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EXHIBIT 10.78
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into on June 11, 1999 (the
"Effective Date"), by and between Xxxxxx X. Xxxxxxx ("Employee") and Crescent
Operating, Inc. ("Employer"), and each of their respective subsidiary entities
and other direct or indirect affiliates, the "Employer Group".
WHEREAS, Employee presently serves as President and Chief Executive Officer of
COI and certain of the other entities constituting the Employer Group;
WHEREAS, the parties wish to resolve all outstanding claims and disputes between
them in an amicable manner;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, the sufficiency of which the parties
acknowledge, it is agreed as follows:
1. Employee hereby resigns from all directorships and offices of whatever
nature held by Employee with any member of the Employer Group, with such
resignation to be effective as of the Effective Date and renounces and
relinquishes all appointments as attorney-in-fact on behalf of any member
of the Employer Group.
2. In consideration for Employee's promises in this Agreement, Employer agrees
to pay to Employee within five days of the execution of this Agreement the
amount of his monthly salary through June 30, 1999, and in addition the
lump sum of $100,000 cash, provided that such payment shall be subject to
such payroll tax and other withholding as is required by law. Employee
shall have no obligation to mitigate the amounts payable to Employee under
this Agreement, nor shall the amount of any payment hereunder be reduced by
any compensation earned by Employee as a result of his performance of
services for a third party. The Employer Group also agrees to reimburse all
reasonable business expenses incurred by Employee on behalf of the Employer
Group prior to the date of his resignation, in accordance with the Employer
Group's policies and procedures regarding executive expense reimbursement.
Except as set forth specifically in this Section or as set forth in the
document(s) effecting the accelerated vesting of the New Vested Options
(defined in Section 5 below), Employee will not be entitled to any other
payment whatsoever for his promises in this Agreement.
3. Employer and Employee acknowledge that Employee's ceasing to be involved in
management of Employer will constitute an event of default under the Credit
Agreement between Employer and NationsBank of Texas (n/k/a Bank of
America); Employee agrees to cooperate with Employer upon request in its
efforts to obtain from NationsBank a waiver of that event of default (the
"Waiver"), but Employee shall not have any liability to Employer if
Employee cooperates with Employer but the Waiver is not obtained . Employer
and Employee further acknowledge that Employee is jointly and severally
obligated with certain other management personnel of Employer under that
Support Agreement in favor of NationsBank; Employer agrees that it shall be
responsible for obtaining from NationsBank and from the other management
personnel of Employer who are parties to that Support Agreement the full
and complete release of Employee (the "Release") from the Support
Agreement. Employer shall indemnify Employee and hold him harmless from and
against any claims, damages or losses incurred by Employee resulting from
(i) any event of default under the Credit Agreement occurring as a result
of the failure to obtain the Waiver for any reason or (2) Employer's
failure to obtain the Release.
4. Employee is a limited partner of COPI Colorado, LP, of which Employer is
the sole general
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partner. In its capacity as sole general partner, Employer agrees, subject
to the following conditions, that, as of a date to be mutually agreed upon
by Employer and Employee but which shall not be earlier than January 2,
2000, nor later than February 28, 2000, Employer shall either cause the
Partnership to be liquidated and wound up or cause the Partnership to
redeem Employee's limited partner interest, in either event with Employee
being entitled to receive in cash payment of an amount equal to the value
of his pro rata interest in the Partnership. Employer and Employee agree
that the Employer shall cause the Partnership to select an independent
qualified appraiser (an "Appraiser") for purposes of determining the value
of Employee's interest in the Partnership in connection with the
liquidation or redemption; but if Employee objects to such Appraiser, then
Employee, at his expense, may select an Appraiser for the same purpose, in
which event the two Appraisers shall cooperate to determine the value of
Employee's interest in the Partnership; but if the two Appraisers are
unable, within a reasonable time, to agree upon the value of Employee's
interest in the Partnership, then the two Appraisers shall select a third
Appraiser, and the third Appraiser shall determine the value of Employee's
interest in the Partnership and its valuation shall be final and binding
upon Employer and Employee. For purposes of this paragraph, it is agreed
that PricewaterhouseCoopers shall be considered an independent qualified
appraiser acceptable to each party.
