Document:

Exhibit 10.10

 

Revised Exhibit A

to the

Amended Asset Purchase Agreement

 

Definitions of

terms used in this Exhibit:

 

Note: Unless otherwise defined

herein below, terms shall have the same meaning ascribed to them in the

Amendment to the Asset Purchase Agreement dated October 27, 2000 (the

“Agreement”) executed simultaneously with this Revised Exhibit A.

 

“Earn Out” is defined as the

amount (for the calendar year [“CY”] periods in Table 1 below) Buyer is to pay

Rubin pursuant to the Agreement as amended, which results from taking the

Consideration to be Paid (in Table 1) and adjusting it based on MM Net Billings

Target Achieved, Direct Margin achieved for MM (as defined below) Consulting

and Metricnet, and Outside Consultant Use, all as described below in this

Revised Exhibit A.

 

“META Measurements” (“MM”) is

defined as the Division — which is the

Business (as defined in the Agreement), after the Closing (as defined in the

Agreement) of the Agreement, acquired and operated by Buyer as a separate

division of Buyer (until on or about 1/1/02, after which there was no separate

division) — PLUS the following 3 META Group Consulting (“MGC”) services

reporting to Rubin: Sourcing (“SOP”),

Process and Metrics (“PMP”), and Operations and Benchmarking (“OEP”).

Note: For purposes of

clarification, MM includes performance results from Metricnet publications and

services. Note: MM product codes

and staff are identified in Schedule I and Schedule II, respectively.

 

“MM Consulting” is defined as

the three MGC services SOP, PMP and OEP, and Rubin Retainer (defined

below).

 

“Rubin Retainer” is defined as

MM Consulting work performed, over a single or multi-month period of time,

solely by Rubin for a client of Company where said client is billed by Company

over a single or multi-month period of time.

 

“Pure Outside Consultant

Revenue” is defined as Revenue generated through consulting work fulfilled

solely by  Outside Consultants minus all Buyer expenses (including but

not limited to all direct and indirect expenses, e.g., sales commissions,

marketing costs, general and administrative costs); such consulting work is

treated as Net Billings for all calculations of Net Billings Target Achieved,

and is treated as 100% Direct Margin for all calculations of MM Consulting

Direct Margin Targets achieved. Buyer’s CFO and Rubin need to mutually agree

before Revenue can be classified as “Pure Outside Consultant Revenue”.

 

1. MM Earn Out

Performance Target Areas

 

For the CY 2002 Earn Out period

and each CY Earn Out period thereafter, Rubin’s Earn Out shall be based

upon:  the performance of MM in

achieving its Net Billings Target, MM Consulting Direct Margin Target and

Metricnet Direct Margin Target, and MM’s Outside Consultant Use.  If certain events occur, including but not

limited to market or other economic conditions, acquisition of Buyer or certain

assets of Buyer or change in control of Buyer, then Buyer and Rubin agree to

consult with each other in good faith toward a reasonable modification to the

amount of Earn Out to be paid in a given CY period and total Consideration to

be Paid under the Agreement, MM performance targets, MM Net Billings Targets,

MM Consulting Direct Margin, and Metricnet Direct Margin targets for such

period. Buyer and Rubin agree that Buyer shall determine whether new products,

if any, developed by Rubin are to classified for purposes of accounting,

earnout calculation, Net Billings Targets, Direct Margin Targets and

performance evaluations, as either MM Consulting or Metricnet publications.

 

2. Earn Out

Calculation

 

The amount of Earn Out to be

paid in any CY Earn Out period (see Table 1 below) shall be calculated as

follows:

 

(50% of the

Consideration to be Paid for that CY Earn Out period) x

 

 

(adjustment

for MM Net Billings Target Achieved for MM in that CY period x adjustment for

Outside Consultant Use)

 

PLUS

 

[(50% of the

Consideration to be Paid for that CY Earn Out period) x

 

(adjustment

for MM Consulting Direct Margin achieved in that CY period, multiplied by the

amount obtained by dividing MM Consulting Net Billings achieved in that CY

period by total MM Net Billings achieved in that CY period, all multiplied by

the adjustment for Outside Consultant Use in that CY period)

 

plus

 

(adjustment for Metricnet Direct Margin achieved in that CY period,

multiplied by the amount obtained by dividing Metricnet Net Billings achieved

in that CY period by total MM Net Billings achieved in that CY period, all

multiplied by the adjustment for Outside Consultant Use in that CY period.)]

 

 

Table 1:

 

Summary of CY Earn Out Periods, Dates and

Consideration to be Paid, MM Net Billings Target, and MM Consulting &

Metricnet Direct Margin  Targets

 

	

  CY Earn Out Period

  	

   

  	

  Date for Earn

  Out to be Paid

  	

   

  	

  Consideration to

  be Paid

  	

   

  	

  MM Net

  Billings Target

  	

   

  	

  MM Consulting Direct

  Margin Target

  	

   

  	

  Metricnet Direct

  Margin Target

  	

   

  
	

  CY2002

  	

   

  	

  March 31, 2003

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  18,664,000

  	

   

  	

  53

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2003

  	

   

  	

  March 31, 2004

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  24,263,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2004

  	

   

  	

  March 31, 2005

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  31,542,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2005

  	

   

  	

  March 31, 2006

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  41,005,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2006

  	

   

  	

  March 31, 2007

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  53,306,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  

 

Note 1:   If in any CY period, MM

Net Billings Target achieved is less than or equal to 80% (89% for CY 2002

only), Rubin shall receive zero Earn Out for that CY period.

