Exhibit
10.8


 


[TRAMMELL CROW COMPANY LETTERHEAD]


 


April 27, 2004


 


Diane Paddison


[XXXXXXXXXX]


[XXXXXXXXXX]


 


Re:          Employment Agreement


 


Dear Diane:


 


We are pleased to present
you with this employment letter agreement (“Agreement”) which sets forth the
terms upon which you will continue to be employed by Trammell Crow Company (the
“Company”, or “we”, or “us”).


 


1.             Employment Period.  Subject to the terms and provisions of this
Agreement, we agree to continue to employ you, and you agree to continue to be
employed by us, for a period (the “Employment Period”) commencing on the
date hereof and expiring December 31, 2006; provided, that on December 31, 2006
and on each subsequent December 31, this Agreement will automatically be
extended for one additional year unless, during the four  month
period beginning March 1 and ending July 1 immediately prior to the
next scheduled extension, you or we will have given written notice (a “Non-Renewal
Notice”) that the Employment Period will not be extended (a “Non-Renewal”).


 


2.             Employment Terms and Conditions.


 


(a)           Position and Duties; Extent of Services; Location.  During the Employment Period, you will serve
initially as National Director of Client Services of the Company and from time
to time will serve in such other positions as the Board of Directors of the
Company (the “Board”) may from time to time determine.  In so doing, you will have such powers and
duties (including holding officer positions with one or more Subsidiaries of
the Company) as may be assigned from time to time by the Board.  During the Employment Period, you will
devote your full business time, energy, and best efforts to the business and
affairs of the Company.  You agree not
to engage, directly or indirectly, in any other business, investment, or activity
that interferes with your performance of your duties under this Agreement, is
contrary to the interests of the Company or requires any portion of your
business time, provided, however, that (i) you may serve on the board of
directors (or similar governing body) of one public company if the Board has
provided prior approval for such service, and (ii) unless it would


 

















 


unreasonably
interfere with your performance of your duties to the Company, you may serve on
the board of directors (or similar governing body) of no more than one other 


 


organization
that does not directly or indirectly conduct a Competing Business (as defined
herein), in each case which boards shall be in addition to the boards of
directors (or similar governing bodies) on which you serve at the request of
the Company.   The location of your
principal work office will be Dallas, Texas. 
“Subsidiary” means any entity 50% or more of the voting
securities of which are owned, directly or indirectly, by the Company.


 


(b)           Compensation.  During the Employment Period, you will receive an annual base
salary (“Annual Base Salary”), payable in accordance with the customary
payroll practices of the Company for executive officers.  The Board, in its sole discretion, may at
any time increase the amount of the Annual Base Salary as it may deem
appropriate.  From time to time prior to
a Change in Control, and following the second anniversary of such Change in
Control, the Board may decrease your Annual Base Salary in the same manner and
to the same proportional extent as the average (mean) percentage decrease in
the annual base salaries of all other members of the Executive Officer
Committee.  The term “Annual Base
Salary” will refer to the Annual Base Salary as it may be so adjusted from
time to time.  In addition, during the
Employment Period, you will (i) be eligible to receive such annual bonus
payments, if any, as the Board or the Compensation Committee of the Board may
specify in its sole discretion (each an “Annual Bonus”), subject to any
terms or conditions as may be established by the Board or its Compensation
Committee, provided, that you will be provided an individual “annual incentive
plan” for each year and any performance criteria included in such incentive
plan must be
reasonably achievable,
(ii) be entitled to participate in all incentive, savings, stock option, profit
sharing and retirement plans, practices, policies and programs applicable
generally to other executives of the Company (“Investment Plans”),
subject to all of the terms and conditions of such Investment Plans; and (iii)
be eligible to participate in all health, life and disability insurance
policies, all death and disability plans, practices, policies and programs and
all other welfare benefit plans, practices, policies and programs which are in
each such case applicable generally to other executives of the Company (“Welfare
Plans”), subject to all of the terms and conditions of such Welfare
Plans.  Subject to Sections 4 and 5, any
Annual Bonus awarded to you by the Board or the Compensation Committee of the
Board for any calendar year will be payable in March of the following year,
whether or not you are employed by the Company at such time. The term “Executive
Officer Committee” will refer to the Company’s Executive Officer Committee,
any successor committee thereto, and if there is no longer such a committee at
the time in question, then a comparable group of the Company’s executive
officers (as defined in Rule 3b-7 promulgated under the Securities Exchange Act
of 1934).


 


(c)           Vesting of Equity Awards.  Notwithstanding the provisions of any plan
or agreement governing such an Award (as defined in Section
4(c)), all Awards granted to you that remain outstanding and
unvested immediately prior to the occurrence of a Change in Control (as defined
in Section 4(d)(i)) automatically shall
vest in full upon the occurrence of the Change in Control.


 


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3.             Termination of Employment.


 


(a)           Death.  Your employment hereunder will terminate
automatically upon your death.


 


(b)           Disability. 
If your Disability occurs, we may give you a written Notice of
Termination (herein so called), and your employment will terminate effective 30
days later if you have not returned to perform, with or without reasonable
accommodation, the essential functions of your position on a full-time
basis.  “Disability” means your
inability, due to physical or mental incapacity or impairment, to perform the
material duties of yourposition(s) with the Company for
any period of more than 120 consecutive days, or for more than 180 days,
regardless of how consecutively they occur, during any 360-day period.


 


(c)           Termination by Us.  We may terminate your employment hereunder at any time (A),
subject to Section 6(b), for Cause or (B) for any reason other than
Cause.  “Cause” means (i) your
continued failure to substantially perform your obligations and duties, as
determined in good faith by the Board, and which is not remedied within 30 days
after your receipt of written notice thereof; (ii) commission of an act of
fraud, embezzlement, misappropriation, willful misconduct or breach of
fiduciary duty against the Company or other conduct materially harmful or
potentially materially harmful to the Company’s best interest, as determined in
good faith by the Board; (iii) material breach of Section 7 or 8
which is not cured within 30 days after your receipt of notice thereof, if such
breach is capable of being cured; (iv) conviction, plea of no contest or nolo
contendere, deferred adjudication or unadjudicated probation for any felony or
any crime involving moral turpitude; (v) failure to carry out, or comply with,
in any material respect, any lawful directive of the Board consistent with the
terms of this Agreement, which is not remedied within 30 days after receipt of
written notice thereof; or (vi) unlawful use (including being under the
influence) or possession of illegal drugs.


