PROFIT RECOVERY GROUP INTERNATIONAL INC
DESCRIPTION OF COMPENSATION DATED JANUARY 15, 2001
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>3
<FILENAME>g67612ex10-16.txt
<DESCRIPTION>DESCRIPTION OF COMPENSATION DATED JANUARY 15, 2001
<TEXT>

<PAGE>   1
                                                                  EXHIBIT 10.16


                                January 15, 2001


Mr. Donald E. Ellis, Jr.
607 Haddington Lane
Peachtree City, Georgia  30269

         Re:  Employment Offer

Dear Gene:

I am pleased to memorialize the terms of your full time employment with The
Profit Recovery Group USA, Inc. ("PRG") as Executive Vice President-Finance,
Chief Financial Officer and Treasurer of PRG and of The Profit Recovery Group
International, Inc. ("PRGX") conditioned upon your signing the attached Employee
Agreement. You will report to the Chief Executive Officer of PRGX. You will be
responsible for all Finance Department functions of PRG and PRGX, including
financial planning, budgeting, accounting and treasury functions and will serve
as key spokesperson and contact for shareholders, investors and banking agencies
for PRGX. We are very excited about your joining our organization and the
opportunities for our mutual success.

The following confirms our offer:

1.       Base Salary. Base salary paid at the rate of $300,000.00 per annum,
         paid $11,538.46 every two weeks and pro-rated for partial years. You
         commenced employment with PRG on October 26, 2000.

2.       Performance Bonus. While you remain employed by PRG you will be
         eligible for annual bonuses, which will include annual payout
         potentials of up to 70% of your base salary for achievement of your
         performance goals. These goals will be role-specific performance
         objectives to be mutually agreed upon by you and the Chief Executive
         Officer of PRGX. The measurement periods will be calendar quarter or
         calendar year or a combination of both. Your bonus will be no less than
         $50,000.00 per annum. Your bonus will be pro-rated for partial years
         based on the number of days you were employed by PRG during such year.

3.       Car Allowance. You will receive a car allowance paid at the rate of
         $25,000.00 per annum, paid $2,083.33 monthly during your employment and
         pro-rated for partial periods.
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 2


4.       Options. The Board of Directors of PRGX has granted to you options to
         purchase 250,000 shares of Common Stock in The Profit Recovery Group
         International, Inc. with 100,000 shares vesting as of October 26, 2000
         and the remaining 150,000 vesting ratably and monthly over 36 months.
         This grant is made pursuant to the terms of an option agreement, the
         form of which will be delivered to you under separate cover.

5.       Employee Benefits. You will be eligible for participation in PRG's
         Employee Benefits Plan, which currently offers medical, dental, life,
         short term and long term disability insurance, flexible spending
         accounts, 401(k) Savings Plan and Employee Stock Purchase Program. The
         effective dates for your coverage and participation in these plans
         will be communicated to you under separate cover. During the term of
         your employment, PRG will also pay the premiums, or, at your option,
         reimburse you for premiums paid, on a $650,000 term life policy
         (policy #41113584, carrier: TransAmerica Occidental Life Insurance
         Company) which PRG previously acquired for you. While employed by PRG,
         PRG will reimburse you for the cost incurred in connection with an
         annual comprehensive physical examination to the extent not covered by
         insurance.

6.       Reimbursement of Expenses. PRG will pay your reasonable travel and
         business expenses (including air travel at first class rate), subject
         to you submitting receipts in accordance with PRG's normal practices
         and procedures. Additionally, PRG will reimburse you for the
         reasonable costs of having your own counsel review this Agreement on
         your behalf prior to your signing this Agreement.

7.       Vacation. You will be entitled to three (3) weeks of paid vacation for
         each full year of employment with PRG, subject to PRG's policies and
         procedures as promulgated from time to time.

