exv10w11



 





Exhibit 10.11




HFF SECURITIES L.P.



PROFIT PARTICIPATION BONUS PLAN



     1. Purpose. This Profit Participation Bonus Plan (the “Plan”) is established to
attract, retain and provide incentives to employees, and to promote the financial success, of HFF
Securities L.P., a Delaware limited partnership (the “Company”). Capitalized terms shall have the
meanings defined herein.



     2. Effective Date. The Plan is effective as provided herein.



     3. Applicability of Plan to Designated Offices. The Plan shall apply to each separate
office of the Company (each, an “Office”) designated by the Managing Member of the Company (the
“Managing Member”).



     4. Office Bonus Pool Calculation.



          (a) Calculation of Office Bonus Pool. With respect to each Office to which the Plan
applies and for each calendar year (a “Plan Year”), if a fourteen and one-half percent (14.5%) or
greater Profit Margin (as defined below) is generated by such Office, as determined by the Managing
Member in accordance with the terms herein, then an amount equal to fifteen percent (15%) of the
Adjusted Operating Income (as defined below) generated by such Office, as determined by the
Managing Member in accordance with the terms herein, shall comprise the “Office Bonus Pool” for
such Office.




               (i) For purposes of the Plan, Profit Margin means the net operating income of such Office
(taking into account allocations of overhead expenses) as a percentage of the revenue of such
Office, all as determined in accordance with U.S. Generally Accepted Accounting Principles applied
on a consistent basis (“GAAP”).




               (ii) For purposes of the Plan, Adjusted Operating Income means the net operating income of
such Office (taking into account allocations of overhead expenses) adjusted for depreciation and
amortization, all as determined in accordance with GAAP.




          (b) Timing of Calculation. The amount of the Office Bonus Pool, if any, for each
Office to which the Plan applies shall be calculated on the last business day of each Plan Year (or
on such other date determined by the Managing Member) (the “Determination Date”) by the Chief
Financial Officer of HFF, Inc. or his or her designee (the “Chief Financial Officer”).




          (c) No Adjustment. The Office Bonus Pool shall not be adjusted based on any
information that becomes available at any time following the Determination Date, absent fraud,
accounting irregularities, willful misconduct, gross negligence or manifest error. The Office
Bonus Pool calculation performed on the Determination Date shall take in account all relevant
information available on that Determination Date.




          (d) Special Rule for Certain Offices.




 









 







               (i) Default Rule. For any Office in which both investment sales employees and debt
employees are employed, the investment sales group and the debt group shall be treated for all
purposes under the Plan as separate Offices and the head of each such group (each, a “Group Head”)
shall be treated for all purposes under the Plan as an Office Head.




               (ii) Election by Group Heads. Notwithstanding Section 4(d)(i) of the Plan, the Group
Heads in any Office at which both investment sales employees and debt employees are employed may,
prior to the beginning of a Plan Year, jointly elect (after consultation with the Managing Member)
to treat the investment sales group and the debt group at such Office as a single Office for all
purposes under the Plan by providing a joint notice of such election to the Chief Financial Officer
or his or her designee.




     5. Allocation of Office Bonus Pool.



          (a) Individual Eligibility. Each full-time or part-time employee of the Company is
eligible to receive a bonus payment under the Plan (a “Profit Participation Bonus”) with respect to
services performed during a Plan Year.




          (b) Allocation. For each Plan Year, each Office Head, in consultation with the
Managing Member, shall select the recipients of Profit Participation Bonuses and shall determine
the allocation of the Office Bonus Pool among such recipients (“Allocation Plan”).




          (c) Submission of Allocation Plan. Each Office Head shall submit the Allocation Plan
for the Plan Year to the Chief Financial Officer prior to the Determination Date.




          (d) Termination of Employment. Except as otherwise provided in an individual’s
employment agreement with the Company, if any, no individual shall be eligible to receive a Profit
Participation Bonus if the Company does not employ him or her on the Determination Date. Whether
an individual is employed by the Company on the Determination Date shall be determined in the sole
and absolute discretion of the Office Head of the Office in which such individual is or was
employed, in consultation with the Managing Member.




     6. Payment of Profit Participation Bonus. Subject to any applicable federal, state,
local or other withholding taxes, Profit Participation Bonuses shall be paid in accordance with
each Office’s Allocation Plan on the Determination Date, or, if determined by the Managing Member
with respect to any Office, on or before March 15 of the year following the Plan Year with respect
to which the Profit Sharing Bonus was earned.



     7. Administration.



          (a) Managing Member. The Plan shall be administered by the Managing Member. Any
action of the Managing Member in administering the Plan shall be final, conclusive and binding on
all persons, including the Company, its subsidiaries and affiliates, any employee and any persons
claiming rights from or through employees of the Company.




          (b) Powers of the Managing Member. Subject to the provisions of the Plan, the
Managing Member shall have full and final authority in his or her discretion (i) to construe and
interpret the Plan and to make all other determinations, including
determinations as to the


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eligibility of any employee to a benefit hereunder, as he or she may deem necessary or
advisable for the administration of the Plan, (ii) to correct any defect or supply any omission or
reconcile any inconsistency in the Plan, (iii) to adopt, amend and rescind such rules and
regulations as, in his or her opinion, may be advisable in the administration of the Plan, (iv) to
require any person to furnish such reasonable information as requested for the purpose of the
proper administration of the Plan as a condition to receiving any benefits under the Plan, and (v)
to prepare and distribute information explaining the Plan to employees.