 


(d)           Resignation by
You.  You may terminate your
employment hereunder at any time (i) subject to Section 6(a), for
Good Reason or (ii) without Good Reason. 
Prior to a Change in Control and following the second anniversary of
such Change in Control, “Good Reason” means (A) any material diminution
(considering all previous diminutions during the Employment Period in the
aggregate, including all previous diminutions during the Employment Period
which are not material when considered separately) in your position, authority,
powers, functions, duties or responsibilities; provided, however, that Good
Reason may not be asserted by you under this clause (A) after a Non-Renewal
Notice has been given; (B) the relocation or transfer of your principal
office to a location more than 50 miles from your regular work address as of
the date hereof without your consent; (C) any reduction in your Annual Base Salary to an amount that is less
than 90% of the highest Annual Base Salary in effect for you during the
Employment Period;  (D) any
reduction in your Annual Bonus Target from your Annual Bonus Target for the
calendar year 2003; (E) the receipt by you of Awards (excluding Non-Performance
Awards) in any calendar year that differ (as to number, terms or type of
Awards), in a manner adverse to you, from the Award of 57,500 stock options
received by certain members of the Executive Officer Committee in calendar year
2002, unless either (1)


 


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such adverse
differences are in the same manner and to the same proportional extent as the
average (mean) changes made to the Awards (excluding Non-Performance Awards)
received by all other members of the Executive Officer Committee (excluding the
Chief Executive Officer of the Company) in such calendar year (for purposes of
this clause (1), any member of the Executive Officer Committee in such calendar
year who was not a member of the Executive Officer Committee in calendar year
2002 shall be deemed to have received an Award of 57,500 stock options in
calendar year 2002) or (2) such adverse differences are directly related to the
Board’s good faith assessment of your relative contribution to the Company or
your relative performance as compared to other members of the Executive Officer
Committee  (excluding
the Chief Executive Officer of the Company); provided,
however, that in the case of adverse differences pursuant to clause (2), the
receipt by you of a number of any type of Award in such calendar year that is
less than one-half of the Final Average Number of Awards of such type for such
calendar year shall constitute Good Reason; or (F) any failure by the Company
to comply with any of the provisions of Section 2(b) which failure
is not contemplated previously within this definition, excluding in all such
cases any isolated, insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of notice
thereof given by you.  Upon or after a
Change in Control but prior to the second anniversary of such Change in
Control, “Good Reason” means (A) any material diminution
(considering all previous diminutions during the Employment Period in the
aggregate, including all previous diminutions during the Employment Period
which are not material when considered separately) in your position authority,
powers, functions, duties or responsibilities in effect immediately prior to
the Change in Control (subject to the same exclusions as provided above prior
to a Change in Control and following the second anniversary of such Change in
Control); (B) any reduction in your Annual Base Salary;
(C) (i) any reduction in your Annual Bonus Target from your Annual
Bonus Target for the calendar year 2003 or (ii) the awarding to you of an
Annual Bonus that is less in amount than the Annual Bonus awarded to you for
the calendar year immediately preceding the year during which the Change in
Control occurs; (D) the receipt by you of Awards (excluding
Non-Performance Awards) in any calendar year that differ (as to number, terms
or type of Awards), in a manner adverse to you, from the Award of 57,500 stock
options received by certain members of the Executive Officer Committee in
calendar year 2002, unless either (1) such adverse differences are in the same
manner and to the same proportional extent as the average (mean) changes made
to the Awards (excluding Non-Performance Awards) received by all other members
of the Executive Officer Committee (excluding the Chief Executive Officer of
the Company) in such calendar year (for purposes of this clause (1), any member
of the Executive Officer Committee in such calendar year who was not a member
of the Executive Officer Committee in calendar year 2002 shall be deemed to
have received an Award of 57,500 stock options in calendar year 2002) or (2)
such adverse differences are directly related to the Board’s good faith
assessment of your relative contribution to the Company or your relative
performance as compared to other members of the Executive Officer Committee
(excluding the Chief Executive Officer of the Company); provided, however, that
in the case of adverse differences pursuant to clause (2), the receipt by you
of a number of any type of Award in such calendar year that is less than
one-half of the Final Average Number of Awards of such type for such 


 


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calendar year
shall constitute Good Reason; or (E) any failure by the Company to comply
with any of the provisions of Section 2(b) which failure is not
contemplated previously within this definition; or (F) the relocation or
transfer of your principal office to a location more than 50 miles from your
regular work address as of the date hereof without your consent, excluding in
all such cases any isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by you. 
As used in this Agreement:


 


(i)            “Annual Bonus
Target” means the percentage of your Annual Base Salary that is authorized
to be awarded to you as an Annual Bonus if certain performance criteria are
met.


 


(ii)           “Final Average Number of Awards” means, for
any calendar year and for each type of Award granted during such year, the
quotient (rounded up to the nearest whole number) equal to the aggregate number
of Awards of such type (excluding Non-Performance Awards) received by all
members of the Adjusted EOC Group in such calendar year, divided by the number
of members of the Adjusted EOC Group in such calendar year.


 


(iii)          “Adjusted EOC Group” means, for any calendar
year and for each type of Award granted during such year, the members of the Executive
Officer Committee who are eligible to receive Awards of such type (excluding
members of the Executive Officer Committee who receive Non-Performance Awards)
in such calendar year, excluding the Chief Executive Officer of the Company and
each Outlier Award Recipient in such calendar year; provided, however, that if
more than 50% of the members of the Executive Officer Committee for any
calendar year are determined to be Outlier Award Recipients in such calendar
year, then, notwithstanding the foregoing, all members of the Executive Officer
Committee (excluding the Chief Executive Officer of the Company) who are
eligible to receive Awards of such type (excluding members of the Executive
Officer Committee who receive Non-Performance Awards) in such calendar year
shall be included in the Adjusted EOC Group for such calendar year with respect
to such type.


 


(iv)          “Non-Performance
Awards” means, for any calendar year and for each type of Award granted
during such year, Awards of such type received by members of the Executive
Officer Committee that are granted to such members primarily in recognition of
promotions (as to position, authority, powers, functions, duties or
responsibilities) or in recognition of becoming a member of the Executive
Officer Committee.


 


(v)           “Outlier Award Recipient”
means, for any calendar year and for each type of Award granted during such
year, each member of the Executive Officer Committee (excluding
the Chief Executive Officer of the Company) who is eligible to receive Awards
of such type (excluding any member of the Executive Officer Committee who
receives Non-Performance Awards) in such calendar year and who receives a
number of Awards of such type (excluding


 


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Non-Performance
Awards) in such calendar year that is (i) 150% or more of the Preliminary
Average Number of Awards or (ii) 66 2/3% or less of the Preliminary Average
Number of Awards.


