnership or other entity
controlled by, or under common control with, the Company. For these purposes,
control shall consist of the ownership, either directly or indirectly, of more
than 50% of the ownership interests of an entity.

         (b)      "Board" means the Board of Directors of the Company.

         (c)      "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.

         (d)      "Committee" means the Committee referred to in Section 3 of
the Plan. If at any time no Committee shall be in office, then the functions of
the Committee specified in the Plan may be exercised by the Board, as set forth
in Section 3 hereof.

         (e)      "Company" means PRG-Schultz International, Inc., a corporation
organized under the laws of the State of Georgia, or any successor corporation.

         (f)      "Fair Market Value" means, for purposes of determining the
exercise price for a Stock Option or SAR granted hereunder, as of any given
date:

                  (i)      if the Stock is listed on an established stock
         exchange or exchanges, or traded on the Nasdaq National Market System
         ("Nasdaq/NMS") the closing price of the Stock as listed thereon on the
         applicable day, or if no sale of Stock has been made on any exchange on
         that date, on the next preceding day on which there was a sale of
         Stock;

                  (ii)     if the Stock is not listed on an established stock
         exchange or Nasdaq/NMS but is instead traded over-the-counter, the
         mean of the dealer "bid" and "ask" prices of the Stock in the
         over-the-counter market on the applicable day, as reported by the
         National Association of Securities Dealers, Inc.;

                  (iii)    if the Stock is not listed on any exchange or traded
         over-the-counter, the value as determined in good faith by the
         Committee;

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         (g)      "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.

         (h)      "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.

         (i)      "Optionee" means any person holding an Option in accordance
with the terms of this Plan.

         (j)      "Parent" means any corporation (other than the Company) and
any successor corporation in an unbroken chain of corporations ending with the
Company if each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.

         (k)      "Plan" is defined in Section 1 hereof and includes the Plan as
hereinafter amended from time to time.

         (l)      "Plan Participant" means any person granted an Option SAR or
Stock Award pursuant to the Plan.

         (m)      "SAR" means a stock appreciation right which entitles a Plan
Participant to receive, in cash or Stock (as determined in accordance with
Section 6(g)) value equal to all or a portion of the excess of: (a) the Fair
Market Value of a specified number of shares of Stock at the time of exercise,
over (b) an exercise price established by the Committee.

         (n)      "Stock" means the common stock of the Company.

         (o)      "Stock Award" means a grant of shares of Stock or of a right
to receive shares of Stock (or their cash equivalent or a combination of both)
in the future.

         (p)      "Stock Option" or "Option" means any option to purchase shares
of Stock granted pursuant to the Plan.

         (q)      "Subsidiary" means any corporation (other than the Company)
and any successor corporation in an unbroken chain of corporations beginning
with the Company if each of the corporations (other than the last corporation in
the unbroken chain) owns stock possessing 50% or more of the total combined
voting

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power of all classes of stock in one of the other corporations in the chain.

SECTION 3. ADMINISTRATION.

         (a)      By Committee. The Plan shall be administered by a Committee of
not less than two Directors who are not employees of the Company, who shall be
members of the Board and who shall serve at the pleasure of the Board. The
functions of the Committee specified in the Plan may be exercised by the Board,
if and to the extent that no Committee exists which has the authority to so
administer the Plan.

         (b)      Authority of Committee The Committee shall have full authority
to grant, pursuant to the terms of the Plan, Stock Options, SARs and Stock
Awards to directors, officers and other key employees, consultants and advisors
eligible to be Plan Participants under Section 5 hereof. The Committee shall
have the authority to adopt, alter and repeal such rules, guidelines and
practices governing the Plan as it shall, from time to time, deem advisable; to
interpret the terms and provisions of the Plan and any award under the Plan (and
any agreements relating thereto); and to otherwise supervise the administration
of the Plan. Without limiting the generality of the foregoing, the Committee
shall have the authority:

                  (i)      to select the directors, officers and other key
         employees of, and consultants and advisors to, the Company and any
         Subsidiaries, Parent and Affiliate to whom Stock Options, SARs and
         other Stock Awards may from time to time be granted hereunder;

