Document:

<PAGE>

                                                                   Exhibit 10.21

                      THIRD AMENDMENT TO CREDIT AGREEMENT

          This THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of January 27, 2000 (this "Amendment"), is by and among KORN/FERRY
INTERNATIONAL, a Delaware corporation (the "Borrower"), the undersigned LENDERS
(the "Lenders"), the undersigned ISSUING BANKS (the "Issuing Banks"), and MELLON
BANK, N.A., a national banking association, as agent for the Lenders under the
Credit Agreement referred to below (in such capacity, together with its
successors in such capacity, the "Agent").

                                   RECITALS

          A.   The Borrower, the Lenders, the Issuing Banks and the Agent are
parties to that certain Credit Agreement, dated as of February 8, 1999 (as
amended by that certain First Amendment to Credit Agreement dated as of April
15, 1999, and that certain Second Amendment to Credit Agreement dated as of
December 31, 1999, the "Credit Agreement"), pursuant to which the Lenders have
agreed, on the terms and subject to the conditions described therein, to make
Loans to the Borrower, and the Issuing Banks have agreed, on such terms and
subject to such conditions, to issue Letters of Credit for the account of the
Borrower.

          B.   The Borrower desires an amendment to the minimum Consolidated
Tangible Net Worth covenant in Section 7.1(b) of the Credit Agreement to reduce
the minimum Consolidated Tangible Net Worth the Borrower is required to maintain
under the Credit Agreement and enable the Borrower to consummate its acquisition
of a foreign subsidiary on January 28, 2000 (the "Acquisition").

          C.   The Lenders are willing to so amend the Credit Agreement as set
forth below.

                                THIRD AMENDMENT

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:

          SECTION 1.  Amendment to Section 7.1(b) of the Credit Agreement.
                      ---------------------------------------------------
Section 7.1(b) of the Credit Agreement is hereby amended by replacing the
existing Section 7.1(b) in its entirety with a new Section 7.1(b), such new
Section 7.1(b) to read in its entirety as follows:
<PAGE>

          (b)  Minimum Consolidated Tangible Net Worth.  At all times,
               ---------------------------------------
               Consolidated Tangible Net Worth shall not be less than the sum of
               (i) $20,000,000, plus (ii) 50% of the cumulative positive
               Consolidated Net Income for the two quarters ended April 30, 1999
               and for each fiscal year thereafter (without deduction for any
               loss for any such period), plus (iii) 100% of the Net Cash
               Proceeds of any issuances of equity by the Borrower from the
               Closing Date until the last day of such fiscal year of the
               Borrower.

          SECTION 2.  Miscellaneous.
                      -------------

          2.1  Definitions. Capitalized terms used but not otherwise defined in
               -----------
this Amendment have the meanings given to such terms in the Credit Agreement.

          2.2  Effect of Amendment. This Amendment shall become effective as of
               -------------------
the date first above written upon the last to occur of:

               (a)  execution and delivery hereof by (i) the Lenders or the
Required Lenders as permitted or required by Section 10.3 of the Credit
Agreement, (ii) the Borrower, (iii) the Issuing Banks , and (iv) the Agent. The
execution below by the Lenders or Required Lenders (as the case may be) and the
Issuing Banks shall constitute a direction to the Agent to execute this
Amendment;

               (b)  payment by the Borrower to the Agent (for the account of the
Lenders) of an amendment fee equal to 5 basis points on the total aggregate
Commitments of the Lenders (i.e., 5 basis points on $50,000,000);

               (c)  delivery by the Borrower to the Agent, with a counterpart
for each Issuing Bank and each Lender, of true copies of all corporate action
taken by the Borrower and each other Loan Party relative to the Acquisition and
this Amendment; and

               (d)  delivery by the Borrower to the Agent, with a counterpart
for each Issuing Bank and each Lender, of an opinion addressed to the Agent,
each Issuing Bank and each Lender, dated the date of this Amendment, of
O'Melveny & Myers, LLP, counsel to each of the Loan Parties, as to the
enforceability of the Credit Agreement and the other Loan Documents as amended.
Such opinion shall be reasonably satisfactory in form and substance to the
Agent, each Issuing Bank and each Lender.

          2.3  Ratification. The Credit Agreement, as amended by this Amendment,
               ------------
is in all respects ratified, approved and confirmed and shall, as so amended,
remain in full force and effect.

                                      -2-
<PAGE>

          2.4  Governing Law.  This Amendment shall be governed by and construed
               -------------
in accordance with the laws of the Commonwealth of Pennsylvania without giving
effect to the conflict of law principles thereof.

          2.5  Counterparts.  This Amendment may be executed in any number of
               ------------
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.

                                      -3-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.

