Exhibit 10.4

 

ANGEL HERRERA

SEPARATION AGREEMENT

 

This Agreement (the “Agreement”) will confirm the arrangements we have discussed
concerning your separation from Campus Crest Communities, Inc. (the “Company” or
“we” or “us”) as a result of the voluntary termination of your employment
effective February 28, 2015. It constitutes our entire understanding regarding
the terms of your separation.

 

1.Separation of Employment. Your last day of employment with the Company will be
February 28, 2015 (your “Separation Date”). As of your Separation Date, you are
voluntarily resigning, are relieved of all further duties and responsibilities,
and are no longer authorized to transact business or incur any expenses,
obligations, or liabilities on behalf of the Company. To formalize your
resignation, you agree to execute the letter of resignation attached hereto as
Exhibit A. However, for ninety (90) days following your Separation Date, you
agree to be available to respond to occasional inquiries or reasonable requests
for assistance from us, which we do not anticipate would require more than an
hour per week on average, related to matters arising during your employment with
the Company.

 

2.Post-Separation Benefits. In exchange for your executing this Agreement and
abiding by its terms, the Company will provide you with the following benefits:

 

·The sum of $122,556.12, less payroll deductions, to be paid within ten days
after the effective date of this Agreement;

 

·The 41,137 shares of restricted Company stock that were granted to you in 2014
will vest fully on your Separation Date;

 

·The Company will cooperate with its benefits carriers to ensure that you
receive all of the benefits to which you are entitled; and

 

·You will be provided with information regarding your right to extend your
Company-provided group health insurance coverage under the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”). The monthly COBRA premium if you choose to
continue your current family medical, dental, and vision coverage will be
$1676.02.

 

The Company agrees that it will state in pertinent part as follows on the Form
8K it is required by law to file following Mr. Herrera’s official resignation:
“On February 20, 2015, Angel Herrera tendered his resignation as Chief Operating
Officer of the Company, effective on February 28, 2015. Mr. Herrera’s
resignation was not the result of any dispute or disagreement with the Company
regarding the Company’s operations, policies or practices, but rather was a
result of Mr. Herrera’s desire to pursue other opportunities closer to his
family’s home in the southwest.”

 

 

 

 

You agree that you will be responsible for any and all costs associated with the
temporary apartment you have been renting in the Charlotte, North Carolina area,
including costs for rent, early termination of the lease, breakage, and security
deposit as well as costs associated with your vacating that apartment and moving
your personal effects back to Texas.

 

The Company shall have the right to offset against any sums payable to you under
this Agreement that are exempt from section 409A of the Internal Revenue Code of
1986, as amended, any amounts you owe the Company as a result of expense account
indebtedness, failure to return Company property, or other advances or debts
due.

 

You acknowledge that the payments and benefits described above and all other
benefits and consideration contained herein are given to you in exchange for
your executing this Agreement and abiding by its terms. You further acknowledge
that the payments and benefits described above are not required by your
Employment Agreement or the Company’s policies and procedures and constitute
value to which you are not already entitled.

 

You will not be eligible to accrue vacation, participate in any retirement or
savings plan, or receive any other employment benefits after your Separation
Date. No further amounts shall be due or owed to you from the Company for or in
any way relating to or connected with your employment with us, except as set
forth above.

 