 

Note 2:   In order for Executive

to receive an Earn Out in a given period, the following formula must be true:

 

(MM Consulting Revenue achieved X MM

Consulting Direct Margin achieved) + (Metricnet Revenue achieved X Metricnet

Direct Margin achieved)

 

must be greater than or equal to

 

95% X {(MM Consulting Revenue achieved X MM

Consulting Direct Margin Target [as set forth in Table 1 above]) + (Metricnet

Revenue achieved X Metricnet Direct Margin Target [as set forth in Table 1

above])}.

 

2

 

3.  Adjustment to 50% of the Consideration to be

Paid based on Net Billings Target Achieved

 

Fifty percent (50%) of the

Consideration to be Paid for each CY Earn Out period shall be adjusted based

upon MM Net Billings Target Achieved and adjusted for Outside Consultant Use.

The Net Billings Target Achieved is calculated by taking MM Net Billings

achieved in a CY Earn Out period, and dividing it by MM Net Billings Target for

that CY Earn Out period.

 

For example:

 

Fifty percent (50%) of the

Consideration to be Paid for that CY Earn Out period is multiplied by the

percentage number in the corresponding column under “% Adjustment to 50% of the

Consideration to be Paid based on Net Billings Target Achieved” in either Table

2a below for CY 2002 or Table 2b below for CY 2003 and beyond.

 

Note: For purposes of Earn Out

calculation, Net Billings Target Achieved shall be rounded up for % numbers

greater than or equal to .5, and shall be rounded down for % numbers less than

..5.

 

Table 2a:

CY 2002 Only

 

Adjustment to 50% of the Consideration to be Paid

based on Net Billings Target Achieved

 

Net Billings Target Achieved

as related to

% Adjustment to 50% of the Consideration to be Paid based on Net Billings

Target Achieved:

 

	

  Net Billings Target Achieved

  	

   

  	

  % Adjustment to 50% of the Consideration to be Paid

  based on Net Billings Target Achieved

  	

   

  
	

  >100%

  	

   

  	

  100.0

  	

  %

  
	

  100%

  	

   

  	

  100.0

  	

  %

  
	

  99%

  	

   

  	

  90.0

  	

  %

  
	

  98%

  	

   

  	

  80.0

  	

  %

  
	

  97%

  	

   

  	

  70.0

  	

  %

  
	

  96%

  	

   

  	

  60.0

  	

  %

  
	

  95%

  	

   

  	

  50.0

  	

  %

  
	

  94%

  	

   

  	

  40.0

  	

  %

  
	

  93%

  	

   

  	

  30.0

  	

  %

  
	

  92%

  	

   

  	

  20.0

  	

  %

  
	

  91%

  	

   

  	

  10.0

  	

  %

  
	

  90%

  	

   

  	

  5.0

  	

  %

  
	

  89%

  	

   

  	

  0

  	

  %

  
	

  <89%

  	

   

  	

  0

  	

  %

  
					

 

3

 

Table 2b:

CY 2003 and Subsequent CYs

 

Adjustment to 50% of the Consideration to be

Paid based on Net Billings Target Achieved

 

Net Billings Target Achieved

as related to

% Adjustment to 50% of the Consideration to be Paid based on Net Billings

Target Achieved:

 

	

  Net Billings Target Achieved

  	

   

  	

  % Adjustment to 50% of the Consideration to be Paid

  based on Net Billings Target Achieved

  	

   

  
	

  >100%

  	

   

  	

  100.0

  	

  %

  
	

  100%

  	

   

  	

  100.0

  	

  %

  
	

  99%

  	

   

  	

  97.5

  	

  %

  
	

  98%

  	

   

  	

  95.0

  	

  %

  
	

  97%

  	

   

  	

  92.5

  	

  %

  
	

  96%

  	

   

  	

  90.0

  	

  %

  
	

  95%

  	

   

  	

  87.5

  	

  %

  
	

  94%

  	

   

  	

  85.0

  	

  %

  
	

  93%

  	

   

  	

  82.5

  	

  %

  
	

  92%

  	

   

  	

  80.0

  	

  %

  
	

  91%

  	

   

  	

  77.5

  	

  %

  
	

  90%

  	

   

  	

  75.0

  	

  %

  
	

  89%

  	

   

  	

  72.5

  	

  %

  
	

  88%

  	

   

  	

  70.0

  	

  %

  
	

  87%

  	

   

  	

  67.5

  	

  %

  
	

  86%

  	

   

  	

  65.0

  	

  %

  
	

  85%

  	

   

  	

  62.5

  	

  %

  
	

  84%

  	

   

  	

  60.0

  	

  %

  
	

  83%

  	

   

  	

  45.0

  	

  %

  
	

  82%

  	

   

  	

  30.0

  	

  %

  
	

  81%

  	

   

  	

  15.0

  	

  %

  
	

  80%

  	

   

  	

  0

  	

   

  
	

  <80%

  	

   

  	

  0

  	

   

  
					

 

4. Adjustment

to 50% of Consideration to be Paid based on Direct Margin Achieved

 

Fifty percent (50%) of the

Consideration to be Paid for each CY Earn Out period shall be adjusted based

upon the following:

 

[adjustment

for MM Consulting Direct Margin achieved in that CY period (see the percentage

number in the corresponding column under “% Adjustment to 50% of the

Consideration to be Paid based on MM Consulting Direct Margin achieved” in

either Table 3a below for CY 2002 or Table 3b below for CY 2003 and beyond),

multiplied by the amount obtained by dividing MM Consulting Net Billings

achieved in that CY period by total MM Net Billings achieved in that CY period,

all multiplied by the adjustment for Outside Consultant Use in that CY period

(see Table 5 below)]

 

Plus

 

[adjustment

for Metricnet Direct Margin achieved in that CY period (see the percentage

number in the corresponding column under 

“% Adjustment to 50% of the Consideration to be Paid based on Metricnet

Direct Margin achieved” in Table 4 below), multiplied by the amount obtained by

dividing Metricnet Net Billings achieved in that CY period by total MM Net

Billings achieved in that CY period, all multiplied by the adjustment for

Outside Consultant Use in that CY period (see Table 5)].