                                             KORN/FERRY INTERNATIONAL

                                             By: /s/ Elizabeth Murray
                                                --------------------------------

                                             Title: Chief Financial Officer
                                                --------------------------------

                                             MELLON BANK, N.A., as a Lender, as
                                             an Issuing Bank and as Agent

                                             By: /s/ Lawrence Ivey
                                                --------------------------------

                                             Title: Vice President
                                                --------------------------------

                                             BANK OF AMERICAN NATIONAL TRUST
                                             AND SAVINGS ASSOCIATION, as an
                                             Issuing Bank and a Lender

                                             By: /s/ J. Derek Watson
                                                --------------------------------

                                             Title: Vice President
                                                --------------------------------

                                      -4-<PAGE>

                                                                   EXHIBIT 10.22

                              EMPLOYMENT AGREEMENT

                                    BETWEEN

                            KORN/FERRY INTERNATIONAL

                                      AND

                                GARY C. HOURIHAN
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<C>  <S>                                                                       <C>
1.   Employment................................................................... 1

2.   Term of Employment........................................................... 1

3.   Position, Duties and Responsibilities........................................ 1

4.   Annual Compensation.......................................................... 2

     (a)      Base Salary......................................................... 2

     (b)      Annual Incentive Cash Bonus......................................... 3

5.   Employee Benefit Programs and Perquisites.................................... 3

     (a)      General............................................................. 3

     (b)      Reimbursement of Business Expenses.................................. 4

     (c)      Conditions of Employment............................................ 4

6.   Termination of Employment.................................................... 4

     (a)      Death............................................................... 4

     (b)      Disability.......................................................... 5

     (c)      Termination by the Company for Cause, Voluntary Termination by
              Executive, Failure to Renew by Executive............................ 6

     (d)      Termination by the Company Without Cause, by Executive for Good
              Reason or for Failure by the Company to Renew Agreement Prior to
              Change in Control................................................... 6

     (e)      Termination for Performance Reason Prior to a Change in Control..... 9

     (f)      Following a Change of Control, Termination by the Company Without
              Cause or For Performance Reasons or by Executive for Good Reason....11

7.   No Mitigation; No Offset.....................................................14

8.   Confidential Information; Cooperation with Regard to Litigation..............15
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<C>  <S>                                                                          <C>
     (a)      Nondisclosure of Confidential Information...........................15

     (b)      Definition of Confidential Information..............................15

     (c)      Cooperation in Litigation...........................................16

9.   Non-solicitation.............................................................17

10.  Remedies.....................................................................17

11.  Resolution of Disputes.......................................................17

12.  Indemnification..............................................................18

     (a)      Company Indemnity...................................................18

     (b)      No Presumption Regarding Standard of Conduct........................19

     (c)      Liability Insurance.................................................20

13.  Effect of Agreement on Other Benefits........................................20

14.  Assignment; Binding Nature...................................................20

15.  Representations..............................................................21

16.  Entire Agreement.............................................................21

17.  Amendment or Waiver..........................................................21

18.  Severability.................................................................22

19.  Survivorship.................................................................22

20.  Beneficiaries/References.....................................................22

21.  Governing Law................................................................23

22.  Notices......................................................................23
</TABLE>

                                      -1-
<PAGE>

                              EMPLOYMENT AGREEMENT

          This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of this 6th day of March, 2000, by and between KORN/FERRY INTERNATIONAL, a
Delaware corporation with its principal offices in Los Angeles, California (the
"Company"), and GARY C. HOURIHAN (the "Executive").

          1.    Employment.  The Company agrees to employ Executive and
                ----------
Executive agrees to be employed by the Company upon the terms and conditions set
forth in this Agreement.

          2.    Term of Employment.  Executive's employment under this
                ------------------
Agreement will begin on March 6, 2000 and will continue for an initial term
ending April 30, 2002. The term will automatically be renewed for successive
two-year periods thereafter, until the first April 30th following the date on
which Executive reaches age 65, at which time the term will expire, provided,
however, that either the Company or the Executive may terminate this Agreement
at the end of the initial term by delivering to the other party at least 120
days' prior written notice of such termination or at the end of any subsequent
two-year renewal term by delivering to the other party at least 120 days' prior
written notice of such termination. (In this Agreement, the delivery of such a
notice shall be referred to as a "failure to renew" the Agreement.)

          3.    Position, Duties and Responsibilities.  Executive will serve as
                -------------------------------------
Executive Vice President, Organizational Development with duties and
responsibilities customary to such offices. Executive will be considered a
senior executive officer of the Company and treated accordingly. Executive will
report directly to, and will perform such duties and functions consistent with
Executive's position and as are assigned to

                                      -2-
<PAGE>

Executive by the Chief Executive Officer of the Company or by the Company's
Board of Directors (the "Board"). At the request of the Board, Executive will
serve as an officer or director of the Company's subsidiaries and other
affiliates without additional compensation. Executive will devote substantially
all of Executive's business time and attention to the performance of Executive's
obligations, duties and responsibilities under this Agreement. Subject to
Company policies applicable to senior executives generally, Executive may engage
in personal, charitable, professional and investment activities to the extent
such activities do not conflict or interfere with Executive's obligations to, or
Executive's ability to perform the normal duties and functions of Executive
pursuant to this Agreement.

          4.   Annual Compensation.
               -------------------

          (a)  Base Salary.  The Company will pay a base salary to Executive at
               -----------
a minimum annual rate of $340,000 in accordance with its regular payroll
practices. At least annually and in the month preceding the end of the fiscal
year, the Board will review the level of Executive's base salary. The Board,
acting in its discretion, may increase (but may not decrease) the annual rate of
base salary in effect at any time, unless the Board concludes that an
across-the-board reduction in compensation is required for all executive
officers of the Company, in which case the Executive's compensation shall be
ratably reduced. The base salary in effect as of any date of determination is
referred to hereinafter as the "Base Salary."

