EXHIBIT 10.01
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Employment Agreement") is entered into
as of the 19th day of February, 2002, by and between Crescent Real Estate
Equities Limited Partnership, a Delaware limited partnership ("Employer" or
"Operating Partnership"), Crescent Real Estate Equities Company, a Texas real
estate investment trust ("Crescent") and Xxxx X. Xxxx ("Employee" and together
with Crescent and Employer, the "Parties").
RECITALS
Crescent Real Estate Equities Company ("Crescent") is the sole
stockholder of Crescent Real Estate Equities, Ltd. (the "General Partner"),
which is the sole general partner of the Operating Partnership, and the owner of
a majority of the outstanding limited partner interests in the Employer.
Employee is currently a valued officer of Crescent and the General
Partner, and in these capacities serves the interests of the Employer and
Crescent. Employee's skill and talents as a chief executive officer are highly
valued by the real estate and investment industries. In order to further the
interests of Crescent and the Employer, Crescent, the General Partner, acting as
the sole general partner of Employer pursuant to the partnership agreement of
Employer, and Employee mutually agree that Employee should be employed by
Employer with greater compensation incentives for future services to Employer
and Crescent.
Employee, the Executive Compensation Committee of Crescent (the
"Executive Compensation Committee"), and the Employer's Compensation Committee
(the "Compensation Committee") have engaged in significant negotiations to
determine the amount and form of Employee's compensation for the term of this
Employment Agreement. The Executive Compensation Committee of Crescent, and the
Employer's Compensation Committee have determined that, as a part of the
Compensation Package (as defined herein) to Employee and as an integral part of
Employer and Employee's agreement regarding employment for the next five years,
Employee shall receive the right to (i) earn 300,000 restricted shares of common
stock (the "Restricted Stock") of Crescent under the Third Amended and Restated
1995 Crescent Real Estate Equities Company Stock Incentive Plan, (ii) earn an
option to purchase 221,429 units of Employer under the 1996 Crescent Real Estate
Equities Limited Partnership Unit Incentive Plan ("the 1996 Plan") and (iii)
earn an option to purchase an additional 1,278,571 units of Employer (the
options described in (ii) and (iii) collectively referred to as the "Unit
Options"). There will be additional conditions related to the earning of the
Restricted Stock and the Unit Options, which are set forth, respectively, in (a)
that certain Restricted Stock Agreement, dated of even date herewith, and (b)
that certain Unit Option Agreement, dated of even date herewith, and (c) that
certain Unit Option Agreement dated of even date herewith, all of which are
attached as exhibits to this Employment Agreement and which form a part of this
Employment Agreement for all purposes.
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The Compensation Package provided for herein is intended to compensate
Employee for services performed by Employee for Employer from and after February
19, 2002 and during the term of this Employment Agreement and thereafter for the
postemployment obligations of Employee, including confidentiality and
noncompetition, such compensation being expressly contingent on Employee's
fulfillment of these service and other requirements as set forth herein. The
compensation described in this Employment Agreement has been negotiated by
Employer and Employee in lieu of much more significant future cash compensation
for the future services of Employee. Furthermore, Employee's ability to earn
Restricted Stock and Unit Options under this Employment Agreement shall be
prospective only and shall be earned only while this Employment Agreement is in
effect.
Crescent and Employer has previously discussed these matters with
Employee, and Employee desires to accept such employment on such terms.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties agree as follows:
PROVISIONS
1. EMPLOYMENT. Employer hereby employs Employee and Employee
hereby accepts employment with Employer upon the terms and conditions
hereinafter set forth. Without regard to this Agreement and the Compensation
Package described herein, Employee represents and agrees that he has been fully
and completely compensated for all services rendered prior to the date of this
Agreement by Employee to any of Crescent, Employer, the General Partner and each
of their respective affiliates.
