**Exhibit 10.14**

 

January 9, 2004

 

 

Michael J. Lafitte

[XXXXXXXXXX]

[XXXXXXXXXX]

 

Re:              Employment Agreement

 

Dear Michael:

 

We are pleased to present you with thisemployment letter agreement (“Agreement”) which sets forth the terms upon whichyou 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 thisAgreement, we agree to continue to employ you, and you agree to continue to beemployed by us, for a period (the “Employment Period”) commencing on thedate hereof and expiring December 31, 2006; provided, that on December 31, 2006and on each subsequent December 31, this Agreement will automatically beextended for one additional year unless, during the four****month period beginning March 1 andending July 1 immediately prior to the next scheduled extension, you or wewill have given written notice (a “Non-Renewal Notice”) that theEmployment 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 President ofGlobal Services of the Company and from time to time will serve in such otherpositions as the Board of Directors of the Company (the “Board”) mayfrom time to time determine.  In sodoing, you will have such powers and duties (including holding officerpositions with one or more Subsidiaries of the Company) as may be assigned fromtime to time by the Board.  During theEmployment Period, you will devote your full business time, energy, and bestefforts to the business and affairs of the Company.  You agree not to engage, directly or indirectly, in any otherbusiness, investment, or activity that interferes with your performance of yourduties under this Agreement, is contrary to the interests of the Company orrequires any portion of your business time, provided, however, that (i) you mayserve on the board of directors (or similar governing body) of one publiccompany if the Board has provided prior approval for such service, and (ii)unless it would unreasonably interfere with your performance of your duties tothe Company, you may serve on the board of directors (or similar governingbody) of no more than one other organization that does not directly orindirectly conduct a Competing Business (as defined herein), in each case whichboards shall be in addition to the boards of directors (or similar governingbodies) on which you serve at the request of the Company.  The location of your principal work officewill

 

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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 receivean annual base salary (“Annual Base Salary”), payable in accordance withthe customary payroll practices of the Company for executive officers.  The Board, in its sole discretion, may atany time increase the amount of the Annual Base Salary as it may deemappropriate.  From time to time prior toa Change in Control, and following the second anniversary of such Change inControl, the Board may decrease your Annual Base Salary in the same manner andto the same proportional extent as the average (mean) percentage decrease inthe annual base salaries of all other members of the Executive OfficerCommittee.  The term “Annual BaseSalary” will refer to the Annual Base Salary as it may be so adjusted fromtime to time.  In addition, during theEmployment Period, you will (i) be eligible to receive such annual bonuspayments, if any, as the Board or the Compensation Committee of the Board mayspecify in its sole discretion (each an “Annual Bonus”), subject to anyterms or conditions as may be established by the Board or its CompensationCommittee, provided, that you will be provided an individual “annual incentiveplan” for each year and any performance criteria included in such incentiveplan must be reasonably achievable**,**(ii) be entitled to participate in all incentive, savings, stock option, profitsharing and retirement plans, practices, policies and programs applicablegenerally 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 insurancepolicies, all death and disability plans, practices, policies and programs andall other welfare benefit plans, practices, policies and programs which are ineach such case applicable generally to other executives of the Company (“WelfarePlans”), subject to all of the terms and conditions of such WelfarePlans.  Subject to Sections 4 and 5, anyAnnual Bonus awarded to you by the Board or the Compensation Committee of theBoard 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 “ExecutiveOfficer Committee” will refer to the Company’s Executive Officer Committee,any successor committee thereto, and if there is no longer such a committee atthe time in question, then a comparable group of the Company’s executiveofficers (as defined in Rule 3b-7 promulgated under the Securities Exchange Actof 1934).

 

(c)           Vesting of EquityAwards.  Notwithstanding theprovisions of any plan or agreement governing such an Award (as defined in Section4(c)), all Awards granted to you that remain outstanding and unvestedimmediately prior to the occurrence of a Change in Control (as defined in Section4(d)(i)) automatically shall vest in full upon the occurrence of the Changein Control.