8.       Termination.

         (a)      This Agreement may be terminated by PRG for "cause" upon
                  delivery to you of notice of termination. As used herein,
                  "cause" means (i) fraud or dishonesty committed by you in the
                  course of your employment with PRG or PRGX, gross negligence
                  or willful misconduct committed by you in the course of your
                  employment with PRG or PRGX which has or might reasonably be
                  expected to have a material adverse effect upon the business
                  or operations of PRGX and its subsidiaries taken as a whole,
                  conviction of a felony or other crime of moral turpitude in
                  the course of employment (e.g., fraud, theft, embezzlement
                  and the like), or (ii) engaging in activities prohibited by
                  Sections 3, 4, 5 or 6 of the attached Employee Agreement, or
                  any other material breach of this Agreement. A termination of
                  your employment for "cause" based upon the immediately
                  preceding sentence shall take effect thirty (30) days after
                  PRG gives you written notice of such termination unless you
                  shall, during such thirty (30) day period, remedy the events
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 3


                  or circumstances constituting "cause" to the reasonable
                  satisfaction of the Chief Executive Officer of PRGX;
                  provided, however, that such termination shall take effect
                  immediately upon the giving of notice of termination with
                  "cause" if PRG shall have reasonably determined in good faith
                  that such events or circumstances are not remediable (which
                  determination shall be stated in such written notice). If the
                  Chief Executive Officer of PRGX or Stanley Cohen ("Cohen") or
                  Jonathan Golden ("Golden") becomes aware of any facts or
                  circumstances that would give PRG the right to terminate your
                  employment for cause pursuant to this Section 8(a), PRG shall
                  give you notice of the existence of such facts or
                  circumstances within thirty (30) days of such facts or
                  circumstances being known by the Chief Executive Officer of
                  PRGX or by Golden or Cohen; provided, however, that this
                  sentence shall apply to Golden and Cohen only for so long as
                  such person continuously remains a member of the Board of
                  Directors of PRGX.

         (b)      You may, without cause, terminate this Agreement by giving
                  PRG thirty (30) days' written notice in the manner specified
                  in Section 11 hereof and such termination will be effective
                  on the thirtieth (30th) day following the date of such notice
                  or such earlier date as PRG specifies. PRG may, without
                  cause, terminate this Agreement by giving to you thirty (30)
                  days' written notice in the manner specified in Section 11
                  hereof and such termination will be effective on the
                  thirtieth (30th) day following the date of such notice. At
                  PRG's option, you will cease performing your duties as an
                  employee on such earlier date as PRG may specify in its
                  notice of termination.

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

         (d)      This Agreement may be terminated by you for "Good Reason"
                  upon thirty (30) days prior written notice of termination
                  (the "Termination Notice") served personally in
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 4


                  accordance with Section 11 hereof, such "Good Reason" being
                  specified in the Termination Notice; provided that at the
                  time of such notice to PRG, there is no basis for termination
                  by PRG of your employment for cause and the facts and
                  circumstances constituting cause have not been known by the
                  Chief Executive Officer of PRGX or, if applicable, Cohen or
                  Golden, for thirty (30) days or more; and further provided
                  that at the time of such Termination Notice to PRG you have
                  delivered at least 30 days prior thereto a written notice to
                  PRG (the "Event Notice") stating a condition (a "Qualifying
                  Event") exists which with the passage of time will allow you
                  to terminate your employment for "Good Reason" and specifying
                  the factual basis for such Qualifying Event and such
                  Qualifying Event has not been cured by PRG prior to its
                  receipt of the Termination Notice. For purposes of this
                  Agreement, "Good Reason" means any one of the following
                  events: (i) the assignment to you of duties or positions or
                  titles inconsistent with or lower than any of the duties,
                  positions or titles provided in this Agreement; (ii) the
                  principal place where you are required to perform a
                  substantial portion of your employment duties hereunder is
                  outside of the metropolitan Atlanta, Georgia area; (iii) the
                  reduction of your Base Salary, potential Bonus or annual
                  automobile allowance below amounts set forth herein; provided
                  however you shall have no right to terminate pursuant to this
                  clause (iii) of Section 8(d) if PRGX's Board of Directors or
                  the Compensation Committee of the Board of PRGX (the
                  "Committee") has duly authorized and directed a general
                  compensation decrease for all executive employees of PRG and
                  PRGX and the reduction of the sum of your Base Salary,
                  potential Bonus and automobile allowance hereunder is reduced
                  on a pro rata basis in respect of all other such executives;
                  or (iv) a "Change in Control" (as defined below) shall have
                  occurred. If you believe that a Qualifying Event has
                  occurred, you must give PRG the Event Notice within thirty
                  (30) days following the occurrence of such Qualifying Event
                  or you will not be entitled to rely on such event as the
                  basis for terminating your employment for Good Reason. PRG
                  will have thirty (30) days after its receipt of the Event
                  Notice to notify you that it disagrees in good faith with
                  your assertion that there has been a Qualifying Event and to
                  provide you with a detailed written explanation as to why it
                  disagrees. If PRG does not notify you within thirty (30) days
                  of its receipt of the Event Notice that it disagrees with
                  your assertion that there has been a Qualifying Event, PRG
                  shall be deemed to have agreed with your assertion that there
                  has been a Qualifying Event. If PRG agrees or is deemed to
                  agree with your assertion, or any disagreement is finally
                  resolved finding that a Qualifying Event has occurred, you
                  must give the Termination Notice within thirty (30) days
                  following the earliest of such agreement, deemed agreement or
                  final resolution or you will not be entitled to rely on the
                  specific facts underlying such Qualifying Event as the basis
                  for terminating your employment for Good Reason. If PRG
                  disagrees with your assertion in a timely manner, you may
                  give the Termination Notice at any time prior to the
                  resolution of whether a Qualifying Event has occurred;
                  provided, however, that your employment will be considered
<PAGE>   5

Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 5


                  terminated without Good Reason pending the outcome of the
                  disagreement as to whether a Qualifying Event has occurred.
                  If you terminate your employment in accordance with this
                  Section 8(d) and PRG disagrees with your assertion that a
                  Qualifying Event has occurred, and if the outcome of such
                  disagreement is that a Qualifying Event has occurred, you
                  will be entitled to interest at the prime rate, as announced
                  by Bank of America, N.A. or any successor thereto, Atlanta,
                  Georgia, on any severance payments you subsequently receive
                  calculated from the date you would have received such
                  payments if PRG had not disagreed with your assertion that a
                  Qualifying Event had occurred to the date you actually
                  receive such severance payments. Notwithstanding the
                  foregoing, a termination shall not be treated as a
                  termination for "Good Reason" (A) if you have consented in
                  writing in your individual capacity (regardless of any action
                  taken by you in your capacity as an officer of PRG or PRGX or
                  in your capacity as a stockholder of PRGX on any matter
                  presented to PRGX stockholders for a vote) to the occurrence
                  of the Qualifying Event giving rise to the claim of
                  termination for Good Reason or (B) unless you have delivered
                  an Event Notice to PRG at least 30 days prior to providing
                  the Termination Notice and the Qualifying Event identified in
                  the Event Notice shall not have been cured by PRG prior to
                  its receipt of the Termination Notice.

                  For purposes of this Agreement, a "Change in Control" shall
                  have occurred if:

                  (A)      John M. Cook no longer serves as Chief Executive
                           Officer of PRGX; or

                  (B)      a majority of the directors of PRGX shall be persons
                           other than persons:

                           (xx)     for whose election proxies shall have been
                                    solicited by the board; or

                           (yy)     who are then serving as directors appointed
                                    by the board to fill vacancies on the board
                                    caused by death or resignation, but not by
                                    removal, or to fill newly-created
                                    directorships;

                           or

                  (C)      a majority of the outstanding voting power of PRGX
                           shall have been acquired or beneficially owned by
                           any person (other than PRGX or a subsidiary of PRGX)
                           or any two or more persons acting as a partnership,
                           limited partnership, syndicate or other group,
                           entity or association acting in concert for the
                           purpose of acquiring, holding or disposing of voting
                           stock of PRGX; or

                  (D)      there shall have occurred:
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 6


                           (ww)     a merger or consolidation of PRGX with or
                                    into another corporation, other than (1) a
                                    merger or consolidation with a subsidiary
                                    of PRGX or (2) a merger or consolidation in
                                    which the holders of voting stock of PRGX
                                    immediately prior to the merger as a class
                                    hold immediately after the merger at least
                                    a majority of all outstanding voting power
                                    of the surviving or resulting corporation
                                    or its parent; or

                           (xx)     a statutory exchange of shares of one or
                                    more classes or series of outstanding
                                    voting stock of PRGX for cash, securities
                                    or other property, other than an exchange
                                    in which the holders of voting stock of
                                    PRGX immediately prior to the exchange as a
                                    class hold immediately after the exchange
                                    at least a majority of all outstanding
                                    voting power of the entity with which the
                                    PRGX stock is being exchanged; or

                           (yy)     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 prior to the sale
                                    or disposition as a class hold 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;
                                    or

                           (zz)     the liquidation or dissolution of PRGX.

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

         (f)      The provisions in this Agreement as they relate to the giving
                  of notice prior to termination of employment shall control
                  any contrary notice requirements (or lack thereof) set forth
                  in the Employee Agreement.