 


(vi)          “Preliminary Average Number of Awards” means,
for any calendar year and for each type of Award granted during such year, the
quotient (rounded up to the nearest whole number) equal to the aggregate number
of Awards of such type (excluding Non-Performance Awards) received by all
members of the Executive Officer Committee (excluding the Chief Executive
Officer of the Company) in such calendar year, divided by the number of members
of the Executive Officer Committee (excluding the Chief Executive Officer of
the Company) who are eligible to receive Awards of such type (excluding members
of the Executive Officer Committee who receive Non-Performance Awards) in such
calendar year.


 


(vii)         The phrase “number
of Awards” refers to the underlying number of shares of capital stock of the
Company to which the applicable Award relates.


 


(e)           Expiration of Term.  Your employment will end at the expiration of the Employment
Period as a result of any Non-Renewal. 
Except as described in Sections 3(e)(i), (ii), and (iii)
and in the definition of Change in Control, a termination of your employment
under this Agreement due to the expiration of the Employment Period as a result
of any Non-Renewal will not be deemed a termination of your employment
entitling you to any benefits described in Section 4 or Section 5.


 


(i)            If the Company
delivers a Non-Renewal Notice to you prior to any Change in Control or after
the second anniversary of such Change in Control, upon the effectiveness of
such Non-Renewal you will be entitled to receive (i) an amount equal to your
Pro Rata Bonus, which will be paid at such time as the Company pays its other
members of the Executive Officer Committee their annual cash incentive bonuses
with respect to the calendar year in which termination occurs, (ii) the
severance or separation benefits (including continuation of any welfare
benefits) provided generally by us to the members of the Executive Officer
Committee under our general policies in effect from time to time upon
termination by the Company of their employment (excluding any other severance
or separation benefits available to any member of the Executive Officer
Committee pursuant to an employment agreement and not under our general
policies in effect from time to time), and (iii) the other compensation and
benefits described in Section 4(b).


 


(ii)           If the Company
delivers a Non-Renewal Notice to you after a Change in Control but prior to the
second anniversary of such Change in Control, you will have the rights
described in Section 5(c) upon the effectiveness of such Non-Renewal.


 


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(iii)          If any Non-Renewal
is effected at your election, you will be entitled to receive (i) an amount
equal to your Pro Rata Bonus, which will be paid at such time as the Company
pays its other members of the Executive Officer Committee their annual cash
incentive bonuses with respect to the calendar year in which termination
occurs, and (ii) the other compensation and benefits described in Section
4(b) upon the effectiveness of such Non-Renewal.


 


(f)            Agreement Not to
Terminate.  We agree that,
notwithstanding any provision to the contrary contained in this Employment
Agreement, we shall not have the right to terminate your employment, other than
for Cause, for a period of time commencing on the date of this Agreement and
ending on the 180th day following the date of this Agreement.


 


4.             Compensation Upon
Termination Prior to a Change in Control and After the Second Anniversary of
such Change in Control. 
Prior to a Change in Control and after the second anniversary of such
Change in Control, conditioned on the effectiveness of a Release signed by you
or your legal representative, you will be entitled to the following
compensation from the Company upon the termination of your employment, which is
in lieu of any other severance pay or employment benefits to which you might
otherwise be entitled (whether contractual, under a severance plan, the WARN
Act, any other applicable law, or otherwise):


 


(a)           Death or Disability.  If your employment is terminated by reason
of your death or Disability, the Company will pay you or your legal
representative, as applicable, (A) in a cash lump sum within thirty (30) days
after the effective date of the Release, the following amounts:  (1) the sum of your unpaid Annual Base
Salary through the date of termination and any compensation previously deferred
by you (together with any accrued interest or earnings thereon) (“Accrued
Obligations”); and (2) the amount of any unpaid Annual Bonus that was
awarded to you prior to the date of termination; (B) any amounts arising
from your participation in any Investment Plan (“Accrued Investments”),
which amounts will be payable in accordance with the terms and conditions of
such Investment Plan; (C) any amounts to which you are entitled from your
participation in, or benefits under, any Welfare Plan (“Accrued Welfare
Benefits”), which amounts will be payable in accordance with the terms and
conditions of such Welfare Plan; and (D) an amount equal to your Pro Rata
Bonus, which will be paid at such time as the Company pays its other members of
the Executive Officer Committee their annual cash incentive bonuses with
respect to the calendar year in which termination of your employment
occurs.  “Pro Rata Bonus” means
the amount equal to the product of (i) your Annual Bonus Target for the
calendar year in which your employment is terminated (or your Annual Bonus
Target for the immediately preceding year if you resign for Good Reason as
defined in the first clause (D) or the second clause (C)(i) of Section
3(d)), multiplied by (ii) the amount of your Annual Base Salary for the
calendar year in which your employment is terminated (or the highest Annual
Base Salary to which you were entitled during the twelve months immediately
preceding the date of termination if you resign for Good Reason as defined in
the first clause (C) or the second clause (B) of Section 3(d)), multiplied
by (iii) the average (mean) percentage of annual cash incentive bonus
targets actually paid as bonuses to the members of the Executive Officer Committee  as a group
for such year, and multiplied by (iv) a fraction, the numerator of which
is the number of days that have


 


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elapsed in
such calendar year as of the date of termination, and the denominator of which
is 365.  Except as described in this Section 4(a), in the event of your
termination by reason of your death or Disability, you and your legal
representatives, as applicable, will forfeit all rights to any other
compensation.


 


(b)           For Cause;
Resignation by You Without Good Reason; Non-Renewal Election by You or the
Company.  If your employment is
terminated by us for Cause or by you without Good Reason or due to a
Non-Renewal election by us or you, we will have no further obligations to you
other than as set forth in Section 3(e), if applicable, and the
obligation for payment of (i) Accrued Obligations (which will be payable within
the time period set forth in Section 4(a)(A) above), (ii) the Accrued
Investments and the Accrued Welfare Benefits (which will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable), and (iii) the amount of any unpaid Annual Bonus
that was awarded to you prior to the date of termination (which will be payable
within the time period set forth in Section 4(a)(A) above).  Except as described in this Section 4(b)
or in Section 3(e), if applicable, in the event of your termination by
the Company for Cause or due to your resignation without Good Reason or a
Non-Renewal election by us or you, you will forfeit all rights to any other
compensation.