                  (ii)     to determine whether and to what extent Incentive
         Stock Options, Non-Qualified Stock Options, SARS and other Stock Awards
         or any combination thereof are to be granted hereunder to one or more
         eligible persons;

                  (iii)    to determine the number of shares subject to each
         such Option, SAR and other Stock Award granted hereunder;

                  (iv)     to determine the terms and conditions, not
         inconsistent with the terms of the Plan, of any Option, SAR or other
         Stock Award granted hereunder including, but not limited to, the
         exercise price, or any vesting, acceleration, or forfeiture
         restrictions regarding any Option, SAR or other Stock Award and/or the
         shares of Stock relating thereto, or any other restrictions and to
         waive any such terms or conditions in each case on such factors as the
         Committee shall determine, in its sole discretion; and

                  (v)      to determine whether and under what circumstances
         cash payments shall be made upon the termination of a Stock Option, SAR
         or other Stock Award, and whether and under what circumstances Stock
         acquired pursuant to the exercise of a Stock Option or SAR or pursuant

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         to the grant of a Stock Award shall be repurchased by the Company.

         (c)      Committee Decisions Final and Binding. All decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding on all persons,
including the Company and Plan Participants.

         (d)      Indemnification. In addition to such other rights of
indemnification that they may have as directors of the Company or as members of
the Committee, the members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member is liable for negligence or misconduct in
the performance of his or her duties.

SECTION 4. STOCK SUBJECT TO PLAN.

         The total number of shares of Stock reserved and available for
distribution under the Plan shall be 10,875,000 shares (including shares subject
to previous grants under the Company's 1996 Stock Option Plan), subject to
adjustment as set forth herein, increased from time to time by action of the
Board of Directors and the Stockholders of the Company. Such shares may consist,
in whole or in part, of authorized and unissued shares or treasury shares. If
any outstanding Option, SAR or other Stock Award under the Plan expires or is
terminated, the shares allocated to the unexercised portion of such Option, SAR
or other Stock Award shall again be available for future Stock Option grants.

         Notwithstanding the foregoing,

                  (i)      The maximum number of shares that may be covered by
                           awards granted to any one individual pursuant to
                           Section 6 (relating to Options and SARs) shall be
                           500,000 shares during any consecutive 12 month
                           period.

                  (ii)     On or before March 12, 2002, the maximum number of
                           shares that may be covered by Stock Awards granted to
                           any one individual pursuant to Section 7 shall be
                           500,000 shares during any consecutive 12 month
                           period. After March 12, 2002, the maximum number of
                           shares that may be covered by Stock Awards granted to
                           any one individual pursuant to Section 7 shall be
                           300,000 shares during any consecutive 12 month
                           period. The maximum number of shares covered by Stock
                           Awards that may be granted after March

                                     Page 4
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                           12, 2002 pursuant to Section 7 shall be, in the
                           aggregate, 300,000 shares.

         In the event of any transaction described in Section 8(d) hereof, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the individual maximums set forth
above, in the number and option price of shares subject to outstanding Options
and SARs and in the number of shares subject to outstanding Stock Awards such
that each Plan Participant will continue to hold the same economic equivalent he
had immediately prior to such transaction and such that all maximums will be
increased or decreased in accordance with such transaction, provided that the
number of shares subject to any such award shall always be a whole number.

SECTION 5. ELIGIBILITY.

         Directors, officers and key employees of, and consultants and advisors
to, the Company and any Subsidiaries, Parent and Affiliate thereof who are
responsible for or contribute to the management, growth and/or profitability of
the business of the Company and/or any Subsidiaries, Parent and Affiliate
thereof are eligible to be Plan Participants and to receive awards under the
Plan.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS AND SARS.

         Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options, and (ii) Non-Qualified Stock Options. The Committee shall have
the authority to grant to any eligible person Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options; provided, however,
that no person who is not an employee of the Company, its Parent or its
Subsidiaries shall be eligible to be granted Incentive Stock Options.