9.       Severance Payments.

         (a)      If your employment with PRG is terminated for cause or if you
                  voluntarily resign other than (i) for Good Reason or (ii) due
                  to Retirement (as defined below), you will receive your base
                  salary prorated through the date of termination, payable in
                  accordance with PRG's normal payroll procedure, and you will
                  not receive any
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 7


                  bonus or any other amount in respect of the year in which
                  termination occurs or in respect of any subsequent years.

         (b)      If your employment with PRG is terminated prior to October 26,
                  2003 either by PRG or any successor to PRG without cause or by
                  you for Good Reason, you will receive:

                  (i)      your base salary and performance bonus for the year
                           in which such termination occurs prorated through the
                           date of such termination, plus

                  (ii)     a severance payment, subject to adjustment as set
                           forth below, equal to twenty-four (24) months of base
                           salary and car allowance, plus

                  (iii)    a bonus of One Hundred Thousand Dollars
                           ($100,000.00), plus

                  (iv)     an amount (the "Excise Tax Reimbursement") sufficient
                           to pay the federal excise tax, if any, imposed under
                           Section 4999 of the Internal Revenue Code of 1986, as
                           amended, or any successor statute thereto (the
                           "Code") with respect to any compensation to which you
                           are entitled (X) hereunder other than the Excise Tax
                           Reimbursement, (Y) under any other agreement between
                           you and PRG or PRGX or any successor to PRG or PRGX,
                           or (Z) under any benefit plan of PRG or PRGX or any
                           successor to PRG or PRGX in which you participate,
                           whether such compensation described in clauses (X)
                           through (Z) of this subsection (b)(iv) is payable in
                           cash or otherwise (including any amount attributable
                           under Sections 280G and 4999 of the Code or
                           regulations promulgated thereunder to acceleration of
                           options), in connection with any termination of your
                           employment to which this subsection 9(b) applies;
                           plus

                  (v)      an amount to reimburse you in full for any additional
                           federal excise tax under Section 4999 of the Code and
                           federal and state income taxes and Medicare taxes
                           (calculated using a federal income tax rate of 39.6%,
                           a state income tax rate of 6% and the prevailing
                           marginal Medicare tax rate) imposed on the Excise Tax
                           Reimbursement and the amount payable under this
                           clause (v) of subsection 9(b).

                  Except as provided in this subsection 9(b), or in any other
                  agreement between you and PRG or PRGX or any successor to PRG
                  or PRGX, you will not receive any other amount from PRG or
                  PRGX or any successor to PRG or PRGX in respect of the year in
                  which termination occurs or in respect of subsequent years.
                  The prorated base salary will be paid in accordance with PRG's
                  or its successor's normal payroll procedure, the prorated
                  performance bonus will be paid in a lump sum within ninety
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 8


                  (90) days after the end of the year to which it relates, and
                  the remaining payments will be paid in a lump sum within ten
                  (10) days following termination.

         (c)      If your employment with PRG is terminated on or after October
                  26, 2003 by PRG without cause or by you for Good Reason or is
                  terminated at any time by your death or Retirement, you (or
                  your legal representative in the case of death) will receive
                  base salary and performance bonus for the year in which such
                  termination occurs prorated through the date of such
                  termination and you will not receive any other amount in
                  respect of the year in which termination occurs or in respect
                  of any subsequent years. The prorated base salary will be paid
                  in accordance with PRG's normal payroll procedure and the
                  prorated performance bonus will be paid in a lump sum within
                  ninety (90) days after the end of the year to which it
                  relates.