 


(c)           Without Cause; Resignation for Good Reason.  If we terminate your employment without
Cause or you resign for Good Reason, then we will pay or provide to you:


 


(i)            a cash lump sum
within thirty (30) days after the effective date of the Release equal to the
aggregate of the following amounts:  (A)
the Accrued Obligations; (B) an amount equal to one and twenty-five one
hundredths (1.25) multiplied by the sum of (x) the highest Annual Base Salary
to which you were entitled during the twelve months immediately preceding the
date of termination, and (y) the sum of (i) one-half of your average (mean)
Annual Bonus awarded to you for the three years preceding termination, plus
(ii) one-half of the product of your current Annual Bonus Target (or your
Annual Bonus Target for the immediately preceding year if you resign for Good
Reason as defined in the first clause (D) of Section 3(d)), multiplied by the
amount of your Annual Base Salary for the calendar year in which your employment
is terminated (or the highest Annual Base Salary to which you were entitled
during the twelve months immediately preceding the date of termination if you
resign for Good Reason as defined in the first clause (C) of Section 3(d)); and
(C) the amount of any unpaid Annual Bonus that was awarded to you prior to the
date of termination;


 


(ii)           an amount equal to
your Pro Rata Bonus, which will be paid at such time as the Company pays its
other members of the Executive Officer Committee their annual cash incentive
bonuses with respect to the calendar year in which termination of your
employment occurs;


 


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(iii)          the Accrued
Investments and the Accrued Welfare Benefits, which amounts will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable;


 


(iv)          if you are entitled
on the date of termination to coverage under the healthcare portion of the Trammell Crow and
Associated Companies Welfare Benefits Plan or a similar Company group health
arrangement  (the “Health Plan”),
continuation of such coverage for you and your dependents for a period ending
on the 180th day following the second (2nd)  anniversary
of the date of termination, at the active employee cost payable by you with
respect to those costs paid by you prior to your termination; provided,
however, that this coverage will count towards the depletion of any continued
health care coverage rights that you and your dependents may have pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”);
provided further, however, that you or your dependents’ rights to continued
health care coverage pursuant to this Section will terminate at the time you or
your dependents become covered, as described in COBRA, under another group
health plan, and will also terminate as of the date the Company ceases to
provide coverage to its senior executives generally under any such Health Plan;
and


 


(v)           upon your request
and at the Company’s sole cost and expense, your enrollment in an outplacement
program with a placement agency selected by the Company, and reasonably
acceptable to you, for a period of up to twelve months, commencing on the date
of termination.


 


Notwithstanding the
provisions of any plan or agreement governing such an Award, the Company also
will continue to vest all of your outstanding Awards that would have otherwise
vested during the eighteen (18) month period beginning on the date of
termination and such Awards will continue to vest and, if applicable, be
exercisable during such eighteen (18) month period; provided, that nothing set
forth herein shall result in an extension of the term of any Award beyond the term of the Award that would be
applicable absent any termination of your employment; provided further,
however, that, in the case of a termination of your employment pursuant to this
Section 4(c), if the terms of the plan or agreement governing such Award
are more favorable to you as to vesting or exercisability than the terms of
this paragraph, then the more favorable term(s) of such Award agreement or plan
(in lieu of the corresponding less favorable term(s) in this paragraph) shall
govern the vesting or exercisability, as the case may be, of such Award upon
your termination. “Award” means any option to acquire common stock,
restricted stock award, stock appreciation right or similar equity-based award
granted under the Trammell Crow Long-Term Incentive Plan or any other option or
equity-based incentive plan sponsored by the Company.  Except as described in this Section
4(c), in the event of your termination by us without Cause or by you
for Good Reason, you will forfeit all rights to any other compensation.


 


(d)           As used in this
Agreement:


 


(i)            “Change in
Control” has the meaning given such term in the Trammell Crow Long-Term
Incentive Plan (as such plan is in effect on the


 


9

















 


date of this
Agreement, the “LTIP”); provided, however, that the occurrence of a Rule 13e-3
transaction (within the meaning of Rule 13e-3 promulgated under the Securities
Exchange Act of 1934 or any similar successor rule thereto) that has been
approved by the Board and subsequent to which you are part of a group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 or any similar successor rule thereto) that owns more than 50%,
respectively, of the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the Company will not be deemed to be
a Change in Control; provided, further, if, prior to any Change in Control, you
terminate your employment for Good Reason or your employment is terminated by
the Company without Cause or as a result of a Non-Renewal Notice delivered by
the Company prior to such Change in Control and a Change in Control occurs
within 180 days after such termination, or within 180 days after such
Non-Renewal Notice delivery in the case of a Non-Renewal (excluding a Change in
Control that occurs pursuant to an unsolicited tender or exchange offer by any
person, in response to which the Company does not recommend acceptance of the
person’s tender or exchange offer), then for all purposes hereof, the date of
the Change of Control with respect to your employment shall mean the date
immediately prior to such termination, or immediately prior to such Non-Renewal
Notice delivery in the case of a Non-Renewal; provided, further that
notwithstanding that any such transaction does not constitute a Change in
Control as defined in the LTIP, a Change in Control shall be deemed to have
occurred for all purposes under this Agreement upon either (A) the consummation
of a Business Combination (as defined in the LTIP) with a National Competitor,
unless, following such Business Combination, the conditions in clauses (B) and
(C) of Section 1.6 (iii) of the LTIP are satisfied and all or
substantially all of the individuals and entities who were the beneficial
owners of, respectively, the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities (each as defined in the LTIP)
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60%, respectively, of the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including, without limitation,
a corporation which as a result of such transaction owns the Company, or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case may be,
or (B) the acquisition by any National Competitor (or any group (as defined in
the LTIP) of which a National Competitor is a controlling (within the meaning
of Rule 12b-2 promulgated under the Securities Exchange Act of 1934) member of
the group) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934) of 40% or more of either
the Outstanding Corporation Common Stock or the Outstanding Corporation Voting
Securities.  By way of clarification,
any transaction with a National


 


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Competitor
that constitutes a Change in Control as defined in the LTIP shall be considered
a Change in Control for all purposes under this Agreement.


 


(ii)           “National
Competitor” means any one of the companies known as Jones Lange LaSalle,
Inc., Grubb and Ellis Co. and CB Richard Ellis or their respective successors.


 


5.             Compensation Upon Termination Occurring
On or Within Two Years After a Change in Control.  After a Change in Control and on or before
the second anniversary of such Change in Control, conditioned on the
effectiveness of a Release signed by you or your legal representative, you will
be entitled to the following compensation from the Company upon termination of
your employment (including a termination resulting from the delivery of a
Non-Renewal Notice by the Company or you during such two-year period), which
shall be in lieu of any other severance pay or employment benefits to which you
might otherwise be entitled (whether contractual, under a severance plan, the
WARN Act, any other applicable law, or otherwise):


 


(a)           Death or Disability.  If your employment is terminated by reason
of your death or Disability, the Company will pay you or your legal
representative, as applicable, (A) in a cash lump sum within thirty (30) days
after the effective date of the Release, the following amounts:  (1) the Accrued Obligations; and (2) the
amount of any unpaid Annual Bonus that was awarded to you prior to the date of
termination; (B) the Accrued Investments, which amounts will be payable in
accordance with the terms and conditions of the Investment Plans; (C) the
Accrued Welfare Benefits, which amounts will be payable in accordance with the
terms and conditions of the Welfare Plans; and (D) an amount equal to your Pro
Rata Bonus, which will be paid at such time as the Company pays its other members
of the Executive Officer Committee their annual cash incentive bonuses with
respect to the calendar year in which termination of your employment
occurs.  Except as described in this Section
5(a), in the event of your termination by reason of your death or
Disability, you and your legal representatives, as applicable, will forfeit all
rights to any other compensation.