5. Employee and Employer acknowledge that, contemporaneously with this
Agreement, the Compensation Committee and/or full Board of Directors of
Employer has accelerated the vesting of certain unvested stock options held
by Employee (the "New Vested Options"); identified in Exhibit A, pursuant
to the First Amended and Restated Nonqualified Stock Option Agreement
(1997) attached hereto Exhibit B and the First Amended and Restated
Nonqualified Stock Option Agreement (1999) attached hereto as Exhibit C.
Employer agrees to use all reasonable efforts to ensure that the New Vested
Options, all other options that are vested as of the Effective Date, and
all securities as to which those options may be exercised by Employee will
continue to be registered under the Securities Act of 1933 and that all
existing rights of Employee pursuant to the relevant stock option plans and
stock option agreements will be preserved. Employee represents and
acknowledges to the Employer that his interest in the stock options and
unit options previously issued to him by Employer are either his separate
property or subject to the sole management, control and disposition of
Employee.
6. The Employer Group shall provide Employee an insurance and indemnification
policy (including any fiduciary liability policy) that provides coverage
with respect to any claims made during the six (6) year period following
the Effective Date that is substantially similar to the Employer Group's
existing policies or, if substantially equivalent insurance coverage is
unavailable, the best coverage reasonably available.
7. As a further condition to the agreements contained herein, neither Employee
nor any person acting on Employee's behalf will, and neither Employee or
such other person will assist or encourage others (including those
providing financing to Employee for any purpose) to, directly or
indirectly, for a period of one (1) year from the date of this Agreement
(i) induce or attempt to persuade any persons with whom any member of the
Employer Group is now doing business, or has at any time in the past done
business, to curtail, cancel or otherwise terminate their business with any
member of the Employer Group, provided, however, that commencing on the
Effective Date, Employee may do business with investment banking firms,
real estate companies, and any other business which now does, or at any
time in the past has done, business with any member of the Employer Group,
where the Employee's conduct of such business does not otherwise violate
this Section 5(i), or (ii) without the express prior written approval of
the relevant member, employ, offer to employ or permit to post for any
position of employment any employee of
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any member of the Employer Group or otherwise interfere with the employment
by any member of the Employer Group of any individual who is an employee of
such member.
8. Employee agrees that the payments and other benefits referenced in Section
2, the covenants in Sections 3 and 4, and the modifications to the unvested
stock options contemplated by Section 5 are in full, final and complete
settlement of all claims Employee may have against any member of Employer
Group or any of such member's past and present affiliates, officers,
directors, owners, employees, agents, successors and assigns, and the
Employer Group agrees that Employee's promises in this Agreement are in
full, final and complete settlement of all claims Employer Group may have
against Employee, his heirs and assigns. Nothing in this Agreement shall be
construed as an admission of liability by any member of Employer Group or
any of such member's past and present affiliates, officers, directors,
owners, employees or agents, or by Employee.
9. (a) Employee covenants not to xxx, and fully and forever releases and
discharges each member of Employer Group and each of such member's past and
present affiliates, directors, officers, owners, employees and agents, as
well as each of such member's successors and assigns (collectively, the
"COI Releasees") from any and all claims, liabilities, damages, demands,
and causes of action or liabilities of any nature or kind, whether now
known or unknown, arising out of or in any way connected with Employee's
employment or other relationship with any member of Employer Group or the
termination of that employment or other relationship. Each member of the
Employer Group covenants not to xxx, and fully and forever releases
Employee, his agents, heirs and assigns (collectively, the "Xxxxxxx
Releasees"), from any and all claims, liabilities, damages, demands, and
causes of action or liabilities of any nature or kind, whether now known or
unknown, arising out of or in any way connected with Employee's employment
or other relationship with any member of the Employer Group or the
termination of that employment or other relationship.