          (b)  Annual Incentive Cash Bonus.  Executive will participate in the
               ---------------------------
Company's annual incentive cash bonus plan established for senior executives,
with an

                                      -3-
<PAGE>

annual target bonus equal to 100% of Base Salary, or such higher amount as may
be determined by the Board ("Annual Target Bonus") and an annual maximum bonus
equal to 200% of Base Salary, or such higher amount as may be determined by the
Board ("Annual Maximum Bonus"). Executive's actual annual incentive cash bonus
("Annual Bonus") may be payable after thirty (30) days after the end of the
fiscal year for which it is earned, but not later than ninety (90) days after
the end of the fiscal year for which it is earned. Unless otherwise expressly
determined by the Board, in its discretion, such Annual Bonus shall be
considered earned only if Executive is employed by the Company as of the last
day of the fiscal year to which such Annual Bonus applies.

          5.   Employee Benefit Programs and Perquisites.
               -----------------------------------------

          (a)  General.  Executive will be entitled to participate in such
               -------
retirement or pension plans, stock option or other equity compensation plans,
group health, long term disability and group life insurance plans, and any other
welfare and fringe benefit plans, arrangements, programs and perquisites
sponsored or maintained by the Company from time to time for the benefit of its
senior executives generally, including four weeks paid vacation. Unless
otherwise expressly provided in this Agreement, all COBRA benefits referred to
herein shall be paid by Executive.

          (b)  Reimbursement of Business Expenses.  Executive is authorized to
               ----------------------------------
incur reasonable expenses in accordance with the Company's written policy in
carrying out Executive's duties and responsibilities under this Agreement, and
the Company will promptly reimburse Executive for all such expenses that are so
incurred upon

                                      -4-
<PAGE>

presentation of appropriate vouchers or receipts, subject to the Company's
expense reimbursement policies applicable to senior executive officers
generally.

          (c)  Conditions of Employment.  Executive's place of employment
               ------------------------
during the term of Executive's employment under this Agreement will be at the
Los Angeles office of the Company, subject to the need for reasonable business
travel. The conditions of Executive's employment, including, without limitation,
office space, office appointments, secretarial, administrative and other
support, will be consistent with Executive's status as a senior executive
officer of the Company.

          6.   Termination of Employment.
               -------------------------

          (a)  Death.  If Executive's employment with the Company terminates
               -----
before the end of the term by reason of Executive's death, then the following
shall occur: (1) as soon as practicable thereafter and, in any event, not later
than the thirtieth (30/th/) day following the date of Executive's death, the
Company shall pay to Executive's estate an amount equal to Executive's "Accrued
Compensation" (as defined in Section 6(i) below); (2) all outstanding stock
options and other equity-type incentives held by Executive at the time of
Executive's death will become fully vested as of the date of Executive's death
(whether or not fully vested immediately prior to Executive's death) and remain
exercisable until their originally scheduled expiration dates; and  (3)
Executive's spouse and covered dependents will be entitled to continued
participation in the Company's group health plan(s) or at the same benefit level
and to the same extent, if any, as such continued participation at the expense
of the Company is available to the

                                      -5-
<PAGE>

shareholder/officers of the Company generally and, thereafter, for such
additional period as may be available under COBRA at their expense.

     (b)  Disability.  If the Company terminates Executive's employment by
          ----------
reason of Executive's "disability," (defined below), then the following shall
occur: (1) the Company shall pay to Executive within thirty (30) days after the
date of such termination Executive's Accrued Compensation (as defined in Section
6(i) below); (2) all outstanding stock options and other equity-type incentives
held by Executive at the time of Executive's termination will become fully
vested as of the date of such termination (whether or not fully vested
immediately prior to Executive's termination) and remain exercisable until their
originally scheduled expiration dates; and (3) Executive and Executive's spouse
and covered dependents will be entitled to continued participation in the
Company's group health plan(s) or at the same benefit level and to the same
extent, if any, as such continued participation at the expense of the Company is
available to the shareholder/officers of the Company generally and, thereafter,
for such additional period as may be available under COBRA at Executive's
expense. For purposes of this Agreement, the term "disability" means any
medically determinable physical or mental condition or impairment which prevents
the Executive from performing the principal functions of Executive's duties with
the Company that can be expected to result in death or that has lasted or can be
expected to last for a period of ninety (90) consecutive days or for shorter
periods aggregating one hundred and eighty (180) days in any consecutive twelve
(12) month period, with such determination to be made by an approved medical
doctor. For this purpose an approved medical doctor shall mean a medical doctor

                                      -6-
<PAGE>

selected by the Company and Executive. If the parties cannot agree on a medical
doctor, each party shall select a medical doctor and the two doctors shall
select a third medical doctor who shall be the approved medical doctor for this
purpose.

          (c)  Termination by the Company for Cause, Voluntary Termination by
               --------------------------------------------------------------
Executive, Failure to Renew by Executive.  If the Company terminates Executive's
----------------------------------------
employment for "Cause" (as defined below) or if Executive voluntarily terminates
Executive's employment without "Good Reason" (as defined in Section 6(d) below)
before the end of the stated term of this Agreement that is then in effect, or
if Executive fails to renew this Agreement, then the Company shall pay to
Executive within thirty (30) days after the date of such termination Executive's
Accrued Compensation (as defined in Section 6(i) below), and nothing more. For
purposes of this Agreement, termination for "Cause" shall mean termination
because Executive is convicted of a felony involving moral turpitude.

