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EXHIBIT 10.1
EXECUTION COPY
April 11, 2000
American Express Travel Related Services, Inc.
3 World Financial Center
AMEX Tower
New York, New York 10285
Attn: General Counsel's Office
Re: Second Amendment to the Marketing Agreement dated as of March
10, 1998, as amended by letter dated November 17, 1998, by and
between American Express Travel Related Services Company,
Inc., Administaff, Inc., Administaff Companies, Inc. and
Administaff of Texas, Inc.
Dear Ladies and Gentlemen:
Reference is made hereby to the Marketing Agreement (the "Marketing
Agreement") dated as of March 10, 1998, as amended by letter dated November 17,
1998 (the "First Amendment"), by and between American Express Travel Related
Services, Inc. ("AMEX"), Administaff, Inc. ("ASF DE"), Administaff Companies,
Inc. ("ASF COMP") and Administaff ("ASF TX" and together with ASF DE and ASF
COMP, collectively referred to herein as "ASF"). By execution and delivery of
this letter agreement (the "Second Amendment"), the parties are effecting an
amendment to the Marketing Agreement on the terms set forth herein. Capitalized
terms used herein, but not defined, will have the meanings assigned to such
terms in the Marketing Agreement.
This Second Amendment sets forth the understandings of the parties with
respect to the matters set forth below:
1. Section 1 is hereby amended to add the following new definitions in
alphabetical sequence:
"AMEX Site: means the Internet sites operated by or on behalf of AMEX
or an AMEX affiliate, together with any mirror and successor sites, or
co-branded sites."
"ASF Site: means any Internet site operated by or on behalf of ASF or
an ASF affiliate, together with any mirror and successor site or
co-branded site."
* * *
"Budgeted Sales: mean with respect to a given Calendar Year, a number
of Paid Worksite Employees equal to the number of Dedicated Staff for
that Calendar Year multiplied by * * *.
"Calendar Year: means from January 1 to December 31 of any year."
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"Five-Year Term: means for AMEX Clients sold on or after March 1, 2000,
a five-year period from the date an AMEX Lead becomes an AMEX Client."
"Joint Marketing Team: means a team consisting of individuals appointed
by each of AMEX and ASF that will conduct the activities set forth in
Section 4(e)."
"Qualified First Call: means an AMEX Lead that results in an
Appointment and meeting with an ASF sales person."
2. The following definitions are hereby amended to read as follows:
"AMEX Customer: means (i) any Business Entity that utilizes an AMEX
product or service (e.g. an American Express Corporate Card), (ii) a
user of the AMEX Site and (iii) any AMEX generated referral to ASF.
* * *
"Expiration Date: means December 31, 2005 (including any renewal period
as provided)."
3. The first paragraph of Section 4(a) is hereby amended to read in its
entirety as follows:
"a. AMEX Marketing Activities: AMEX will use commercially
reasonable efforts to generate AMEX Leads to ASF (the "AMEX
Marketing Activities"), which efforts may include, but shall
not necessarily be limited to, a broad-based marketing
campaign in support of ASF's efforts to improve its sales
efficiency, to assist in opening new ASF markets, and to
promote ASF and the Services to AMEX Customers and other
Business Entities that meet ASF's reasonable guidelines,
including size, location and SIC code."
4. New Section 4(a)(5) is hereby added:
"(5) * * *
5. The second sentence of Section 4(c) is hereby amended to read as follows:
"At no cost to AMEX, ASF will proceed with training of ASF's
inside and outside sales personnel in the customized alliance
training program developed and tested in 1999 by ASF and AMEX,
subject to review and approval by AMEX of all training
material."
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6. New Section 4(e) is hereby added:
"e. Quarterly Meetings: AMEX and ASF will establish a Joint
Marketing Team, which will meet quarterly to (i) review the
AMEX marketing plans and the allocation by AMEX of the AMEX
Minimum Marketing Expenditure to each of the Marketing
Activities and (ii) compare progress against the economic
model attached as Exhibit B to this Second Amendment. In the
event of a disagreement, AMEX's decision shall be binding with
respect to the allocation of the AMEX Minimum Marketing
Expenditure to the AMEX Marketing Activities."