 

4

 

Table 3a:

CY 2002 Only

 

Adjustment to 50% of the Consideration to be

Paid based on MM Consulting Direct Margin achieved:

 

	

  Direct

  Margin achieved

  	

   

  	

  % Adjustment to 50% of the

  Consideration to be Paid based

  on MM Consulting Direct

  Margin achieved

  	

   

  
	

  >53%

  	

   

  	

  100

  	

  %

  
	

  53%

  	

   

  	

  100

  	

  %

  
	

  52%

  	

   

  	

  67.0

  	

  %

  
	

  51%

  	

   

  	

  33.0

  	

  %

  
	

  50%

  	

   

  	

  0

  	

   

  
	

  50%

  	

   

  	

  0

  	

   

  
					

 

Table 3b:

CY 2003 and Subsequent CYs

 

Adjustment to 50% of the Consideration to be

Paid based on MM Consulting Direct Margin achieved:

 

	

  Direct

  Margin achieved

  	

   

  	

  % Adjustment to 50% of the

  Consideration to be Paid based

  on MM Consulting Direct

  Margin achieved

  	

   

  
	

  >55%

  	

   

  	

  100

  	

  %

  
	

  55%

  	

   

  	

  100

  	

  %

  
	

  54%

  	

   

  	

  80

  	

  %

  
	

  53%

  	

   

  	

  60

  	

  %

  
	

  52%

  	

   

  	

  40

  	

  %

  
	

  51%

  	

   

  	

  20

  	

  %

  
	

  50%

  	

   

  	

  0

  	

   

  
	

  <50%

  	

   

  	

  0

  	

   

  
					

 

Table 4:

 

Adjustment to 50% of the Consideration to be

Paid based on Metricnet Direct Margin achieved:

 

	

  Direct

  Margin achieved

  	

   

  	

  % Adjustment to 50% of the

  Consideration to be Paid based

  on Metricnet Direct Margin

  achieved

  	

   

  
	

  >78%

  	

   

  	

  100

  	

  %

  
	

  >78%

  	

   

  	

  100

  	

  %

  
	

  77%

  	

   

  	

  80

  	

  %

  
	

  76%

  	

   

  	

  60

  	

  %

  
	

  75%

  	

   

  	

  40

  	

  %

  
	

  74%

  	

   

  	

  20

  	

  %

  
	

  73%

  	

   

  	

  0

  	

   

  
	

  <73%

  	

   

  	

  0

  	

   

  
					

 

Note: For purposes of Earn Out calculation, Direct Margin achieved

shall be rounded up for % numbers greater than or equal to .5, and shall be

rounded down for % numbers less than .5.

 

5

 

5. Adjustment

to Consideration to be Paid based on Outside Consultant Use 

 

The adjustment to 50% of

Consideration to be Paid based on Direct Margin achieved for a CY Earn Out

Period and the adjustment to 50% of the Consideration to be Paid based on Net

Billings Target Achieved for a CY Earn Out period are each multiplied by the

percentage number in the corresponding column under “% Adjustment to the

Consideration to be Paid based on Outside Consultant Use” in Table 5 below.

 

Note 1: There shall be no

adjustment hereunder if and to the extent that a specific Outside Consultant

has been authorized in advance (e.g., prior to performing any contractual work

on a specific contract), either in writing or via electronic mail, by the

Managing Director of MGC.

 

Table 5:

 

Adjustment to Consideration to be Paid based

on Outside Consultant Use:

 

	

  Outside

  Consultant Use

  	

   

  	

  % Adjustment to

  Consideration to be Paid based

  on Outside Consultant Use

  	

   

  
	

  <25%

  	

   

  	

  100

  	

  %

  
	

  25%

  	

   

  	

  100

  	

  %

  
	

  26%

  	

   

  	

  95

  	

  %

  
	

  27%

  	

   

  	

  90

  	

  %

  
	

  28%

  	

   

  	

  85

  	

  %

  
	

  29%

  	

   

  	

  80

  	

  %

  
	

  30%

  	

   

  	

  75

  	

  %

  
	

  31%

  	

   

  	

  60

  	

  %

  
	

  32%

  	

   

  	

  45

  	

  %

  
	

  33%

  	

   

  	

  30

  	

  %

  
	

  34%

  	

   

  	

  15

  	

  %

  
	

  35%

  	

   

  	

  0

  	

  %

  
	

  >35%

  	

   

  	

  0

  	

  %

  
					

 

Note 2: For purposes of Earn

Out calculation, Outside Consultant Use shall be rounded up for % numbers

greater than or equal to .5, and shall be rounded down for % numbers less than

..5.

 

6. Example of Earn Out Calculation for CY 2003 Earn Out period

 

6.1. Rubin’s CY Earn Out is

based on three performance areas:

 

•                  Assets under

Rubin’s direct control achieving a Net Billings Target

 

•                  Assets under

Rubin’s direct control achieving Direct Margin Targets

 

•                  Outside

Consultant Use.

 

If in any CY

period, Net Billings achieved is less than or equal to 80% (89% for CY 2002

only) of target, Rubin shall receive zero Earn Out for that CY period.

 

If in any CY

period Rubin fails to achieve a minimum of 95% of Direct Margin Targets, Rubin

shall receive zero Earn Out for that CY period.