3.Release of Claims. Except for any claims you may have for workers’
compensation benefits, unemployment compensation benefits, vested pension or
retirement benefits, or nonforfeitable health care, disability, or other similar
welfare benefits (which are not released by this Agreement) and in further
consideration of the benefits we have agreed to provide you, you do hereby
release and forever discharge the Company and its affiliates, subsidiaries,
parent companies, predecessors, successors, and assigns, and all of their
present and former officers, directors, benefit plans and programs, agents,
representatives, shareholders, attorneys, trustees, and employees (hereinafter
collectively referred to as the “Releasees”) from any and all claims, actions,
causes of action, suits, entitlements, liabilities, agreements, damages, losses,
or expenses (including attorney’s fees and costs actually incurred) of any
nature whatsoever, whether known or unknown (hereinafter “Claim” or “Claims”),
that you have, may have had, or may later claim to have had against any of them
for personal injuries, losses or damage to personal property, breach of contract
(express or implied), breach of any covenant of good faith (express or implied),
or any other losses or expenses of any kind (whether arising in tort or contract
or by statute) resulting from anything that has occurred prior to the date you
execute this Agreement. This release includes, but is not limited to, any Claims
for back pay, liquidated damages, compensatory damages, or any other losses or
other damages to you or your property resulting from any claimed violation of
local, state, or federal law, including, for example (but not limited to),
claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e et seq. (prohibiting discrimination on account of race, color, religion,
sex, or national origin); 42 U.S.C. § 1981; the Age Discrimination in Employment
Act (the “ADEA”), 29 U.S.C. § 621 et seq. (prohibiting discrimination on account
of age); the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.
(prohibiting discrimination on account of disabilities); the Uniformed Services
Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4301 et seq.; the
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.; the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.;
Title II of the Genetic Information Nondiscrimination Act of 2008, 42 U.S.C. §
2000ff et seq.; the North Carolina Equal Employment Practices Act, N.C. Gen.
Stat. § 143-422.1 et seq.; the North Carolina Persons With Disabilities
Protection Act, N.C. Gen. Stat. § 168A-1 et seq.; the Occupational Safety and
Health Act of North Carolina, N.C. Gen. Stat. § 95-151; the North Carolina Wage
and Hour Act, N.C. Gen. Stat. § 95-25.1 et seq.; the Texas Commission on Human
Rights Act, Tex. Lab. Code Ann. § 21.001 et seq.; the Texas Equal Pay Law, Tex.
Gov’t Code Ann. § 659.001; the Texas Hazard Communication Act, Tex. Health &
Safety Code Ann. § 502.017(c); any other Claims under federal, state, or local
statutory or common law; or any claim under any Employment Agreement between you
and the Company. The foregoing release of Claims expressly includes a waiver of
any right to recovery for the Claims released herein in any and all private
causes of action and/or charges and/or in any and all complaints filed with, or
by, any governmental agency and/or other person or tribunal. This Agreement does
not, however, waive rights or claims that may arise after the date you sign it
below.

 

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You expressly acknowledge that this Agreement is intended to include in its
effect, without limitation, all Claims which you do not know or suspect to exist
in your favor at the time you sign this Agreement, and that this Agreement
contemplates the extinguishment of any such Claim or Claims. Thus, in order to
effectuate a full and complete release and discharge of the Released Parties,
you expressly waive and relinquish all rights and benefits which you may have
under any state or federal statute or common law principle that would otherwise
limit the effect of this Agreement to Claims known or suspected prior to the
date you sign this Agreement, and do so understanding and acknowledging the
significance and consequences of such specific waiver.

 

The Company hereby releases and forever discharges You from any and all claims,
actions, causes of action, suits, entitlements, liabilities, agreements,
damages, losses, or expenses (including attorney’s fees and costs actually
incurred) of any nature whatsoever, whether known or unknown (hereinafter
“Claim” or “Claims”), that it has, may have had, or may later claim to have had
against You for personal injuries, losses or damage to personal property, breach
of contract (express or implied), breach of any covenant of good faith (express
or implied), or any other losses or expenses of any kind (whether arising in
tort or contract or by statute) resulting from anything that has occurred prior
to the date you execute this Agreement, except that any claims based on conduct
by you that was fraudulent or criminal under applicable law is not covered by
this release. The Company states that it is not currently aware of any such
fraudulent or criminal conduct by you.

 

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4.Affirmations. You affirm that you have not filed, caused to be filed, or are
not presently a party to any claim, complaint, or action against the Company in
any forum or form. You furthermore affirm that you have no known workplace
injuries or occupational diseases and have been provided and/or have not been
denied any leave requested under the Family and Medical Leave Act. You further
affirm that you are not aware of any wrongful, tortious, or criminal action
committed by the Company or its agents. If it is proven at any time hereafter
that any of the above affirmations was false when made, you agree that you shall
be found in breach of the terms of this Agreement.