2. DUTIES. Subject to the powers of the Employer to elect and
remove employees, Employee will serve Employer as its Chief Executive Officer
(or in such other executive function as Employer may determine) and will
perform, faithfully and diligently, the services and functions relating to such
employment, or otherwise reasonably incident to such employment, as may be
reasonably designated from time to time by Employer. Employee will devote his
time, attention, skills, benefits and best efforts to the performance of his
duties hereunder and to the promotion of the business and interests of Employer
and its affiliates. Employee will not, without the prior written consent of the
Operating Partnership, become engaged in any other activity requiring
significant time or personal services by Employee that will conflict with the
proper performance of any such duties under this Employment Agreement. Employer
hereby acknowledges that Employee has a broad and varied range of investment
interests and agrees that Employee must devote such reasonable time and
attention to the proper and judicious management of such interests as may be
reasonably required from time to time. Accordingly, nothing contained in this
Employment Agreement shall limit or be deemed to limit Employee's investment
activities, and Employee's engaging in such activities shall not be deemed to be
a breach or violation of this Employment Agreement; provided,
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however, Employee shall not undertake new investment activities that will
materially interfere with the performance of Employee's duties hereunder.
3. TERM. Unless sooner terminated pursuant to the provisions
hereof, the term of this Employment Agreement (the "Term") shall be for a term
of five years, commencing on the date of this Employment Agreement and
terminating February 19, 2007.
4. COMPENSATION. As compensation for his services rendered
under this Employment Agreement as well as for certain postemployment
obligations, Employee will be entitled to receive the following (the
"Compensation Package"):
(a) Salary. During the Term, Employee will be paid an annual
salary of $750,000.00, payable monthly. At any time and from time to
time, the Salary may be increased if so determined by the General
Partner or its Compensation Committee after a review of Employee's
performance of his duties hereunder.
(b) Bonus. In addition to the Salary, Employee will be
entitled to receive such bonuses as may be determined by the General
Partner or its Compensation Committee.
(c) Unit Options. During the Term, Employee may earn the right
to options to purchase 1,500,000 Units of the Operating Partnership, as
evidenced by the form of the Unit Option Agreements, attached hereto as
Exhibits A and B.
(d) Restricted Stock. During the Term, Employee may earn the
Restricted Stock , as evidenced by the form of the Restricted Stock
Agreement, attached hereto as Exhibit C.
(e) Benefits. During the Term, Employee will be entitled to
receive such group benefits as Employer may provide to its other
employees at comparable salaries and responsibilities to those of
Employee not less favorable than those provided any employee of
Employer.
(f) Expenses. Employer will reimburse Employee for all
reasonable and necessary out-of-pocket travel and other expenses
incurred by Employee in rendering services required under this
Employment Agreement, on a monthly basis upon submission of a detailed
monthly statement and reasonable documentation.
5. CONFIDENTIALITY; NON-COMPETITION. Employee will have access
to confidential information with respect to Employer, its affiliates, and their
operations and policies. Therefore, Employee agrees to the following:
(a) Acknowledgement of Proprietary Interest. Employee
recognizes the proprietary interest of Employer and its affiliates in
any Confidential
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Information (as hereinafter defined) of Employer and its 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, will be and is the property of
Employer and its 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
Employer and its affiliates. As used herein, "Confidential Information"
means all confidential and proprietary information of Employer and its
affiliates, including without limitation information derived from
reports, investigations, experiments, research, drawing, designs,
plans, proposals, codes, marketing and sales programs, client lists,
client mailing lists, financial projections, cost summaries, pricing
formula, and all other concepts, ideas, materials, or information
prepared or performed for or by Employer or its affiliates.
"Confidential Information" also includes information related to the
business, products or sales of Employer or its affiliates, or any of
their respective customers, other than information that is otherwise
publicly available. Employee acknowledges that he has been provided, is
contemporaneously herewith being provided and will be provided
Confidential Information by the Employer.
(b) Covenant Not-to-Divulge Confidential Information. Employee
acknowledges and agrees that Employer and its affiliates are entitled
to prevent the disclosure of Confidential Information. As a portion of
the consideration for the employment of Employee and for the
Compensation Package being paid to Employee by Employer, Employee
agrees at all times during the Term and thereafter 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 Employer and its
affiliates to further the business of Employer and its affiliates, and
not to use except in the pursuit of the business of the Employer and
its affiliates, the Confidential Information, without the prior written
consent of the Operating Partner, including Confidential Information
developed by Employee.