          (d)  Termination by the Company Without Cause, by Executive for Good
               ---------------------------------------------------------------
Reason or for Failure by the Company to Renew Agreement Prior to Change in
--------------------------------------------------------------------------
Control.  If Executive's employment is terminated prior to a Change in Control
-------
by the Company without Cause or by Executive for "Good Reason'' (defined below),
or if the Company fails to renew this Agreement prior to a Change in Control and
before Executive reaches the age of 65, then the following shall occur: (1) the
Company shall pay to Executive within thirty (30) days after the date of such
termination Executive's Accrued Compensation (as defined in Section 6(i) below);
(2) the Company shall pay to Executive within thirty (30) days after the date of
such termination a lump sum payment

                                      -7-
<PAGE>

equal to (i) 1.5 times the then current Base Salary plus (ii) 1.5 times the
Annual Target Bonus for Executive established for the incentive year in which
such termination occurs; provided, however, that if Executive's employment is
terminated because the Company fails to renew this Agreement, then Executive
shall be entitled only to (i) one times the then current Base Salary plus (ii)
one times the Annual Target Bonus for Executive established for the incentive
year in which such termination occurs; (3) Executive, Executive's spouse and
covered dependents will be entitled to continued participation in the Company's
group health plan(s) at the expense of the Company at the same benefit level at
which the Executive and the Executive's spouse and covered dependent(s)
participated immediately before the termination of Executive's employment for a
period of eighteen (18) months after such termination; provided, however, that
if such termination is due to the Company's failure to renew, then the period of
participation will only be for one (1) year after such termination, and
thereafter for such additional period as may be available under COBRA or under
any post-retirement group health plan or arrangement in which Executive
participated prior to the termination of Executive's employment; and (4) all
outstanding stock options and other equity-type incentives held by Executive at
the time of Executive's termination of employment will become fully vested as of
the date of such termination (whether or not fully vested immediately prior to
Executive's termination) and remain exercisable until their originally scheduled
expiration dates.

          For the purposes of this Agreement, "Good Reason" means

                                      -8-
<PAGE>

          (A)  any significant reduction by the Company of Executive's duties or
               responsibilities or the assignment by the Company to Executive of
               duties or responsibilities which are materially inconsistent with
               his duties or responsibilities or the assignment by the Company
               to Executive of duties or responsibilities which impair his
               ability to function as Executive Vice President, Organizational
               Development;

          (B)  the failure or refusal by the Company to satisfy any of its
               compensation obligations under this Agreement or any material
               reduction of any employee benefit or perquisite enjoyed by
               Executive other than as part of an across-the-board reduction
               applicable to all executive officers of the Company; or

          (C)  the failure by the Company to perform, or any breach by the
               Company of, its obligations under any provision of this Agreement
               which failure or breach is not cured by the Company (if capable
               of being cured) within ninety (90) days following receipt of
               notice thereof from Executive to the Company; or

          (D)  Executive's primary location of business or the Company's
               headquarters is moved more than fifty (50) miles from its present
               location without Executive's prior consent, provided that the
               participation, advocacy, vote or any other role assumed by
               Executive in any decision to move such offices more than fifty
               (50)

                                      -9-
<PAGE>

               miles from his primary location of business or its present
               location, as applicable, shall not constitute his personal
               consent to move his primary location of business or its present
               location for purposes of this paragraph; or

          (E)  any change or reduction of Executive's titles without Executive's
               prior consent; or

          (F)  the failure of the Company to obtain the assumption in writing of
               all of its obligations to perform this Agreement by any successor
               to all or substantially all of the assets of the Company within
               fifteen (15) days after a merger, consolidation, sale or similar
               transaction.

          (e)  Termination for Performance Reason Prior to a Change in Control.
               ---------------------------------------------------------------
Executive's employment is terminated by Company prior to a Change in Control for
a "Performance Reason" (defined below), then (1) the Company shall pay to
Executive within thirty (30) days after the date of such termination Executive's
Accrued Compensation (as defined in Section 6(i) below); (2) the Company shall
pay to Executive within thirty (30) days after the date of such termination a
lump sum payment equal to (i) one times the then current Base Salary plus (ii)
one times the Annual Target Bonus for Executive established for the incentive
year in which such termination occurs; (3) Executive and Executive's spouse and
covered dependents will be entitled to continued participation in the Company's
group health plan(s) at the expense of the Company at the same benefit level at
which the Executive and the Executive's spouse and covered dependent(s)
participated immediately before the termination of Executive's employment

                                     -10-
<PAGE>

for a period of twelve (12) months after such termination, and thereafter for
such additional period as may be available under COBRA or under any
post-retirement group health plan or arrangement in which Executive participated
prior to the termination of Executive's employment; and (4) all outstanding
stock options and other equity-type incentives held by Executive at the tine of
Executive's termination of employment will become fully vested as of the date of
such termination (whether or not fully vested immediately prior to Executive's
termination) and remain exercisable until their originally scheduled expiration
dates.