 

5.Covenant Not to Sue. The Parties agree that, except to the extent such right
may not be waived by law, they will not commence any legal action or lawsuit or
otherwise assert any legal claim seeking relief for any Claim released or waived
under the Release of Claims provision above. This “covenant not to sue” does
not, however, prevent or prohibit you from seeking a judicial determination of
the validity of your Release of Claims under the Age Discrimination in
Employment Act (“ADEA”). In addition, this “covenant not to sue” does not
prevent or prohibit you from filing any administrative complaint or charge
against the Releasees (or any of them) with any federal, state, or local agency,
including, for instance, the U.S. Equal Employment Opportunity Commission or the
U.S. Department of Labor, but you understand that by signing this Agreement, you
will have no right to recover monetary damages or obtain individual relief of
any kind in such proceeding with respect to Claims released or waived by this
Agreement. Similarly, this covenant not to sue does not prevent or prohibit the
Company from bringing a claim against you based on conduct by you that was
fraudulent or criminal under applicable law.

 

6.Non-Admission. This Agreement shall not in any way be construed as an
admission by the Company that it has acted wrongfully with respect to you or any
other person, or that you have any rights whatsoever against the Company.

 

7.Return of Property. You represent that you have returned or agree that you
will return to the Company on or before the Effective Date of this Agreement any
and all Company property in your possession or control, including, but not
limited to all keys, credit cards, computers, cellular telephones, and other
personal items or equipment provided to you by the Company for use during your
employment, together with all written or recorded materials, documents, computer
discs, plans, records, notes, files, drawings, or papers, and any copies
thereof, relating to the affairs of the Company, including all notes or records
relating to clients of the Company. Any severance benefits payable under this
Agreement will not be paid until after you have returned all Company property in
your possession.

 

8.Confidentiality. You agree that you will keep the terms, amount, and fact of
this Agreement completely confidential, and that, except as required by law, as
necessary for the enforcement of this Agreement, or as authorized in writing by
the Company, you will not hereafter disclose any information concerning this
Agreement to anyone other than your immediate family and professional
representatives who will be informed by you of, and must agree to be bound by,
this confidentiality clause before you disclose any information about this
Agreement to them.

 

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9.The parties agree that the Confidentiality and Noncompetition Agreement that
you entered into effective October 27, 2014 remains in effect and is
incorporated herein by reference with the following modifications:

 

·Sections 1(d) and 1(j) are deleted.

 

·The following language is added to Section 1:

 

(d)          “Competitive Business” shall mean the development, construction,
acquisition, sale, marketing or management of facilities whose primary function
and purpose is student housing and/or the provision of third party student
housing services to providers of student housing.

 

and

 

(j)          “Services” shall mean (a) providing managerial, operational or
executive-level oversight, (b) providing strategic guidance, (c) providing any
additional services of the type that Executive performed for Company. You
acknowledge and agree that these are the services that you performed for the
Company.

 

·Section 4 is amended to read as follows:

 

You covenant and agree that during the Restricted Period, in any State of the
United States of America in which the Company conducts business, has purchased
or is under contract to purchase real estate to conduct business, or has
identified specific sites as potential future development opportunities, you
shall not, directly or indirectly whether individually or as a principal,
partner, officer, director, consultant contractor, employee, stockholder or
manager of any person, partnership, corporation limited liability company or any
other entity provide Services for a Competitive Business.

 

·The following language is added as the last sentence of Section 5:

 

This provision (ii) applies to those persons, concerns, or entities that were
actual or potential customers or suppliers of the Company during the time period
of Executive’s employment with the Company and with which Executive or those he
supervised had contact on behalf of the Company.

 

Except as otherwise provided in this Agreement, the Employment Agreement that
you and the Company entered into effective October 27, 2014 is hereby superseded
and shall be null and void, effective immediately.