 


(b)           For Cause; Resignation by You Without Good Reason.  If your employment is terminated by us for
Cause or by you without Good Reason, we will have no further obligations to you
other than for payment of (i) Accrued Obligations (which will be payable within
the time period set forth in Section 5(a)(A) above), (ii) the
Accrued Investments and the Accrued Welfare Benefits (which will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable), and (iii) the amount of any unpaid Annual Bonus
that was awarded to you prior to the date of termination (which will be payable
within the time period set forth in Section 5(a)(A) above).  Except as described in this Section 5(b), in the event
of your termination by the Company for Cause or due to your resignation without
Good Reason, you will forfeit all rights to any other compensation.


 


(c)           Without Cause; Resignation for Good Reason; Non-Renewal
Election by Company.  If your
employment is terminated by the Company without Cause or due to a Non-Renewal
election made by the Company as provided in Section 3(e)(ii) or by
you for


 


11

















 


Good Reason
(taking into account in each such case the definition of Change in Control),
then, in lieu of any other severance pay or benefits, and conditioned on the
effectiveness of a Release signed by you, the Company will pay or provide to
you:


 


(i)            a cash lump sum
within thirty (30) days after the effective date of the Release equal to the
aggregate of the following amounts:  (A)
the Accrued Obligations; (B) an amount equal to two (2.0) multiplied by the sum
of (x) the highest Annual Base Salary to which you were entitled during the
twelve months immediately preceding the date of termination, and (y) the sum of
(i) one-half of your average (mean) Annual Bonus awarded to you for the three
years preceding termination (or the three years preceding the year to which the
Annual Bonus in question relates if you resign for Good Reason as defined in
the second clause (C)(ii) of Section 3(d)), plus (ii) one-half of the product
of your current Annual Bonus Target (or your Annual Bonus Target for the
immediately preceding year if you resign for Good Reason as defined in the
second clause (C)(i) of Section 3(d)), multiplied by the amount of your
Annual Base Salary for the calendar year in which your employment is terminated
(or the highest Annual Base Salary to which you were entitled during the twelve
months immediately preceding the date of termination if you resign for Good
Reason as defined in the second clause (B) of Section 3(d)); and (C) the amount
of any unpaid Annual Bonus that was awarded to you prior to the date of
termination; provided, however, that if the Company fails to make such lump sum
payment when due and such failure continues for ten (10) days following notice
of nonpayment to the Company, the amount of the payment the Company is
obligated to make pursuant to this Section 5(c)(i) shall automatically be
increased by twenty-five percent (25%);


 


(ii)           the Accrued
Investments and the Accrued Welfare Benefits, which amounts will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable;


 


(iii)          a cash lump sum
within thirty (30) days after the effective date of the Release equal to the
sum of (1) the unvested portion of your Matching Contribution Account under the
Company’s Retirement Savings Plan, plus (2) the product of (x) two (2.0)
multiplied times (y) the Matching Contribution you received for the calendar
year ended prior to the calendar year in which the Change in Control occurs;


 


(iv)          if you are entitled
on the date of termination to coverage under the healthcare portion of the
Health Plan, continuation of such coverage for a period ending on the 180th day
following the second (2nd)  anniversary
of the date of termination, at the active employee cost payable by you with
respect to those costs paid by you prior to such termination.  Provided, however, that this coverage will
count towards the depletion of any continued health care coverage rights that
you and your dependents may have pursuant to COBRA.  Provided further, that you or your dependents’ rights to
continued health care coverage pursuant to this Section will terminate at the
time you or your dependents become


 


12

















 


covered, as
described in COBRA, under another group health plan, and will also terminate as
of the date the Company ceases to provide coverage to its senior executives
generally under any such Health Plan;


 


(v)           an amount equal to
your Pro Rata Bonus, which will be paid at such time as the Company pays its
other members of the Executive Officer Committee their annual cash incentive
bonuses with respect to the calendar year in which termination occurs; and


 


(vi)          upon your request
and at the Company’s sole cost and expense, your enrollment in an outplacement
program with a placement agency selected by the Company, and reasonably
acceptable to you, for a period of up to twelve months, commencing on the
effective date of the Release.


 


Notwithstanding
the provisions of any plan or agreement governing such an Award and without
limiting Section 2(c), (A) the Company will also continue to vest
all of your outstanding Awards granted on or after a Change in Control that
would have otherwise vested during the eighteen (18) month period beginning on
the date of termination and such Awards will continue to vest and, if
applicable, be exercisable during such eighteen (18) month period and (B) all
of your outstanding Awards that are vested immediately prior to the date of
termination shall be exercisable during the eighteen (18) month period
beginning on the date of termination; provided, however, that nothing set forth
herein shall result in an extension of the term of any Award beyond the term of
the Award that would be applicable absent any termination of your employment;
provided, further, however, that, in the case of a termination of your
employment pursuant to this Section 5(c),
if the terms of the plan or agreement governing such Award are more favorable
to you as to vesting or exercisability than the terms of this paragraph, then
the more favorable term(s) of such Award agreement or plan (in lieu of the
corresponding less favorable term(s) in this paragraph) shall govern the
vesting or exercisability, as the case may be, of such Award upon your
termination.  Except as described in
this Section 5(c), in the event of your
termination by us without Cause or due to a Non-Renewal election made by the
Company as provided in Section 3(e)(ii) or by you for Good Reason
(taking into account in each such case the definition of Change in Control),
you will forfeit all rights to any other compensation.


 


(d)           Non-Renewal Election by You.  If your employment is terminated due to a
Non-Renewal Election by you, we will have no further obligations to you other
than as set forth in Section 3(e)(iii), which also includes provision
for the compensation and other benefits described in Section 4(b).  Except as described in Section 4(b)
and Section 3(e)(iii), in the event of your termination due to a
Non-Renewal election by you, you will forfeit all rights to any other
compensation.