(c) Return of Materials at Termination. In the event of any
termination or cessation of his employment with Employer for any reason
whatsoever, Employee will promptly deliver to Employer all documents,
data and other information pertaining to Confidential Information.
Employee will not take any documents or other information, or any
reproduction or excerpt thereof, containing or pertaining to any
Confidential Information.
(d) Competition. Employee has previously entered into a
Non-Competition Agreement, and acknowledges that such Non-Competition
Agreement is now in full force and effect in order to carry out the
terms of this Paragraph. The Non-Competition Agreement is attached as
Exhibit D.
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6. TERMINATION. The employment relationship created hereby
will terminate upon the occurrence of any of the following events:
(a) The expiration of the Term as set forth in Section 3
above;
(b) The death of Employee;
(c) The Disability of Employee;
(d) The resignation of Employee from employment with the
Operating Partnership, the General Partner and Crescent, by written
notice delivered to Employer;
(e) Written notice to Employee from the General Partner,
acting on behalf of the Operating Partnership, of termination from
employment with the Operating Partnership, the General Partner and
Crescent, for Just Cause;
(f) The voluntary resignation by Employee from employment with
the Operating Partnership, the General Partner and Crescent, for Good
Reason within 24 months following a Change in Control ("Resignation for
Good Reason") or,
(g) Written notice to Employee from the General Partner,
acting on behalf of the Operating Partnership, of termination from
employment with the Operating Partnership, the General Partner and
Crescent, for any reason other than as set forth in Sections 6(a),
6(b), 6(c), 6(d) or 6(e).
Notwithstanding anything to the contrary in this Employment Agreement,
the provisions of Section 5 will survive any termination, for whatever reason,
of Employee's employment under this Employment Agreement. In addition to the
rights, if any, under the Unit Option Agreements and the Restricted Stock
Agreement, in the event of the termination of Employee's employment prior to the
completion of the Term, Employee or his estate, as the case may be, will be
entitled only to the Salary payable pursuant to Section 4 hereof through the end
of the calendar month in which termination occurs, except that if Employee's
employment is terminated pursuant to Sections 6(b), 6(c), 6(f) or 6(g), Employee
will be entitled to receive a payment equal to one year's Salary at the rate in
effect immediately prior to the termination together with an amount equal to
Employee's highest bonus paid in the 12 month period immediately preceding
termination of Employee's employment.
For the purposes of this Employment Agreement:
For purposes of this Agreement, "Disability" shall mean the absence of
the Employee from the Employee's duties with the Operating Partnership,
General Partner and Crescent on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical
illness or injury which renders Employee unable to perform all of the
material and substantial duties of his
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employment, as it existed immediately prior to such illness or injury,
and which is reasonably be expected to be permanent.
"Just Cause" shall mean (i) an act, acts or omission involving a
felony, fraud, willful misconduct, or gross negligence, (ii) commission
of any act that causes or reasonably might be expected to cause
substantial injury to the Operating Partnership or the General Partner
or is against the material best interests of the Operating Partnership
of the General Partner, (iii) an uncured breach of any of Employee's
material duties under this Employment Agreement, or (iv) an uncured
breach of any material provision of the Noncompetition Agreement.
"Good Reason" shall mean (A) a reduction in the amount of Employee's
aggregate cash compensation (including base salary and any bonus)
payable within any twelve-month period following a Change in Control
below the amount of such aggregate cash compensation paid to, or
accrued by the General Partner with respect to, Employee in the
twelve-month period immediately preceding the change in control; (B)
the assignment of Employee to any employment status other than a
position reasonably equivalent to a chief executive officer and having
duties comparable to those exercised by Employee immediately before the
Change in Control, or (C) a geographical relocation or attempted
relocation of Employee to an office more than fifty (50) miles distant
from Fort Worth, Texas, without Employee's consent.