 

**3.****             Termination of Employment**.

 

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

 

(b)           Disability.  If your Disability occurs, we may give you awritten Notice of Termination (herein so called), and your employment willterminate effective 30 days later if you have not returned to perform, with orwithout reasonable accommodation, the essential functions of your position on afull-time basis.  “Disability” means your inability, due tophysical or mental incapacity or impairment, to perform the material duties ofyour position(s) with the Company

 

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forany 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 hereunderat any time (A), subject to Section 6(b), for Cause or (B) for anyreason other than Cause.  “Cause”means (i) your continued failure to substantially perform your obligations andduties, as determined in good faith by the Board, and which is not remediedwithin 30 days after your receipt of written notice thereof; (ii) commission ofan act of fraud, embezzlement, misappropriation, willful misconduct or breachof fiduciary duty against the Company or other conduct materially harmful orpotentially materially harmful to the Company’s best interest, as determined ingood faith by the Board; (iii) material breach of Section 7 or 8which is not cured within 30 days after your receipt of notice thereof, if suchbreach is capable of being cured; (iv) conviction, plea of no contest or nolocontendere, deferred adjudication or unadjudicated probation for any felony orany crime involving moral turpitude; (v) failure to carry out, or comply with,in any material respect, any lawful directive of the Board consistent with theterms of this Agreement, which is not remedied within 30 days after receipt ofwritten notice thereof; or (vi) unlawful use (including being under theinfluence) or possession of illegal drugs.

 

(d)           Resignation by You.  You may terminate your employment hereunderat any time (i) subject to Section 6(a), for Good Reason or (ii) withoutGood Reason.  Prior to a Change inControl and following the second anniversary of such Change in Control, “GoodReason” means (A) any material diminution (considering all previousdiminutions during the Employment Period in the aggregate, including allprevious diminutions during the Employment Period which are not material whenconsidered separately) in your position, authority, powers, functions, dutiesor responsibilities; provided,however, that Good Reason may not be asserted by you under this clause (A) aftera Non-Renewal Notice has been given; (B) the relocation or transfer ofyour principal office to a location more than 50 miles from your regular workaddress as of the date hereof without your consent; (C) any reduction in yourAnnual Base Salary to an amount that is less than 90% of the highest AnnualBase Salary in effect for you during the Employment Period; (D) anyreduction in your Annual Bonus Target from your Annual Bonus Target for thecalendar year 2003; (E) the receipt by you of Awards in any calendar year thatdiffer (as to number, terms or type of Awards), in a manner adverse to you,from the Award of  57,500 stock optionsreceived by certain members of the Executive Officer Committee in calendar year2002, unless either (1) such adverse differences are in the same manner and tothe same proportional extent as the average (mean) changes made to the Awardsreceived by all other members of the Executive Officer Committee in suchcalendar year or (2) such adverse differences are directly related to theBoard’s good faith assessment of your relative contribution to the Company oryour relative performance as compared to other members of the Executive OfficerCommittee; provided, however, that in the case of adverse differences pursuantto clause (2), the receipt by you of a number of any type of Award in suchcalendar year that is less than one-half of the Final Average Number of Awardsof such type for such calendar year shall constitute Good Reason; or (F) anyfailure by the Company to comply with any of the provisions of Section 2(b)which failure is not contemplated previously within this definition, excludingin all such cases any isolated, insubstantial and inadvertent failure notoccurring in bad faith and which is remedied by the Company promptly afterreceipt of notice thereof given by you. Upon or after a Change in Control but prior to the second anniversary ofsuch Change in Control, “Good Reason” means (A) any materialdiminution (considering all previous diminutions during the Employment Periodin the aggregate, including all previous diminutions during the

 