          For the purposes of this Agreement, a "Performance Reason" occurs if
(i) Executive has engaged in repeated failures to perform and has willfully
neglected Executive's material duties in a manner which the Board determines is
not reasonably satisfactory to it, (ii) the Board has determined in good faith
that such repeated failures to perform and willful neglect have resulted in
material harm to the Company, (iii) the Board gives Executive a detailed written
description specifying Executive's alleged repeated failures to perform and the
Executive's willful neglect of Executive's material duty as well as the material
harm suffered by the Company, and provides Executive ninety (90) days to cure
such repeated failures to perform and willful neglect and (iv) such repeated
failures to perform and willful neglect by Executive continue after the
expiration of the ninety (90) day cure period specified in the written notice
from the Board.

          (f)  Following a Change of Control, Termination by the Company
               ---------------------------------------------------------
Without Cause or For Performance Reasons or by Executive for Good Reason.  If
------------------------------------------------------------------------
a

                                     -11-
<PAGE>

Change in Control (defined in Schedule A) occurs and if, within 12 months after
                                                 ---
the date on which the Change in Control occurs, Executive's employment is
terminated by the Company without Cause or by reason of the Company's failure to
renew, or by the Company for a Performance Reason, or by Executive for Good
Reason, then (1) the Company shall pay to Executive within thirty (30) days
after the date of such termination Executive's Accrued Compensation (as defined
in Section 6(i) below); (2) the Company shall pay to Executive within thirty
(30) days after the date of such termination a lump sum payment equal to (i) two
times the then current Base Salary or two times Executive's annual base salary
in effect just prior to the Change in Control, whichever amount is higher, plus
(ii) the higher of two times the Annual Maximum Bonus for Executive for the
incentive year in which such termination occurs or two times the Annual Maximum
Bonus for Executive applicable to the fiscal year preceding the year in which
such termination occurs; (3) Executive and Executive's spouse and covered
dependents will be entitled to continued participation in the Company's group
health plan(s) at the expense of the Company at the same benefit level at which
the Executive and the Executive's spouse and covered dependent(s) participated
immediately before the termination of Executive's employment for a period of two
(2) years after such termination, and, thereafter, for such additional period as
may be available under COBRA or under any post-retirement group health plan or
arrangement in which Executive participated prior to the termination of
Executive's employment; and (4) all outstanding stock options and other
equity-type incentives held by executive at the time of Executive's termination
of employment will become fully vested as of the date of such termination
(whether or not

                                     -12-
<PAGE>

fully vested immediately prior to Executive's termination) and remain
exercisable until their originally scheduled expiration dates.

          (g)  Notwithstanding anything contained herein to the contrary, if any
amounts due to Executive under this Agreement and any other plan or program of
the Company constitute a "parachute payment," as such term is defined in Section
280G(b)(2) of the Internal Revenue Code, and the amount of the parachute
payment, reduced by all federal, state and local taxes applicable thereto,
including the excise tax imposed pursuant to Section 4999 of the Internal
Revenue Code, is less than the amount Executive would receive if he were paid
three times his "base amount," as defined in Section 280G(b)(3) of the Internal
Revenue Code, less $1.00, reduced by all federal, state and local taxes
applicable thereto, then the aggregate of the amounts constituting the parachute
payment shall be reduced to an amount that will equal three times his "base
amount" less $1.00. The determinations to be made with respect to this Section
6(g) shall be made by an accounting firm (the "Auditor") jointly selected by the
Company and Executive and paid by the Company. The Auditor shall be a nationally
recognized United States public accounting firm that has not during the two
years preceding the date of its selection acted, in any way, on behalf of the
Company or any of its subsidiaries. If Executive and the Company cannot agree on
the firm to serve as the Auditor, then Executive and the Company shall each
select one such accounting firm and those two firms shall jointly select such
accounting firm to serve as the Auditor. If a determination is made by the
Auditor that a reduction in the aggregate of all payments due to Executive upon
a Change in Control is required by this Section 6(g), Executive shall have the
right

                                     -13-
<PAGE>

to specify the portion of such reduction, if any, that will be made under this
Agreement and each plan or program of the Company. If he does not so specify
within sixty (60) days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall determine, in its sole
discretion, the portion of such reduction, if any, to be made under this
Agreement and each plan or program of the Company.

          (h)  Except as otherwise provided in this Agreement, Executive's
entitlements under applicable plans and programs of the Company following
termination of Executive's employment will be determined under the terms of
those plans and programs.

          (i)  For purposes of this Agreement, the term "Accrued Compensation"
means, as of any date, the amount of any unpaid Base Salary earned by Executive
through the date of termination of Executive's employment and the amount of any
unpaid Annual Bonus earned by Executive through the last day of the fiscal year
of the Company immediately preceding the fiscal year in which Executive's
employment is terminated, plus any additional amounts and/or benefits payable to
or in respect of Executive under and in accordance with the provisions of any
employee plan, program or arrangement under which Executive is covered
immediately prior to termination of Executive's employment.