"Change in Control" shall mean the acquisition of 15% or more of the
voting securities of Crescent Real Estate Equities Company (Crescent)
by any person or by persons acting as a group within the meaning of
Section 13(d)(3) of the Exchange Act (other than an acquisition by a
person or group meeting the requirements of clauses (i) and (ii) of
Rule 13d-1(b)(1) promulgated under the Exchange Act, or by any employee
pension benefit plan (within the meaning of Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
of Crescent or of its subsidiaries, including a trust established
pursuant to such plan. However, no Change in Control or threatened
Change in Control shall be deemed to have occurred (A) if before the
acquisition of, or offer to acquire, 15% or more of the voting
securities of Crescent, the full Board of Directors of Crescent (the
"Board") has adopted by not less than two-thirds vote a resolution
specifically approving such acquisition or offer or (B) from (I) a
transfer of Crescent's voting securities by Xxxxxxx X. Xxxxxxxxx
("Rainwater") to (a) a member of Rainwater's immediate family (within
the meaning of Rule 16a-1(e) of the Exchange Act) either during
Rainwater's lifetime or by will or the laws of descent and
distribution; (b) any trust as to which Rainwater or a member (or
members) of his immediate family (within the meaning of Rule 16a-1(e)
of the Exchange Act) is the beneficiary; (c) any trust as to which
Rainwater is the settlor with sole power to revoke; (d) any entity over
which Rainwater has the power, directly or indirectly, to direct or
cause the direction of the management and policies of the entity,
whether through the
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ownership of voting securities, by contract or otherwise; or (e) any
charitable trust, foundation or corporation under Section 501(c)(3) of
the Code that is funded by Rainwater; or (II) the acquisition of voting
securities of Crescent by either (a) Rainwater or (b) a person, trust
or other entity described in the foregoing clauses (I)(a)-(e) of this
subparagraph. The term "person" shall mean an individual or a
corporation, partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization or any
other form of entity not specifically listed herein.
7. REMEDIES. Employee recognizes and acknowledges that in the
event of any default in, or breach of any of, the terms, conditions or
provisions of this Employment Agreement (either actual or threatened) by
Employee, Employer's and its affiliates remedies at law will be inadequate.
Accordingly, Employee agrees that in such event, Employer and its affiliates
will have the right of specific performance and/or injunctive relief in addition
to any and all other remedies and rights at law or in equity, and such rights
and remedies will be cumulative.
8. ACKNOWLEDGEMENTS. Employee acknowledges and recognizes that
the enforcement of any of the provisions set forth in Section 5 and/or Exhibit C
will not interfere with Employee's ability to pursue a proper livelihood.
Employee recognizes and agrees that the enforcement of this Employment Agreement
is necessary to ensure the preservation and continuity of the business and good
will of Employer and its affiliates.
9. NOTICES. Any notices, consents, demands, requests,
approvals and other communications to be given under this Employment Agreement
by either party to the other will be deemed to have been duly given if given in
writing and personally delivered or sent by mail, registered or certified,
postage prepaid with return receipt requested, as follows: if to Employer, to
Executive Compensation Committee, Board of Directors of Crescent, 777 Main, Ste.
2100, Xxxx Xxxxx, Xxxxx 00000; or if to Employee, to Xxxx X. Xxxx, 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx 00000.
Notices delivered personally will be deemed communicated as of actual receipt;
mailed notices will be deemed communicated as of three days after mailing.
10. ENTIRE AGREEMENT. Subject to the provisions of Section 22,
Integration, below, this Employment Agreement contains the entire agreement of
the parties hereto and supersedes all prior agreements and understandings, oral
or written between the parties hereto. No modification or amendment of any of
the terms, conditions or provisions herein may be made otherwise than by written
agreement signed by the parties hereto.
11. GOVERNING LAW; VENUE. This Employment Agreement and the
rights and obligations of the parties hereto will be governed, construed and
enforced in accordance with the laws of the State of Texas, without regard to
the principles of
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conflicts of laws thereof. The parties agree that this Employment Agreement
shall be performable in Tarrant County, Texas.
12. PARTIES BOUND; ASSIGNMENT. This Employment Agreement and
the rights and obligations hereunder will be binding upon and inure to the
benefit of Employer and Employee, and their respective successors and assigns.