 


13

















 


6.             Other Provisions Relating to Termination.


 


(a)           Good Reason. 
Upon you learning of any event described in the definition of Good
Reason, you may terminate your employment for Good Reason by giving a Notice of
Termination (describing, if applicable, the action required to cure the basis
for termination) to us within 60 days thereafter. If the event constituting
Good Reason may be cured, we will have the opportunity to cure any such event
for a period of 60 days following receipt of your Notice of Termination.  If you do not give a Notice of Termination
to us within 60 days after learning of an event giving rise to Good Reason,
then this Agreement will remain in effect and, without any further act on your
part, you will have waived your right to terminate your employment hereunder
for Good Reason in respect of such event.


 


(b)           Cause. 
Upon the Company learning of any event described in the definition of
Cause, we may terminate your employment for Cause by giving a Notice of
Termination (describing, if applicable, the action required to cure the basis
for termination) to you within 60 days thereafter. If we do not give you a
Notice of Termination within 60 days after learning of an event giving rise to
Cause, then this Agreement will remain in effect and, without any further act
on our part, we will have waived our right to terminate your employment for
Cause in respect of such event.


 


(c)           Full Settlement; Mitigation.  In no event will you be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to you under any of the provisions of this Agreement and, except for
your right, if any, to continue your participation in the Health Plan as
provided herein, such amounts will not be reduced whether or not you obtain
other employment.  The Company will not
be liable to you for any damages for breach of this Agreement arising out of the
termination of your employment other than for amounts payable under Sections
3(e), 4 or 5, which amounts will be payable subject to the
terms and conditions set forth therein. 
The Company will be entitled to seek damages from you for any breach of Section 7
or 8 by you or for your criminal misconduct.


 


(d)           Release and Other Agreements.  Notwithstanding any other provision in this
Agreement to the contrary, as a condition to receiving the benefits described
in this Agreement, upon any termination of your employment hereunder you hereby
agree to execute (and not revoke) a release in substantially the form attached
hereto as Exhibit A (the “Release”) and
such other documents and agreements as required by the Company, in the form and
pursuant to the procedures reasonably established by the Company.  For purposes of this Agreement, the Release
will be considered to have been executed by you if it is signed by your legal
representative in the case of your legal incompetence or on behalf of your
estate in the case of your death.  Upon
your execution and delivery of the Release, the Company will also promptly
execute and deliver the Release.


 


7.             Confidential Information.


 


(a)           You acknowledge that
the Company has trade, business and financial secrets and other confidential
and proprietary information regarding the Company and its


 


14

















 


business, in
whatever form, tangible or intangible (collectively, the “Confidential
Information”), and that during the course of your employment with the
Company you have received, will receive or will contribute to the Confidential
Information.  During the 180-day period
commencing on the date of this Agreement and ending on the 180th day following
the date of this Agreement, we will (a) disclose to you, or place you in a
position to have access to or develop, Confidential Information, (b) place you
in a position to develop business goodwill on behalf of the Company, and/or (c)
disclose or entrust business opportunities of the Company to you.  Confidential Information includes, to the
extent confidential and proprietary to the Company, sales materials, technical
information, processes and compilations of information, records, specifications
and information concerning customers, prospective customers or vendors,
customer and prospective customer lists, and information regarding methods of
doing business.  However, Confidential
Information does not include your general knowledge of and experience in the
real estate business or your personal and professional relationships and it
does not include information that (i) is obtained by you from a source other
than the Company or its affiliates who is not under a duty of non-disclosure to
the Company or such affiliate or (ii) is in the public domain or is or becomes
generally available to the public other than through disclosure by you in
violation of the provisions of this Agreement.


 


(b)           You are aware of
those policies implemented by the Company to keep its Confidential Information
secret.  You acknowledge that the
Confidential Information has been developed or acquired by the Company through
the expenditure of substantial time, effort and money and provides the Company
with an advantage over competitors who do not know or use such Confidential
Information.


 


(c)           During and following
your employment by the Company, you will hold in confidence and will not
directly or indirectly disclose, use, copy, make lists of, or make available to
others any Confidential Information except in the good faith performance of
your duties to the Company or to the extent authorized in writing by the Board
or required by law or compelled by legal process.  You agree to use reasonable efforts to give the Company notice
(accompanied by a copy of the subpoena, order or other process used to compel
disclosure) of any and all attempts to compel disclosure of any Confidential
Information, in such a manner so as to provide the Company with written notice
within one (1) business day after you are informed that such disclosure is
being or will be compelled.


 


(d)           You further agree
not to use any Confidential Information for the benefit of any person or entity
other than the Company.


 


(e)           Upon termination of
your employment, you agree that all Confidential Information and other files,
documents, materials and other repositories containing information concerning
the Company or the business of the Company (including all copies thereof) in
your possession, custody or control, whether prepared by you or others, will
remain with or be returned to the Company promptly (within twenty-four (24)
hours) after the date of such termination.


 


15

















 


(f)            Notwithstanding
anything herein to the contrary, you may disclose to any and all persons,
without limitation of any kind, the U.S. federal income tax treatment and tax
structure of the transactions contemplated in this Agreement and all materials
of any kind (including opinions and other tax analyses) that are provided to
you relating to such tax treatment and tax structure.  For this purpose, “tax structure” is limited to facts relevant to
the U.S. federal income tax treatment of the transactions contemplated in this
Agreement and does not include information relating to the identity of the
parties hereto.


 


8.             Non-Competition; Non-Solicitation.


 


(a)           You acknowledge and
agree that your use of Confidential Information and our lists of, and
information concerning, customers and prospective customers in the conduct of
business on behalf of a competitor of the Company would constitute unfair
competition with the Company and would adversely affect the business goodwill
of the Company.  Accordingly, as a
material inducement to the Company to enter into this Agreement; to protect the
Company’s Confidential Information, including lists of, and information concerning,
customers and prospective customers of the Company, that may be disclosed or
entrusted to you (the disclosure of which by you in violation of this Agreement
would adversely affect the business goodwill of the Company), the business
goodwill of the Company that may be developed in you and the business
opportunities that may be disclosed or entrusted to you by the Company; in
consideration for the compensation and other benefits payable hereunder to you,
for the benefits to you of having access to Confidential Information, including
lists of, and information concerning, customers and prospective customers of
the Company, during the Employment Period (the disclosure of which by you in
violation of this Agreement would adversely affect the business goodwill of the
Company); and for other good and valuable consideration, you hereby covenant
and agree that, during the Term of Non-Competition, you will not directly or
indirectly, individually or as an officer, director, manager, employee,
shareholder, consultant, contractor, partner, member, joint venturer, agent,
equity owner or in any capacity whatsoever:


 


(i)            own, engage in,
manage, operate, join, control, be employed by, provide Competing Services to,
or participate in the ownership, management, operation or control of or
provision of Competing Services to, a Competing Business operating in the
Geographic Area;


 


(ii)           recruit, hire,
assist in hiring, attempt to hire, or contact or solicit with respect to hiring
any person who, at any time during the twelve (12) month period ending on the
date of termination, was an employee of the Company; provided, that you may
hire any person that served as an administrative or clerical employee at the
time their employment with the Company terminates so long as you do not
recruit, contact or solicit such employee;


 


(iii)          induce or attempt
to induce any employee of the Company to terminate, or in any way interfere
with, the relationship between the Company and any employee thereof; or


 


16

















 


(iv)          induce or attempt to
induce any customer, client, supplier, service provider, or other business
relation of the Company in the Geographic Area to cease doing business with the
Company, or in any way interfere with the relationship between the Company and
any such person.