 

6

 

6.2.  Earn Out formula is based on the following:

 

50% of Earn

Out is based upon Net Billings Target attainment and an adjustment for Outside

Consultant Use

 

PLUS

 

50% of Earn

Out is based upon Direct Margin Target attainment (broken down by Consulting,

and Publications and Services) and an adjustment for Outside Consultant Use

 

6.3. The amount of Earn Out to

be paid (as set forth in Table 1 below) on March 31, 2003 is to be calculated

as follows:

 

(50% of

$812,500) multiplied by

 

(adjustment

for META Measurements (MM) Net Billings Target Achieved in that CY period

multiplied by the adjustment for Outside Consultant Use)

 

PLUS

 

(50% of

$812,500) multiplied by

 

[(adjustment

for MM Consulting Direct Margin achieved in that CY period) multiplied by (the

amount obtained by dividing MM Consulting Net Billings achieved in that CY

period by total MM Net Billings achieved in that CY period) multiplied by (the

adjustment for Outside Consultant Use in that CY period)

 

plus

 

(adjustment

for Metricnet Direct Margin achieved in that CY period) multiplied by (the

amount obtained by dividing Metricnet Net Billings achieved in that CY period

by total MM Net Billings achieved in that CY period) multiplied by (the

adjustment for Outside Consultant Use in that CY period)]

 

6.4.  The Earn Out formula would appear as:

 

(50% of $812,500) X

(adjustment for MM Net Billings Target Achieved) X (adjustment for Outside

Consultant Use)

 

PLUS

 

(50% of

$812,500) X

 

[(adjustment

for MM Consulting Direct Margin Achieved) X (MM Consulting Net Billing

achieved/MM Net Billings achieved) X (adjustment for Outside Consultant Use)

 

plus

 

(adjustment

for Metricnet Direct margin achieved) X (Metricnet Net Billing achieved/MM Net

Billings Achieved) X (adjustment for Outside Consultant Use)]

 

6.5. Assume for this example the following adjustments to Consideration

to be Paid based on CY 2003 Net Billings Target Achieved, MM Consulting and

Metricnet Direct Margin achieved, and Outside Consultant Use:

 

7

 

Assume Rubin’s Net Billings

Target Achieved is 98%, the corresponding number in the column under

“Adjustment to 50% of the Consideration to be Paid based on Net Billings Target

Achieved” in Table 2b below is 95% (A).

 

Assume Rubin’s MM Consulting

Direct Margin achieved is 54%, the corresponding number in the column under

“Adjustment to 50% of the Consideration to be Paid based on MM Consulting

Direct Margin achieved” in Table 3 below is 80% (B).

 

Assume Rubin’s Metricnet Direct

Margin achieved is 78%, the corresponding number in the column under

“Adjustment to 50% of the Consideration to be Paid based on Metricnet Direct

Margin achieved” in Table 4 below is 100% (C).

 

Assume MM’s Outside Consulting

Use is less than 25%, the corresponding number in the column under “Adjustment

to the Consideration to be Paid based on Outside Consulting Use” in Table 5

below is 100% (D).

 

The Summary Table below lists

the assumptions made above:

 

Summary Table

of

Example of adjustments to Consideration to be Paid for CY 2003 Earn Out

Period

 

	

  %

  adjustment to 50% of

  the Consideration to be 

  Paid based on
Net Billings Target

  Achieved

  	

   

  	

  % adjustment to 50% of

  the Consideration to be

  Paid based on

  MM Consulting Direct

  Margin achieved

  	

   

  	

  % adjustment to 50%

  of the Consideration to

  be Paid based on
Metricnet Direct

  Margin achieved

  	

   

  	

  % adjustment to

  Consideration to be

  Paid based on

  Outside Consultant

  Use

  	

   

  
	

  (A)

  	

   

  	

  (B)

  	

   

  	

  (C)

  	

   

  	

  (D)

  	

   

  
	

  95%

  	

   

  	

  80%

  	

   

  	

  100%

  	

   

  	

  100%

  	

   

  

 

6.6 Calculation for minimum CY

2003 META Measurement Direct Margin required for any Earn Out to occur:

 

(MM Consulting Revenue achieved multiplied by

MM Consulting Direct Margin achieved) plus (Metricnet Revenue achieved

multiplied by Metricnet Direct Margin achieved)

 

must be greater than or equal to

 

95% multiplied by {(MM Consulting Revenue

achieved multiplied by MM Consulting Direct Margin Target [as set forth in

Table 1 below]) plus (Metricnet Revenue achieved multiplied by Metricnet Direct

Margin Target [as set forth in Table 1 below])}.

 

Assume for

this example the above calculation indicates MM Direct Margin achieved is at

least 95% of CY 2003 MM Consulting and Metricnet Revenue achieved each

multiplied by its corresponding CY 2003 MM Consulting and Metricnet Direct

Margin Target, respectively.

 

6.7. Calculate:

 

MM Consulting Net Billings

achieved divided by total MM Net Billings achieved, and Metricnet Net Billings

achieved divided by total MM Net Billings achieved.

 

Assume for this example:

 

8

 

MM Consulting Net Billings

achieved divided by total MM Net Billings achieved = .88 (E), and Metricnet Net

Billings achieved divided by total MM Net Billings achieved = .12. (F)

 

The calculation will appear as:

 

Earn Out achieved through Net Billings attainment

and Outside Consultant Use

 

(A)    (D)

(50% of $812,500) x (.95 x 1.00)

 

PLUS

 

Earn Out achieved through Direct Margin

attainment and Outside Consultant Use

 

(B)    (E)      

(C)       (F)       (D)

(50% of $812,500) x ([(.80 x .88) + (1.00 x .12)] x 1.00)

 

The final calculation appears

as following:

 

$385,937.50

 

PLUS

 

$334,750.00

 

= $720,687.50

 

to be split 2/3 in cash, and

1/3 in stock,

which is $480,458.33 in cash, and 

$240,229.17 in stock.

