THIS EMPLOYMENT
AGREEMENT (this “ Agreement ”) is made
and entered into as of this 5th day of February, 2007 by and
between Greg Conley (“ Executive ”) and
HFF, Inc., a Delaware Corporation (the
“Company” ).
WHEREAS ,
HFF Holdings LLC, a Delaware limited liability company (“
HFF Holdings ”) is party to that certain Sale
and Merger Agreement, dated as of January 30, 2007, among HFF
Holdings, the Company, and the other parties thereto (the “
Sale and Merger Agreement ”), pursuant to which
the Company will acquire 100% of HFF Partnership Holdings LLC, a
Delaware limited liability company (“ Holdco
”) (through its wholly-owned subsidiary, Holliday GP Corp.
(the “ General Partner ”), which is the
current general partner of Holliday Fenoglio Fowler, L.P., a Texas
limited partnership (“ HFF LP
”)).
WHEREAS ,
conditioned upon the closing of the transactions contemplated by
the Sale and Merger Agreement (the “ Closing
”) and the effectiveness of a Registration Statement on Form
S-1 registering the Company’s Class A common stock (the
“ Registration Statement ”), the Company
desires to continue the employ of Executive, and Executive desires
to continue to be employed by the Company, under the terms
specified in this Agreement.
NOW,
THEREFORE , in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1.
Employment . Provided that the Closing occurs and the
Registration Statement becomes effective, the Company agrees,
during the Term (as defined in Section 2 below), to employ
Executive as an employee of the Company and Executive agrees to
accept such employment, upon the terms and conditions hereinafter
set forth.
2.
Term . Subject to
earlier expiration under Section 6 below, Executive’s
employment by the Company hereunder shall be for a term commencing
on the date that of the Closing (the “ Effective
Date ”) and expiring on the close of business on the
second anniversary of the Effective Date (the “
Term ”); provided that such Term is not
extended in accordance with the next following sentence. The Term
shall automatically be extended for an additional one year period
on each anniversary of the Effective Date unless, not later than
120 days prior to any such anniversary, either party to this
Agreement shall have given notice to the other that the Term shall
not be extended or further extended beyond its then automatically
extended term, if any. The effective date of the termination of
Executive’s employment hereunder, regardless of the reason
therefor, is referred to in this Agreement as the “
Date of Termination .” Notwithstanding the
foregoing, the provisions contained in Section 7
(Non-Disclosure), Section 8 (Non-Disparagement) and
Section 9 (Enforcement; Remedies and Forfeitures) shall
survive and continue after the Term.
3. Duties
and Responsibilities .
(a)
Positions . During the Term, Executive shall serve as the
Chief Financial Officer (the “ CFO ”) of
the Company.
(b)
Duties and Responsibilities . Executive shall render service
as the CFO primarily in the Company’s Houston, Texas office.
Executive’s primary duties and obligations hereunder shall be
as directed from time to time by the Chief Executive Officer of the
Company (the “CEO”). In furtherance of the foregoing,
during the Term, Executive shall devote substantially all of his
business time to carrying out such duties.
(c)
Time Commitment . Executive’s employment by the
Company shall be full-time and exclusive and, during the Term,
Executive agrees that he shall (i) devote substantially all of
his business time and attention, his best efforts, and all his
skill and ability to promote the interests of the Company and its
affiliates, and (ii) carry out his duties in a competent and
professional manner. Notwithstanding the foregoing, subject to the
terms of Section 3(b), Executive shall be permitted to
(A) engage in charitable and civic activities, and
(B) manage his personal passive investments which are
(1) investments that are not similar or related to the kinds
of investments entered into by Company or its affiliates, and
(2) are fully disclosed to the CEO and are approved in writing
by the CEO prior to such investment.
(a)
Salary . During the Term, as compensation for his services
hereunder and in consideration of the obligations contained herein,
during the Term the Company shall pay Executive, in accordance with
its normal payroll practice an annual salary of $215,000 (the
“Base Salary”). During the Term, the Compensation
Committee of the Company’s Board of Directors (the
“Compensation Committee”) in consultation with the CEO
shall review the Base Salary annually and may, in the Compensation
Committee’s sole discretion, increase (but not decrease) the
Base Salary.
(b)
Cash Bonus . During the Term, Executive shall be eligible to
receive an annual cash bonus of up to 50% of his Base Salary, as
determined by the Compensation Committee (the “Bonus”),
which shall be payable based upon Executive’s individual
achievement of pre-determined financial or strategic performance
goals established by the Company from time to time, in its sole and
absolute discretion.
(c)
Long-Term Incentive Compensation . On the Effective Date,
subject to the terms and conditions of the HFF, Inc. 2006 Omnibus
Incentive Compensation Plan (the “Omnibus Plan”) and
the applicable award agreement with Executive under the Omnibus
Plan (the “Award Agreement”), the Company shall grant
to Executive Restricted Stock Units (the “RSUs”) based
upon the Company’s Class A common stock (“Common
Stock”) with an aggregate fair market value on the date of
grant of $300,000. Subject to the terms of the Omnibus Plan, the
Award Agreement, and as otherwise provided herein, the RSUs granted
hereunder shall vest as follows, provided that the Executive must
be employed by the Company on the relevant vesting date:
(i) 25% of the RSUs will vest on the second anniversary of the
Effective Date, and (ii) an additional 25% of the RSUs will
vest on each of the third, fourth and fifth anniversaries of the
Effective Date. Shares of stock will be delivered to the Executive
immediately following the applicable vesting date.