          7.   No Mitigation; No Offset.  Executive will have no obligation to
               ------------------------
seek other employment or to otherwise mitigate the Company's obligations to
Executive arising from the termination of Executive's employment, and no amounts
paid or payable

                                     -14-
<PAGE>

to Executive by the Company under this Agreement shall be subject to offset for
any remuneration in which Executive may become entitled from any other source
after Executive's employment with the Company terminates, whether attributable
to subsequent employment, self-employment or otherwise except that subsequent
employment with an employer providing benefit plans shall result in an offset
against benefits payable by the Company hereunder to the extent of the benefits
paid by the new employer.

          8.   Confidential Information; Cooperation with Regard to Litigation.
               ---------------------------------------------------------------

          (a)  Nondisclosure of Confidential Information.  During the term of
               -----------------------------------------
Executive's employment and thereafter, Executive will not, without the prior
written consent of the Company, disclose to anyone (except in good faith in the
ordinary course of business to a person who will be advised by Executive to keep
such information confidential) or make use of any Confidential Information (as
defined below). Notwithstanding the foregoing, Executive may disclose
Confidential Information if such disclosure or use is required in connection
with the performance of Executive's duties hereunder or is required by
applicable law, legal process, by any governmental agency having supervisory
authority over the business of the Company or any of its Affiliates (as defined
in Section 8(b) below) or by any administrative or legislative body (including a
committee thereof) that requires Executive to divulge, disclose or make
accessible such information. In the event that Executive is so ordered, he will
give prompt written notice to the Company in order to allow the Company the
opportunity to object to or otherwise resist such order.

                                     -15-
<PAGE>

          (b)  Definition of Confidential Information.  For purposes of this
               --------------------------------------
Agreement, "Confidential Information" means information concerning the business
of the Company or any corporation or other entity that, directly or indirectly,
controls, is controlled by or under common control with the Company (an
"Affiliate") relating to any of its or their products, product development,
trade secrets, customers, suppliers, finances, and business plans and
strategies. Excluded from the definition of Confidential Information is
information (1) that is or becomes part of the public domain, other than through
the breach of this Agreement by Executive or (2) regarding the Company's
business or industry properly acquired by Executive in the course of Executive's
career as an executive in the Company's industry and independent of Executive's
employment by the Company. For this purpose, information known or available
generally within the trade or industry of the Company or any Affiliate shall be
deemed to be known or available to the public and not to be Confidential
Information.

          (c)  Cooperation in Litigation.  Executive will cooperate with the
               -------------------------
Company in any manner reasonably requested by the Company, during the term of
executive's employment and thereafter (including following Executive's
termination of employment for any reason), by making Executive reasonably
available to testify on behalf of the Company or any Affiliate of the Company in
any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to reasonably assist the Company or any such Affiliate in any
such action, suit, or proceeding by providing information and meeting and
consulting with the Board or its representatives or counsel,

                                     -16-
<PAGE>

or representatives or counsel to the Company or any such Affiliate, as
reasonably requested; provided, however, that the same does not materially
                      --------  -------
interfere with Executive's then current professional activities. The Company
will reimburse Executive, on an after-tax basis, for all expenses reasonably
incurred by Executive in connection with Executive's provision of testimony or
assistance and if such assistance is provided after Executive's termination of
employment, will pay Executive a per diem rate of $1,500.

          9.   Non-solicitation.  During the term of Executive's employment and
               ----------------
for a period of 24 months thereafter or the remainder of the Liquidity Period
(whichever is longer), Executive will not induce or solicit, directly or
indirectly, any employee of the Company or of any Affiliate (other than
Executive's secretary) to terminate such employee's employment with the Company
or any Affiliate.

          10.  Remedies.  If Executive commits a material breach of any of the
               --------
provisions contained in Section 9 above, then the Company will have the right to
seek injunctive relief.  Executive acknowledges that such a breach of Section 9
could cause irreparable injury and that money damages may not provide an
adequate remedy for the Company.  Nothing contained herein will prevent
Executive from contesting any such action by the Company on the ground that no
violation or threatened violation of Section 9 has occurred.

          11.  Resolution of Disputes. Any controversy or claim arising out of
               ----------------------
or relating to is Agreement or any breach or asserted breach hereof or
questioning the validity and blinding effect hereof arising under or in
connection with this Agreement,

                                     -17-
<PAGE>

other than seeking injunctive relief under Section 10, shall be resolved by
binding arbitration, to be held in Los Angeles in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Pending the resolution of any arbitration or court proceeding, the
Company will continue payment of all amounts and benefits due Executive under
this Agreement. All costs and expenses of any arbitration or court proceeding
(including fees and disbursements of counsel) shall be borne by the respective
party incurring such costs and expenses. Notwithstanding the foregoing,
following a Change in Control, all reasonable costs and expenses (including fees
and disbursements of counsel) incurred by Executive pursuant to this section
shall be paid on behalf of or reimbursed to Executive promptly by the Company;
provided, however, that Executive shall repay such amounts to the Company if and
to the extent the arbitrator(s) determine(s) that any of Executive's litigation
assertions or defenses were in bad faith.