         (d)      If your employment with PRG is terminated for Disability, you
                  or your legal representative will receive (i) all unpaid base
                  salary and bonuses for the year in which such termination
                  occurs prorated through the date of termination with such
                  prorated base salary payable in accordance with PRG's normal
                  payroll procedure and the prorated bonus payable in a lump sum
                  within ninety (90) days after the end of the year to which it
                  relates, and (ii) base salary for a period of ninety (90) days
                  following termination of employment due to Disability at the
                  rates in effect upon the date of such termination payable in
                  accordance with PRG's normal payroll procedure, reduced (but
                  not below zero) by the sum of (x) all amounts paid by PRG to
                  you as base salary prior to termination of employment for the
                  times that you were unable to perform the services required of
                  you under this Agreement due to illness, accident or any other
                  physical or mental incapacity which resulted in your
                  Disability and (y) all amounts that you are eligible to
                  receive under any of PRG's standard short-term group
                  disability insurance coverage provided to you as a result of
                  such illness, accident or any other physical or mental
                  incapacity. To the extent that PRG has not reduced its
                  payments to you to reflect such amount that you are eligible
                  to receive under such short-term group disability coverage,
                  you will immediately remit to PRG such amount upon your
                  receipt thereof. You will not receive any other amount in
                  respect of the year in which termination occurs or in respect
                  of any subsequent years. In lieu of terminating your
                  employment for a Disability, PRG may elect to put you on
                  unpaid leave of absence for a period determined in PRG's sole
                  discretion, but in no event to exceed one year. If put on
                  unpaid leave of absence, you will be entitled to the same
                  compensation to which you are entitled if you are terminated
                  as set forth above in this subsection 9(d) and shall not be
                  entitled to any further compensation except that you will
                  continue to maintain your eligibility in all PRG benefit plans
                  (but only to the extent such continued eligibility is not
                  prohibited pursuant to the terms of any such plan) provided
                  that PRG will have no responsibility to pay any premiums or
                  other amounts on your behalf with respect to any such plans.
                  Notwithstanding anything contained herein to the
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 9


                  contrary, if PRG elects to place you on unpaid leave of
                  absence in lieu of terminating you as provided in this
                  Subsection 9(d), (i) PRG will be entitled to subsequently
                  terminate your employment with PRG on the expiration of such
                  leave of absence without any further monetary obligations to
                  you and (ii) PRG will have no obligation to reinstate you to
                  active status unless PRG determines in its sole discretion
                  that such reinstatement is in the best interests of both PRG
                  and you.

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

         (f)      If you fail to observe or perform in any material respect any
                  of your continuing duties and obligations under this Agreement
                  or your duties and obligations under Sections 3, 4, 5, or 6 of
                  the attached Employee Agreement, you will forfeit any right to
                  severance or other termination payments of any amounts other
                  than base salary prorated through the date of termination and
                  upon PRG's demand for same, you shall repay PRG any severance
                  or other termination payments paid to you after the date of
                  termination of your employment with PRG (other than such base
                  salary).

         (g)      Notwithstanding anything contained herein to the contrary, as
                  conditions precedent to receiving any severance benefits under
                  this Agreement, you will be required to (i) return all
                  property of PRG including, without limitation, all
                  Confidential Information (as that term is define in your
                  Employee Agreement), and (ii) execute and deliver in a
                  mutually satisfactory form (A) a general release and covenant
                  not to sue in favor of PRG, and its officers, directors and
                  employees, and (B) an agreement (1) to assist PRG with any
                  claims or litigation with others involving matters within the
                  scope of your employment with PRG, whether or not such claims
                  or litigation is initiated by PRG or others, (2) to refrain
                  from assisting others who are asserting claims against PRG or
                  suing PRG, unless otherwise required by law, and (3) to
                  refrain from any disparagement of PRG, or its officers,
                  directors or employees, unless otherwise required by law.

10.      Successors and Assigns. You may not assign this Agreement. This
         Agreement may only be assigned by PRG to any affiliate of PRG;
         provided, however, PRG shall remain liable for all obligations under
         this Agreement. The provisions of this Agreement will be binding upon
         your heirs and legal representatives.

11.      Notices. All notices pursuant to this Agreement will be in writing and
         either (i) delivered by hand, (ii) mailed by United States certified
         mail, return receipt requested, postage prepaid, or (iii) sent by an
         internationally recognized courier which maintains evidence of delivery
         and
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 10


         receipt. All notices or other communications will be directed to the
         following addresses (or to such other addresses as either of us may
         designate by notice to the other):

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

If to you:           607 Haddington Lane
                     Peachtree City, Georgia  30269

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

13.      Acceleration of Prior Severance Payments. You acknowledge that, as an
         inducement to accept this Agreement, you have received the balance of
         $145,833.31 owing to you pursuant to the first sentence of Section
         11(c) of that certain Employment Agreement dated July 20, 1999 between
         PRG and you, as amended, in full satisfaction of PRG's and PRGX's
         obligations under that sentence. Accelerated payment of such balance
         amount is mutually agreed to be a signing bonus hereunder.

14.      Post Employment Assistance. Notwithstanding anything to the contrary in
         this Agreement, commencing after the termination of this Agreement for
         any reason, in the event PRGX, PRG or any of their affiliates requests
         your assistance or you are a named defendant in any claim, threat or
         inquiry related to your employment with PRG or PRGX, then you will be
         paid $180/hour for your services plus expenses. You will make
         reasonable efforts to be available to PRG and PRGX to provide such
         assistance.