         Options and SARs granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:

         (a)      Option Designation. Each Option granted under the Plan shall
be clearly identified at the time of grant as an Incentive Stock Option or a
Non-Qualified Stock Option. An Incentive Stock Option may not be granted in
tandem stock option arrangements under the Plan (i.e., where an Incentive Stock
Option is issued together with a Non-Qualified Stock Option and the exercise of
either type of Option affects the right to exercise the other type of Option).

         (b)      Written Agreement. Each Option and SAR granted under the Plan
shall be evidenced by a written agreement in such form as the Committee shall
from time to time approve. All such agreements shall comply with and be subject
to the terms of the Plan.

         (c)      Exercise Price. The "Exercise Price" of each Option and SAR
granted under this Section 6 shall be established by the Committee or shall be

                                     Page 5
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determined by a method established by the Committee at the time the Option or
SAR is granted; except that the Exercise Price shall not be less than the
greater of 100% of the Fair Market Value or the par value of a share of Stock as
of the Pricing Date, as defined below. However, if the Plan Participant owns
more than 10% of the total combined voting power of all classes of capital stock
of the Company or any Subsidiary or Parent, the Exercise Price of an Incentive
Stock Option granted to such Plan Participant shall not be less than 110% of the
Fair Market Value of a share of Stock as of the Pricing Date. For purposes of
the preceding sentence, the "Pricing Date" shall be the date on which the Option
or SAR is granted, except that the Committee may provide that: (i) the Pricing
Date is the date on which the recipient is hired or promoted (or similar event),
if the grant of the Option or SAR occurs not more than 90 days after the date of
such hiring, promotion or other event; and (ii) if an Option or SAR is granted
in tandem with, or in substitution for, an outstanding award, the Pricing Date
is the date of grant of such outstanding award.

         (d)      Term. The term of each Stock Option and SAR shall be fixed by
the Committee, but no Stock Option granted on or before March 12, 2002 shall be
exercised more than ten years (or, in the case of an Incentive Stock Option
granted to an employee who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary
or Parent, more than five years) after the date the Option is granted. Stock
Options and SARs granted after March 12, 2002 shall not be exercised more than
seven years after the date the Option is granted.

         (e)      Exercisability. Stock Options and SARs shall be exercised at
such time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant. If the Committee provides, in its
sole discretion, that any Stock Option or SAR is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time at or after grant in whole or in part, based on such factors as the
Committee shall determine, in its sole discretion.

         (f)      Method of Exercise. Subject to whatever installment exercise
provisions apply pursuant to Section 6(e) hereof, Options and SARs may be
exercised in whole or in part at any time during the term thereof, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased or the amount of the SAR to be exercised.

         Such notice shall be accompanied by payment in full of the purchase
price in the case of an Option, either by cash, check, note or such other
instrument as the Committee may accept. As determined by the Committee, in its
sole discretion, at or after grant, payment in full or in part may also be made
in the form of Stock already owned by the Optionee based, in each case, on the
fair market value of the Stock on the date the Option is exercised, as
determined for this purpose by the Committee in its sole discretion; provided,
however, that in no event shall payment in full or in part for the exercise of
an Option be made with any Stock which, as of the date of exercise of the
Option, has been owned by the Optionee less than six (6) months. If the
Committee permits such payment in the form of Stock, the certificate or
certificates representing the shares of

                                     Page 6
<PAGE>

Stock to be delivered shall be duly executed in blank by the Optionee or shall
be accompanied by a stock power duly executed in blank suitable for purposes of
transferring such shares to the Company. Fractional shares of Stock will not be
accepted in payment of the purchase price of shares acquired upon exercise of
the Option.

         No shares of Stock shall be issued until full payment therefor has been
made.

         (g)      Settlement of Award. Distribution following exercise of an
Option or SAR, and shares of Stock distributed pursuant to such exercise, shall
be subject to such conditions, restrictions and contingencies as the Committee
may establish. Settlement of SARs may be made in shares of Stock (valued at
their Fair Market Value at the time of exercise), in cash, or in a combination
thereof, as determined in the discretion of the Committee. The Committee, in its
discretion, may impose such conditions, restrictions and contingencies and may
waive any such conditions, restrictions and contingencies, at or after grant, or
otherwise accelerate the vesting of any Option or SAR, at any time, in its
discretion with respect to shares of Stock acquired pursuant to the exercise of
an Option or an SAR as the Committee determines to be desirable.