          12.  Indemnification.
               ---------------

          (a)  Company Indemnity.  If Executive is made a party, or is
               -----------------
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that he is or was a director, officer or employee of the Company or any
Affiliate or was serving at the request of the Company or any Affiliate as a
director, officer, member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of such

                                     -18-
<PAGE>

Proceeding is Executive's alleged action in an official capacity while serving
as a director, officer, member, employee or agent, then the Company will
indemnify Executive and hold Executive harmless to the fullest extent legally
permitted or authorized by the Company's articles of incorporation, certificate
of incorporation or bylaws or resolutions of the Company's Board to the extent
not inconsistent with state laws, against all costs, expense, liability and loss
(including, without limitation, attorney's fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by Executive in connection therewith, except to the extent
attributable to Executive's gross negligence or fraud, and such indemnification
shall continue as to Executive even if he has ceased to be a director, member,
officer, employee or agent of the Company or Affiliate and shall inure to the
benefit of Executive's heirs, executors and administrators. The Company will
advance to Executive all reasonable costs and expenses to be incurred by
Executive in connection with a Proceeding within 20 days after receipt by the
Company of a written request for such advance. Such request shall include an
undertaking by Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses. The provisions of this section shall not be deemed exclusive
of any other rights of indemnification to which Executive may be entitled or
which may be granted to Executive and shall be in addition to any rights of
indemnification to which he may be entitled under any policy of insurance.

          (b)  No Presumption Regarding Standard of Conduct.  Neither the
               --------------------------------------------
failure of the Company (including its Board, independent legal counsel or
shareholders)

                                     -19-
<PAGE>

to have made a determination prior to the commencement of any proceeding
concerning payment of amounts claimed by Executive under the preceding
subsection (a) of this section that indemnification of Executive is proper
because Executive has met the applicable standard of conduct, nor a
determination by the Company (including its Board, independent legal counsel or
shareholders) that Executive has not met such applicable standard of conduct,
shall create a presumption that Executive has not met the applicable standard of
conduct.

          (c)  Liability Insurance.  The Company will continue and maintain a
               -------------------
directors and officers liability insurance policy covering Executive to the
extent the Company provides such coverage for its other senior executive
officers.

          13.  Effect of Agreement on Other Benefits.  Except as specifically
               -------------------------------------
provided in this Agreement, the existence of this Agreement shall not be
interpreted to preclude, prohibit or restrict Executive's participation in any
other employee benefit or other plans or programs in which he currently
participates.

          14.  Assignment; Binding Nature.  This Agreement shall be binding upon
               --------------------------
and inure to the benefit of the parties and their respective successors, heirs
(in the case of Executive) and permitted assigns.  No rights or obligations of
the Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred to the
successor of the Company or its business if the assignee or transferee assumes
the liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law.  No rights or obligations
of Executive under this Agreement may be assigned or transferred

                                     -20-
<PAGE>

by Executive other than Executive's rights to compensation and benefits, which
may be transferred only by will or operation of law, except as otherwise
specifically provided or permitted hereunder.

          15.  Representations.  The Company represents and warrants that it is
               ---------------
fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
Agreement between it and any other person, firm or organization.  Executive
represents and warrants that there is no legal or other impediment which would
prohibit Executive from entering into this Agreement or which would prevent
Executive from fulfilling Executive's obligations under this Agreement.

          16.  Entire Agreement.  This Agreement contains the entire
               ----------------
understanding and agreement between the parties concerning the subject matter
thereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the parties with
respect thereto. No provisions contained in the Repurchase Agreement or any
future amendment thereto shall modify this Agreement in any manner whatsoever.
To the extent the Repurchase Agreement is inconsistent with this Agreement,
including Section 7 hereof, this Agreement shall supercede the Repurchase
Agreement.

          17.  Amendment or Waiver.  No provision in this Agreement may be
               -------------------
amended unless such amendment is agreed to in writing and signed by Executive
and an authorized officer of the Company. Except as set forth herein, no delay
or omission to exercise any right, power or remedy accruing to any party shall
impair any such right,

                                     -21-
<PAGE>

power or remedy or shall be construed to be a waiver of or an acquiescence to
any breach hereof. No waiver by either party of any breach by the other party of
any condition or provision contained in this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent time. Any waiver must be in
writing and signed by Executive or an authorized officer of the Company, as the
case may be.

          18.  Severability.  In the event that any provision or portion of this
               ------------
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.

          19.  Survivorship.  The respective rights and obligations of the
               ------------
parties hereunder shall survive any termination of Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.

          20.  Beneficiaries/References.  Executive shall be entitled, to the
               ------------------------
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death by giving the Company written notice thereof.  In the event of
Executive's death or a judicial determination of Executive's incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to
refer to Executive's beneficiary, estate or other legal representative.

                                     -22-
<PAGE>

          21.  Governing Law.  This Agreement shall be governed by and
               -------------
construed and interpreted in accordance with the laws of California without
reference to principles of conflict of laws.

          22.  Notices.  Any notice required or permitted to be given by a party
               -------
hereto to another party hereto shall be in writing and shall be delivered either
(a) by facsimile, (b) by first class mail, postage prepaid, (c) by overnight
courier for next business day delivery, or (d) by messenger, in each case
addressed to the party concerned at the address of the party indicated below or
to such changed address as such party may subsequently give such notice of:

          If to the Company:        KORN/FERRY INTERNATIONAL
                                    1800 Century Park East
                                    Los Angeles, CA  90067
                                    Attention:  Chief Executive Officer

          If to Executive:          GARY C. HOURIHAN
                                    2245 Robles Avenue
                                    San Marino, CA  91108

          Any notice so addressed and delivered shall be deemed to have been
given (i) if delivered by facsimile, on the date of delivery as indicated by the
written confirmation of the senders facsimile machine showing completion of such
transmission without error, (ii) if delivered by first-class mail, five (5) days
after deposit of such notice in the mail, (iii) if sent by overnight courier for
next business day delivery, the business day following deposit of such notice
with such courier, or (iv) if delivered by messenger, when delivered to the
address specified above.

          IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement on the date first above written.

                                     -23-
<PAGE>

                       KORN/FERRY INTERNATIONAL

                       By: /s/ Windle B. Priem
                          ___________________________________________________
                          Windle B. Priem, Chief Executive Officer and President

                       EXECUTIVE

                       /s/ Gary C. Hourihan
                       _____________________________________________________
                       Gary C. Hourihan

                                     -24-
<PAGE>

                                   SCHEDULE A
                        DEFINITION OF CHANGE IN CONTROL

          For purposes of this Agreement, a "Change in Control" shall mean any
of the following:

                    (a)  an acquisition by any Person (excluding one or more
          Excluded Persons) of beneficial ownership (within the meaning of Rule
          13d-3 under the Exchange Act or a pecuniary interest in (either
          comprising "ownership of,") more than 30% of the Common Stock of the
                      ------------
          Company or voting securities entitled to then vote generally in the
          election of directors of the Company ("Voting Stock"), after giving
                                                 ------------
          effect to any new issue in the case of an acquisition from Korn/Ferry
          International; or

                     b)  Approval by the shareholders of the Company of a plan,
          or the consummation, of merger, consolidation, or reorganization of
          the Company or of a sale or other disposition of all or substantially
          all of the Company's consolidated assets as an entirety (collectively,
          a "Business Combination"), other than a Business Combination (1) in
          which all or substantially all of the holders of Voting Stock of the
          Company hold or receive directly or indirectly 70% or more of the
          voting stock of the entity resulting from the Business Combination (or
          a parent company), and (2) after which no Person (other than any one
          or more of the Excluded Persons) owns more than 30% of the voting
          stock of the resulting entity (or a parent company) who did not own
          directly or indirectly at least that amount of Voting Stock
          immediately before the Business Combination, and (3) after which one
          or more Excluded Persons own an aggregate number of shares of voting
          stock at least equal to the aggregate number of shares of voting stock
          owned by any other Person who is not an Excluded person (except for
          any person described in and satisfying the conditions of Rule 13d-
          1(b)(1) under the Exchange Act), if any, and who owns more than 30% of
          the voting stock; or

                    (c)  Approval by the Board of Directors of the Company and
          (if required by law) by shareholders of the Company of a plan to
          consummate the dissolution or complete liquidation of Korn/Ferry
          International; or

                    (d)  during any period of two consecutive years, individuals
          who at the beginning of such period constituted the Board and any new
          director (other than a director designated by a person who has entered
          into an agreement or arrangement with Korn/Ferry International to
          effect a transaction described in clause (a) or (b) of this
          definition) whose appointment, election, or nomination for election
          was approved by a vote of at least two-thirds (2/3) of the directors
          then still in office who either

                                      A-1
<PAGE>

          were directors at the beginning of the period or whose appointment,
          election or nomination for election was previously so approved, cease
          for any reason to constitute a majority of the Board; provided that
          for purposes of this clause (d), any directors elected at any time
          during 1999 shall be deemed to have served on the Board since the
          beginning of 1999.

          Notwithstanding the above provisions in this Schedule A, no Change in
Control shall be deemed to have occurred if a Business Combination, as described
in paragraph (b) above, is effected and the Incumbent Board, through the
adoption of a Board resolution, determines that, in substance, no Change in
Control has occurred.

          "Company" means Korn/Ferry International, a California Corporation,
its successors, and/or its Subsidiaries, as the context requires.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.

          "Excluded Person" means

               (a) the Company; or

               (b) any person described in and satisfying the conditions of
          Rule 13d-l(b)(l) under the Exchange Act; or

               (c) any employee benefit plan of Korn/Ferry International; or

               (d) any affiliates (within the meaning of the Exchange Act),
          successors, or heirs, descendants or members of the immediate families
          of the individuals identified in party (b) of this definition.

          "Person" means an organization, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
governmental entity and a "person" as that term is used under Section 13(d) or
14(d) of the Exchange Act.

                                      A-2
<PAGE>

          (a) Death.  If Executive's employment with the Company terminates
              -----
before the end of the term by reason of Executive's death, then the following
shall occur: (1) as soon as practicable thereafter and, in any event, not later
than the thirtieth (30/th/) day following the date of Executive's death, the
Company shall pay to Executive's estate an amount equal to Executive's "Accrued
Compensation" (as defined in Section 6(i) below); (2) all outstanding stock
options and other equity-type incentives held by Executive at the time of
Executive's death will become fully vested as of the date of Executive's death
(whether or not fully vested immediately prior to Executive's death) and remain
exercisable until their originally scheduled expiration dates; and  (3)
Executive's spouse and covered dependents will be entitled to continued
participation in the Company's group health plan(s) or at the same benefit level
and to the same extent, if any, as such continued participation at the expense
of the Company is available to the shareholder/officers of the Company generally
and, thereafter, for such additional period as may be available under COBRA at
their expense.

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