FIRST AMENDMENT
                                       TO
                        SEPARATION AND RELEASE AGREEMENT
 
 
     THIS FIRST AMENDMENT TO SEPARATION AND RELEASE AGREEMENT (this "Amendment")
is made and entered into as of March 16, 2006, between  PRG-Schultz USA, Inc., a
Georgia  corporation (the "Company"),  and John M. Cook, a resident of the State
of Georgia ("Executive").
 
     WHEREAS,  the Company and Executive  entered into a Separation  and Release
Agreement dated as of August 2, 2005 (the "Separation Agreement") setting forth,
inter alia, the terms under which Executive separated from the Company.
 
     WHEREAS,  as a condition  precedent to the Company's  restructuring  of its
bondholder  debt and its bank  debt,  the  Company  is  obligated  to secure the
Amendment of Executive's  Separation  Agreement as hereinbelow provided (without
which Amendment the same corporate restructuring will not proceed).
 
     WHEREAS,  each of the Company and Executive  desire to amend the Separation
Agreement as hereinafter provided.
 
     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth  herein,  and for other good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:
 
     1.  Amendment.  Section  5(b)(II)(A) is hereby amended by deleting  Section
5(b)(II)(A) in its entirety and by substituting in lieu thereof the following:
 
          "(A) in monthly installments,  commencing April 1, 2006, the following
          payments:
 
                    Payment No.              Amount Per Payment
 
                        1                       $275,620.96
 
                      2-58                       $91,873.72
 
                      Total                   $5,512,423.00
                                               =============
 
The Company shall pay all applicable payroll taxes and national health insurance
taxes accruing with respect to the payments under this Section."
 
     2. Fees and Expenses. On April 1, 2006, the Company shall pay the fixed sum
of  $150,000  to CT  Investments,  LLC  to  defray  the  fees  and  expenses  of
Executive's  legal counsel and financial advisor incurred in connection with the
multiple  months of  negotiations  leading up to and including  this  Amendment;
provided,  however,  that the  aggregate  amount  of fees and  expenses  payable
pursuant to this Section 2 and  pursuant to Section 2 of that certain  Amendment
to Separation  and Release  Agreement,  dated as of March 16, 2006,  between the
Company and John M. Toma shall be collectively fixed at $150,000.
 
     3. Certain  Definitions.  Capitalized terms used without definition in this
Amendment  have the meanings set forth in the  Separation  Agreement (as amended
hereby).
 
 
<PAGE>
 
     4.  Counterparts.   This  Amendment  may  be  executed  in  any  number  of
counterparts,  each of which will be deemed to be an original,  but all of which
will constitute one and the same  instrument,  and the signature of any party to
any counterpart shall be deemed a signature to, and maybe appended to, any other
counterpart.
 
     5. Effect; Governing Law. Except as specifically amended by this Amendment,
the Separation  Agreement shall remain in full force and effect.  This Amendment
shall be binding  upon and shall inure to the benefit of the parties  hereto and
their successors and permitted assigns.  This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia (without regard to
the conflicts-of-law principles thereof).
 
                                    * * * * *
 
 
 
 
<PAGE>
 
 
     IN WITNESS  WHEREOF,  the parties hereto have executed this Amendment as of
the day and year first above written.
 
                                       PRG-SCHULTZ USA, INC.
 
 
                                       By:  /s/ James B. McCurry
                                           -------------------------------------
                                       Name:  James B. McCurry
                                           -------------------------------------
                                       Title: President and Chief Executive
                                              Officer
                                           -------------------------------------
 
 
 
                                       EXECUTIVE:
 
                                        /s/ John M. Cook
                                       -------------------------------------
                                       John M. Cook
 
 
 

JAMES B.  MCCURRY

 

                              EMPLOYMENT AGREEMENT

 

     This Employment Agreement (this "Agreement") is entered into as of July __,

2005 (the "Effective Date") among  PRG-SCHULTZ USA, INC., a Georgia  corporation

(the "Company"),  PRG-SCHULTZ  INTERNATIONAL,  INC., a Georgia  corporation that

owns all of the capital  stock of the  Company  ("PRGX"),  and JAMES B.  MCCURRY

("Executive").

 

     The parties agree as follows:

 

     1. Certain  Definitions.  Certain  words or phrases  with  initial  capital

letters  not  otherwise  defined  herein are to have the  meanings  set forth in

paragraph 8.

 

     2. Employment.  The Company shall employ  Executive,  and Executive accepts

employment  with the  Company,  as of the  Effective  Date,  upon the  terms and

conditions set forth in this Agreement for the period beginning on the Effective

Date and ending as provided in paragraph 5 (the "Employment Period").

 

     3. Position and Duties.

 

     (a) During the Employment  Period,  Executive  shall serve as the President

and Chief  Executive  Officer of the Company  and is to have the normal  duties,

responsibilities and authority of an executive serving in such position, subject

to the power of the board of directors of the Company (the "Company  Board") and

the board of  directors  of PRGX (the "PRGX  Board") to  provide  oversight  and

direction with respect to such duties,  responsibilities  and authority,  either

generally or in specific instances and consistent with such position.

 

     (b) During the Employment  Period,  the PRGX Board shall nominate Executive

to serve as a member of the PRGX Board.  Subject, as required,  to reelection by

PRGX's  shareholders,  Executive shall serve as a member of the PRGX Board, with

no additional  remuneration payable to Executive for that service. Upon the Date

of Termination,  Executive shall, at the PRGX Board's  request,  resign from the

PRGX Board.

 

     (c) During the Employment Period, the PRGX Board shall appoint Executive to

serve as president and chief executive officer of PRGX. Executive shall serve as

the  president  and  chief  executive   officer  of  PRGX,  with  no  additional

remuneration   payable  to  Executive  for  that  service.   Upon  the  Date  of

Termination,  Executive  shall,  at the PRGX  Board's  request,  resign from the

position of president and chief executive officer of PRGX.

 

     (d) Executive shall report to the Company Board and the PRGX Board.

 

     (e) During the Employment  Period,  Executive shall devote Executive's best

efforts  and  Executive's  full  professional  time and  attention  (except  for

permitted   vacation  periods  and  reasonable   periods  of  illness  or  other

incapacity)  to the Business and affairs of the Company,  its  subsidiaries  and

affiliates.  Executive shall perform Executive's duties and  responsibilities to

the best of Executive's abilities in a diligent, trustworthy,  business-like and

efficient manner.  During the Employment Period,  Executive shall not serve as a

director  or  a  principal  of  another  company  or  any  charitable  or  civic

organization without the PRGX Board's prior consent,  except that the PRGX Board

hereby  approves and consents to Executive's  continued  service on the board of

 

<PAGE>

 

directors of Interstate Hotels and Resorts,  Inc. (or its successors) and on the

board of trustees of The Galloway School, of Atlanta, Georgia.

 

     (f)  Executive  shall  perform  Executive's  duties  and   responsibilities

principally in the Atlanta, Georgia metropolitan area.

 

     (g) Executive  shall  acquire,  through  purchase on the open market,  that

number  of shares  of the  Company's  common  stock as is  required  by any PRGX

Board-approved share ownership program applicable to all of the Company's senior

executives as may be in effect from time to time.  Executive shall maintain this

minimum  ownership  requirement  at all times  during the  Employment  Period in

accordance with the provisions of the share ownership program.

 

     4. Compensation and Benefits.

 

     (a)  Salary.  The  Company  agrees to pay  Executive  a salary  during  the

Employment  Period in installments  based on the Company's  payroll practices as

may be in effect from time to time.  The Company shall set  Executive's  initial

salary  at the rate of  $500,000  per year  ("Base  Salary").  The  Compensation

Committee  of the PRGX Board shall review  Executive's  Base Salary from time to

time. The Compensation  Committee of the PRGX Board may, in its sole discretion,

increase  Executive's Base Salary, but may decrease Executive's Base Salary only

to the extent that the  Company  institutes  a salary  reduction  generally  and

ratably  applicable  to all senior  executives  of the  Company.  If the Company

modifies the Base Salary as defined, "Base Salary" in this Agreement is to refer

to the modified Base Salary.

 

     (b) Annual Bonus.

 

     (i) For fiscal year 2005, Executive is entitled to receive a bonus equal to

70% of Base  Salary,  prorated  based on the  number of days  actually  employed

during  fiscal year 2005,  payable to  Executive in a lump sum not later than 75

days after the end of the fiscal year.

 

     (ii) For each fiscal year following  fiscal year 2005 during the Employment

Period,  Executive shall be eligible to receive an annual bonus, with the annual

bonus potential to be between 70% of Base Salary (i.e.,  70% upon achievement of

annual "target"  performance  goals) and a maximum of 140% of Base Salary (i.e.,

140% upon achievement of annual "maximum"  performance goals), with the "target"

and "maximum" performance goals and bonus criteria to be defined and approved by

the  Compensation  Committee  of the PRGX Board in advance for each fiscal year.

The Company  shall pay any such annual  bonus  earned to Executive in a lump sum

not later than 75 days after the end of the fiscal year.

 

     (c)  Stock  Options.   Contemporaneously  with  Executive's  entering  into

employment  with the  Company,  PRGX shall grant  Executive a stock  option with

respect to 2,000,000  shares of the common stock of PRGX, in  accordance  with a

stock  option  agreement in the form  attached  hereto as Exhibit A and executed

contemporaneously with this Agreement.

 

                                       2

 

<PAGE>

 

     (d) Expense  Reimbursement.  The Company will  reimburse  Executive for all

reasonable  expenses  incurred by Executive during the Employment  Period in the

course of performing  Executive's duties under this Agreement in accordance with

the  Company's  policies  in effect  from time to time with  respect  to travel,

entertainment  and  other  business  expenses,  and  subject  to  the  Company's

requirements applicable generally with respect to reporting and documentation of

such expenses.