 

9

 

6.8.  Tables.

 

Table 1:

 

Summary of CY Earn Out Periods, Dates and

Consideration to be Paid, MM Net Billings Target, and MM Consulting &

Metricnet Direct Margin  Targets

 

	

  CY Earn Out Period

  	

   

  	

  Date for Earn

  Out to be Paid

  	

   

  	

  Consideration to

  be Paid

  	

   

  	

  MM Net

  Billings Target

  	

   

  	

  MM Consulting Direct

  Margin Target

  	

   

  	

  Metricnet Direct

  Margin Target

  	

   

  
	

  CY2002

  	

   

  	

  March 31, 2003

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  18,664,000

  	

   

  	

  53

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2003

  	

   

  	

  March 31, 2004

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  24,263,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2004

  	

   

  	

  March 31, 2005

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  31,542,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2005

  	

   

  	

  March 31, 2006

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  41,005,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  CY2006

  	

   

  	

  March 31, 2007

  	

   

  	

  $541,667 in cash;

  $270,833 in stock

  	

   

  	

  $

  	

  53,306,000

  	

   

  	

  55

  	

  %

  	

  78

  	

  %

  

 

 

Note 1:   If in any CY period, MM

Net Billings Target achieved is less than or equal to 80% (89% for CY 2002

only), Rubin shall receive zero Earn Out.

 

Note 2: If in any CY period Rubin fails to achieve a minimum of 95% of

Direct Margin Targets, Rubin shall receive zero Earn Out for that CY period. In

order for Executive to receive an Earn Out in a given period, the following

formula must be true:

 

(MM Consulting Revenue achieved X MM Consulting

Direct Margin achieved) + (Metricnet Revenue achieved X Metricnet Direct Margin

achieved)

 

must be greater than or equal to

 

95% X {(MM Consulting Revenue achieved X MM

Consulting Direct Margin Target [as set forth in Table 1 above]) + (Metricnet

Revenue achieved X Metricnet Direct Margin Target [as set forth in Table 1

above])}.

 

10

 

Table 2a:

 

CY 2002 Only

Adjustment to 50% of the Consideration to be Paid based on

Net Billings Target Achieved

 

Net Billings Target Achieved

As related to

% Adjustment to 50% of the Consideration to be Paid based on Net Billings

Target

Achieved:

 

	

  Net

  Billings Target Achieved

  	

   

  	

  % Adjustment

  to 50% of the Consideration to be Paid

  based on Net Billings Target Achieved

  	

   

  
	

  >100%

  	

   

  	

  100.0

  	

  %

  
	

  100%

  	

   

  	

  100.0

  	

  %

  
	

  99%

  	

   

  	

  90.0

  	

  %

  
	

  98%

  	

   

  	

  80.0

  	

  %

  
	

  97%

  	

   

  	

  70.0

  	

  %

  
	

  96%

  	

   

  	

  60.0

  	

  %

  
	

  95%

  	

   

  	

  50.0

  	

  %

  
	

  94%

  	

   

  	

  40.0

  	

  %

  
	

  93%

  	

   

  	

  30.0

  	

  %

  
	

  92%

  	

   

  	

  20.0

  	

  %

  
	

  91%

  	

   

  	

  10.0

  	

  %

  
	

  90%

  	

   

  	

  5.0

  	

  %

  
	

  89%

  	

   

  	

  0

  	

   

  
	

  <89%

  	

   

  	

  0

  	

   

  
					

 

Table 2b:

 

CY 2003 and Subsequent CYs

Adjustment to 50% of the Consideration to be Paid based on

Net Billings Target Achieved

 

Net Billings Target Achieved

As related to

% Adjustment to 50% of the Consideration to be Paid based on Net Billings

Target Achieved:

 

	

  Net Billings Target Achieved

  	

   

  	

  % Adjustment to 50% of the Consideration to

  be Paid

  based on Net Billings Target Achieved

  	

   

  
	

  >100%

  	

   

  	

  100.0

  	

  %

  
	

  100%

  	

   

  	

  100.0

  	

  %

  
	

  99%

  	

   

  	

  97.5

  	

  %

  
	

  98%

  	

   

  	

  95.0

  	

  %

  
	

  97%

  	

   

  	

  92.5

  	

  %

  
	

  96%

  	

   

  	

  90.0

  	

  %

  
	

  95%

  	

   

  	

  87.5

  	

  %

  
	

  94%

  	

   

  	

  85.0

  	

  %

  
	

  93%

  	

   

  	

  82.5

  	

  %

  
	

  92%

  	

   

  	

  80.0

  	

  %

  
	

  91%

  	

   

  	

  77.5

  	

  %

  
	

  90%

  	

   

  	

  75.0

  	

  %

  
	

  89%

  	

   

  	

  72.5

  	

  %

  
	

  88%

  	

   

  	

  70.0

  	

  %

  
	

  87%

  	

   

  	

  67.5

  	

  %

  
	

  86%

  	

   

  	

  65.0

  	

  %

  
	

  85%

  	

   

  	

  62.5

  	

  %

  
	

  84%

  	

   

  	

  60.0

  	

  %

  
	

  83%

  	

   

  	

  45.0

  	

  %

  
	

  82%

  	

   

  	

  30.0

  	

  %

  
	

  81%

  	

   

  	

  15.0

  	

  %

  
	

  80%

  	

   

  	

  0

  	

   

  
	

  <80%

  	

   

  	

  0

  	

   

  
					

 

Note: For purposes of Earn Out calculation, Net Billings Target

Achieved shall be rounded up for % numbers greater than or equal to .5, and

shall be rounded down for % numbers less than .5.

