SECOND AMENDMENT
TO THE
SECOND AMENDED
AND
RESTATED EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO THE SECOND AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this "Amendment"), dated as of October 7, 2002, is made by and among
Insignia Financial Group, Inc., a Delaware corporation (the "Parent Company"),
Insignia/ESG, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxx (the "Executive").
WHEREAS, Insignia/ESG Holdings, Inc., the predecessor in interest to
the Parent Company, the Company and the Executive have entered into a Second
Amended and Restated Employment Agreement, made as of July 31, 1998, as amended
to date by the Amendment to Second Amended and Restated Employment Agreement,
made as of July 21, 2001, by and among the Parent Company, the Company and the
Executive (the "Employment Agreement"), pursuant to which the terms and
conditions of the Executive's employment are set forth; and
WHEREAS, the Parent Company, the Company and the Executive now desire
to amend the Employment Agreement as hereinafter set forth;
NOW, THEREFORE, the Parent Company, the Company and the Executive
hereby agree as follows:
1. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the Employment
Agreement.
2. AMENDMENT TO SECTION 3(C). Effective on the date hereof, Section
3(c) of the Employment Agreement is hereby amended to read in its
entirety as follows:
"For each month prior to August, 2002, the Company shall
advance to the Executive an amount equal to $50,000 less
withholding permitted by Section 12 on the first day of each
month (such amounts including the related withholding are
referred to as the "Advances") against receipt of the Override
and Annual Bonus payable in respect of the calendar year in
which such Advances were paid. Not later than March 31
following the end of each fiscal year (or 90 days following
the termination of the Employment Period, if earlier), the
Compensation Committee shall deliver to the Executive a
calculation of the amount of Override payable to him pursuant
to Section 3(b) of this Agreement, the amount of the Annual
Bonus payable to him pursuant to Section 3(e) of this
Agreement for the preceding year (or portion thereof if the
Employment Period has terminated during such year) and the
amount of Additional Payments payable to him pursuant to
Section 3(d) of this Agreement for the preceding year. In the
event the Advances for any such period exceed the aggregate
amount of the Override and Annual Bonus the Executive shall
repay such excess to the Company within 15 days of receipt of
such calculation. Subject only to recoupment under Section
3(d) below, in the event the Override and Annual Bonus earned
for such period exceeds the Advances for such period, the
Company shall pay such excess less
withholding to the Executive within 15 days of delivery of
such calculation."
3. AMENDMENT TO SECTION 3(D). Effective on the date hereof, Section
3(d) of the Employment Agreement is hereby amended by adding the
following four sentences at the end thereof to read as follows:
"In addition, the Executive shall be entitled to receive an
additional 20% of the promotional and net commission amounts
received by Insignia/ESG after June 30, 2002, as such amounts
are described and referred to above in this Section 3(d) (the
"Additional Payments"); provided, however, that in no event
shall the amount of Additional Payments actually paid to the
Executive in any calendar month exceed $50,000. Any amount of
Additional Payments in respect of any calendar month to which
the Executive is entitled in excess of such monthly $50,000
maximum amount (the "Excess Additional Payments") (i) shall,
in respect of each calendar year, be carried back to any prior
month in any such calendar year (but only to months after
July, 2002, in the case of calendar year 2002) for which
$50,000 of Additional Payments was not actually paid to the
Executive until the earlier to occur of (a) the actual payment
of $50,000 of Additional Payments to the Executive in respect
of each such prior month in such calendar year, and (b) the
date of payment of the Annual Bonus amount for and in respect
of such calendar year, and (ii) any remaining Excess
Additional Payments shall be carried forward indefinitely and
paid to the Executive in any subsequent calendar months in
which less than $50,000 of Additional Payments are earned by
the Executive until $50,000 of Additional Payments are
actually paid to the Executive in respect of each such
subsequent calendar month (but, notwithstanding the above, any
such remaining Excess Additional Payments so carried forward
shall only be paid to the Executive if the Executive is
employed by the Company on the date of payment and upon any
termination of the Executive's employment such carry forward
amount shall be reduced to zero and eliminated without any
payment to the Executive). Notwithstanding the above or
anything to the contrary in Section 3(c) or otherwise, the
Additional Payments and Excess Additional Payments actually
paid to the Executive during any particular calendar year
shall (x) be recoupable from any Override and Annual Bonus
amounts, and from any other cash payments, other than Base
Salary, earned by or payable to the Executive in respect of
such calendar year and/or subsequent calendar years, including
without limitation severance payments or benefits (the
"Recoupable Amounts") or (y) be forfeited and repaid to the
Company by the Executive if (A) the Executive terminates or
resigns his employment or (B) the Company terminates the
Executive's employment for Cause, in either case, at any time
during any such calendar year. If the Recoupable Amounts in
(x) above in respect of any calendar year are insufficient to
fully recoup the amount of Additional Payments and Excess
Additional Payments actually paid in respect of such calendar
year or prior calendar years, the aggregate amount of such
unrecouped Additional Payments and Excess Additional Payments
shall be carried forward indefinitely to subsequent calendar
years and shall again be
subject to such recoupment by the Company in any such
subsequent calendar years."
4. AFFIRMATION. Except as set forth above, all other terms and
provisions of the Employment Agreement, as in effect immediately prior
to the date hereof, shall remain in full force and effect.
5. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
INSIGNIA FINANCIAL GROUP, INC.
BY: /s/ Xxxx X. Xxxxxxx
--------------------------------------
NAME: Xxxx X. Xxxxxxx
------------------------------------
ITS: Executive Vice President
-------------------------------------
INSIGNIA/ESG, INC.
BY: /s/ Xxxx X. Xxxxxxx
--------------------------------------
NAME: Xxxx X. Xxxxxxx
------------------------------------
ITS: Senior Vice President
-------------------------------------
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