 

     (e) Standard Executive  Benefits Package.  Executive is entitled during the

Employment  Period to  participate,  on the same  basis as the  Company's  other

senior  executives,  in the Company's  Standard  Executive  Benefits Package.  A

summary of such benefits as in effect on the date of this  Agreement is attached

hereto as Exhibit B.

 

     (f)  Vacation;  Holidays.  Executive  is  entitled  to four  weeks  of paid

vacation,  without  carryover for unused  vacation,  as well as paid holidays in

accordance with the Company's policies in effect from time to time.

 

     (g)  Indemnification.  Contemporaneously  with  this  Agreement,  PRGX  and

Executive shall execute PRGX's standard form of  Indemnification  Agreement,  in

the form attached hereto as Exhibit C.

 

     (h) Professional Fees. Promptly following receipt of invoices therefor, the

Company will reimburse  Executive for Executive's  reasonable  professional fees

and costs (and related  disbursements)  incurred in connection with  Executive's

negotiation and execution of this Agreement, in an amount not to exceed $15,000.

 

     (i) Additional  Compensation/Benefits.  The  Compensation  Committee of the

PRGX Board, in its sole discretion,  will determine any compensation or benefits

to be provided to Executive during the Employment Period other than as set forth

in this  Agreement,  including,  without  limitation,  any future grant of stock

options or other equity awards.

 

     (j) Disgorgement of Compensation.  If the Company is required to prepare an

accounting  restatement  due to  its  material  noncompliance,  as a  result  of

misconduct,   with  any  financial  reporting   requirement  under  the  federal

securities  laws, to the extent  required by law,  Executive  will reimburse the

Company for (i) any bonus or other incentive-based or equity-based  compensation

received by Executive from the Company  (including such compensation  payable in

accordance  with this  paragraph 4 and  paragraph 6) during the 12-month  period

following the first public  issuance or filing with the  Securities and Exchange

Commission  (whichever  first occurs) of the financial  document  embodying that

financial reporting requirement; and (ii) any profits realized by Executive from

the sale of the Company's securities during that 12-month period.

 

     (k) COBRA  Reimbursement.  Until the expiration of any  applicable  waiting

periods  necessary  for  Executive to commence  participation  in the  Company's

healthcare  plans,  the Company shall reimburse to Executive,  upon  Executive's

written  requests  therefor  from time to time,  the amounts  paid on account of

premiums to FedEx Kinko's by Executive in  connection  with  Executive's  rights

under COBRA (as defined below) to maintain the healthcare  benefits  provided to

Executive under FedEx Kinko's healthcare plans.

 

                                       3

 

<PAGE>

 

     5. Employment Period.

 

     (a) Subject to  subparagraph  5(b), the Employment  Period will commence on

the  Effective  Date and will  continue  until,  and will end  upon,  the  third

anniversary of the Effective Date;  except that on the third  anniversary of the

Effective Date,  unless either party shall have given the other 30-days' written

notice otherwise,  the Employment Period will be extended  automatically for one

additional year.

 

     (b) The  Employment  Period  will end upon the first to occur of any of the

following  events:  (i)  Executive's  death;  (ii) the Company's  termination of

Executive's employment on account of Disability; (iii) the Company's termination

of  Executive's  employment  for Cause (a  "Termination  for  Cause");  (iv) the

Company's  termination of Executive's  employment  without Cause (a "Termination

without Cause"); (v) Executive's  termination of Executive's employment for Good

Reason (a "Termination  for Good Reason");  or (vi)  Executive's  termination of

Executive's  employment  for any  reason  other than Good  Reason (a  "Voluntary

Termination").

 

     (c) Any termination of Executive's  employment under subparagraph 5(b) must

be  communicated  by a  Notice  of  Termination  delivered  by  the  Company  or

Executive, as the case may be, to the other party.

 

     (d) Executive will be deemed to have waived any right to a Termination  for

Good Reason  based on the  occurrence  or  existence  of a  particular  event or

circumstance  constituting  Good Reason  unless  Executive  delivers a Notice of

Termination  within 90 days from the date  Executive  first  became aware of the

event or circumstance.

 

     6. Post-Employment Period Payments.

 

     (a) At the Date of Termination, regardless of the reason for termination of

employment,  Executive  will be entitled to (i) any Base Salary that has accrued

but is  unpaid,  any  annual  bonus  that has been  earned  but is  unpaid,  any

reimbursable  expenses that have been incurred but are unpaid, and any unexpired

vacation  days that have accrued  under the  Company's  vacation  policy but are

unused, as of the end of the Employment  Period,  (ii) any plan benefits that by

their terms extend beyond termination of Executive's employment (but only to the

extent provided in any such benefit plan in which Executive has  participated as

a Company employee and excluding, except as hereinafter provided in paragraph 6,

any Company  severance  pay program or policy) and (iii)  reimbursement  for any

benefits to which  Executive is entitled and has paid in accordance  with Part 6

of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974,

as amended  ("COBRA") (such  reimbursement to be made upon  Executive's  written

requests therefor from time to time).  Except as specifically  described in this

subparagraph 6(a) and in the succeeding subparagraphs of this paragraph 6 (under

the circumstances described in those succeeding  subparagraphs),  from and after

the Date of  Termination  Executive  shall  cease to have any  rights to salary,

bonus, expense reimbursements or other benefits from the Company.

 

 

                                       4

<PAGE>

 

     (b) If the Employment Period ends in accordance with paragraph 5 on account

of Executive's  death,  Disability,  Voluntary  Termination  or Termination  for

Cause,  the  Company  will  make no  further  payments  to  Executive  except as

contemplated in subparagraph 6(a).

 

     (c)  Subject  to  subparagraph  (2),  if  the  Employment  Period  ends  in

accordance  with  paragraph  5 on account of a  Termination  without  Cause or a

Termination for Good Reason, Executive shall be entitled to the following:

 

(1)  a lump sum payment equal to either (i) in the event the  Employment  Period

     ends prior to the date that is 16 months after the  Effective  Date,  0.125

     times  the  number  of  months  in  the  Employment  Period  multiplied  by

     Executive's  Average Annual  Compensation (as defined below) or (ii) in the

     event  the  Employment  Period  ends on or after the date that is 16 months

     after the Effective Date, 2 times Executive's  Average Annual  Compensation

     (for purposes hereof,  "Average Annual  Compensation" means (x) Executive's

     Base  Salary for fiscal  year 2005,  if the Date of  Termination  occurs in

     fiscal year 2005, or the average of  Executive's  Base Salary in effect for

     the final two fiscal years in the Employment  Period  (including the fiscal

     year in which the Date of Termination  occurs),  if the Date of Termination

     occurs after  December 31,  2005;  plus (y) (A) if the Date of  Termination

     occurs prior to January 1, 2006, 70% of Base Salary,  prorated based on the

     number of days actually  employed  during fiscal year 2005; (B) if the Date

     of Termination occurs after December 31, 2005 but prior to January 1, 2007,

     70% of  Executive's  Base Salary for fiscal  year 2005;  (C) if the Date of

     Termination occurs during fiscal year 2007, the actual annual bonus paid in

     respect of fiscal year 2006; or (D) if the Date of Termination occurs after

     December 31, 2007, the average of the actual annual bonuses paid or payable

     in respect of the two full fiscal years  immediately  preceding  the fiscal

     year in which the Date of Termination occurs); and

 

(2)  continued  participation in the Company's  medical and dental plans, on the

     same basis (including cost) as active employees  participate in such plans,

     until the  earlier of (i)  Executive's  eligibility  for any such  coverage

     under another  employer's or any other  medical or dental  insurance  plans

     sponsored  by a  subsequent  employer  of  Executive  or  (ii)  the  second

     anniversary  of the Date of  Termination;  except  that in the  event  that

     participation  in any such plan is barred,  the Company shall pay Executive

     on  a  monthly  basis  an  amount  that,  following   withholding  for  the

     application  or imposition of any income or employment  taxes,  is equal to

     the  amount of any  premiums  paid by  Executive  to obtain  benefits  (for

     Executive and his dependents)  equivalent to the benefits he is entitled to

     receive under the Company's benefit plans.

 

     (d) The Company shall make no payments in accordance with subparagraph 6(c)

if  Executive  declines  to sign and return a Release  Agreement  or revokes the

Release Agreement within the time provided in the Release Agreement. The Company

shall make all payments required to be made in accordance with subparagraph 6(c)

within 30 days after the end of any  revocation  period  provided by the Release

Agreement.

 

     (e)  Executive  is not  required to  mitigate  the amount of any payment or

benefit provided for in this Agreement by seeking other employment or otherwise.

 

     7. Competitive Activity; Confidentiality; Non-solicitation.

 

                                       5

<PAGE>

 

     (a) Acknowledgements and Agreements. Executive acknowledges and agrees that

in the  performance of  Executive's  duties to the Company during the Employment

Period,  Executive will be brought into frequent  contact,  either in person, by

telephone  or through  the mails,  with the  Company's  existing  and  potential

customers  and  employees.  Executive  also  agrees  that any Trade  Secrets and

Confidential  Information of the Company gained by Executive during  Executive's

association  with  the  Company  have  been  developed  by the  Company  through

substantial  expenditures of time, effort and money and constitute the Company's

valuable and unique property.  Executive further understands and agrees that the

foregoing makes it necessary, for the protection of the Business, that Executive

not compete with the Company during the  Employment  Period and not compete with

the Company  for a  reasonable  period  thereafter,  as further  provided in the

following subparagraphs.