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Employment Period which are not material when considered separately) inyour position authority, powers, functions, duties or responsibilities ineffect immediately prior to the Change in Control (subject to the sameexclusions as provided above prior to a Change in Control and following thesecond anniversary of such Change in Control); (B) any reduction in yourAnnual Base Salary; (C) (i) any reduction in your Annual Bonus Targetfrom your Annual Bonus Target for the calendar year 2003 or (ii) theawarding to you of an Annual Bonus that is less in amount than the Annual Bonusawarded to you for the calendar year immediately preceding the year duringwhich the Change in Control occurs; (D) the receipt by you of Awards inany calendar year that differ (as to number, terms or type of Awards), in amanner adverse to you, from the Award of 57,500 stock options received by certain members of the ExecutiveOfficer Committee in calendar year 2002, unless either (1) such adversedifferences are in the same manner and to the same proportional extent as theaverage (mean) changes made to the Awards received by all other members of theExecutive Officer Committee in such calendar year or (2) such adversedifferences are directly related to the Board’s good faith assessment of yourrelative contribution to the Company or your relative performance as comparedto other members of the Executive Officer Committee; provided, however, that inthe case of adverse differences pursuant to clause (2), the receipt by you of anumber of any type of Award in such calendar year that is less than one-half ofthe Final Average Number of Awards of such type for such calendar year shallconstitute Good Reason; or (E) any failure by the Company to comply withany of the provisions of Section  2(b) which failure is notcontemplated previously within this definition; or (F) the relocation ortransfer of your principal office to a location more than 50 miles from yourregular work address as of the date hereof without your consent, excluding inall such cases any isolated, insubstantial and inadvertent failure notoccurring in bad faith and which is remedied by the Company promptly afterreceipt of notice thereof given by you. As used in this Agreement:

 

(i)            “AnnualBonus Target” means the percentage of your Annual Base Salary that isauthorized to be awarded to you as an Annual Bonus if certain performancecriteria are met.

 

(ii)           “FinalAverage Number of Awards” means, for any calendar year and for each type ofAward granted during such year, the quotient (rounded up to the nearest wholenumber) equal to the aggregate number of Awards of such type received by allmembers of the Adjusted EOC Group in such calendar year, divided by the numberof members of the Adjusted EOC Group in such calendar year.

 

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

 

(iv)          “OutlierAward Recipient” means, for any calendar year and for each type of Awardgranted during such year, each member of the Executive Officer

 

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Committee (excluding the Chief ExecutiveOfficer of the Company) who is eligible to receive Awards of such type in suchcalendar year and who receives a number of Awards of such type in such calendaryear 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.

 

(v)           “PreliminaryAverage Number of Awards” means, for any calendar year and for each type ofAward granted during such year, the quotient (rounded up to the nearest wholenumber) equal to the aggregate number of Awards of such type received by allmembers of the Executive Officer Committee (excluding the Chief ExecutiveOfficer of the Company) in such calendar year, divided by the number of membersof the Executive Officer Committee (excluding the Chief Executive Officer ofthe Company) who are eligible to receive Awards of such type in such calendaryear.

 

(vi)          Thephrase “number of Awards” refers to the underlying number of shares of capitalstock of the Company to which the applicable Award relates.

 

(e)           Expiration of Term.  Your employment will end at the expirationof the Employment Period as a result of any Non-Renewal.  Except as described in Sections 3(e)(i)and (ii), a termination of your employment under this Agreement due tothe expiration of the Employment Period as a result of any Non-Renewal will notbe deemed a termination of your employment entitling you to any benefitsdescribed in Section 4 or Section 5.

 

(i)            Ifthe Company delivers a Non-Renewal Notice to you, upon the effectiveness ofsuch Non-Renewal you will be entitled to receive (i) an amount equal to yourPro Rata Bonus, which will be paid at such time as the Company pays its othermembers of the Executive Officer Committee their annual cash incentive bonuseswith respect to the calendar year in which termination occurs, (ii) theseverance or separation benefits (including continuation of any welfarebenefits) provided generally by us to the members of the Executive OfficerCommittee under our general policies in effect from time to time upontermination by the Company of their employment (excluding any other severance orseparation benefits available to any member of the Executive Officer Committeepursuant to an employment agreement and not under our general policies ineffect from time to time), and (iii) the other compensation and benefitsdescribed in Section 4(b).