 


Notwithstanding the foregoing, the Company
agrees that you may own less than one percent of the outstanding voting
securities of any publicly traded company that is a Competing Business so long
as you do not otherwise participate in such competing business in any way
prohibited by this Section.


 


(b)           You acknowledge that
the geographic boundaries, scope of prohibited activities, and time duration of
the preceding paragraphs in this Section are reasonable in nature and are no
broader than are necessary to maintain the goodwill of the Company and the
confidentiality of its Confidential Information and to protect the goodwill and
other legitimate business interests of the Company, and also that the
enforcement of such covenants would not cause you any undue hardship or
unreasonably interfere with your ability to earn a livelihood.  If you violate the covenants and
restrictions in this Section and the Company brings legal action for injunctive
or other equitable relief, you agree that the Company will not be deprived of
the benefit of the full period of the restrictive covenant, as a result of the
time involved in obtaining such relief. 
Accordingly, you agree that the provisions in this Section will have a
duration determined pursuant to Subsection (a) above, computed from the date
the legal or equitable relief is granted.


 


(c)           As used in this
Agreement:


 


(i)            “Competing
Business” means a business that competes in any material respect with the
business, or any line of business, engaged in by the Company or any of its
Subsidiaries (A) at the time in question in respect of the Term of
Non-Competition occurring prior to the date of termination of your employment
and (B) as of the date of termination of your employment in respect of the Term
of Non-Competition occurring on and after the date of termination of your
employment.


 


(ii)           “Competing
Services” means services that, if provided to a business other than a
Competing Business, would constitute the conduct of a Competing Business.


 


(iii)          “Geographic Area”
means the geographic area in which the Company or any of its Subsidiaries
engages in its respective business or any line of its business (A) at the time
in question in respect of the Term of Non-Competition occurring prior to the date
of termination of your employment and (B) as of the date of termination of your
employment in respect of the Term of Non-Competition occurring on and after the
date of termination of your employment.


 


17

















 


(iv)          “Term of
Non-Competition” means the period of time beginning on the date hereof and
continuing until 5:00 p.m., Dallas, Texas time, on:


 


(A)          the date of
termination if your employment is terminated (1) by the Company for any reason
other than Cause, (2) by you for Good Reason, (3) due to a Non-Renewal election
by you prior to a Change in Control or after the second anniversary of such
Change in Control, or (4) due to a Non-Renewal election made by the Company at
any time, or


 


(B)           the date that is
twelve (12) months after the date of termination if your employment is
terminated (1) by the Company for Cause, (2) by you for any reason other than
Good Reason, or (3) due to any Non-Renewal election made by you after a Change
in Control and on or before the second anniversary of such Change in Control.


 


(d)           If any court or
arbitrator determines that any portion of this Section 8 is invalid or
unenforceable, the remainder of this Section 8 will not thereby be
affected and will be given full effect without regard to the invalid or
unenforceable provisions.  If any court
or arbitrator construes any of the provisions of this Section 8 to be
invalid or unenforceable because of the duration or scope of such provision,
such court or arbitrator will be required to reduce the duration or scope of
such provision, to the minimum extent necessary so as to be enforceable, and to
enforce such provision as so reduced.


 


9.             Gross-Up for Certain Taxes.  If any of the payments or benefits due to
you under this Agreement would otherwise result in your liability for any
excise taxes pursuant to Internal Revenue Code (“Code”) Section 4999 (“Excise
Tax”) (whether at the time of payment or upon a later IRS audit), the
Company and you agree to use commercially reasonable efforts to restructure, in
a manner reasonably acceptable to the Company and you, such payments or
benefits due to you so that such Excise Tax is eliminated or minimized to the
extent permitted by applicable law; provided, however, that, without creating
any implication as to whether or not, under all the circumstances it would be
unreasonable for you to refuse to defer receipt for a shorter period, the
Company agrees that, regardless of the circumstances, it shall not be
unreasonable for you to refuse to defer receipt of a material portion of the
payments or benefits due to you under this Section 9 for more than six
months after the date on which such payments or benefits would otherwise become
due to you under this Agreement.  If,
despite the use of commercially reasonable efforts, the Company and you are
unable either to agree on any such restructuring or to restructure the payments
or benefits due to you under this Agreement to eliminate such Excise Tax, the
Company will reimburse you for the amount of such Excise Tax plus all federal,
state and local taxes applicable to the Company’s payment of such Excise Taxes,
including any additional taxes due under Section 4999 of the Code with respect
to payments made pursuant to this provision. 
Calculations for
these purposes will assume the highest marginal rate for individuals applicable
at the time of calculation.  The
intent of this Section 9 is that the Company will pay you an additional
amount (the “Gross-Up Payment”) such that the net amount retained by you
after deduction of (i) any Excise Tax imposed on any such payment or benefit;
and (ii) any excise tax, federal, state or local income, payroll, and/or other
taxes,


 


18

















 


imposed on the Gross-Up Payment, will equal
the amount of such payment or benefit reduced by all applicable taxes on such
amount other than the Excise Tax.


 


10.          Successors; Binding Agreement.


 


(a)           This Agreement may
not be assigned by you other than by will or by the laws of descent and
distribution.  This Agreement will inure
to the benefit of and be enforceable by your personal and legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees. This Agreement will inure to the benefit of and be binding upon the
Company and its successors and assigns.


 


(b)           The Company will
require any successor to all or substantially all of the business and/or assets
of the Company, by a written agreement in form and substance reasonably
satisfactory to you, to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.  Failure of the Company to obtain such agreement prior to the effectiveness
of any such succession will be considered grounds for you to terminate your
employment for Good Reason, and if you do so terminate your employment, you
will be entitled to compensation from the Company in the same amount and on the
same terms as you would be entitled to pursuant to Section 5 if you
terminated your employment for Good Reason thereunder after, but before the
second anniversary of, a Change in Control. 
As used in this Agreement and after any such succession, “Company” will
mean the Company as hereinbefore defined and any successor and/or assigns which
assumes and agrees to perform this Agreement by operation of law, or otherwise.