7. Section 5(a)(1) is hereby amended in its entirety to read as follows:
"Embedded Product: At AMEX's discretion, AMEX may require ASF
to embed the Required Embedding in the Services provided to
AMEX Clients or other existing or potential ASF Clients, and
ASF shall use all reasonable commercial efforts to integrate
the Required Embedding into a seamless offering of the
Services. Subject to mutually acceptable terms and conditions,
AMEX agrees that ASF may offer Embedded Products other than
the Required Embedding ("Other Embedded Products"), such as
Small Business Services Corporate Card, Business Travel,
On-line Banking and Brokerage Services, Fee Services, Student
Loan Services, and Credit Card Services. AMEX agrees to set
aside the normal referral fees with respect to Other Embedded
Products in the form of (a) special offers creating savings to
Clients and/or employees or (b) commissions paid to ASF. The
rights and obligations of ASF with respect to Other Embedded
Products shall be subject to the terms and conditions of
individual agreements made between ASF and such AMEX business
unit(s) as specified by AMEX with respect to each Other
Embedded Product (each a "Product Agreement"), which the
parties agree to negotiate in good faith. Any and all Embedded
Products will, at AMEX's discretion, be clearly identified
under the name and brand that AMEX designates, and ASF agrees
that all Embedded Products shall have preferred placement at
the top of the principal web pages for the financial and
travel sections of the ASF Site."
8. New Section 5(c) is hereby added:
"c. Added Staff, Markets and Offices. ASF will use reasonable
efforts to expand into new markets at a rate of approximately
one such new market per quarter, unless, in its sole
discretion, ASF determines that such expansion is not in its
best interests."
9. New Section 6(b)(4) is hereby added:
* * *
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10. Section 7(a) is hereby amended in its entirety to read as follows:
"a.
* * *
(4) ASF shall deliver to AMEX the Commission Report for
each month together with the payments required under
this Section 7 for such month.
(5) * * *
(6) Payments for all commissions shall be due and payable
by ASF to AMEX on or before the 25th day of each
month (the "Due Date") for the prior month's
commission.
(7) ASF shall pay interest at the rate of 18% per annum
on all commissions paid after the Due Date."
(8) * * *
11. Section 9(b) is hereby amended to read as follows:
* * *
12. Upon signing this Second Amendment, AMEX and ASF will jointly prepare a
press release for release by ASF announcing the new terms of the Marketing
Agreement.
13. This Amendment may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original but all of which shall
together constitute one and the same instrument.
14. Except as modified by this Second Amendment and the First Amendment, the
Marketing Agreement shall continue in full force and effect. The Marketing
Agreement, the First Amendment, and this Second Amendment shall be read,
taken and construed as one and the same instrument.
15. This Second Amendment constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior
contemporaneous oral or written understandings or agreements among the
parties which relate to the subject matter hereof.
16. This Second Amendment shall be binding upon and shall inure to the benefit
of and be enforceable by the parties hereto and their respective successors
and permitted assigns.
17. Upon the execution and delivery of this Second Amendment by the parties
hereto, this Second Amendment shall be and become a binding agreement among
the parties hereto.
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Very truly yours,
ADMINISTAFF, INC.
By: /s/ Paul J. Sarvadi
------------------------------
Name: Paul J. Sarvadi
Title: President and Chief
Executive Officer
ADMINISTAFF OF TEXAS, INC.
By: /s/ Paul J. Sarvadi
------------------------------
Name: Paul J. Sarvadi
Title: President and Chief
Executive Officer
ADMINISTAFF COMPANIES, INC.
By: /s/ Paul J. Sarvadi
------------------------------
Name: Paul J. Sarvadi
Title: President and Chief
Executive Officer
ADMINISTAFF, INC.
Accepted and agreed to:
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
By: /s/ Larry Sharnak
-----------------------
Name: Larry Sharnak
Title: Senior Vice President, AERS
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EXHIBIT A
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EXHIBIT B
* * *
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