 

11

 

 

Table 3a:

CY 2002 Only

 

Adjustment to 50% of the Consideration to be Paid based on MM

Consulting Direct Margin

achieved:

 

	

  Direct

  Margin achieved

  	

   

  	

  %

  Adjustment to 50% of the

  Consideration to be Paid based

  on MM Consulting Direct

  Margin achieved

  	

   

  
	

  >53%

  	

   

  	

  100

  	

  %

  
	

  53%

  	

   

  	

  100

  	

  %

  
	

  52%

  	

   

  	

  67.0

  	

  %

  
	

  51%

  	

   

  	

  33.0

  	

  %

  
	

  50%

  	

   

  	

  0

  	

   

  
	

  50%

  	

   

  	

  0

  	

   

  
					

 

Table 3b:

CY 2003 and Subsequent CYs

 

Adjustment to 50% of the Consideration to be Paid based on MM

Consulting Direct Margin

achieved:

 

	

  Direct

  Margin achieved

  	

   

  	

  %

  Adjustment to 50% of the

  Consideration to be Paid based

  on MM Consulting Direct

  Margin achieved

  	

   

  
	

  >55%

  	

   

  	

  100

  	

  %

  
	

  55%

  	

   

  	

  100

  	

  %

  
	

  54%

  	

   

  	

  80

  	

  %

  
	

  53%

  	

   

  	

  60

  	

  %

  
	

  52%

  	

   

  	

  40

  	

  %

  
	

  51%

  	

   

  	

  20

  	

  %

  
	

  50%

  	

   

  	

  0

  	

   

  
	

  <50%

  	

   

  	

  0

  	

   

  
					

 

Note: For purposes of Earn Out calculation, MM Consulting Direct Margin

achieved shall be rounded up for % numbers greater than or equal to .5, and

shall be rounded down for % numbers less than .5.

 

Table 4:

 

Adjustment to 50% of the Consideration to be Paid based on Metricnet

Direct Margin achieved:

 

 

	

  Direct

  Margin achieved

  	

   

  	

  %

  Adjustment to 50% of the

  Consideration to be Paid based

  on Metricnet Direct Margin

  achieved

  	

   

  
	

  >78%

  	

   

  	

  100

  	

  %

  
	

  >78%

  	

   

  	

  100

  	

  %

  
	

  77%

  	

   

  	

  80

  	

  %

  
	

  76%

  	

   

  	

  60

  	

  %

  
	

  75%

  	

   

  	

  40

  	

  %

  
	

  74%

  	

   

  	

  20

  	

  %

  
	

  73%

  	

   

  	

  0

  	

   

  
	

  <73%

  	

   

  	

  0

  	

   

  
					

 

Note: For purposes of Earn Out calculation, Metricnet Direct Margin

achieved shall be rounded up for % numbers greater than or equal to .5, and

shall be rounded down for % numbers less than .5.

 

12

 

Table 5:

 

Adjustment to Consideration to be Paid based

on Outside Consultant Use:

 

	

  Outside

  Consultant Use

  	

   

  	

  % Adjustment to

  Consideration to be Paid based

  on Outside Consultant Use

  	

   

  
	

  <25%

  	

   

  	

  100

  	

  %

  
	

  25%

  	

   

  	

  100

  	

  %

  
	

  26%

  	

   

  	

  95

  	

  %

  
	

  27%

  	

   

  	

  90

  	

  %

  
	

  28%

  	

   

  	

  85

  	

  %

  
	

  29%

  	

   

  	

  80

  	

  %

  
	

  30%

  	

   

  	

  75

  	

  %

  
	

  31%

  	

   

  	

  60

  	

  %

  
	

  32%

  	

   

  	

  45

  	

  %

  
	

  33%

  	

   

  	

  30

  	

  %

  
	

  34%

  	

   

  	

  15

  	

  %

  
	

  35%

  	

   

  	

  0

  	

  %

  
	

  >35%

  	

   

  	

  0

  	

  %

  
					

 

Note 2: For purposes of Earn

Out calculation, Outside Consultant Use shall be rounded up for % numbers

greater than or equal to .5, and shall be rounded down for % numbers less than

..5.

 

13Exhibit 10.11

 

AMENDMENT No. 1

to
META GROUP, INC.

EMPLOYMENT AND MANAGEMENT AGREEMENT

 

This

Amendment No. 1 (“Amendment”) is entered into as of July 31, 2002 (the

“Amendment Effective Date”) between HOWARD

RUBIN, an individual residing at 450 Long Ridge Road, Pound Ridge, New York

10576 (the “Executive”), and META Group, Inc. (“Company”), to amend the

META GROUP, INC. EMPLOYMENT AND MANAGEMENT

AGREEMENT, dated as of October 27, 2000 (the “Employment Agreement”) between

them.

 

For good and valuable consideration,

the receipt and sufficiency of which is hereby acknowledged, the Executive and

the Company (the “Parties”) hereby agree to amend the Employment Agreement as

follows:

 

GLOSSARY of

Definitions used in this Amendment:

(Note: Capitalized terms not

otherwise defined hereinbelow shall have the same meaning ascribed to them in

the Asset Purchase Agreement dated October 27, 2000 as amended

contemporaneously herewith 

(collectively, the “AP Agreement”).