(b) Nothing in this Agreement shall be construed to prohibit either party
from taking action to enforce this Agreement or the other agreements or
arrangements that survive in accordance with Section 18, In the event such
action is taken, the prevailing party shall be entitled to payment by the
non-prevailing party of his or its costs and expenses, including without
limitation reasonable attorney's fees, in additional to any other relief to
which he or it may be entitled.
(c) Nothing in this Agreement shall preclude the COI Releasees or the
Xxxxxxx Releasees, or any one or more of them, from raising counterclaims
and defenses in any suit brought against such Releasee by, in the case of a
suit against a COI Releasee, a Xxxxxxx Releasee, or, in the case of a suit
brought against a Xxxxxxx Releasee, a COI Releasee.
10. (a) Employee recognizes the proprietary interest of the Employer Group and
their affiliates in any Confidential Information (as hereinafter defined)
of the Employer Group and their affiliates. Employee acknowledges and
agrees that any and all Confidential Information learned by Employee during
the course of his engagement by Employer or otherwise, whether developed by
Employee alone or in conjunction with others or otherwise, is the property
of the Employer Group and their affiliates. Employee further acknowledges
and understands that his disclosure of any Confidential Information and/or
proprietary information will result in irreparable injury and damage to the
Employer Group and their affiliates. As used herein, "Confidential
Information" means all confidential and proprietary information of the
Employer Group and their affiliates, including without limitation
information derived from reports, investigations, experiments, research,
drawings, designs, plans, proposals, codes, marketing and sales programs,
client lists, client mailing lists,
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financial projections, cost summaries, pricing formulas, and all other
concepts, ideas, materials, or information prepared or performed for or by
the Employer Group or their affiliates. "Confidential Information" also
includes information related to the business, products or sales of the
Employer Group or their affiliates, or any of their respective customers,
other than information that is otherwise publicly available without breach
by any person of any duty to the Employer Group or their affiliates.
(b) Employee acknowledges and agrees that the Employer Group and their
affiliates are entitled to prevent the disclosure of Confidential
Information. As a portion of the consideration for the compensation being
paid to Employee by Employer, Employee agrees at all times to hold in
strict confidence and not to disclose or allow to be disclosed to any
person, firm or corporation, other than to persons engaged by the Employer
Group and their affiliates to further the business of the Employer Group
and their affiliates, and not to use, the Confidential Information without
the prior written consent of the Employer Group.
(c) Employee agrees to provide representatives of the Employer Group
reasonable access to the files and other information containing
Confidential Information. Employee will return to the Employer Group all
originals and copies of any material containing Confidential Information
within 14 days following written request. Employee will also return to the
Employer Group within 14 days following a written request any other items
in his possession, custody or control that are the property of a member of
the Employer Group.
(d) Notwithstanding the foregoing, (i) Employee may use for his own benefit or
the benefit of others any Confidential Information which he can show he
developed outside the course and scope of his employment with the Employer
Group; and (ii) Employee may disclose Confidential Information when
required to do so by compulsory legal process, provided that Employee
promptly upon receiving notice of such process shall notify the Employer
Group and shall cooperate to the fullest extent in any lawful efforts of
the Employer Group to protect the Confidential Information from compulsory
disclosure.
11. Employee hereby acknowledges that he is aware of the restrictions imposed
by federal and state securities laws on a person possessing material
nonpublic information about a company. In this regard, Employee hereby
agrees that while he is in possession of material nonpublic information
with respect to the Employer Group, he will not purchase or sell any
securities of Employer or any other member of the Employer Group, or
communicate such information to any third party, in violation of any such
laws.