Employer will have the right to assign this Employment Agreement to Crescent, or
any of its subsidiaries or affiliated entities, or to Employer's successors or
assigns. The terms "successors" and "assigns" will include any person,
corporation, partnership or other entity that buys all or substantially all of
Employer's assets or all of its equity interests, or with which Employer merges
or consolidates. The rights, duties or benefits to Employee hereunder are
personal to him, and no such right or benefit may be assigned by him. The
parties hereto acknowledge and agree that Employer's affiliates are third party
beneficiaries of the covenants and agreements of Employee set forth in Section 6
above.
13. CHOICE OF FORUM. The parties hereto agree that should any
suit, action or proceeding arising out of this Employment Agreement be
instituted by any party hereto (other than a suit, action or proceeding to
enforce or realize upon any final court judgment arising out of this Employment
Agreement), such suit, action or proceeding shall be instituted only in a state
or federal court in Tarrant County, Texas. Each of the parties hereto consents
to the in personam jurisdiction of any such state or federal court in Tarrant
County, Texas and waives any objection to the venue of any suit, action or
proceeding. The parties recognize that courts outside Tarrant County, Texas may
also have jurisdiction over suits, actions or proceedings arising out of this
Employment Agreement, and in the event that any party hereto shall institute a
proceeding involving this Employment Agreement in a jurisdiction outside Tarrant
County, Texas, the party instituting such proceeding shall indemnify any other
party hereto for any losses and expenses that may result from the breach of the
foregoing covenant to institute such proceeding only in a state or federal court
in Tarrant County, Texas, including without limitation or additional expenses
incurred as a result of litigating in another jurisdiction, such as reasonable
fees and expenses of local counsel and travel and lodging expenses for parties,
witnesses, experts and support personnel.
14. SERVICE OF PROCESS. Service of any and all process that
may be served on any party hereto in any suit, action or proceeding arising out
of this Employment Agreement may be made in the manner and to the address set
forth in Section 11 and service thus made shall be taken and held to be valid
personal service upon such party by any party hereto on whose behalf such
service is made.
15. ENFORCEABILITY. If, for any reason, any provision
contained in this Employment Agreement should be held invalid in part by a court
of competent jurisdiction, then it is the intent of each of the parties hereto
that the balance of this Employment Agreement be enforced to the fullest extent
permitted by applicable law. Accordingly, should a court of competent
jurisdiction determine that the scope of any covenant is too broad to be
enforced as written, it is the intent of each of the parties that
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the court should reform such covenant to such narrower scope as it determines
enforceable.
16. WAIVER OF BREACH. The waiver by any party hereto of a
breach of any provision of this Employment Agreement will not operate or be
construed as a waiver of any subsequent breach by any party.
17. CAPTIONS. The captions in this Employment Agreement are
for convenience of reference only and will not limit or otherwise affect any of
the terms or provisions hereof.
18. COSTS. If any action at law or in equity is necessary to
enforce or interpret the terms of this Employment Agreement, the prevailing
party will be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which he or it may be entitled.
19. OTHER OBLIGATIONS. Employee represents and warrants that
he has not as of the execution of this Employment Agreement assumed any
obligations inconsistent with those contained herein.
20. AFFILIATE. An "affiliate" of any party hereto will mean
any person controlling, controlled by or under common control with such party.
21. COUNTERPARTS. This Employment Agreement may be executed in
one or more counterparts, each of which will be deemed an original and all of
which will constitute one and the same instrument, but only one of which need be
produced.
22. INTEGRATION. The parties agree that the Unit Option
Agreements, Restricted Stock Agreements, and Non-Compete Agreements attached
hereto as Exhibits A, B, C, and D, respectively, are an integral part of this
Employment Agreement, are incorporated by reference in their entirety into this
Employment Agreement, and form a significant portion of the consideration for
the Employment Agreement between Employer and Employee. This Employment
Agreement shall be interpreted in conjunction with all Exhibits attached hereto,
and any ambiguities shall be resolved by taking into account the intent of the
Parties that the Employment Agreement and the Exhibits attached hereto are part
of an integrated employment and compensation arrangement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Crescent Real Estate Equities, L.P.:
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Authorized Signature
Employee:
/s/ Xxxx X. Xxxx
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