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Exhibit 10.2 NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option
Agreement (this "Option Agreement") is entered into as of January
___, 2009 by and between PRG-SCHULTZ INTERNATIONAL, INC., a Georgia
corporation (" PRGX "), and ROMIL BAHL (" Executive
"). W I T N E S S E T H: WHEREAS,
PRGX and Executive are parties to an employment agreement effective
as of even date herewith (the " Employment Agreement "); and
WHEREAS, in connection with
Executive’s hiring by PRGX as its Chief Executive Officer,
PRGX agreed to grant certain inducement awards consisting of
nonqualified stock options to purchase 296,296 shares of
PRGX’s common stock, no par value per share; and
WHEREAS, these inducement awards are
being granted outside of any shareholder-approved equity
compensation plan of PRGX and have been approved by the
Compensation Committee of PRGX’s Board of Directors and
granted as an inducement material to commencement of
Executive’s employment with PRGX in accordance with NASDAQ
Marketplace Rule 4350(i)(1)(A)(iv); and
WHEREAS, in accordance with Paragraph
3(d) of the Employment Agreement, in connection with
Executive’s commencement of employment with PRGX, Executive
is to receive nonqualified stock options with respect to 296,296
shares of the common stock, no par value per share, of PRGX (the "
Common Stock "). Therefore,
the parties agree as follows:
1. Grant of Nonqualified
Stock Option . PRGX hereby grants to Executive the right
and option to purchase from PRGX, on the terms and subject to the
conditions set forth in this Option Agreement, 296,296 shares of
Common Stock (such shares, the " Option Shares "; such
option, the " Option "). The date of grant of the Option
(the " Grant Date ") is January ___, 2009. Of the 296,296
Option Shares, the Options covering 111,111 Option Shares will vest
and become exercisable as set forth in subparagraph 3(a) below (the
"Initial Options") and the Options covering 185,185 Option Shares
will vest and become exercisable as set forth in subparagraph 3(b)
below (the "One-Time Options").
2. Exercise Price of the
Option . The exercise price for the Option Shares is $_____
per share, the closing price of the Common Stock on the NASDAQ
National Market on the Grant Date (the " Exercise Price ").
3. Vesting of the
Option . Subject to the earlier expiration or termination
of this Option in accordance with its terms, the Options granted
under this Option Agreement will be vested and exercisable as
follows:
(a) 25%
of the Initial Options will become vested and exercisable on the
first, second, third and fourth anniversaries of the Grant Date,
until the Initial Options are vested and
exercisable in full, provided Executive remains in the
continuous employ of PRGX through such date(s).
(b) 50%
of the One-Time Options will become vested and exercisable on each
of the second and fourth anniversaries of the Grant Date, until the
One-Time Options are vested and exercisable in full, provided
Executive remains in the continuous employ of PRGX through such
date(s).
(c) Notwithstanding
the foregoing, 100% of all the outstanding unvested Options will
become vested and exercisable on a Change in Control (as defined in
the Employment Agreement) to the extent not previously vested and
exercisable, provided Executive remains in the continuous employ of
PRGX until the Change in Control.
(d) Upon
a termination of Executive’s employment by PRGX without
Cause, by Executive for Good Reason, by Executive upon PRGX’s
failure to renew the Employment Agreement or on Executive’s
Incapacity (as defined in the Employment Agreement) or death (as
set forth in the Employment Agreement), the outstanding unvested
Options will become vested and exercisable upon such termination to
the extent such Options would have become vested and exercisable
based solely on the continued employment of Executive through the
next anniversary of the Grant Date immediately following the
termination of Executive’s employment.
(e) The
Compensation Committee of the Board of Directors of PRGX (the
"Compensation Committee") may, in its sole discretion, accelerate
the vesting and exercisability of all or a portion of the Options
without regard to whether the requirements for vesting and
exercisability thereof in subparagraphs 3(a), (b), (c) or
(d) have been met. 4.
Method of Exercise of Option .
(a) To
the extent then exercisable, Executive may exercise the Option in
whole or in part; except that no single exercise of the Option is
to be for less than 100 Option Shares, unless at the time of the
exercise, the maximum number of Option Shares available for
purchase under the Option is less than 100 Option Shares. In no
event is the Option to be exercised for a fractional share of
Common Stock.
(b) To
exercise the Option, Executive shall give written notice to PRGX
stating the number of shares for which the Option is being
exercised and the intended manner of payment. The date of this
notice shall be the exercise date. The notice must be accompanied
by payment in full of the aggregate Exercise Price, either by cash,
check, or such other medium of payment as the Compensation
Committee may permit. If the Compensation Committee so permits,
payment in full or part may also be made (i) by surrendering
(actually or by attestation) shares of Common Stock to PRGX that
Executive already owns and, if necessary to avoid adverse
accounting consequences, has held for at least six months;
(ii) by a cashless exercise through a broker; (iii) by
means of a "net exercise" procedure or (iv) by such other
medium of payment as the Compensation Committee in its discretion
may authorize. If the payment is in the form of shares of Common
Stock, then the certificate or certificates representing those
shares must be duly executed in blank by Executive or must be
accompanied by a stock power duly executed in blank suitable for
purposes of transferring those shares to PRGX. Fractional
shares
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of Common Stock will not be accepted in payment of the purchase
price of Option Shares. PRGX shall not issue the Option Shares
until full payment for them has been made.
(c) As
soon as practicable upon PRGX’s receipt of Executive’s
notice of exercise and payment, PRGX shall direct the due issuance
of the Option Shares so purchased.
(d) As
a further condition precedent to the exercise of this Option in
whole or in part, Executive shall comply with all regulations and
the requirements of any regulatory authority having control of, or
supervision over, the issuance of the shares of Common Stock and
accordingly shall execute any documents that the Board of Directors
of PRGX (the " PRGX Board "), in its sole discretion, deems
necessary or advisable to effect such compliance.
(e) In
the case of Executive’s death, the Option, to the extent
exercisable, may be exercised by the executor or administrator of
Executive’s estate or by any person or persons who have
acquired the Option directly from Executive by bequest or
inheritance. 5.
Non-Transferability of Options . Executive shall not
assign or transfer the Option, other than by will or the laws of
descent and distribution. During Executive’s lifetime, only
Executive (or, in the event of legal incapacity or incompetency,
Executive’s guardian or legal representative) may exercise
the Option. Notwithstanding the foregoing, however, Executive, with
the approval of the Compensation Committee, may transfer the Option
for no consideration to or for the benefit of Executive’s
Immediate Family (including, without limitation, to a trust for the
benefit of Executive’s Immediate Family or to a partnership
or limited liability company for one or more members of
Executive’s Immediate Family), subject to such limits as the
Compensation Committee may establish, and the transferee(s) shall
remain subject to all the terms and conditions applicable to the
Option prior to transfer. The term "Immediate Family
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