 

     (b)  Confidentiality.  During and after the  Employment  Period,  Executive

shall treat as confidential  and shall not,  without the Company's prior written

approval,  use (other than in the performance of Executive's  designated  duties

for the Company) or disclose any Trade Secrets or Confidential Information.

 

     (c)  Records.  All  records,  notes,  files,   recordings,   tapes,  disks,

memoranda,  reports,  price lists,  client  lists,  drawings,  plans,  sketches,

documents,  equipment,  apparatus,  and  like  items,  and all  copies  thereof,

relating to the Business or any Trade Secrets or Confidential  Information  that

may be prepared by  Executive  or that may be disclosed to or that may come into

the possession of Executive during the Employment  Period,  are to be and remain

the Company's sole and exclusive  property.  Executive shall promptly deliver to

the Company the  originals  and all copies of any of the  foregoing  that are in

Executive's  possession,  custody or control,  at any time upon request from the

Company.

 

     (d) Executive Inventions.

 

     (i) All Works are to be the Company's sole and absolute property, including

all  patent,  copyright,  trade  secret,  or other  rights in  respect  thereof.

Executive shall assign to Company all right,  title,  and interest in and to any

and all Works, including all worldwide copyrights,  patent rights, and all trade

secret  information  embodied therein,  in all media and including all rights to

create  derivative works thereof.  Executive waives any and all rights Executive

may have in any Works, including but not limited to the right to acknowledgement

as author or moral  rights.  Executive  shall  not use or  include  in Works any

patented, copyrighted,  restricted or protected code, specifications,  concepts,

or trade  secrets of any third  party or any other  information  that  Executive

would be prohibited from using by any  confidentiality,  non-disclosure or other

agreement with any third party.  Executive shall fully and promptly  disclose in

writing to the Company any such Works as such Works may arise from time to time.

 

     (ii)  Executive  shall,  without  charge  to the  Company  other  than  for

reimbursement  of Executive's  reasonable  out-of-pocket  expenses,  execute and

deliver all such further documents and instruments,  including  applications for

patents and  copyrights,  and perform such acts, at any time during or after the

term of this  Agreement as may be necessary or desirable,  to obtain,  maintain,

and defend patents,  copyrights,  or other proprietary  rights in respect of the

 

 

                                       6

<PAGE>

 

Works or to vest title to the Works in the Company, its successors,  assigns, or

designees.  Without  limiting the generality of the foregoing,  Executive  shall

give all lawful testimony,  during or after the term of Executive's  employment,

that may be required in connection with any  proceedings  involving any Works so

assigned by Executive.  Executive shall keep and maintain  adequate and complete

records (in the form of notes, laboratory notebooks, sketches, drawings, optical

drives,  hard drives and as may  otherwise  be  specified by the Company) of all

inventions and original works of authorship made by Executive (solely or jointly

with others) in the course of employment with Company,  with the Company's time,

on the Company's premises, or using the Company's resources or equipment,  which

records are to be available  to and remain the  Company's  sole  property at all

times.

 

     (e)  Cooperation.  Executive shall cooperate at all times to the extent and

in the manner  requested  by the Company and at the  Company's  expense,  in the

prosecution or defense of any claims,  litigation or other proceeding  involving

the  Works,  the  Company's  property  or  the  Trade  Secrets  or  Confidential

Information.  Executive shall comply with regulations,  policies, and procedures

established by the Company,  including,  without  limitation,  all  regulations,

policies, and procedures established for the purpose of protecting Trade Secrets

and Confidential Information.

 

     (f) Agreement Not to Compete. During the Employment Period and for a period

of two  years  from  the  Date of  Termination,  regardless  of the  reason  for

termination  of employment,  Executive  shall not,  without the Company's  prior

written consent, within the Restricted Territory,  for Executive or on behalf of

another,  directly or  indirectly,  engage in any business  for which  Executive

provides  services  that are the same or  substantially  similar to  Executive's

services  for the Company (as  described  in  paragraph  3) to or on behalf of a

Competing Business.  Executive acknowledges and agrees that Restricted Territory

is the geographic area within which Executive performs services for the Company.

 

     (g) Agreement Not to Solicit  Customers.  During the Employment  Period and

for a period of two years from the Date of Termination, regardless of the reason

for termination of employment,  Executive shall not, without the Company's prior

written  consent,  directly or indirectly,  on Executive's  own behalf or in the

service or on behalf of others,  (i) solicit or attempt to divert or appropriate

to a Competing Business any customer or actual prospect of the Company with whom

Executive  dealt on the Company's  behalf at any time during the 12-month period

immediately  preceding  the Date of  Termination,  or (ii) solicit or attempt to

divert or appropriate to a Competing  Business,  any customer or actual prospect

of the Company with whom an employee  that was directly  supervised by Executive

dealt on the Company's behalf at any time during the 12-month period immediately

preceding the Date of Termination.

 

     (h) Agreement Not to Solicit  Employees.  During the Employment  Period and

for a period of two years from the Date of Termination, regardless of the reason

for termination of employment,  Executive shall not, without the Company's prior

consent,  directly or indirectly, on Executive's own behalf or in the service or

on behalf of others,  solicit,  divert or recruit any Company  employee to leave

such employment, whether such employment is by written contract or at will.

 

     (i) Remedies.

 

 

                                       7

<PAGE>

 

     (i) By virtue of the duties and  responsibilities  attendant to Executive's

employment by the Company and the special  knowledge of the  Company's  affairs,

Business,  clients,  and  operations  that  Executive  has  and  will  have as a

consequence of Executive's  employment,  Executive  acknowledges and agrees that

irreparable  loss and damage will be suffered by the Company if Executive should

breach  or  violate  any of the  covenants  and  agreements  contained  in  this

paragraph  7.  Therefore,  in addition to any other  remedies  available  to the

Company, Executive acknowledges and agrees that the Company shall be entitled to

an injunction to prevent a breach or contemplated  breach by Executive of any of

the covenants or agreements contained in this paragraph 7.

 

     (ii) The  existence  of any  claim,  demand,  action  or cause of action of

Executive  against  the  Company,  whether  predicated  upon this  Agreement  or

otherwise, is not to constitute a defense to the Company's enforcement of any of

the covenants or agreements contained in paragraph 7. The Company's rights under

this  Agreement  are in  addition  to, and not in lieu of, all other  rights the

Company  may have at law or in equity to protect its  confidential  information,

trade secrets and other proprietary interests.

 

     (j) Indirect Competition.  Executive will be in violation of this paragraph

7 if  Executive  engages  in any or all of the  activities  set  forth  in  this

paragraph 7 directly as an individual on Executive's own account,  or indirectly

as a partner, joint venturer, employee, agent, salesperson,  consultant, officer

and/or  director of any firm,  association,  partnership,  corporation  or other

entity,  or as a shareholder of any corporation or the owner of the interests in

any other entity,  in which  Executive or  Executive's  spouse,  child or parent

owns, directly or indirectly,  individually or in the aggregate, more than 5% of

the  outstanding  stock  or other  ownership  interests.  Ownership  of a lesser

percentage in any such entity, in and of itself, will not constitute a violation

of this paragraph 7, so long as Executive  does not engage in action  prohibited

in this paragraph 7 with regard to such entity.

 

     (k)  Definition  of  "Company".  For  purposes  of this  paragraph  7,  the

"Company" includes any direct and indirect  subsidiary,  parent,  affiliate,  or

related company of the Company.

 

     8. Definitions.

 

     (a) "Business" means,  with respect to the Company,  (i) audit services (A)

to identify and recover lost profits or, in the case of governmental agencies or

programs, overpayments or erroneous or wrongful payments or reimbursements, from

any source, including, without limitation,  payment errors, missed or inaccurate

discounts, allowances, or rebates, vendor pricing errors, or duplicate payments,

or any other services  substantially similar to or readily suitable for any such

described services and (B) to identify expense containment  opportunities;  (ii)

development and use of technology to provide such services;  and (iii) provision

of related  consulting  services,  as further  described  in any and all Company

marketing and sales  manuals and materials as the same may be altered,  amended,

supplemented or otherwise changed from time to time.

 

     (b) "Cause"  means,  as determined  by the PRGX Board in good faith:  (i) a

material breach of the duties and  responsibilities  of Executive or any written

policies  or  directives  of PRGX or the  Company  (other  than as a  result  of

 

 

                                       8

<PAGE>

 

Disability)  that is (A)  willful  or  involves  gross  negligence,  and (B) not

remedied  within 30 days after  receipt of written  notice from the Company that

specifically  identifies  the manner in which such  breach  has  occurred;  (ii)

Executive's  commission  of any  felony  that  causes  damage  to the  property,

business or reputation of PRGX or the Company; (iii) Executive's engagement in a

fraudulent or dishonest act; (iv) Executive's  engagement in habitual insobriety

or the use of illegal drugs or substances; (v) Executive's breach of Executive's

fiduciary  duties to PRGX or the Company;  (vi)  Executive's  willful failure to

cooperate,  or willful failure to cause and direct the persons under Executive's

management  or  direction,  or  employed  by, or  consultants  or agents to, the

Company or PRGX to cooperate,  with all corporate  investigations or independent

investigations  by  the  PRGX  Board  or the  Company  Board,  all  governmental

investigations  of the Company or PRGX and all orders involving  Executive,  the

Company or PRGX entered by a court of competent jurisdiction;  (vii) Executive's

violation  in any  material  respect of PRGX's Code of Conduct or PRGX's Code of

Ethics  for  Senior  Financial  Officers  or  any  successor  codes;  or  (viii)

Executive's  engagement in activities prohibited by paragraph 7. Notwithstanding

the foregoing,  however,  Executive  shall not be deemed to have been terminated

for Cause unless and until there shall have been  delivered  to Executive  (i) a

letter from the PRGX Board  finding  that, in the good faith opinion of the PRGX

Board,  Executive  was guilty of the  conduct set forth in any of the clauses of

the preceding sentence and specifying the particulars thereof in detail and (ii)

a copy of a resolution  duly adopted by the  affirmative  vote of the members of

the PRGX  Board who are not  officers  of the  Company  at a meeting of the PRGX

Board called and held for such purpose (after reasonable notice to Executive and

an opportunity for Executive,  together with  Executive's  counsel,  to be heard

before the PRGX Board),  finding,  in the good faith  opinion of the PRGX Board,

that Executive was guilty of such conduct and specifying the particulars thereof

in detail.