 

“Division” is defined as the Business (as defined in the AP Agreement),

after the Closing (as defined in the AP Agreement) of the AP Agreement,

acquired and operated by Company as a separate division of Company (until on or

about 1/1/02, after which there was no separate division).

 

“GAAP” is defined as United States Generally Accepted Accounting

Principles.

 

“MGC” is

defined as META Group Consulting.

 

“META Measurements” (“MM”) is

defined as the Division — which is the

Business (as defined in the AP Agreement), after the Closing (as defined in the

AP Agreement) of the AP Agreement, acquired and operated by Buyer as a separate

division of Buyer (until on or about 1/1/02, after which there was no separate

division) — PLUS the following 3 META Group Consulting (“MGC”) services

reporting to Rubin: Sourcing (“SOP”),

Process and Metrics (“PMP”), and Operations and Benchmarking (“OEP”).

Note: For purposes of

clarification, MM includes performance results from Metricnet publications and

services. Note: MM product codes

and staff are identified in Schedule I and Schedule II, respectively of the AP

Agreement.

 

“Rubin Retainer” is defined as MM Consulting

work performed, over a single or multi-month period of time, solely by

Executive for a client of Company where said client is invoiced by Company over

a single or multi-month period of time.

 

“Sales CY” is defined as the

12-month period from February 1 of one CY to January 31 of the following CY,

subject to modification of such start and end dates by Company’s management

(including alteration of the period being 12 months).

 

1. Section 1 is deleted and replaced with the following:

 

“1.                                 Employment by the Company.  The

Company agrees to employ the Executive in the position of Executive Vice

President and Chief Strategy Officer of the Company, and the Executive accepts

such employment and agrees to perform such duties as are customarily assigned

to an employee holding such positions, including without limitation management

of the Division; the parties acknowledge that all officers of the Company may

by law only be chosen,

 

1

 

and with such titles, as determined by resolution of the Company’s

Board of Directors, with authority and duties as prescribed in such

resolutions. The Executive agrees to devote his full business time and energies

to the business of the Company and/or its Subsidiaries and/or Affiliates and to

faithfully, diligently and competently perform his duties hereunder.  In furtherance of the foregoing, the

Executive shall hold in trust for the benefit of the Company, and promptly

remit to the Company, any cash or in-kind income received by the Executive

during the Term (as defined below) from any source other than (i) the Company

and its Affiliates, (ii) passive investments made by the Executive or for the

Executive’s benefit, and (iii) gifts to the Executive.  The Executive agrees to avoid using for

business communication any personal email address (other than the domain name

metagroup.com), and shall use META Group’s email and sanctioned business cards

and marketing logo(s).

 

The Executive shall have direct management of the following MGC

services (also known as practice areas): SOP, PMP and OEP. For clarification,

the Parties note that, beginning February 28, 2002, PMP personnel were

transferred to either SOP or OEP; for accounting and performance purposes, PMP

product codes shall remain in effect to capture residual costs and residual Net

Billings and Revenues, until such time as the Chief Financial Officer of the

Company determines otherwise. The parties acknowledge that the configuration

and names of the practice areas are subject to change upon mutual

agreement of the Company and Executive in writing (where Email is an acceptable

form of writing).

 

The Executive (for the performance of MM) will report to the Managing

Director of MGC, presently Michael Pedersen. For purposes of staff management,

resource management, consulting operations, accounting, bonus accrual and

P&L reporting, MM will be under and report directly to the Managing

Director of MGC. For purposes of marketing new products and leveraging of MM

intellectual property into the Company’s research community, the Executive will

report directly to the Company’s CEO, with dotted line reporting to the

Company’s Director of Research. Existing staff engaged in the Metricnet

business shall report directly to the Executive, with dotted line reporting to

the Managing Director of MGC.  All MM

staff hired after the date hereof to be engaged in MM consulting or Metricnet,

or support of MM operations in any capacity, shall report to the Executive.

Changes in reporting structure may be accomplished by mutual agreement of the

parties evidenced in written or electronic mail form.”

 

2. Section 2 is deleted and

replaced with the following:

 

“1.                                 Term of Employment.  The term

of this Employment Agreement (the “Term”) shall be for the initial period

commencing on the date hereof and ending on December 31, 2005, unless the

Executive is earlier terminated as provided in Section 4 hereof.  After December 31, 2005, this Employment

Agreement shall be automatically renewed for successive one (1) year periods,

unless terminated by a party on at least sixty (60) days written notice prior

to the end of the then current Term. 

Notice of non-renewal shall not be deemed or otherwise construed as a

termination without Cause.”

 

3. Section 3.2 is deleted and

replaced with the following:

 

“3.2                           Recoverable

Draw.  In addition to Base

Salary, the Executive shall be entitled to receive a monthly amount in the form

of a Recoverable Draw (as defined below), payable within thirty (30) days after

each month’s end, equal to:

 

(A) 1⁄2 of the Rubin Retainer (as

defined above) Revenue for the applicable month,

 

minus (B) the Executive’s

monthly Base Salary, and

 

2

 

minus (C) monthly direct

expenses for Rubin Retainer staff salaries, travel & entertainment, and

other Company support and direct event costs, royalty payments, commissions,

draws, direct marketing and other direct expenses, all relating to achieving Rubin

Retainer Revenue.

 

The parties agree to follow a

monthly calculation and review process relating to determination of the

Recoverable Draw, which process is attached hereto as Addendum 1.

 

“Recoverable

Draw” is defined as the amount of additional compensation which the Executive

is to receive from Company on a monthly basis (separate from Base Salary, Earn

Out and Commission – as defined in Revised Exhibit A to the Asset Purchase

Agreement), and is based upon the calculations detailed immediately above, namely

A minus B minus C.

