AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “ Agreement
”) is made and entered into as of February 5, 2007 (the
“ Restated Effective Date ”), by and
between John H. Pelusi, Jr. (“ Employee
”) and Holliday Fenoglio Fowler, LP, a Texas limited
partnership (“ HFF ”).
WHEREAS, Employee
is a member (“ Member ”) of HFF Holdings
LLC, a Delaware limited liability company (“ HFF
Holdings ”), pursuant to that certain Second Amended
and Restated Limited Liability Company Agreement of HFF Holdings
LLC, dated as of the date hereof;
WHEREAS, Employee
previously entered into an employment agreement with HFF (the
“ Original Employment Agreement ”), dated
March 29, 2006 (the “ Original Effective
Date ”);
WHEREAS, HFF
Holdings previously owned 100% of the equity of Holliday GP Corp.
(the “ General Partner ”);
WHEREAS, HFF
Holdings is party to that certain Sale and Merger Agreement, dated
as of the date hereof, among HFF Holdings, HFF Inc. (“
Publico ”), and the other parties thereto (the
“ Sale and Merger Agreement ”), pursuant
to which Publico (through its wholly-owned subsidiary, HFF
Partnership Holdings LLC, a Delaware limited liability company
(“ Holdco ”)) will own 100% of the
General Partner;
WHEREAS, in
connection with the transactions contemplated by the Contribution
and Sale and Merger Agreement, it is necessary to amend and restate
the Original Employment Agreement; and,
WHEREAS, HFF
desires to continue the employ of Employee, and Employee desires to
continue to be employed by HFF, under the terms specified in this
Agreement.
NOW, THEREFORE, in
consideration of the mutual covenants, agreements, acknowledgments,
representations, and warranties contained herein, and other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Employee and HFF, intending to be legally
bound, agree as follows:
1.
Term . The term of Employee’s employment hereunder
shall commence on the Restated Effective Date and shall end on the
date (the “ Termination Date ”) that
Employee’s employment is terminated by HFF or Employee for
any reason, including, but not limited to death, disability, with
or without Cause (as defined below), or for no reason.
Notwithstanding the foregoing but subject to Sections 4(e) and
6(d), the provisions contained in Section 4 (Non-
Competition),
Section 5 (Non-Disclosure), Section 6 (Non-Solicitation
of Client), Section 7 (Non-Solicitation of Employees),
Section 8 (Non-Disparagement) and Section 9 (Enforcement;
Remedies and Forfeitures) shall survive and continue after the term
of this Agreement.
2.
Responsibilities . Employee’s primary duties and
obligations hereunder shall be as directed from time to time by the
General Partner of HFF as directed by the board of directors of
Publico (the “ Board ”) after considering
the recommendations and advice of the Operating Committee of Holdco
and the managing member of the operating committee of Holdco (the
“ Holdco Managing Member ”). During the
period of Employee’s employment, he shall devote his full
business time, energy and best efforts to the business and affairs
of HFF.
3.
Compensation and Benefits . In consideration for the
foregoing and for the covenants described below, HFF agrees to
provide to Employee the following compensation and
benefits:
(a)
Commission and Other Income . Policies and allocations with
respect to commission sharing, draws against commissions, bonuses
and other income allocation will be established from time to time
by the General Partner of HFF as directed by the Board after
consideration of the recommendations and advice of the Holdco
Operating Committee and Holdco Managing Member, and Employee shall
be paid in accordance with such policies and
allocations.
(b)
Benefits . Employee shall be provided with the welfare
benefits and other fringe benefits to the same extent and on the
same terms as those benefits are provided by HFF from time to time
to HFF’s other similar employees. Employee shall be entitled
to elect to participate in any of HFF’s standard benefit
plans according to their terms. These plans may be modified or
terminated from time-to-time by HFF in accordance with the terms
thereof. The written plan documents shall govern any questions of
eligibility, coverage, duration of coverage, or other details of
the plans.
(c)
Expense Reimbursement . HFF agrees to reimburse Employee for
all reasonable, ordinary, necessary and documented business
expenses incurred in the performance of services hereunder in
accordance with the policies of HFF as from time to time in effect.
Employee, as a condition precedent to obtaining such payment or
reimbursement, shall provide to HFF any and all statements, bills
or receipts evidencing the travel or out-of-pocket expenses for
which Employee seeks payment or reimbursement, and any other
information or materials, as HFF may from time to time reasonably
request.
(d) No
Mitigation . Subject to Sections 4, 5, 6 and 7, in no
event shall Employee be obligated to seek other employment or be
obligated to mitigate any of the amounts payable to Employee under
any of the provisions of this Agreement.
(a) Employee
acknowledges that HFF, the General Partner, Holdco, Publico and
their affiliates and their related entities (the “
Company Entities ”) are engaged in a highly
competitive
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business on a
nationwide basis, and that the Company Entities intend to expand
the business by entering into new business lines and by increasing
the geographic scope domestically and potentially internationally,
and that the relationships with their Clients (as defined below),
goodwill, and Confidential Information (defined below) are
extremely valuable, provide them with competitive business
advantages and are critical to their success. Employee further
acknowledges and agrees that the Company Entities have expended
considerable time, money and effort to build a competitive business
which is national in scope and to develop such Client
relationships, goodwill and Confidential Information. Employee
further acknowledges that, as an Employee and by virtue of his or
her employment with HFF, Employee has had and will have close
contact with such Clients, has developed and will develop
relationships with such Clients and goodwill on behalf of the
Company Entities, has and will have access to, possesses and will
possess and has developed and will develop Confidential Information
of and on behalf of the Company Entities. Employee therefore
understands and agrees that both the nature and scope of the
covenants contained in this Section 4 as well as the covenants
set forth in Sections 5, 6, 7 and 8 are reasonable and
necessary for the protection of HFF and the other Company Entities,
including, without limitation, its and/or their Client
relationships, goodwill and Confidential Information, as defined
and limited below.