 

     (c)  "Change  in  Control"  means the  occurrence  of any of the  following

events:  (i) the  acquisition  of  beneficial  ownership  of a  majority  of the

outstanding voting stock of PRGX by any person (other than PRGX, a subsidiary of

PRGX or any person that, on the Effective Date, beneficially owned not less than

four  million  shares of the  common  stock of PRGX) or any two or more  persons

(other than persons  that, on the Effective  Date,  beneficially  owned not less

than four million  shares of the common stock of PRGX) acting as a  partnership,

limited  partnership,  syndicate or other group, entity or association acting in

concert for the purpose of voting,  acquiring,  holding,  or disposing of voting

stock of PRGX;  at any time  during  any  period of two  consecutive  years (not

including  any  period  prior  to the  Effective  Date,  individuals  who at the

beginning  of such period  constituted  the PRGX Board,  and any new  directors,

whose  election by the PRGX Board or  nomination  for election by the holders of

the voting  stock of PRGX was approved by a vote of at least  two-thirds  of the

directors of PRGX then still in office who either were  directors of PRGX at the

beginning  of the  period or whose  election  or  nomination  for  election  was

previously  so  approved  (the  "Current  Directors"),  cease for any  reason to

constitute a majority thereof, (iii) a merger or a consolidation of PRGX with or

into another  corporation  or entity,  other than (A) a merger or  consolidation

with a subsidiary of PRGX, or (B) a merger or consolidation in which the holders

of  voting  stock  of  PRGX  immediately  before  the  merger  hold  as a  class

immediately after the merger at least a majority of all outstanding voting power

of the surviving or resulting  corporation or its parent,  the Current Directors

constitute  at least a majority of the board of directors  of such  surviving or

resulting corporation or its parent, and such surviving or resulting corporation

or its  parent  expressly  assume and agree to perform  the  obligations  of the

Company and PRGX under this  Agreement;  (iv) a statutory  exchange of shares of

one or more  classes  or series of  outstanding  voting  stock of PRGX for cash,

 

 

                                       9

<PAGE>

 

securities,  or other  property,  other than an exchange in which the holders of

voting stock of PRGX immediately before the exchange hold as a class immediately

after the  exchange at least a majority of all  outstanding  voting power of the

entity  with  which  PRGX  stock  is  being  exchanged,  the  Current  Directors

constitute  at least a majority of the board of directors  of such  entity,  and

such  entity  expressly  assumes and agrees to perform  the  obligations  of the

Company and PRGX under this Agreement;  (v) the sale or other disposition of all

or  substantially  all of the assets of PRGX, in one  transaction or a series of

transactions,  other than a sale or  disposition  in which the holders of voting

stock  of  PRGX  immediately  before  the  sale or  disposition  hold as a class

immediately  after the  exchange at least a majority of all  outstanding  voting

power of the  entity to which the  assets of PRGX are being  sold,  the  Current

Directors  constitute  at least a  majority  of the board of  directors  of such

entity,  and such entity expressly assumes and agrees to perform the obligations

of the  Company  and PRGX  under  this  Agreement;  or (vi) the  liquidation  or

dissolution of PRGX.

 

     (d)  "Competing  Business"  means  any  business  engaging  in the  same or

substantially similar business as the Business.

 

     (e)  "Confidential  Information"  means  any  confidential  or  proprietary

information  relating  to the  Company  or its  customers  that  is not a  Trade

Secret.,  except  for  information  that (i) was  generally  known  prior to the

Effective Date; (ii) was in Executive's  possession  prior to the Effective Date

(other than  information  supplied to him by the Company or its agents),  to the

extent Executive has written record of possessing such information  prior to the

Effective  Date;  (iii)  becomes  generally  known through no act or omission by

Executive;  (iv) is supplied to Executive  subsequent to the Effective Date by a

third party not under an  obligation  of  confidentiality  with  respect to such

information;  (v) was independently  developed by Executive without reference to

or knowledge of any information, data, or disclosures received from the Company;

or (vi) is  required  to be  disclosed  pursuant to an order of a court or other

governmental agency of competent jurisdiction.

 

     (f) "Date of Termination" means (i) if Executive's employment is terminated

by the  Company  for  Disability,  30 days  after the  Company  gives  Notice of

Termination  to  Executive  (provided  that  Executive  has not  returned to the

performance  of  Executive's  duties on a  full-time  basis  during  this 30-day

period),  (ii) if  Executive's  employment  is  terminated by Executive for Good

Reason,  the  date  specified  in  the  Notice  of  Termination,  and  (iii)  if

Executive's  employment is  terminated by the Company for any other reason,  the

date on which a Notice of Termination is given.

 

     (g) "Disability"  means Executive's  inability or expected  inability (or a

combination  of both) to perform the services  required of Executive  under this

Agreement due to illness,  accident or any other  physical or mental  incapacity

for an  aggregate  of 90 days within any period of 180  consecutive  days during

which this Agreement is in effect,  as agreed by the parties or as determined in

accordance with the next sentence.  If there is a dispute between  Executive and

the  Company in the  determination  of  Disability  as to  whether  an  illness,

accident or any other physical or mental incapacity exists or existed during the

applicable  period,  then such  dispute  is to be  decided  by a medical  doctor

selected  by  the  Company  and a  medical  doctor  selected  by  Executive  and

Executive's  legal  representative  (or, in the event that these doctors fail to

 

 

                                       10

<PAGE>

 

agree,  then in the majority opinion of these doctors and a third medical doctor

chosen  by these  doctors).  Each  party  shall pay all  costs  associated  with

engaging the medical  doctor  selected by such party and the parties  shall each

pay one-half of the costs associated with engaging any third medical doctor.

 

     (h)  "Good  Reason"  means,  subject  to  the  next  sentence,  any  of the

following: (i) the Company's demotion of Executive to a lesser position than the

position  that he is serving in prior to the  demotion;  (ii) the  assignment to

Executive  of duties  materially  inconsistent  with his  position  or  material

reduction of Executive's duties,  responsibilities or authority (as described in

paragraph 3), in either case without  Executive's prior written consent;  except

that a change in the  foregoing  that  results  solely from PRGX ceasing to be a

publicly  traded  entity or from PRGX  becoming a wholly owned  subsidiary  of a

publicly traded entity will not, in either event and standing alone,  constitute

grounds for "Good  Reason";  (iii) any  decrease in  Executive's  Base Salary or

annual bonus or benefits under the Standard Executive  Benefits Package,  except

to the extent  that the  Company has  instituted  a salary,  bonuses or benefits

reduction  generally  and ratably  applicable  to all senior  executives  of the

Company  and so long as such  reduction  does not  occur in  contemplation  of a

Change in  Control;  (iv)  unless  agreed to by  Executive,  the  relocation  of

Executive's  principal  place of business  outside of the  metropolitan  area of

Atlanta, Georgia; (v) the PRGX Board's failure to nominate Executive to serve as

a member  of the  PRGX  Board;  or (vi)  the  failure  by the  Company,  without

Executive's consent, to pay to Executive any portion of Executive's Base Salary,

annual bonus or other benefits  within ten business days after the date the same

is due, in each case not remedied by the Company within 30 days after receipt by

the  Company  of  written  notification  from  Executive  to  the  Company  that

specifically  identifies the Good Reason. During the one-year period following a

Change in Control,  however,  (i) no Good Reason for termination can occur under

this  Agreement  because  of  any  change  in  Executive's  title  or  reporting

relationship as a consequence of the Change in Control and any  determination of

Good Reason,  if the  determination  relates to  Executive's  title or reporting

relationship,  is to be made by  reference  to  Executive's  title or  reporting

relationship  that exists as a  consequence  of the Change in Control;  and (ii)

without  limiting  the  occurrence  of Good  Reason as defined in the  preceding

sentence  other than  because of a change in, or by  reference  to,  Executive's

title or reporting  relationship  as  specified in clause (i) of this  sentence,

Good Reason for  termination  can also occur under this Agreement  upon: (A) the

failure by the Company to continue to provide  Executive  with benefits at least

as favorable in the aggregate to those  enjoyed by Executive  under the Standard

Executive  Benefits Package in which Executive was  participating at the time of

the Change in Control,  (B) the taking of any action by the  Company  that would

directly or indirectly  materially reduce any such benefits or deprive Executive

of any material fringe benefit (including  equity-based benefits) enjoyed at the

time of the Change in Control, or (C) the Company's failure to provide Executive

with the number of paid vacation days to which Executive is entitled at the time

of the Change in Control,  excluding  in  subclauses  (A) - (C),  any failure or

action by the Company that is not taken in bad faith and that is remedied by the

Company promptly after receipt of notice thereof from Executive.

 

     (i) "Notice of  Termination"  means a written notice that  indicates  those

specific  termination  provisions  in this  Agreement  relied upon and that sets

forth in  reasonable  detail  the facts and  circumstances  claimed to provide a

basis  for  termination  of  Executive's   employment  under  the  provision  so

indicated.  For purposes of this Agreement,  no purported  termination by either

party is to be effective without a Notice of Termination.