 

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10.Non-Disparagement. You agree not to make any oral or written statement or
take any other action that disparages or criticizes the Company or its
management or practices, that damages the Company’s good reputation, or that
impairs its normal operations. You understand that this nondisparagement
provision does not apply on occasions when you are subpoenaed or ordered by a
court or other governmental authority to testify or give evidence and must, of
course, respond truthfully, to conduct otherwise protected by the Sarbanes-Oxley
Act, or to conduct or testimony in the context of enforcing the terms of this
Agreement or other rights, powers, privileges, or claims not released by this
Agreement. You also understand that the foregoing nondisparagement provision
does not apply on occasions when you provide truthful information in good faith
to any federal, state, or local governmental body, agency, or official
investigating an alleged violation of any antidiscrimination or other
employment-related law or otherwise gathering information or evidence pursuant
to any official investigation, hearing, trial, or proceeding. Nothing in this
nondisparagement provision is intended in any way to intimidate, coerce, deter,
persuade, or compensate you with respect to providing, withholding, or
restricting any communication whatsoever to the extent prohibited under 18
U.S.C. §§ 201, 1503, or 1512 or under any similar or related provision of state
or federal law.

 

11.Expenses. You agree that you have been reimbursed by the Company for all
reasonable and necessary out-of-pocket travel and other business expenses
incurred by you in accordance with the Company’s policies.

 

12.Consequences of Breach. You agree that you will indemnify and hold the
Releasees harmless from any loss, cost, damage, or expense (including attorneys’
fees) incurred by them arising out of your breach of any portion of this
Agreement. You also understand that your entitlement to and retention of the
benefits we have agreed to provide you herein are expressly conditioned upon
your fulfillment of your promises herein, and you agree, to the extent permitted
or required by law, immediately to return or repay the amounts you have received
from us pursuant to this Agreement in excess of $100.00 upon your breach of any
provision of this Agreement. For the purposes of this paragraph, a subsequent
legal challenge to the validity of your release of claims under the ADEA in this
Agreement will not be considered a breach of this Agreement. However, the
severance benefits paid to you under this Agreement may serve as restitution,
recoupment, and/or setoff in the event you prevail on the merits of such claim.

 

13.Choice of Law and Entire Agreement. This Agreement shall be governed by the
laws of the State of North Carolina, without regard to conflict of laws
principles. This Agreement represents the entire understanding between you and
the Company and supersedes any prior agreement or plan regarding its contents.
Any alteration or modification of this Agreement shall not be valid unless in
writing and signed by all parties.

 

14.Arbitration. Any and all disputes relating to your employment with the
Company, the termination of that employment, and the parties’ compliance with or
alleged breach of this Agreement are subject to arbitration by both you and the
Company in accordance with the arbitration provisions set forth in Paragraphs 13
and 17 of the Employment Agreement between you and the Company entered into on
October 27, 2014, which paragraphs are hereby incorporated by reference.

 

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15.Severability. The provisions of this Agreement are severable, and if any term
of this Agreement is held to be illegal, invalid, or unenforceable by a court of
competent jurisdiction, the remaining terms shall remain in full force and
effect.

 

16.Consideration Period. Because the arrangements discussed in this Agreement
affect important rights and obligations, we advise you to consult with an
attorney before you agree to the terms set forth herein. You have twenty-one
(21) days from the date you receive this Agreement within which to consider it,
and you may take as much of that time as you wish before signing. If you decide
to accept the benefits offered herein, you must sign this Agreement on or before
the expiration of the twenty-one (21)-day period and return it promptly to Dan
Simmons at the Company at simmons1970@att.net, whose address is Campus Crest
Real Estate Management, 2100 Rexford Road, #414, Charlotte, NC 28211. If you do
not wish to accept the terms of this Agreement, you do not have to do anything.

 

17.Revocation Rights. For a period of up to and including seven (7) days after
the date you sign this Agreement, you may revoke it entirely. No rights or
obligations contained in this Agreement shall become enforceable before the end
of the seven-day revocation period. If you decide to revoke the Agreement, you
must deliver to Mr. Simmons at the contact address described in Paragraph 16
above a signed notice of revocation on or before the last day of this seven-day
period. Upon delivery of a notice of revocation to the Company, this Agreement
shall be canceled and void, and neither you nor the Company shall have any
rights or obligations arising under it.