(b) Employee
understands that as an employee of HFF, Employee’s
competition with any of the Company Entities would result in
irreparable harm to HFF and the other Company Entities. Therefore,
until the earlier of (i) five years from the Original
Effective Date, or (ii) the second anniversary of the
Termination Date (the “ Restrictive Period
”), Employee agrees that he or she will not, without the
prior written consent of HFF, Compete (as defined below) with HFF
or any of the other Company Entities anywhere in or with respect to
the United States where HFF or any of the other Company Entities
engages in a Competitive Business (as defined below).
(c) As used
herein, except as modified below, “ Compete
” means to directly or indirectly own, operate, manage,
control, engage in, participate in, invest in, permit his or her
name to be used by, act as a consultant or advisor to, render
services for (alone or in association with any individual or
entity, and the heirs, executors, administrators, legal
representatives, successors and assign of such individual or entity
(a “ Person ”), or otherwise assist any
Person that engages in or owns, invests in, operates, manages or
controls any venture or enterprise which, directly or indirectly,
wholly or partly, engages in the business that provides services or
performs functions that are the same as, substantially similar to,
or substitute for the services or functions provided or performed
by HFF and/or the other Company Entities, or in any new lines of
business considered by (meaning that a comprehensive business plan
and budget were prepared by or for HFF for consideration) and not
rejected by any of the Company Entities at any time during the six
(6) month period preceding the Termination Date, in each case
whether domestically or in such international markets as considered
by any of the Company Entities during such six (6) month
period (the “ Competitive Business ”).
“ Compete ” shall also mean to directly
or indirectly engage in any activity or perform, develop, provide
or offer any services, functions or duties (in any capacity for the
benefit of Employee or any other Person) which involves or
requires, or which would inevitably involve or require, the use or
disclosure (partly or wholly, intentionally or unintentionally) of
any Confidential Information (as defined and
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limited below)
of HFF or the Company Entities. Notwithstanding the foregoing,
Employee will not be deemed to “ Compete
”:
(i) Solely
by reason of the performance of his duties as a full time employee
or part time employee of a commercial bank, savings and loan,
savings bank, insurance company, pension fund, investment bank or
any other entity (including any Commercial Mortgage Backed
Securities (CMBS) entities) making or acquiring commercial real
estate loans or acquiring commercial real estate if,
(A) Employee’s duties for such entity are limited to the
origination or acquisition of commercial real estate loans or
commercial real estate for such entity or (B) such entity
originates such loans or acquires such loans or real estate with
the intent of holding the loans or real estate for its own account,
or in respect of loans, selling the loans in its capacity as a
principal.
(ii) If
Employee shall either (A) be a principal in a business engaged
in real estate development, real estate securities or in the
ownership of commercial real estate, or (B) work as a full
time or part time employee of a company or other entity engaged in
real estate development, investment in real estate securities or
the ownership of commercial real estate or real estate securities,
even though in the course of Employee’s employment, Employee
acquires loans, securities and/or real estate (it being understood
and agreed that in this capacity, Employee shall be permitted to
secure a loan or acquire commercial real estate from, or sell
commercial real estate to HFF’s lending relationships without
violating the restrictions set forth herein).
(iii) Solely
by reason of Employee’s passive ownership of any stock, bond,
note, debenture, mortgage or other security issued by any other
entity if such securities are actively traded on a stock exchange
or on NASDAQ and such securities constitute less than three percent
(3%) of the total voting securities issued by such
entity;
(iv) Solely
by reason of Employee’s passive ownership of any stock, bond,
note, debenture, mortgage or other security that is owned by
Employee as of the date hereof;
(v) Solely
by reason of activities undertaken during his employment by HFF
which are on behalf of, and for the benefit of, HFF or any of the
Company Entities notwithstanding that such activities may involve
engaging in transactions with or for entities that would otherwise
“ Compete ” as defined above;
or
(vi) Solely
by reason of Employee becoming employed by, or becoming a principal
in, any entity involved in residential home sales brokerage and
mortgage banking, provided that none of the Company Entities are
engaged in such activities as of the Termination Date or considered
(meaning that a comprehensive business plan and budget were
prepared for consideration) and did not reject engaging in such
activities at any time during the six (6) month period
preceding the Termination Date.
(d) Nothing
in this Agreement shall prevent Employee from owning less than 1%
of the publicly traded stock of any Person that Competes with HFF
or any of the Company Entities; provided that Employee shall have
no special voting rights, board representation or other
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oversight or
information rights with respect to such Person (except as generally
available to all stockholders of such Person).
(e) This
Section 4 shall not apply in the event that Employee’s
employment is terminated by HFF without Cause. “
Cause ” shall mean: (i) gr
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