15.      Enforcement of Agreement. If you take any action to enforce any
         provision of this Agreement following a Change in Control and you are
         the prevailing party in such action, whether by lawsuit, settlement,
         arbitration or otherwise, PRG and PRGX will pay all of your reasonable
         attorneys' and other professionals' fees and expenses actually incurred
         by you in connection with such enforcement action.

16.      Arbitration. Except as set forth below, any claim, dispute or
         controversy arising under or in connection with this Agreement or
         otherwise in connection with your employment by PRG (including, without
         limitation, any such claim, dispute or controversy arising under any
         federal, state or local statute, regulation, or ordinance or any of
         PRG's or PRGX's employee benefit plans, policies or programs) shall be
         resolved solely and exclusively by binding arbitration. The arbitration
         shall be held in the city of Atlanta, Georgia (or at such
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Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 11


         other location as shall be mutually agreed upon). The arbitration shall
         be heard by a panel of three arbitrators and shall be conducted by the
         American Arbitration Association under its National Rules for the
         Regulation of Employment Disputes in effect at the time of the
         arbitration. Except as otherwise specifically set forth in this letter,
         all fees and expenses of the arbitration (other than a party's
         respective legal and professional fees and expenses, which shall be
         paid by the party incurring same), including a transcript if either
         requests, shall be borne equally by the parties. The arbitrator's
         decision shall be final and binding on the parties and shall bar any
         suit, action or proceeding instituted in any federal, state or local
         court or administrative tribunal. Notwithstanding the preceding
         sentence, the arbitrator's judgment may be entered in any court of
         competent jurisdiction. These arbitration provisions shall survive the
         termination of this Agreement. Notwithstanding anything contained
         herein to the contrary, PRG and PRGX shall not be required to arbitrate
         any disputes regarding the terms set forth in Sections 3 through 6 of
         the attached Employee Agreement. PRG and PRGX shall in all cases be
         permitted to seek all remedies available at law to it in connection
         with the enforcement of such provisions, including the right to seek
         injunctive relief in any court of competent jurisdiction. Prior to
         initiating any arbitration, an aggrieved party shall notify the other
         and the parties shall have ten (10) days to work in good faith to
         resolve any disagreements. If the disagreement remains unresolved for
         ten (10) or more days from the date the aggrieved party's notice is
         received by the other party, the aggrieved party may thereafter pursue
         arbitration in accordance with this Section 16.

                                                                  /s/ DEE
                                                                  --------------
                                                                   Gene Ellis to
                                                                    initial here

                                                                  /s/ JMC
                                                                  --------------
                                                                    John Cook to
                                                                    initial here

17.      Entire Agreement. This Agreement, the Employee Agreement, the
         Indemnification Agreement between PRGX and you dated October 26, 2000
         ("Indemnification Agreement") and such other documents as may be
         referenced herein or therein (the "Referenced Documents"), constitute
         our entire agreement with respect to the subject matter hereof and,
         except as specifically provided herein or in the Employee Agreement,
         the Indemnification Agreement or the Referenced Documents, supersedes
         all of our prior discussions, understandings and agreements. Any such
         prior agreements shall be null and void. To the extent that there is a
         conflict between this letter and the Employee Agreement, the terms of
         this letter shall control. You acknowledge and agree that you have
         received all amounts to which you are entitled under any prior
         employment or severance agreements between you and PRG and release PRG
         from any claims you may have for any additional payments under such
         prior agreements. This Agreement may not be changed orally, but only by
         an agreement in writing signed by the party against whom enforcement of
         any waiver, change, modification, extension or discharge is sought.
         Time is of the essence of this Agreement and each and every Section and
         subsection hereof.
<PAGE>   12

Mr. Donald E. Ellis, Jr.
January 15, 2001
Page 12


Please confirm your acceptance of this offer by signing and returning both this
letter and the Employee Agreement to me at your earliest convenience.

                                          Best wishes,

                                          /s/ JOHN M. COOK
                                          -------------------------------------
                                          John M. Cook,
                                          Chairman and Chief Executive Officer
Accepted and agreed:


 /s/ DONALD E. ELLIS, JR.
--------------------------------------
Donald E. Ellis, Jr.

Date:  January 15, 2001
     ---------------------------------
</TEXT>
</DOCUMENT>