 

 

                                       11

<PAGE>

 

     (j)  "Release  Agreement"  means an  agreement,  substantially  in the form

attached  hereto as  Exhibit  D,  approved  by the  Company,  pursuant  to which

Executive releases all current or future claims, known or unknown, arising on or

before the date of the release  against  the Company or any direct and  indirect

subsidiary,  parent,  affiliated,  or related  company of the Company,  or their

respective officers and directors.

 

     (k)  "Restricted  Territory"  means,  and is  limited  to,  Fulton  County,

Georgia.

 

     (l) "Standard  Executive Benefits Package" means those benefits  (including

retirement,  insurance  and other welfare  benefits,  but  excluding,  except as

provided in paragraph 6, any severance pay program or policy of the Company) for

which substantially all of the Company's senior executives are from time to time

generally eligible, as determined from time to time by the PRGX Board.

 

     (m) "Trade  Secrets"  means  information  of the Company  without regard to

form, including, but not limited to, technical or non-technical data, a formula,

a pattern, a compilation, a program, a device, a method, a technique, a drawing,

a design, a process,  financial data,  financial plans, product plans, or a list

of actual or potential  customers or suppliers  that is not commonly known by or

available  to the public and which  information:  (a)  derives  economic  value,

actual or potential,  from not being  generally  known to, and not being readily

ascertainable  by proper means by, other persons who can obtain  economic  value

from  its  disclosure  or use,  and  (b) is the  subject  of  efforts  that  are

reasonable under the circumstances to maintain its secrecy.

 

     (n) "Works" means any work of  authorship,  code,  invention,  improvement,

discovery,  process,  formula, code algorithm,  program,  system, method, visual

work, or work product,  whether or not patentable or eligible for copyright, and

in  whatever  form or  medium  and all  derivative  works  thereof,  that may be

created, made, developed,  or conceived by Executive in the course of employment

with the Company, with the Company's time, on the Company's premises,  using the

Company's resources or equipment, or relating to the Business.

 

     9. Executive Representations.  Executive represents to the Company that (a)

the execution,  delivery and performance of this Agreement by Executive does not

and will not  conflict  with,  breach,  violate  or cause a  default  under  any

contract, agreement, instrument, order, judgment or decree to which Executive is

a party or by which Executive is bound, (b) Executive is not a party to or bound

by any employment agreement,  noncompete agreement or confidentiality  agreement

with any other person or entity and (c) upon the  execution and delivery of this

Agreement  by the  Company,  this  Agreement  will  be  the  valid  and  binding

obligation of Executive, enforceable in accordance with its terms.

 

     10.  Withholding  of Taxes.  The Company  shall  withhold  from any amounts

payable under this  Agreement all federal,  state,  city or other taxes that the

Company is required to withhold under any applicable law, regulation or ruling.

 

     11. American Jobs Creation Act. Notwithstanding anything to the contrary in

this  Agreement,  in the event that it is determined that any payment to be made

under this  Agreement in connection  with a "separation  of service"  within the

meaning of Section  409A(a)(2)(A)(i)  of the Internal  Revenue Code of 1986,  as

amended (the "Code"), is considered "nonqualified deferred compensation" subject

 

 

                                       12

<PAGE>

 

to Section 409A of the Code,  payment under this  Agreement  will be delayed for

six months following the Date of Termination, but only in the event Executive is

a "specified  employee"  within the meaning of Section  409A(a)(2)(B)(i)  of the

Code.

 

     12.  Successors  and  Assigns.  This  Agreement is to bind and inure to the

benefit of and be  enforceable  by Executive,  the Company and their  respective

heirs, executors, personal representatives,  successors and assigns, except that

neither  party may assign  any  rights or  delegate  any  obligations  hereunder

without the prior written consent of the other party.  Executive hereby consents

to the assignment by the Company of all of its rights and obligations under this

Agreement to any successor to the Company by merger or consolidation or purchase

of all  or  substantially  all  of  the  Company's  assets,  provided  that  the

transferee or successor  assumes the  obligations  of the Company and PRGX under

this Agreement.

 

     13.  Survival.  Subject to any limits on applicability  contained  therein,

paragraph 7 will survive and continue in full force in accordance with its terms

notwithstanding any termination of the Employment Period.

 

     14.  Choice of Law.  This  Agreement is to be governed by the internal law,

and not the laws of conflicts, of the State of Georgia.

 

     15. Severability. Whenever possible, each provision of this Agreement is to

be interpreted in such manner as to be effective and valid under applicable law,

but if any  provision  of  this  Agreement  is held to be  invalid,  illegal  or

unenforceable   in  any  respect  under  any  applicable  law  or  rule  in  any

jurisdiction,  that invalidity,  illegality or unenforceability is not to affect

any other  provision  or any other  jurisdiction,  and this  Agreement  is to be

reformed,  construed and enforced in the jurisdiction as if the invalid, illegal

or unenforceable provision had never been contained herein.

 

     16. Notices.  Any notice provided for in this Agreement is to be in writing

and is to be either personally delivered, sent by reputable overnight carrier or

mailed by first class mail,  return receipt  requested,  to the recipient at the

address indicated as follows:

 

                 Notices to Executive:

 

                           James B. McCurry

                           45 Finch Forest Trail, N.W.

                           Atlanta, Georgia 30327

 

                 Notices to the Company or to PRGX:

 

                           PRG-Schultz USA, Inc.

                           600 Galleria Parkway

                           Suite 100

                           Atlanta, Georgia 30339

                           Attn: General Counsel

 

 

                                       13

<PAGE>

 

or any other  address or to the  attention of any other person as the  recipient

party shall have  specified by prior written  notice to the sending  party.  Any

notice  under  this  Agreement  is to be  deemed  to  have  been  given  when so

delivered, sent or mailed.

 

     17.  Amendment and Waiver.  The provisions of this Agreement may be amended

or waived only with the prior written consent of the Company and Executive,  and

no course of conduct or failure or delay in  enforcing  the  provisions  of this

Agreement is to affect the validity,  binding effect or  enforceability  of this

Agreement.

 

     18. Complete Agreement.  This Agreement embodies the complete agreement and

understanding  between the parties with respect to the subject matter hereof and

effective  as of its date  supersedes  and  preempts  any prior  understandings,

agreements or representations  by or between the parties,  written or oral, that

may have related to the subject matter hereof in any way.

 

     19. Counterparts.  This Agreement may be executed in separate counterparts,

each of which  are to be  deemed  to be an  original  and  both of  which  taken

together are to constitute one and the same agreement.

 

                          [ SIGNATURE PAGE TO FOLLOW ]

 

 

                                       14

<PAGE>

 

 

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

introductory clause.

 

                                         PRG-SCHULTZ USA, INC.

 

 

 

                                         By:

                                            ------------------------------------

                                             Name:

                                             Title:

 

 

 

                                         PRG-SCHULTZ INTERNATIONAL, INC.

 

 

 

                                         By:

                                            ------------------------------------

                                             Name:

                                             Title:

 

 

 

                                         ---------------------------------------

                                         James B. McCurry

 

 

 

 

 

 

 

 

 

                   [ Signature Page to Employment Agreement ]

<PAGE>

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                    EXHIBIT A

 

 

                                OPTION AGREEMENT

 

 

 

 

<PAGE>

 

                                OPTION AGREEMENT

 

     This Stock Option Agreement (this "Option Agreement") is entered into as of

________ __, 2005 between PRG-SCHULTZ INTERNATIONAL, INC., a Georgia corporation

("PRGX") and JAMES B. MCCURRY ("Executive").

 

     PRGX, Executive and PRG-Schultz USA, Inc., a Georgia corporation and wholly

owned subsidiary of PRGX (the "Company") are parties to an employment  agreement

dated of even date herewith (the "Employment Agreement").

 

     In  accordance  with  paragraph  4(c)  of  the  Employment  Agreement,   in

connection with Executive's entering into employment with the Company, Executive

is to receive a stock  option  grant with  respect  to  2,000,000  shares of the

common stock, no par value per share, of PRGX (the "Common Stock").

 

     Therefore, the parties agree as follows:

 

     1. Grant of Non-Qualified 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,  2,000,000 shares of Common Stock

(such shares, the "Option Shares"; such option, the "Option"). The date of grant

of the Option (the  "Grant  Date") is ________  __,  2005.  THE OPTION IS NOT TO

CONSTITUTE  AN INCENTIVE  STOCK OPTION  WITHIN THE MEANING OF SECTION 422 OF THE

INTERNAL  REVENUE CODE OF 1986,  AS AMENDED.  Of the  2,000,000  Option  Shares,

500,000 Option Shares are  time-vested  Option Shares (the  "Time-Vested  Option

Shares") and 1,500,000  Option Shares are  performance-based  Option Shares (the

"Performance-Based Option Shares").

 

     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 last trading day preceding 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 Option  Shares  granted under

this Option Agreement will be exercisable as follows:

 

     (a)  Time-Vested   Option  Shares.   Subject  to  subparagraph   3(d),  the

Time-Vested  Option Shares will become  exercisable on the first  anniversary of

the Grant Date if Executive  remains in the continuous  employ of the Company as

of that date.