SECTION 7. STOCK AWARDS.

         Each Stock Award shall be subject to such conditions, restrictions and
contingencies as the Committee shall determine. These may include continuous
service and/or the achievement of performance measures. The performance measures
that may be used by the Committee for such Awards shall be measured by revenues,
income, or such other criteria as the Committee may specify. The Committee may
designate a single goal criterion or multiple goal criteria for performance
measurement purposes, with the measurement based on absolute Company or business
unit performance and/or on performance as compared with that of other
publicly-traded companies. If the right to become vested in a Stock Award
granted under this Section 7 is conditioned on the completion of a specified
period of service with the Company or any Subsidiary or Parent without
achievement of performance measures or other objectives being required as a
condition of vesting, then the required period of service for vesting shall be
not less than three years (subject to acceleration of vesting, to the extent
permitted by the Committee, in the event of the Participant's death, disability,
change in control or involuntary termination).

SECTION 8. MISCELLANEOUS.

         (a)      Non-Transferability of Options, SARs and Stock Awards. No
Option, SAR or Stock Award shall be transferable by a Plan Participant otherwise
than by will or by the laws of descent and distribution, and all Options and
SARs shall be exercisable, during the Plan Participant's lifetime, only by the
Plan Participant.

         (b)      Investment Representations. The Company may require any
grantee, as a condition of exercising an Option or SAR, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Stock subject to the Option or SAR for his own
account for

                                     Page 7
<PAGE>

investment and not with any present intention of selling or otherwise
distributing the same, and to such other effect as the Company deems necessary
or appropriate in order to comply with federal and applicable state securities
laws.

         (c)      Compliance with Securities Laws. Each Option and SAR shall be
subject to the requirement that, if at any time counsel to the Company shall
determine that the listing, registration, or qualification of the shares subject
to such Option and SAR 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 shares thereunder, such Option or SAR may not be exercised in whole or in
part unless such listing, registration, qualification, consent, or approval
shall have been effected or obtained on conditions acceptable to the Committee.
Nothing herein shall be deemed to require the Company to apply for or to obtain
such listing, registration, or qualification.

         (d)      Recapitalization. If the outstanding shares of Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, stock dividend, combination, subdivision or similar transaction,
then, subject to any required action by the stockholders of the Company, the
number and kind of shares of Stock subject to outstanding Options, SARs or Stock
Awards and available under the Plan and price per share of Stock for any
outstanding Options and SARs shall be proportionately adjusted; provided,
however, that no fractional shares shall be issued or made subject to an Option,
SAR or Stock Award in making the foregoing adjustments. All adjustments made by
the Committee under this Section shall be final, conclusive and binding upon the
holders of Options, SARs and Stock Awards.

         (e)      Reorganization. If, while unexercised Options and/or SARs
remain outstanding under the Plan, the Company proposes to merge or consolidate
with another corporation, whether or not the Company is to be the surviving
corporation, or if the Company proposes to liquidate or sell or otherwise
dispose of substantially all of its assets or substantially all of the
outstanding shares of Stock of the Company are to be sold, then the Committee
may, in its sole discretion, either (i) make appropriate provision for the
protection of any such outstanding Options and SARs by the substitution on an
equitable basis of appropriate stock of the surviving corporation or its parent
in the merger or consolidation, or other reorganized corporation that will be
issuable in respect to the shares of Stock of the Company subject to such
Options and SARs, provided that, with respect to Incentive Stock Options, such
provision shall satisfy the requirement that no additional benefits shall be
conferred upon Optionees as a result of such substitution within the meaning of
Section 424(a) of the Code, and that the excess of the aggregate fair market
value of the shares subject to the Options immediately after such substitution
over the purchase price thereof is not more than the excess of the aggregate
fair market value of the shares subject to such Options immediately before such
substitution over the purchase price thereof, or (ii) upon written notice to the
Plan Participants, provide that all unexercised Options and SARs must be
exercised within a specified number of days of the date of such notice or they
will be terminated. In any such case, the Committee may, in its discretion,
accelerate the date on which outstanding Options and SARs become exercisable. In

                                     Page 8
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no event, however, shall the Committee be obligated to take any action as a
result of any transaction described in this Section 8(e), it being acknowledged
that it is in the Committee's sole discretion to determine if, and to what
extent, the action authorized by this Section 8(e) shall be taken.

