AMENDMENT NO. 1
TO EMPLOYMENT AGREEMENT
Amendment No. 1 dated as of August 18, 1994 (the "Amendment") to the
Employment Agreement referred to below between Axe-Houghton Associates, Inc.
(the "Company") and Xxxx X. Xxxx, Xx. ("Employee").
W I T N E S S E T H
WHEREAS, the Company and Employee are parties to the Employment
Agreement, dated April 8, 1993 (the "Employment Agreement") (unless otherwise
defined herein, all capitalized terms used herein shall have the same meaning
as set forth in the Employment Agreement);
WHEREAS, the Company plans to hire certain additional employees from
time to time (through acquisitions or otherwise) and wishes to make certain
amendments to the Employment Agreement to exclude from the calculation of Bonus
revenues generated by such parties consistent with the Purchase Agreement dated
as of February 18, 1993 (the "Purchase Agreement") among Xxxxxx Group Inc.
("Xxxxxx"), the Company, and the Sellers (as defined below), as amended by
Amendment No. 1 to the Purchase Agreement, dated as of August 18, 1994 among
Xxxxxx, the Company and the Sellers (as defined below);
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
AMENDMENT
Section 1.01. Amendment of Employment Agreement. The Employment
Agreement is hereby amended as follows:
(a) Section 1(i) is hereby deleted and replaced in its entirety by the
following:
(i) "Net Pre-tax Profits" means the amount, if any,
determined in accordance with GAAP consistently applied from year to
year, by which the Company's total revenues generated by the Included
Accounts (but excluding revenues generated by the Excluded Accounts)
exceed expenses incurred in the operation and conduct of the Company's
business excluding all such expenses relating to the Excluded Accounts
and Excluded Employees as determined in good faith by the Board of
Directors of the Company, which expenses include but are not limited
to rent (at Xxxxxx'x cost per square foot), telephones, salaries, any
amounts paid to Company employees upon termination of employment,
consulting, solicitation or other fees paid to third parties, business
travel and entertainment expenses, legal and professional fees
incurred in connection with Company business, and any other direct
expenses incurred by the Company; provided,
however, that the following expenses shall not be deducted from the
Company's revenues when calculating the Earnout; (i) general corporate
allocations or charges by Xxxxxx; (ii) interest paid on the Company
Note referred to in Section 1.6 of the Purchase Agreement; (iii) any
expenses reasonably incurred in the relocation of the Company's
offices to Royal Executive Park, 0 Xxxxxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxx
Xxxx of up to a maximum $100,000, including but not limited to any
expenses incurred in the subletting of the Company's present premises
located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx, and charges on
service contracts incurred solely as a result of the relocation; (iv)
the cost of any stock options granted to Company employees; (v) for
each of the first two years following the Closing, marketing expenses
of up to $500,000 provided such expenses are approved for
reimbursement by Xxxxxx as provided in Section 1.5 of the Purchase
Agreement; (vi) the incurrence of any indebtedness or contractual
obligation which is outside the ordinary course of business and is in
excess of $50,000; (vii) the compromise, settlement or other
forgiveness of indebtedness owed to the Company which involves an
amount in excess of $50,000; (viii) the guarantee or assumption of
liability, contingent or otherwise, with respect to obligations of
third parties which involves an amount in excess of $50,000; and (ix)
interest paid on the Marketing Note referred to in Section 1.5(c)(i)
of the Purchase Agreement.
(b) Section 1 is hereby amended by adding the following after clause
(o):
(p) "Included Accounts" shall mean client accounts presently
or hereafter managed by the Included Employees, except those client
accounts managed using the Vortex Investment style.
(q) "Included Employees" shall mean the Sellers and such
present and future employees hired by the Sellers and working with the
Sellers on Included Accounts.
(r) "Excluded Accounts" shall mean client accounts presently
or hereafter managed by employees other than the Included Employees.
(s) "Excluded Employees" shall mean present and future
employees other than the Included Employees.
(t) "Sellers" shall mean Xxxxx X. Xxxxxxx, Xxxxx Xxxxxxxx,
Xxxxxxx Xxxxxx, Xxxxx X. Xxxx, Xxxx X. Xxxx, Xx., Xxxxxx X. Xxxxx and
Xxxxxx X. Xxxxxxx, collectively.
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ARTICLE II
MISCELLANEOUS
(a) The parties hereby agree that upon the commencement of employment
of the Excluded Employees all responsibilities relating to client accounts
managed using the Vortex investment style shall become the responsibility of
the Excluded Employees.
(b) Except for the matters specifically amended herein, the Employment
Agreement shall remain and continue to be in full force and effect in
accordance with its terms, and the Employment Agreement is hereby ratified,
confirmed and acknowledged by each party thereto.
(c) This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, and all of which
taken together shall constitute one and the same instrument.
(d) This Amendment shall be governed by, and construed in accordance
with the laws of the State of New York, without regard to principles of
conflict of laws.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed as of the date first above written.
AXE-HOUGHTON ASSOCIATES, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Vice-President
Employee:
/s/ Xxxx X. Xxxx, Xx.
-------------------------
Xxxx X. Xxxx, Xx.
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