 

     (b)  Performance-Based  Option Shares.  Subject to  subparagraphs  3(c) and

3(d),  the  Performance-Based  Option  Shares will become  exercisable  in three

Tiers, as follows:

 

(1)  500,000  Performance-Based  Option  Shares  will  become  exercisable  upon

     attainment by PRGX,  at any time  following  the first  anniversary  of the

     Grant Date (but prior to termination or expiration of this Option  pursuant

     to Section 6), of a Market Price (as defined below) per share of the Common

     Stock of not less than  $4.50 per share  for 45  consecutive  trading  days

     ("Tier 1");

 

 

<PAGE>

 

(2)  500,000  Performance-Based  Option  Shares  will  become  exercisable  upon

     attainment by PRGX, at any time  following  the second  anniversary  of the

     Grant Date (but prior to termination or expiration of this Option  pursuant

     to Section 6), of a Market  Price per share of the Common Stock of not less

     than $6.50 per share for 45 consecutive trading days ("Tier 2"); and

 

(3)  500,000  Performance-Based  Option  Shares  will  become  exercisable  upon

     attainment by PRGX,  at any time  following  the third  anniversary  of the

     Grant Date (but prior to termination or expiration of this Option  pursuant

     to Section 6), of a Market  Price per share of the Common Stock of not less

     than $8.00 per share for 45 consecutive trading days ("Tier 3"),

 

($4.50 per share,  $6.50 per share and $8.00 per share being  referred to herein

as the "Price Target" for Tier 1, Tier 2 and Tier 3, respectively). For purposes

of this Option Agreement,  "Market Price" means with respect to shares of Common

Stock the daily  closing  price as reported by the NASDAQ  National  Market,  or

national  securities  exchange on which  shares of Common  Stock are then listed

(or, if shares of Common Stock are not then quoted on the NASDAQ National Market

or listed on a national securities exchange, the daily closing price reported in

the over-the-counter market).

 

     (c)  Discretionary   Acceleration  of   Exercisability.   The  Compensation

Committee of the Board of Directors of PRGX (the "Compensation  Committee") may,

in its sole discretion except as provided in subparagraph  3(d),  accelerate the

exercisability  of all or a portion of  Performance-Based  Option Shares without

regard to whether the  requirements for  exercisability  thereof in subparagraph

3(b) have been met.

 

     (d) Mandatory Acceleration of Exercisability.

 

     (i) Upon a Termination without Cause or a Termination for Good Reason (each

as  defined  in the  Employment  Agreement),  (A)  with  respect  to any Tier of

Performance-Based Option Shares for which the Price Target has been achieved for

45 consecutive trading days, the Option shall  automatically  become exercisable

for all shares included in such Tier without regard to the time period specified

for such Tier in  subparagraph  3(b); and (B) if the Price Target for Tier 1 has

been exceeded for 45  consecutive  trading days, but the Price Target for Tier 2

has not been achieved or exceeded for 45  consecutive  trading days,  the Option

shall automatically become exercisable for a number of shares included in Tier 2

equal to  500,000  multiplied  by the  quotient  of  dividing  (x) the result of

subtracting  4.50 from the highest Market Price achieved by the Common Stock for

forty-five  consecutive  trading days at any time after the Grant Date by (y) 2;

and (C) if the Price  Target  for Tier 2 has been  exceeded  for 45  consecutive

trading days,  but the Price Target for Tier 3 has not been achieved or exceeded

for  45  consecutive  trading  days,  the  Option  shall  automatically   become

exercisable  for a  number  of  shares  included  in  Tier 3  equal  to  500,000

multiplied by the quotient of dividing (x) the result of  subtracting  6.50 from

the highest Market Price achieved by the Common Stock for forty-five consecutive

trading days at any time after the Grant Date by (y) 1.50.

 

     (i) Upon a Change in Control (as defined in the Employment Agreement) or if

PRGX  ceases  to be a  public  company  with  reporting  obligations  under  the

Securities  Exchange Act of 1934, as amended,  (A)the Option will  automatically

 

 

                                       2

<PAGE>

 

become exercisable with respect to all Time-Vested Option Shares;  (B)the Option

will  automatically  become  exercisable  with respect to all  Performance-Based

Option  Shares  included  in a Tier for which  the  applicable  Price  Target is

exceeded by the  Transaction  Price;  (C) if the  Transaction  Price exceeds the

Price Target for Tier 1 but is less than the Price Target for Tier 2, the Option

shall automatically become exercisable for a number of shares included in Tier 2

equal to  500,000  multiplied  by the  quotient  of  dividing  (x) the result of

subtracting 4.50 from the Transaction Price by (y) 2; and (D) if the Transaction

Price  exceeds the Price Target for Tier 2 but is less than the Price Target for

Tier 3, the Option shall automatically become exercisable for a number of shares

included in Tier 3 equal to 500,000  multiplied  by the quotient of dividing (x)

the  result of  subtracting  6.50 from the  Transaction  Price by (y) 1.50.  For

purpose hereof,  "Transaction Price" means the per-share price consideration for

the Common Stock payable to the Company's public shareholders in connection with

the transaction  resulting in, as applicable,  (i) the Change in Control or (ii)

PRGX  ceasing  to be a public  company  with  reporting  obligations  under  the

Securities Exchange Act of 1934, as amended,  or, in the case of clause (ii), if

there is no transaction, the Market Price on the last trading day preceding such

event.  For  purposes  of  determining  the  Transaction   Price,  any  non-cash

consideration to be received by the Company's public shareholders will be valued

by the Compensation Committee, in good faith.

 

     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,  note or any other instrument  acceptable to the

Compensation Committee.  Payment in full or in part may also be made in the form

of shares of Common Stock already owned by Executive based, in each case, on the

Market Price of the shares of Common Stock on the date the Option is  exercised;

except  that in no event is  payment in full or in part for the  exercise  of an

Option to be made with any Option Shares that, as of the date of exercise of the

Option,  have been owned by Executive less than six months. If the payment is in

the form of  shares  of  Common  Stock,  then the  certificate  or  certificates

representing  the 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 of Common Stock

will not be accepted in payment of the  purchase  price of Option  Shares.  PRGX

shall not issue 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 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

 

 

                                       3

<PAGE>

 

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).

 

     6. Termination of Option.

 

     (a) The portion of the Option that is not exercisable pursuant to paragraph

3 as of the Date of Termination  (as defined in the Employment  Agreement)  will

terminate automatically as of that date.

 

     (b)  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  on the

earliest of the following dates: (i) on the Date of Termination,  if termination

of Executive's employment is for Cause (as defined in the Employment Agreement);

(ii) on the first  anniversary  of the Date of  Termination,  if  termination of

Executive's  employment is for death or Disability (as defined in the Employment

Agreement);  (iii)  75  calendar  days  following  the Date of  Termination,  if

termination  of  Executive's  employment  is for any reason  other  than  death,

Disability 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) and 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.

 

 

 

                                       4

<PAGE>

 

     8.  Registration of Option and Option Shares.  As soon as practicable after

the date hereof, PRGX shall file 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 and kind of Option Shares and

the Exercise  Price for the Option  Shares are to be  proportionately  adjusted;

except that no fractional  Option 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, 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 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) upon

written  notice to Executive,  provide that the  unexercised  (but  exercisable)

portion of the Option must be exercised within a specified number of days of the

date of such notice or it will be terminated. 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

certificates  representing  those Option Shares have been endorsed,  transferred

and  delivered,   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.

 

 

 

                                       5

<PAGE>

 

     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.

 

     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,  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

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.

 

     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:

 

                           James B. McCurry

                           45 Finch Forest Trail, N.W.

                           Atlanta, Georgia 30327

 

                  Notices to PRGX:

 

                           PRG-Schultz International, Inc.

                           600 Galleria Parkway

                           Suite 100

                           Atlanta, Georgia 30339

                           Attn: General Counsel

 

 

 

                                       6

<PAGE>

 

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,  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.

 

                          [ SIGNATURE PAGE TO FOLLOW ]

 

 

 

                                       7

<PAGE>

 

 

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

introductory clause.

 

                                         PRG-SCHULTZ INTERNATIONAL, INC.

 

 

 

                                         By:

                                            ------------------------------------

                                             Name:

                                             Title:

 

 

 

                                         ---------------------------------------

                                         James B. McCurry

 

                     [ Signature Page to Option Agreement ]

 

<PAGE>

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                    EXHIBIT B

 

 

                       STANDARD EXECUTIVE BENEFITS PACKAGE

 

 

 

 

<PAGE>

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                    EXHIBIT C

 

 

                            INDEMNIFICATION AGREEMENT

 

 

 

 

<PAGE>

 

                            INDEMNIFICATION AGREEMENT

 

     This  Indemnification  Agreement  (this  "Agreement") is entered into as of

July __, 2005, between  PRG-SCHULTZ  INTERNATIONAL,  INC., a Georgia corporation

(the "Corporation"), and JAMES B. MCCURRY (the "Indemnitee").

 

     Indemnitee  is a  director  and  officer  of the  Corporation,  and in such

capacity is performing a valuable service for the Corporation.

 

     Indemnitee is willing to serve,  continue to serve,  and take on additional

service  for  or on  behalf  of the  Corporation  on the  condition  that  he be

indemnified as herein provided.

 

     It is intended that  Indemnitee  shall be paid promptly by the  Corporation

all amounts necessary to effectuate in full the indemnity provided herein.

 

     Therefore the parties agree as follows:

 

     1. Certain Definitions.

 

     (a) References to the "Corporation"  shall include any corporation which is

a parent  corporation  or a subsidiary  corporation  with respect to PRG-Schultz

International,  Inc. within the meaning of Section 425(e) or (f) of the Internal

Revenue Code of 1986,  as amended,  and shall also  include,  in addition to the

resulting corporation, any constituent corporation (including any constituent of

a  constituent)  absorbed in a  consolidation  or merger which,  if its separate

existence  had  continued,  would have had power and  authority to indemnify its

directors, officers, and employees or agents, so that any person who is or was a

director,  officer, employee or agent of such constituent corporation,  or is or

was  serving  at the  request of such  constituent  corporation  as a  director,

officer, employee or agent of another corporation,  partnership,  joint venture,

trust or other enterprise, shall stand in the same position under this Agreement

with respect to the  resulting or  surviving  corporation  as he would have with

respect to such constituent corporation if its separate existence had continued.