 


11.          Miscellaneous.


 


(a)           Construction.  This Agreement will be deemed drafted equally by both the
parties.  Any presumption or principle
that the language is to be construed against any party will not apply.


 


(b)           Notices. 
For purposes of this Agreement, notices and all other communications
provided for in this Agreement will be in writing and will be deemed to have
been duly given when (i) delivered personally; (ii) sent by facsimile or
similar electronic device and confirmed; (iii) delivered by overnight express;
or (iv) if sent by any other means, upon receipt.  Any notice or other communication shall be delivered to the
address set forth below the Company’s or your signature hereto, as applicable,
or to such other address as either party will have furnished to the other in
writing in accordance herewith.


 


(c)           Severability.  Except as otherwise provided in Section 8(d), if any
provision of this Agreement is held to be illegal, invalid or unenforceable,
such provision will be fully severable; this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a portion of this Agreement; and the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance from


 


19

















 


this
Agreement.  Furthermore, except as
otherwise provided in Section 8(d), in lieu of such illegal,
invalid or unenforceable provision there will be added automatically as part of
this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.


 


(d)           Withholding. 
The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as are required to be withheld pursuant to
any applicable law or regulation.


 


(e)           No Waiver. 
Except as expressly set forth in this Agreement, no waiver by either
party at any time of any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by the other party
will be deemed a waiver of similar or dissimilar provisions or conditions at
any time.


 


(f)            Equitable and Other Relief.  You acknowledge that money damages would be
both incalculable and an insufficient remedy for a breach of Section 7
or 8 by you and that any such breach would cause the Company irreparable
harm.  Accordingly, the Company, in
addition to any other remedies at law or in equity it may have, will be
entitled, without the requirement of posting of bond or other security, to
equitable relief, including injunctive relief and specific performance, in
connection with a breach of Section 7 or 8 by you.  The parties agree that the only
circumstances in which disputes between them will not be subject exclusively to
arbitration pursuant to the provisions in Section 11(h) are in
connection with a breach of Section 7 or 8 by you.  If the Company files a pleading with a court
seeking immediate injunctive relief and this pleading is challenged by you and
injunctive relief sought is not awarded, the Company will pay all of your costs
and attorneys’ fees.  The parties
consent to venue in Dallas County, Texas and to the exclusive jurisdiction of
competent state courts or federal courts in the state or district in Dallas
County, Texas for all litigation which may be brought, subject to the
requirement for arbitration hereunder, with respect to the terms of, and the
transactions and relationships contemplated by, this Agreement.


 


(g)           Entire Agreement.  The provisions of
this Agreement constitute the entire and complete understanding and agreement
between the parties with respect to the subject matter hereof.  The Company and you acknowledge that the
Indemnification Agreement, dated January 6, 2004, by and between you and the
Company shall remain in full force and effect, without limitation of your
rights thereunder by the terms of this Agreement.


 


(h)           Arbitration. 
Except as otherwise provided in Section 11(f), in the event any
claim, demand, cause of action, dispute, controversy or other matter in
question (“Claim”) arises out of this
Agreement (or its termination) or your employment (or termination of
employment) by the Company or its Subsidiaries, then, upon the written request
of you or us, such dispute or controversy will be submitted to binding
arbitration.  Any arbitration will be
conducted in accordance with the Federal Arbitration Act (“FAA”) and, to the extent an issue is not
addressed by the FAA or the FAA does not apply, with the then-current National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association (“AAA”) or other rules of
the AAA as


 


20

















 


applicable to
the claims asserted.  The results of
arbitration will be binding and conclusive on the parties hereto.  All parties agree that venue for arbitration
will be in Dallas County, Texas.  If you
are the prevailing party, then you will be entitled to reimbursement by the
Company for reasonable attorneys fees, reasonable costs and other reasonable
expenses pertaining to the arbitration. 
All proceedings conducted pursuant to this Section 11(h) will be
kept confidential by all parties.  THE ARBITRATORS
SHALL HAVE NO AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES
(WHETHER IT BE EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANY OTHER PENALTY OR
PUNITIVE TYPE OF DAMAGES).  REGARDLESS
OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER TEXAS LAW, YOU AND THE COMPANY
EACH HEREBY WAIVE THE RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION
WITH ANY CLAIMS.  YOU AND THE COMPANY
ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT YOU AND THE COMPANY ARE WAIVING ANY
RIGHT THAT YOU OR THE COMPANY MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS
EXPRESSLY PROVIDED BY SECTION 11(f), A TRIAL BEFORE A JUDGE IN
CONNECTION WITH, OR RELATING TO, A CLAIM.


 


(i)            Survival. 
Sections 3(e), 4, 5, 6, 7, 8, 9,
10 and 11 of this Agreement will survive the termination of this
Agreement.


 


(j)            Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT
OF LAWS OF TEXAS OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF
THE UNITED STATES.


 


(k)           Amendments. 
This Agreement may not be amended or modified at any time except by a
written instrument approved by the Board and executed by the Company and you.


 


(l)            Acknowledgement.  You acknowledge that you have read and understand this Agreement
(including its legal effect), have had an opportunity to consult legal counsel
regarding it, have not acted in reliance upon any representations or promises
made by the Company not contained herein, and have entered into this Agreement
freely.


 


(m)          Counterparts.  This Agreement may be executed (including by facsimile
transmission) in any number of counterparts.


 


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By signing and
countersigning this Agreement in the appropriate space set forth below, we and
you have agreed to be bound by the terms and conditions set forth herein,
effective as of the date first written above.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  TRAMMELL CROW COMPANY,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT E. SULENTIC

  
	
   

  	
  Name:

  	
  Robert E. Sulentic

  
	
   

  	
  Title:

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  Trammell Crow Company

  
	
   

  	
   

  	
  2001 Ross Avenue, Suite 3400

  
	
   

  	
   

  	
  Dallas, Texas  75201

  
	
   

  	
   

  	
  Attention: 
  General Counsel

  
	
   

  	
   

  	
  Telephone: 
  (214) 863-3000

  
	
   

  	
   

  	
  Fax: 
  (214) 863-3125

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED BY EXECUTIVE:

  	
   

  
	
   

  	
   

  
	
  /s/ DIANE S. PADDISON

  	
   

  	
   

  
	
  Name: 
  Diane Paddison

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  [XXXXXXXXXX]

  	
   

  
	
   

  	
  [XXXXXXXXXX]

  	
   

  
	
   

  	
  Telephone: [XXXXXXXXXX]

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  	
   

  
							



 


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