 

(ii)           Ifany 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 asthe Company pays its other members of the Executive Officer Committee theirannual cash incentive bonuses with respect to the calendar year in whichtermination occurs, and (ii) the other compensation and benefits described in Section4(b) upon the effectiveness of such Non-Renewal.

 

**4.****             Compensation UponTermination Prior to a Change in Control and After the Second Anniversary ofsuch Change in Control**.  Priorto a Change in Control and after the second anniversary of such Change inControl, conditioned on the effectiveness of a Release signed by you or yourlegal representative, you will be entitled to the following compensation fromthe Company upon the termination of your employment, which is in lieu of anyother

 

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severance pay or employment benefits to which you might otherwise beentitled (whether contractual, under a severance plan, the WARN Act, any otherapplicable law, or otherwise):

 

(a)           Death or Disability.  If your employment is terminated by reasonof your death or Disability, the Company will pay you or your legalrepresentative, as applicable, (A) in a cash lump sum within thirty (30) daysafter the effective date of the Release, the following amounts:  (1) the sum of your unpaid Annual BaseSalary through the date of termination and any compensation previously deferredby you (together with any accrued interest or earnings thereon) (“AccruedObligations”); and (2) the amount of any unpaid Annual Bonus that wasawarded to you prior to the date of termination; (B) any amounts arisingfrom your participation in any Investment Plan (“Accrued Investments”),which amounts will be payable in accordance with the terms and conditions ofsuch Investment Plan; (C) any amounts to which you are entitled from yourparticipation in, or benefits under, any Welfare Plan (“Accrued WelfareBenefits”), which amounts will be payable in accordance with the terms andconditions of such Welfare Plan; and (D) an amount equal to your Pro RataBonus, which will be paid at such time as the Company pays its other members ofthe Executive Officer Committee their annual cash incentive bonuses withrespect to the calendar year in which termination of your employmentoccurs.  “Pro Rata Bonus” meansthe amount equal to the product of (i) your Annual Bonus Target for thecalendar year in which your employment is terminated (or your Annual BonusTarget for the immediately preceding year if you resign for Good Reason asdefined in the first clause (D) or the second clause (C)(i) of Section3(d)), multiplied by (ii) the amount of your Annual Base Salary for thecalendar year in which your employment is terminated (or the highest AnnualBase Salary to which you were entitled during the twelve months immediatelypreceding the date of termination if you resign for Good Reason as defined inthe first clause (C) or the second clause (B) of Section 3(d)), multipliedby (iii) the average (mean) percentage of annual cash incentive bonustargets actually paid as bonuses to the members of the Executive OfficerCommittee as a group for such year, and multiplied by (iv) a fraction, thenumerator of which is the number of days that have elapsed in such calendaryear 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 andyour legal representatives, as applicable, will forfeit all rights to any othercompensation.

 

(b)           For Cause;Resignation by You Without Good Reason; Non-Renewal Election by You or theCompany.  If your employment isterminated by us for Cause or by you without Good Reason or due to aNon-Renewal election by us or you, we will have no further obligations to youother than as set forth in Section 3(e), if applicable, and theobligation for payment of (i) Accrued Obligations (which will be payable withinthe time period set forth in Section 4(a)(A) above), (ii) theAccrued Investments and the Accrued Welfare Benefits (which will be payable inaccordance with the terms and conditions of the Investment Plans and theWelfare Plans, as applicable), and (iii) the amount of any unpaid Annual Bonusthat was awarded to you prior to the date of termination (which will be payablewithin 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 bythe Company for Cause or due to your resignation without Good Reason or aNon-Renewal election by us or you, you will forfeit all rights to any othercompensation.