 

FACTORS

relating to Recoverable Draw:

 

1. Monthly

Recoverable Draws shall be accumulated on an annual CY basis.

 

2. Whenever a

monthly calculation of Recoverable Draw results in a negative amount, such

negative amount shall be subtracted from positive amounts resulting from future

monthly calculations.

 

3. Consecutive

negative monthly Recoverable Draws shall be accumulated and subtracted from

future positive monthly Recoverable Draws.

 

4. Whenever a

Rubin Retainer contract requires Company support (including but not limited to

MGC personnel) and/or Outside Consultant(s), the total amount of Recoverable

Draw for such Rubin Retainer contract shall be subtracted from future

Recoverable Draws.

 

5.

“Recoverable” in the term “Recoverable Draw” is agreed by the Parties to mean

that in the event Company is not able to collect from the third party client on

the Rubin Retainer contract between Company and such client, for a period in

excess of one hundred eighty (180) days (i.e., said Account Receivable becomes

180 days past due [or uncollected, or outstanding]), then the amount of each

such contract shall be subtracted from the Recoverable Draw amount for the

month in which such 180 period was reached, and if the Recoverable Draw for

such month is negative, then FACTORS 2 and 3 above shall apply.

 

d) The Recoverable Draw shall

not exceed  $760,000 in any CY period.

 

4. Section 3.3 is deleted and

replaced with the following:

 

“3.3                           Bonus,

if any, for CY2002 and Beyond.  The

Executive agrees to participate in the existing annual MGC and META Group

Publications bonus pool (“Bonus Pool”). The proposed Bonus Pool allocations

shall be subject to modification by the CEO of the Company, and shall require

the approval of the CEO and the Compensation Committee of the Board of

Directors of the Company.  Bonus amounts

allocable to the Executive shall be paid to him in a manner consistent with

existing Company and MGC bonus practices. The Executive’s total bonus amount,

stipulated in the Research Division Bonus Plan on an annual basis for each

Sales CY, (subject to approval of Company’s Compensation Committee), shall be

split between MGC and MetricNet, and shall be apportioned in the following

manner:

 

MGC bonus portion is determined

by dividing MM consulting Net Billings achieved (in that Sales CY period) by

total MM Net Billings achieved (in that Sales CY period),

 

3

 

plus

 

MetricNet bonus portion is

determined by dividing Metricnet Net Billings achieved (in that Sales CY

period) by total MM Net Billings achieved (in that Sales CY period).

 

The Company and Executive

acknowledge that bonus, bonus pool, eligibility and allocation, if any, are in

the control of the Compensation Committee of the Board of Directors of the

Company.”

 

5.  Section 4.3 (v) is deleted and

replaced with the following:

 

“(v) the failure of the

Executive to achieve in any calendar year (other than 2002): at least 80% of

the Net Billings Target for MM, and at least 95% of the Direct Margin Targets

for each of MM consulting and Metricnet, as such Net Billings Target and Direct

Margin Targets are set forth in Table 1 of Revised Exhibit A to the Asset

Purchase Agreement; or”

 

6. In Section 7.1, add the

following for an additional copy to Company:

 

and Attention:                  General

Counsel

META Group, Inc.

208 Harbor Drive

Stamford, CT  06912

Fax:  (203) 388-2545

 

7. Executive hereby waives,

releases and holds the Company, its officers, directors, employees, contractors

and agents harmless from and against: (a) any breaches of any provision(s) of

the Employment Agreement committed or alleged to have been committed by the

Company from the date of the Employment Agreement to the date of this

Amendment; and (b) and claims of any kind including but not limited to damages

or losses of any kind related thereto for such period.

 

8. In the event of any

inconsistency between the terms of this Amendment and the terms of the

Employment Agreement, this Amendment shall take precedence.

 

9. Except as expressly amended

as set forth herein, the Employment Agreement shall remain in full force and

effect in accordance with its terms.

 

10. This Amendment may be

executed in several counterparts, all of which taken together shall constitute

one single agreement of the parties.

 

IN WITNESS WHEREOF, the parties

have caused this Amendment to be executed by their duly authorized

representatives as of the date first written above.

 

	

   

  	

  META GROUP, INC.

  
	

   

  	

  By:

  	

  /s/ John A. Piontkowski

  
	

   

  	

   

  	

  Name: John A. Piontkowski

  
	

   

  	

   

  	

  Title: Chief

  Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  HOWARD RUBIN

  
	

   

  	

  /s/ Howard

  Rubin

  

 

4

 

ADDENDUM 1

 

Rubin Retainer Recoverable Draw Monthly

Calculation and Review Process

 

1. Run a report for accounting

unit 1053 – Rubin Consulting (also known as Rubin Retainer), detailing all

revenue for the applicable month.

 

2. Ensure that the proper

revenue recognition is followed (i.e., if a project is to occur over multiple

months and is billed up front, the appropriate portion is deferred).

 

3. Both parties will corroborate

to ensure that all contracts were fulfilled entirely by Executive.

 

4. Multiply applicable revenue

figure by 50%.

 

5. Deduct Executive’s monthly

salary.

 

6. Examine all expenses hitting

1053 P&L (known as Rubin Retainer), monthly direct expenses for Rubin

Retainer staff salaries, travel & entertainment, and other Company support

and direct event costs, royalty payments, commissions, draws, direct marketing

and other direct expenses, all relating to achieving Rubin Retainer Revenue.

 

7. Deduct all such expenses.

 

8. Arrive at a final amount

payable to Executive.

 

9. Corroborate final number

with Executive.

 

10. Process check.

 

5

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