          (c) Delegation. The Managing Member may delegate all or any portion of his or her
duties, responsibilities and powers under the Plan to the chief operating officer, chief financial
officer, any Office Head or Group Head, or any other employee of the Company as the Managing Member
deems appropriate. The Managing Member may revoke any such allocation or delegation at any time
for any reason with or without prior notice.




          (d) Indemnification. The Company shall indemnify and hold harmless the Managing
Member from and against any and all liabilities, costs and expenses incurred by the Managing Member
as a result of any act or omission to act in connection with the performance of the Managing
Member’s duties, responsibilities and obligations under the Plan, to the maximum extent permitted
by law, other than such liabilities, costs and expenses as may result from the gross negligence,
bad faith, willful misconduct or criminal acts of the Managing Member.




          (e) Payment of Administrative Expenses. All reasonable expenses incurred in
administering the Plan shall be paid by the Company.




     8. Recapitalization. The Managing Member shall determine, in his or her sole and
absolute discretion, the effect upon the Plan and the Profit Participation Bonuses payable
hereunder, if any, of any stock dividend, recapitalization, forward stock split or reverse stock
split, reorganization, division, merger, consolidation, spin-off, combination, repurchase or share
exchange, extraordinary or unusual cash distribution or other similar corporate transaction or
event.



     9. Limits on Transferability; Beneficiaries. No right or other interest of an
employee under the Plan shall be pledged, encumbered, or hypothecated to, or in favor of, or
subject to any lien, obligation, or liability of such employee to, any party, other than the
Company, or any of its subsidiaries or affiliates, or assigned or transferred by such employee
otherwise than by will or the laws of descent and distribution. Notwithstanding the foregoing, the
Managing Member may, in his or her sole and absolute discretion, provide that rights or other
interests of an employee under the Plan are transferable, without consideration, to immediate
family members (i.e., children, grandchildren or spouse), to trusts for the benefit of such
immediate family members and to partnerships in which such family members are the only partners.
The Managing Member may attach to such transferability feature such terms and conditions as he or
she deems advisable. In addition, an employee may, in the manner established by the Managing
Member, designate a beneficiary (which may be a person or a trust) to receive any payment under the
Plan upon the death of the Participant. A beneficiary, guardian, legal representative or other
person claiming any rights under the Plan from or through any employee shall be subject to all
terms and conditions of the Plan, except as otherwise



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determined by the Managing Member, and to any additional restrictions deemed necessary or
appropriate by the Managing Member.




     10. No Right to Future Employment. Nothing in this Plan, nor any Profit Participation
Bonus awarded under this Plan, shall confer on any employee or other person any right to be
continued in the employ of, be employed by, or enter into or maintain any other relationship with,
the Company, or limit in any way the right of the Company to terminate such person’s employment or
other relationship at any time, for any reason or no reason.



     11. No Right to Continued Participation. An employee’s receipt of a Profit
Participation Bonus under the Plan for a Plan Year shall not confer upon such employee the right to
receive a Profit Participation Bonus, or any particular amount of a Profit Participation Bonus, in
any subsequent Plan Year.



     12. Funding. The Plan shall be entirely unfunded at all times and no provision shall
be made with respect to segregating assets of the Company for payment of any benefit hereunder at
any time. No employee or other person shall have any interest in any particular assets of the
Company by reason of the right to receive a benefit under the Plan and any such employee or other
person shall have only the rights of a general unsecured creditor of the Company with respect to
any rights under the Plan.



     13. Amendment or Termination of Plan. The Plan may only be amended or terminated
through a writing executed by each limited partner and general partner of the Company.



     14. Successors. The Plan shall be binding upon, and inure to the benefit of, the
Company and its successors and assigns and upon any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets
and business, and the successor shall be substituted for the Company under this Plan.



     15. Section 409A. To the extent determined necessary or advisable by the Managing
Member in his or her sole discretion, Profit Participation Bonus awards hereunder shall be
interpreted to the extent possible to comply with the provisions of section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) (or avoid application of such Code section), to the
extent applicable.



     16. Headings. The titles and headings used in the Plan are intended for convenience
only and shall not be construed as in any way affecting or modifying the text of this Plan, which
text shall control.



     17. Governing Law. The obligations of the Company under this Plan shall be governed
by and construed and interpreted in accordance with the laws of the State of Texas, without regard
to the conflict of laws provisions thereof.



     18. Data Protection. By receiving a Profit Participation Bonus under the Plan, an
employee consents to the collection, processing, transmission and storage by the Company, in any
form whatsoever, of any data of a professional or personal nature which is necessary for the
purposes of administering the Plan.



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     IN WITNESS WHEREOF, the Company has caused the Plan to be executed and effective as of the
date it is adopted by the Company.



	 	 	 	 	 
	 	HFF SECURITIES L.P.

 	 
	 	By:  	 	 
	 	 	Name:  	John H. Pelusi, Jr. 	 
	 	 	Its:  Managing Member 	 
	 




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