 

     (b)  "Disinterested  Director" shall mean a director of the Corporation who

is not a party to the  Proceeding in respect of which  indemnification  is being

sought by Indemnitee.

 

     (c) "Expenses" shall mean all direct and indirect costs (including, without

limitation,   attorneys'  fees,   retainers,   court  costs,   costs  of  bonds,

transcripts, fees of experts, witness fees, travel expenses,  duplicating costs,

printing and binding costs, telephone charges,  postage,  delivery service fees,

and all other  disbursements or out-of-pocket  expenses) actually and reasonably

incurred in connection with a Proceeding or establishing or enforcing a right to

indemnification  under this  Agreement,  applicable law or otherwise;  provided,

however, that "Expenses" shall not include any Liabilities.

 

     (d)  "Indemnification  Period"  shall mean the period of time during  which

Indemnitee  shall  continue  to  serve as a  director  or as an  officer  of the

Corporation,  and  thereafter  so long as  Indemnitee  shall be  subject  to any

possible Proceeding arising out of acts or omissions of Indemnitee as a director

or as an officer of the Corporation.

 

 

<PAGE>

 

     (e) "Liabilities" shall mean liabilities of any type whatsoever  including,

but not limited to, any  judgments,  fines,  ERISA excise  taxes and  penalties,

penalties and amounts paid or obligated to be paid in settlement  (including all

interest  assessments and other charges paid or payable in connection with or in

respect of such  judgments,  fines,  penalties or amounts paid in settlement and

any sums paid in respect of any deductible  under any policies of directors' and

officers' liability insurance) of any Proceeding.

 

     (f)  "Nonreimbursable  Liability"  shall  mean any  expenses  or  liability

incurred in a proceeding in which Indemnitee is adjudged liable,  in a final and

non-appealable judgment, to the Corporation or is subjected to injunctive relief

in favor of the Corporation:

 

     (i) for any  appropriation,  in  violation  of his duties,  of any business

opportunity of the Corporation;

 

     (ii)  for acts or  omissions  which  involve  intentional  misconduct  or a

knowing violation of law;

 

     (iii) for the types of liability set forth in Georgia Business  Corporation

Code Section 14-2-832; and

 

     (iv) for any  transaction  from  which he  received  an  improper  personal

benefit.

 

     (g) "Proceeding"  shall mean any threatened,  pending or completed  action,

claim, suit, arbitration, alternate dispute resolution mechanism, investigation,

administrative   hearing  or  any  other  proceeding  whether  civil,  criminal,

administrative,  arbitrative  or  investigative,  whether  formal  or  informal,

including any appeal therefrom.

 

     (h) For purposes of this Agreement, references to "other enterprises" shall

include employee  benefit plans and trusts;  references to "fines" shall include

any excise taxes assessed on a person with respect to any employee benefit plan;

and references to "serving at the request of the Corporation"  shall include any

service as a  director,  officer,  employee  or agent of the  Corporation  which

imposes duties on, or involves services by, such director, officer, employee, or

agent with respect to an employee  benefit plan or trust,  its  participants  or

beneficiaries;  and a  person  who  acted  in  good  faith  and in a  manner  he

reasonably  believed to be in the interest of the participants and beneficiaries

of an employee  benefit  plan or trust shall be deemed to have acted in a manner

"not opposed to the best  interests of the  Corporation"  as referred to in this

Agreement.

 

     2. Services by Indemnitee.  Indemnitee agrees to serve as a director and/or

officer  of the  Corporation  so long as he is duly  appointed  or  elected  and

qualified  in  accordance  with the  applicable  provisions  of the  Articles of

Incorporation  and By-laws of the  Corporation (as each may be amended from time

to time) or any subsidiary of the  Corporation and until such time as he resigns

or fails to stand for election or is removed from his position.  Indemnitee  may

at any time and for any reason resign or be removed from such position  (subject

to any other contractual  obligation or other obligation imposed by operation of

law),  in which  event the  Corporation  shall  have no  obligation  under  this

Agreement to continue Indemnitee in any such position.

 

 

                                       2

<PAGE>

 

     3. Indemnification.

 

     (a) The  Corporation  shall  indemnify  Indemnitee,  to the fullest  extent

permitted by applicable  law,  whenever he is or was a party or is threatened to

be made a  party  to any  Proceeding,  including  without  limitation  any  such

Proceeding brought by or in the right of the Corporation, because he is or was a

director  or officer of the  Corporation  or is or was serving at the request of

the Corporation as a director,  manager,  officer,  employee,  agent, trustee or

plan fiduciary of another corporation,  partnership,  limited liability company,

joint  venture,  trust or other  enterprise,  or because of anything done or not

done by Indemnitee in such capacity, against Expenses and Liabilities (including

the costs of any  investigation,  defense,  settlement  or appeal)  actually and

reasonably  incurred  by  Indemnitee  or on his behalf in  connection  with such

Proceeding,  if he acted in good faith and in a manner he reasonably believed to

be in or not opposed to the best interests of the Corporation, and, with respect

to any criminal  action or  proceeding,  had no reasonable  cause to believe his

conduct was  unlawful.  The  termination  of any action,  suit or  proceeding by

judgment,  order, settlement,  conviction,  or upon a plea of nolo contendere or

its equivalent,  shall not, of itself,  create a presumption that Indemnitee did

not act in good faith and in a manner which he  reasonably  believed to be in or

not opposed to the best interests of the  Corporation,  and, with respect to any

criminal action or proceeding,  had reasonable cause to believe that his conduct

was unlawful. The foregoing  notwithstanding,  in no event shall the Corporation

indemnify Indemnitee against any Nonreimbursable Liability.

 

     (b)  Without  in  any  way  limiting  the  foregoing,  to the  extent  that

Indemnitee  has been  successful  on the merits or  otherwise  in defense of any

Proceeding,  he shall be indemnified  against Expenses and Liabilities  actually

and reasonably incurred by him in connection therewith.

 

     4. Mandatory  Advancement  of Expenses.  The  Corporation  shall advance to

Indemnitee from time to time all reasonable Expenses incurred by or on behalf of

Indemnitee within fifteen (15) days after the Corporation's receipt of a written

request  for an advance of  Expenses by  Indemnitee,  whether  prior to or after

final disposition of a Proceeding. The written request for an advancement of any

and all  Expenses  under this Section  shall  contain  reasonable  detail of the

Expenses incurred by Indemnitee. The foregoing notwithstanding,  the Corporation

shall not be  obligated  to  advance  Expenses  hereunder  unless it shall  have

received from Indemnitee (a) a written  affirmation of  Indemnitee's  good faith

belief that his  conduct  did not  constitute  behavior  which  could  result in

Nonreimbursable Liability and (b) a written undertaking to repay any advances if

it is ultimately determined that he is not entitled to indemnification  pursuant

to this Agreement.

 

     5. Limitations.  The foregoing  indemnity and advancement of Expenses shall

apply only to the extent that Indemnitee has not been indemnified and reimbursed

pursuant to such  insurance as the  Corporation  may  maintain for  Indemnitee's

benefit  or  pursuant  to  the  Articles  of  Incorporation  or  Bylaws  of  the

Corporation (as each may be amended from time to time); provided,  however, that

notwithstanding the availability of such other indemnification and reimbursement

pursuant  to such  Corporation-maintained  policies,  Indemnitee  may,  with the

Corporation's   consent,  claim  indemnification  and  advancement  of  Expenses

pursuant to this Agreement by assigning Indemnitee's claims under such insurance

to the Corporation to the extent Indemnitee is paid by the Corporation.

 

                                       3

<PAGE>

 

     6. Insurance.  The  Corporation  may, but is not obligated to, purchase and

maintain  insurance to protect  itself and/or  Indemnitee  against  Expenses and

Liabilities in connection  with  Proceedings to the fullest extent  permitted by

applicable  laws. The  Corporation  may, but is not obligated to, create a trust

fund,  grant  a  security  interest  or  use  other  means  (including,  without

limitation,  a letter of credit) to ensure the payment of such amounts as may be

necessary to effect  indemnification  or  advancement of Expenses as provided in

this Agreement.

 

     7. Procedure for Determination of Entitlement to Indemnification.

 

     (a) Whenever  Indemnitee  believes  that he is entitled to  indemnification

pursuant  to this  Agreement,  Indemnitee  shall  submit a written  request  for

indemnification  to the  Corporation.  Any  request  for  indemnification  shall

include  sufficient   documentation  or  information   reasonably  available  to

Indemnitee  to support his claim for  indemnification.  Indemnitee  shall submit

such claim for  indemnification  within a  reasonable  time not to exceed  three

years after any  judgment,  order,  settlement,  dismissal,  arbitration  award,

conviction,  acceptance of a plea of nolo  contendere or its  equivalent,  final

termination  or other  disposition  or partial  disposition  of any  Proceeding,

whichever is the latest event for which Indemnitee requests indemnification.  If

a determination  is required by the  Corporation  that Indemnitee is entitled to

Indemnification,  and the Corporation fails to respond within sixty (60) days of

such request,  the Corporation shall be deemed to have approved the request. Any

indemnification  or advance of expenses  which is due and payable to  Indemnitee

shall be made  promptly  and in any event  within  thirty  (30)  days  after the

determination that Indemnitee is entitled to such amounts.

 

     (b) If such a determination  is required,  the Indemnitee shall be entitled

to select the forum in which Indemnitee's  request for  indemnification  will be

heard,   which   selection   shall  be  included  in  the  written  request  for

indemnification  required  in Section  7(a).  The forum  shall be any one of the

following:

 

     (i) The shareholders of the Corporation; or

 

     (ii) A majority vote of the Board of Directors  consisting of Disinterested

Directors (even though less than a quorum); provided, however, that if there are

no Disinterested  Directors,  or if the Disinterested  Directors so direct,  the

determination shall be made by independent legal counsel in a written opinion.