 

18.Effective Date. This Agreement shall become effective (the “Effective Date”)
eight (8) days after the date you execute it below and have returned all Company
property in your possession, unless it is earlier revoked by you pursuant to the
provisions set forth in the “Revocation Rights” section of this Agreement.

 

19.Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Company and its respective successors and assigns, and upon you
and any of your heirs, personal representatives and assigns, except that my
duties hereunder may not be delegated.

 

20.Interpretation. The language used in this Amended Agreement shall not be
construed in favor of or against either of the Parties, but shall be construed
as if both of the Parties prepared this Amended Agreement. The language used in
this Amended Agreement shall be deemed to be the language chosen by the Parties
to express their mutual intent, and no rule of strict construction shall be
applied against any such Party.

 

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21.Section 409A and Other Tax Treatment. This Agreement is intended comply with
the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended, and the Department of Treasury guidance thereunder (“Section 409A”).
This Agreement shall be interpreted and administered to maximize the exemptions
from Section 409A for the compensation payable pursuant to this Agreement and,
to the extent the Agreement provides for compensation that is subject to Section
409A, to comply with Section 409A and to avoid the imposition of tax, interest
and/or penalties upon you under Section 409A. The Company does not, however,
assume any economic burdens associated with Section 409A or other tax treatment
of the compensation and benefits provided under this Agreement. In particular,
the Company will not be liable to you for any tax, interest, or penalties you
may owe as a result of this Agreement. Each discrete payment described in the
first and fourth bullets of Section 2 is a separate payment for purposes of
Section 409A and is intended to be exempt from Section 409A as a short-term
deferral within the meaning of the final regulations under Section 409A. To the
extent necessary to comply with Section 409A, references in this Agreement to
“termination of employment” or “terminates employment” (and similar references)
shall have the same meaning as “separation from service” within the meaning of
Section 409A (a “Separation from Service”), and no payment subject to Section
409A that is payable upon a termination of employment shall be paid unless and
until (and not later than applicable in compliance with Section 409A) you incur
a Separation from Service. In addition, if you are a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) at the time of your Separation from
Service, any payment subject to Section 409A that would otherwise have been
payable on account of, and within the first six months following, your
Separation from Service will become payable on the first business day after six
months following the Separation Date or, if earlier, the date of your death.

 

22.Acknowledgments. If the terms of this Agreement correctly set forth our
agreement, please so indicate by signing in the appropriate space below. Your
signature will be an acknowledgment that no other promise or agreement of any
kind has been made to you by the Company to cause you to execute this Agreement,
that you had twenty-one (21) days to review this Agreement and to consult with
an attorney or other person of your choosing about its terms before signing it,
that the only consideration for your signature is as indicated above, that you
fully understand and accept this Agreement, that you are not coerced into
signing it, and that you signed it knowingly and voluntarily because it is
satisfactory to you.

 

CAMPUS CREST COMMUNITIES, INC.

 

By: /s/ Richard Kahlbaugh     Richard Kahlbaugh     Interim Chief Executive
Officer  

 

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I have carefully read the above Confidential Separation Agreement and General
Release, understand the meaning and intent thereof, and voluntarily agree to its
terms this 20th day of February, 2015.

 

/s/ Angel Herrera   Angel Herrera  

 

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EXHIBIT A

 

6613 Riverhill Drive

Plano, TX 75024

 

February 20, 2015

 

Mr. Richard Kahlbaugh

Interim Chief Executive Officer

Campus Crest Group

2100 Rexford Road

Charlotte, NC 28211

 

Dear Rick:

 

I have made the decision to voluntarily resign as the Chief Operating Officer of
Campus Crest Group, effective on February 28, 2015. I wish you and the Company
only the best.

 

Sincerely,

 

Angel Herrera

 

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