12. Employee agrees that he will not encourage or assist any of Employer's
employees to litigate claims or file administrative charges against any
member of Employer Group or any of such member's past or present
affiliates, officers, directors, owners, employees and agents, unless
required to provide testimony or documents pursuant to a lawful subpoena or
other compulsory legal process.
13. Each of Employee and the Employer Group agrees that money damages would not
be a sufficient remedy for any breach of any provision of this Agreement by
the other, and that in addition to all other remedies which the aggrieved
party may have at law or in equity, including without limitation in the
case of a breach by Employee the cessation of payments of compensation
pursuant to Section 2 and the forfeiture of Employee's rights in the New
Vested Options, such party will be entitled, without the requirement of
posting a bond or other security, to specific performance and injunctive or
other equitable relief as a remedy for any such breach. No failure or delay
by either of Employee or Employer Group in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will
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any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege
hereunder.
14. Except as otherwise provided in Section 16, Employee and Employer Group
agree that they will treat the existence and terms of this Agreement as
confidential and will not discuss the Agreement or the Press Release
referenced in Section 16 with anyone other than: (i) his or their counsel,
accountants, or tax advisors as necessary to secure their professional
advice, (ii) as may be required by law, and (iii) in Employee's case, his
spouse.
15. Employee agrees to refrain from making any unfavorable comments, in writing
or orally, about any member of Employer Group, or their operations,
policies, or procedures, or about the Releases. Each member of Employer
Group agrees to refrain from making any unfavorable comments, in writing or
orally, about Employee or his job performance while in the service of the
Employer Group.
16. The Employer Group in its sole discretion shall issue a Press Release
concerning Employee's resignation from Employer Group and Employee
expressly covenants and agrees that neither the issuance nor the contents
of nor discussions relating to such Press Release (subject to Section 15)
shall constitute a violation of this Agreement or create a right of action
against any member of the Employer Group.
17. This Agreement shall be binding on the Employer Group and on Employee and
upon their respective heirs, representatives, successors and assigns, and
shall run to the benefit of the Releasees and each of them and to their
respective heirs, representatives, successors and assigns. The undersigned
members of the Employer Group shall be jointly and severally responsible
for any breach of this Agreement by any other member of the Employer Group.
18. This Agreement sets forth the entire agreement between Employee and the
members of Employer Group, and fully supersedes any and all prior
agreements or understandings between them regarding its subject matter;
provided, however, that nothing in this Agreement is intended to or shall
be construed to modify, impair or terminate any obligation of Employee or
the Employer Group pursuant to that certain Indemnification Agreement
covering Employee, a copy of which is attached hereto as Exhibit B, or to
deprive Employee of any indemnification rights he otherwise would have
pursuant to statute or the Employer Group's governing documents. This
Agreement may only be modified by written agreement signed by both parties.
19. Each of the undersigned members of Employer Group and Employee agree that
in the event any provision of this Agreement is deemed to be invalid or
unenforceable by any court or administrative agency of competent
jurisdiction, or in the event that any provision cannot be modified so as
to be valid and enforceable, then that provision shall be deemed severed
from the Agreement and the remainder of the Agreement shall remain in full
force and effect.
20. Employee and Employer mutually agree to cooperate fully with each other,
and to execute and deliver such other instruments, documents and
agreements, and to take such other actions reasonably requested by either
party to better evidence and reflect the transactions contemplated hereby
and to carry into effect the interests and purposes of this Agreement.
21. Employer Group will reimburse Employee for all reasonable and necessary out
of pocket travel and other expenses incurred by Employee in negotiating the
terms of this Agreement.
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22. This Agreement in all respects shall be interpreted and entered under the
laws of the State of Texas. The language of all parts of this Agreement in
all cases shall be construed as a whole, according to its fair meaning, and
not strictly for or against any of the parties.
PLEASE READ CAREFULLY. THIS
AGREEMENT AND GENERAL RELEASE INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
CRESCENT OPERATING, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: Executive Vice President
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/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
EXHIBITS OMITTED.
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