 

     If Indemnitee fails to make such designation, his claim shall be determined

by an  appropriate  court of the State of Georgia or a federal  court located in

the State of Georgia.

 

     8.  Fees  and  Expenses  of  Counsel.  The  Corporation  agrees  to pay the

reasonable fees and expenses of independent legal counsel should such counsel be

retained to make a determination of Indemnitee's  entitlement to indemnification

pursuant to Section 7 of this Agreement.

 

     9. Remedies of Indemnitee.

 

     (a) In the event that (i) a  determination  pursuant to Section 7 hereof is

made that  Indemnitee  is not  entitled  to  indemnification,  (ii)  advances of

Expenses are not made pursuant to this  Agreement for any reason,  (iii) payment

has  not  been  timely  made  following  a   determination   of  entitlement  to

indemnification  pursuant to this Agreement,  or (iv) Indemnitee otherwise seeks

 

 

                                       4

<PAGE>

 

enforcement  of  this  Agreement,  Indemnitee  shall  be  entitled  to  a  final

adjudication of his rights in an appropriate  court.  The Corporation  shall not

oppose Indemnitee's right to seek any such adjudication.

 

     (b) In the event that a  determination  that  Indemnitee is not entitled to

indemnification,  in whole or in part,  has been  made  pursuant  to  Section  7

hereof,  the decision in the judicial  proceeding  provided in paragraph  (a) of

this Section 9 shall be made de novo and  Indemnitee  shall not be prejudiced by

reason of a determination that he is not entitled to indemnification.

 

     (c) If a determination that Indemnitee is entitled to  indemnification  has

been made  pursuant  to Section 7 hereof or  otherwise  pursuant to the terms of

this Agreement,  the  Corporation  shall be bound by such  determination  in the

absence of (i)  misrepresentation  of a material  fact by  Indemnitee  or (ii) a

specific  finding (which has become final) by an  appropriate  court that all or

any part of such indemnification is expressly prohibited by law.

 

     (d) In any court  proceeding  pursuant to this  Section 9, the  Corporation

shall be precluded from asserting that the procedures and  presumptions  of this

Agreement  are  not  valid,  binding  and  enforceable.  The  Corporation  shall

stipulate in any such court that the  Corporation is bound by all the provisions

of this Agreement and is precluded from making any assertion to the contrary.

 

     10.  Modification,  Waiver,  Termination and  Cancellation.  No supplement,

modification,  termination, cancellation or amendment of this Agreement shall be

binding unless executed in writing by both of the parties  hereto.  No waiver of

any of the  provisions of this Agreement  shall be deemed or shall  constitute a

waiver of any other provisions  hereof (whether or not similar),  nor shall such

waiver constitute a continuing waiver.

 

     11. Notice by Indemnitee  and Defense of Claim.  Indemnitee  shall promptly

notify the Corporation in writing upon being served with any summons,  citation,

subpoena, complaint,  indictment,  information or other document relating to any

matter, whether civil, criminal,  administrative,  arbitrative or investigative,

but the  omission  to so notify  the  Corporation  will not  relieve it from any

liability  which it may have to  Indemnitee  if such omission does not prejudice

the  Corporation's  rights.  If such omission does  prejudice the  Corporation's

rights,  the  Corporation  will be relieved from liability only to the extent of

such prejudice.  With respect to any Proceeding as to which Indemnitee  notifies

the Corporation of the commencement thereof:

 

     (a) The  Corporation  will be  entitled to  participate  therein at its own

expense; and

 

     (b) The  Corporation  jointly with any other  indemnifying  party similarly

notified will be entitled to assume the defense thereof, with counsel reasonably

satisfactory to Indemnitee; provided, however, that the Corporation shall not be

entitled  to assume  the  defense of any  Proceeding  if  Indemnitee  shall have

reasonably  concluded  that  there may be a conflict  of  interest  between  the

Corporation  and Indemnitee with respect to such  Proceeding.  After notice from

the Corporation to Indemnitee of its election to assume the defense thereof, the

Corporation  will not be liable  to  Indemnitee  under  this  Agreement  for any

Expenses  subsequently  incurred by Indemnitee  in  connection  with the defense

thereof,  other than reasonable costs of investigation or as otherwise  provided

 

 

                                       5

<PAGE>

 

below.  Indemnitee  shall  have the  right to  employ  his own  counsel  in such

Proceeding but the fees and expenses of such counsel  incurred after notice from

the Corporation of its assumption of the defense thereof shall be at the expense

of Indemnitee unless:

 

     (i) The  employment  of counsel by  Indemnitee  has been  authorized by the

Corporation;

 

     (ii) Indemnitee shall have reasonably concluded that counsel engaged by the

Corporation may not adequately represent Indemnitee;

 

     (iii) The Corporation shall not in fact have employed counsel to assume the

defense in such Proceeding or shall not in fact have assumed such defense and be

acting in connection therewith with reasonable diligence;

 

in each of which  cases the fees and  expenses of such  counsel  shall be at the

expense of the Corporation.

 

     (c) The  Corporation  shall not settle any  Proceeding  in any manner which

would impose any penalty,  liability,  obligation  or  limitation  on Indemnitee

without Indemnitee's written consent;  provided,  however,  that Indemnitee will

not unreasonably withhold his consent to any proposed settlement.

 

     12.  Notices.  All notices,  requests,  consents  and other  communications

hereunder  shall be in  writing  and shall be sent by  Federal  Express or other

overnight or same day courier  service  providing a return receipt (and shall be

effective when received or when refused,  as evidenced on the return receipt) to

the following addresses:

 

                           To Corporation:

 

                                    PRG-Schultz International, Inc.

                                    600 Galleria Parkway, Suite 100

                                    Atlanta, Georgia 30339

                                    Attention: General Counsel

 

                           To Indemnitee:

 

                                    James B. McCurry

                                    45 Finch Forest Trail, N.W.

                                    Atlanta, Georgia 30327

 

     13. Nonexclusivity.  The rights of Indemnitee hereunder shall not be deemed

exclusive  of any other rights to which  Indemnitee  may now or in the future be

entitled under the Georgia Business Corporation Code, the Corporation's Articles

of  Incorporation  or By-Laws (as each may be amended from time to time), or any

agreements,  vote of  shareholders,  resolution  of the  Board of  Directors  or

otherwise.  The  provisions of this Agreement are hereby deemed to be a contract

right between the  Corporation and the Indemnitee and any repeal of the relevant

 

 

                                       6

<PAGE>

 

provisions  of the General  Corporation  law of the State of  Georgia,  or other

applicable law, shall not affect this Agreement or its enforceability.

 

     14. Binding Effect,  Duration and Scope of Agreement.  This Agreement shall

be binding  upon and inure to the benefit of and be  enforceable  by the parties

hereto and their  respective  successors  and assigns  (including  any direct or

indirect successor, by purchase,  merger,  consolidation or otherwise, to all or

substantially  all of the  business  or  assets of the  Corporation),  heirs and

personal and legal  representatives.  This  Agreement  shall  continue in effect

during the Indemnification Period, regardless of whether Indemnitee continues to

serve as a director or as an officer.

 

     15. Severability.  If any provision or provisions of this Agreement (or any

portion thereof) shall be held to be invalid,  illegal or unenforceable  for any

reason whatsoever:

 

     (a) the validity,  legality and enforceability of the remaining  provisions

of this Agreement shall not in any way be affected or impaired thereby; and

 

     (b)  to the  fullest  extent  legally  possible,  the  provisions  of  this

Agreement shall be construed so as to give effect to the intent of any provision

held invalid, illegal or unenforceable.

 

     16. Governing Law and Interpretation of Agreement.  This Agreement shall be

governed by and construed and enforced in accordance  with the laws of the State

of Georgia,  as applied to contracts  between Georgia residents entered into and

to be performed entirely within Georgia. If the laws of the State of Georgia are

hereafter  amended to permit the Corporation to provide broader  indemnification

rights  than  said laws  permitted  the  Corporation  to  provide  prior to such

amendment,  the rights of indemnification  and advancement of expenses conferred

by this  Agreement  shall  automatically  be  broadened  to the  fullest  extent

permitted by the laws of the State of Georgia, as so amended.

 

     17.  Entire  Agreement.  This  Agreement  represents  the entire  agreement

between the parties  hereto,  and there are no other  agreements,  contracts  or

understandings  between the parties hereto with respect to the subject matter of

this  Agreement,  except as  specifically  referred  to herein or as provided in

Section 13 hereof.

 

     18. Partial Indemnification.  If Indemnitee is entitled under any provision

of this Agreement to indemnification by the Company for some or a portion of the

Expenses,  judgments, fines or penalties actually and reasonably incurred by him

in the investigation,  defense,  appeal or settlement of any Proceeding but not,

however, for the total amount thereof, the Company shall nevertheless  indemnify

Indemnitee  for the portion of such Expenses,  judgments,  fines or penalties to

which Indemnitee is entitled.

 

     19.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more

counterparts,  each of which shall for all  purposes be deemed to be an original

but all of which together shall constitute one and the same Agreement.

 

                          [ SIGNATURE PAGE TO FOLLOW ]

 

 

                                       7

<PAGE>

 

 

     IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of the

date first written above.

 

                                         PRG-SCHULTZ INTERNATIONAL, INC.

 

 

 

                                         By:

                                            ------------------------------------

                                         Name:

                                         Title:

 

 

 

 

                                         ---------------------------------------

                                         James B. McCurry

 

 

                 [ Signature Page to Indemnification Agreement ]

 

<PAGE>

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                    EXHIBIT D

 

 

                                 FORM OF RELEASE