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5.
Expenses; Fringe Benefits .
(a)
Expense Reimbursement . During the Term, the Company agrees
to reimburse Executive for all reasonable, ordinary, necessary and
documented business expenses incurred in the performance of
services hereunder in accordance with the policies of the Company
as from time to time in effect. Executive, as a condition precedent
to obtaining such payment or reimbursement, shall provide to the
Company any and all statements, bills or receipts evidencing the
travel or out-of-pocket expenses for which Executive seeks payment
or reimbursement, and any other information or materials, as the
Company may from time to time reasonably request.
(b)
Benefits . During the Term, Executive 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 the Company
from time to time to the Company’s other similarly-situated
employees. Executive shall be entitled to elect to participate in
any of Company’s standard benefit plans according to their
terms. These plans may be modified or terminated from time-to-time
by Company 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)
Club Membership . During the Term, the Company shall pay or
reimburse the Executive for his club membership fees at the River
Club.
(a)
Termination . Executive’s employment may be terminated
at any time and for any reason by the Company or Executive
(including but not limited to death or Disability (as defined
below)).
(b)
Termination for without Cause or by Executive with Good
Reason . During the Term only, if Executive’s employment
is terminated by the Company without Cause (as defined below) or by
Executive with Good Reason (as defined below) (a “Qualifying
Termination”), upon execution of a release of claims in favor
the Company and other Company Entities (as defined below) in a form
and manner acceptable to the Company, Executive shall receive:
(i) all earned, unpaid Base Salary and Bonus earned with
respect to a prior year; (ii) the benefits provided solely in
accordance with the applicable terms of the Company’s
employee benefit plans and programs, including, but not limited to,
the Omnibus Plan (including the change in control provisions
thereof, as applicable), except to the extent specifically provided
otherwise in clauses (v) and (vi) of this
Section 6(b); (iii) continuation of Executive’s Base
Salary in accordance with the Company’s regular payroll
schedule for a period of twelve months beginning on the Date of
Termination (the “Severance Period”); (iv) continuation
of group health plan benefits at the no cost to the Executive
during the Severance Period; (v) 50% of the Executive’s
unvested RSUs, if any, and 50% of unvested options awarded under
Omnibus Plan (“Options”), if any, as of the date of the
Qualifying Termination shall become vested on the date of the
Qualifying Termination; and (vi) Executive shall have
90 days to exercise his vested Options, if any. Any unvested
RSUs or Options are forfeited.
(c)
Termination for Any Other Reason . During the Term only, if
Executive’s employment is terminated for any reason other
than those specified in Section 6(b), including, but not
limited to, a termination by the Company with Cause, by Executive
without Good Reason, due to death or Disability, or expiration of
the Term hereunder (whether or not at the
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election of the
Company or the Executive), Executive shall only be entitled to
receive: (i) all earned, unpaid Base Salary; (ii) the benefits
provided solely in accordance with the applicable terms of the
Company’s employee benefit plans and programs, including, but
not limited to, the Omnibus Plan (including the change in control
provisions thereof, as applicable), except to the extent
specifically provided otherwise in clause (iii) of this
Section 6(c); and, (iii)(A) in the event of a voluntary
termination by the Executive without Good Reason, all vested
Options must be exercised within 30 days of such termination,
(B) in the event of a termination by the Company for Cause,
all Options (whether or not vested) will immediately expire, and
(C) in the event of a termination due to death or Disability,
the Executive or his beneficiary, as applicable, must exercise all
vested stock Options within 1 year of the date of such
termination. Any unvested RSUs and Options will immediately
expire.
(i) For
purposes of this Agreement, “ Cause
” shall mean, in each case as determined by the
Compensation Committee in consultation with the CEO:
(A) gross
misconduct or gross negligence in the performance of
Executive’s duties as an employee of the Company;
(B) conviction
or pleading nolo contendere to a felony or a crime involving moral
turpitude;
(C) significant
nonperformance or misperformance of Executive’s duties as an
employee of the Company;
(D) material
violation of policies and procedures established by the Company
(including, but not limited to, material violations of policies
concerning disclosure of confidential information, sexual
harassment, and travel and entertainment reimbursement);
or
(E) material
violation of this Agreement.
Notwithstanding
the foregoing, except with respect to (B), Cause shall exist only
after the Company gives Executive written notice of the
circumstances giving rise to Cause (“ Cause
Notice ”) and an opportunity to remedy such
circumstances that have given rise to Cause within thirty
(30) days of such Cause Notice to the reasonable satisfaction
of the Compensation Committee in consultation with the
CEO.
(ii) For
purposes of this Agreement, “ Disability
” shall mean Executive’s inability to continue to
render services to the Company by reason of a permanent physical or
mental disability, as determined by a medical physician selected in
good faith by Compensation Committee in consultation with the
CEO.
(iii) For
purposes of this Agreement, “ Good Reason
” shall mean:
(A) a
significant reduction in the duties, authorities of
responsibilities of Executive;
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(B) a
reduction in Executive’s Base Salary without
Executive’s consent;
(C) a
reduction in Executive’s Target Bonus opportunity;
(D) a
change in the location of Executive’s principal place of
employment by more than twenty-five (25) miles from its
location as of the Effective Date; or
(E) a
material violation of this Agreement.
Notwithstanding
the foregoing, except with respect to (D), Good Reason shall exist
only after Executive gives the Company written notice of the
circumstances giving rise to Good Reason (“ Good Reason
Notice ”) within thirty (30) days of the
occurrence of t
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