         (f)      Rights as a Shareholder. A Plan Participant shall have no
rights as a shareholder with respect to any shares subject to an Option or SAR
until the date of issue of a stock certificate to him or her for such shares and
only after such shares are fully paid. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such stock
certificate is issued.

         (g)      Annual Limitation For Incentive Stock Options. To the extent
that the Fair Market Value (determined as of the date of grant of an Option) of
shares of Stock with respect to which an Incentive Stock Option first becomes
exercisable by an Optionee during any calendar year exceeds $100,000, such
excess portion of the Stock Option shall thereafter be treated as a
Non-Qualified Stock Option.

SECTION 9. NO SPECIAL EMPLOYMENT RIGHTS.

         Nothing contained in the Plan or in any agreement pursuant to which an
Option, SAR or Stock Award is granted under the Plan shall confer upon any Plan
Participant any right with respect to the continuation of his employment or
other engagement by the Company or any Subsidiary, Parent or Affiliate or
interfere in any way with the ability of the Company or any Subsidiary, Parent
or Affiliate at any time to terminate such employment or other engagement or to
increase or decrease the compensation of the Plan Participant from the rate in
existence at the time of the grant of an award.

SECTION 10. OTHER EMPLOYEE BENEFITS.

         The amount of any compensation deemed to be received by an Plan
Participant as a result of the exercise of an Option or the sale of shares
received upon such exercise will not constitute "earnings" with respect to which
any other benefits of such Plan Participant are determined, including, without
limitation, benefits under any pension, profit sharing, life insurance, or
salary continuation plan.

SECTION 11. WITHHOLDING.

         The Company's obligation to deliver shares upon the exercise of any
Option or SAR granted under the Plan or to make any payments required by any
option agreement shall be subject to the grantee's satisfaction of any
applicable federal, state, and local income and employment tax and withholding
requirements in a manner and form satisfactory to the Company.

                                     Page 9
<PAGE>

SECTION 12. GOVERNING LAW.

         The Plan, all awards granted under the Plan and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Georgia.

SECTION 13. AMENDMENT OF THE PLAN.

         The Board may at any time and from time to time amend, suspend, alter,
or discontinue the Plan in any respect, except that the Board may not, without
the approval of the Company's shareholders:

         (a)      except as expressly provided in Section 8(d) hereof, alter the
total number of shares reserved for issuance pursuant to the Plan;

         (b)      change the price at which Options and SARs may be granted
pursuant to Section 6(c) hereof;

         (c)      change the persons or class of persons eligible to participate
in the Plan;

         (d)      extend the maximum Option period under Section 6(d) hereof or
the term of the Plan described in Section 14(b) hereof; or

         (e)      materially increase the benefits accruing to Plan
Participants.

         The Committee may amend the terms of any award, prospectively or
retroactively, but, subject to Section 3 hereof, no such amendment shall impair
the rights of any holder without the holder's consent.

SECTION 14. EFFECTIVE DATE AND DURATION OF THE PLAN.

         (a)      Effective Date. The Plan shall become effective when approved
by the Company's shareholders.

         (b)      Termination. Unless the Plan is sooner terminated in
accordance with the terms herein, no further grants of awards may be made under
the Plan after the earlier of (i) the close of business on the day next
preceding the tenth anniversary of the date of its adoption by the shareholders
and (ii) the date on which all shares available for issuance under the Plan
shall have been issued pursuant to Stock Awards or the exercise of Options or
SARs. Notwithstanding the foregoing, Options granted prior to the date specified
in (i) above may extend beyond that date.

                                    Page 10

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