 

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

 

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(i)            acash lump sum within thirty (30) days after the effective date of the Releaseequal to the aggregate of the following amounts:  (A) the Accrued Obligations; (B) an amount equal to one andone-half (1.5) multiplied by the sum of (x) the highest Annual Base Salary towhich you were entitled during the twelve months immediately preceding the dateof termination, and (y) the sum of (i) one-half of your average (mean) AnnualBonus awarded to you for the three years preceding termination, plus(ii) one-half of the product of your current Annual Bonus Target (or yourAnnual Bonus Target for the immediately preceding year if you resign for GoodReason as defined in the first clause (D) of Section 3(d)), multiplied by theamount of your Annual Base Salary for the calendar year in which youremployment is terminated (or the highest Annual Base Salary to which you wereentitled during the twelve months immediately preceding the date of terminationif you resign for Good Reason as defined in the first clause (C) of Section3(d)); and (C) the amount of any unpaid Annual Bonus that was awarded to you priorto the date of termination;

 

(ii)           anamount equal to your Pro Rata Bonus, which will be paid at such time as theCompany pays its other members of the Executive Officer Committee their annualcash incentive bonuses with respect to the calendar year in which terminationof your employment occurs;

 

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

 

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

 

(v)           uponyour request and at the Company’s sole cost and expense, your enrollment in anoutplacement program with a placement agency selected by the Company, andreasonably acceptable to you, for a period of up to twelve months, commencingon the date of termination.

 

Notwithstanding the provisions of any plan oragreement governing such an Award, the Company also will continue to vest allof your outstanding Awards that would have otherwise vested during the eighteen(18) month period beginning on the date of termination and such Awards willcontinue to vest and, if applicable, be exercisable during such eighteen (18)month

 

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period; provided, that nothing set forth herein shall result in anextension of the term of any Award beyondthe term of the Award that would be applicable absent any termination of youremployment; provided further, however, that, in the case of atermination of your employment pursuant to this Section 4(c), if theterms of the plan or agreement governing such Award are more favorable to youas to vesting or exercisability than the terms of this paragraph, then the morefavorable term(s) of such Award agreement or plan (in lieu of the correspondingless favorable term(s) in this paragraph) shall govern the vesting orexercisability, as the case may be, of such Award upon your termination. “Award”means any option to acquire common stock, restricted stock award, stockappreciation right or similar equity-based award granted under the TrammellCrow Long-Term Incentive Plan or any other option or equity-based incentiveplan sponsored by the Company.  Exceptas described in this Section 4(c), in the event of your termination byus without Cause or by you for Good Reason, you will forfeit all rights to anyother compensation.

 

(d)           As used in thisAgreement:

 

(i)            “Changein Control” has the meaning given such term in the Trammell Crow Long-TermIncentive Plan (as such plan is in effect on the 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 Actof 1934 or any similar successor rule thereto) that has been approved by theBoard and subsequent to which you are part of a group (within the meaning ofSection 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 or anysimilar successor rule thereto) that owns more than 50%, respectively, of thethen outstanding shares of common stock and the combined voting power of thethen outstanding voting securities entitled to vote generally in the electionof 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 youremployment for Good Reason or your employment is terminated by the Companywithout Cause and a Change in Control occurs within 180 days after suchtermination (excluding a Change in Control that occurs pursuant to anunsolicited tender or exchange offer by any person, in response to which theCompany does not recommend acceptance of the person’s tender or exchangeoffer), then for all purposes hereof, the date of the Change of Control withrespect to your employment shall mean the date immediately prior to suchtermination; provided, further that notwithstanding that any such transactiondoes not constitute a Change in Control as defined in the LTIP, a Change inControl shall be deemed to have occurred for all purposes under this Agreementupon either (A) the consummation of a Business Combination (as defined in theLTIP) with a National Competitor, unless, following such Business Combination,the conditions in clauses (B) and (C) of Section 1.6 (iii) of the LTIPare satisfied and all or substantially all of the individuals and entities whowere the beneficial owners of, respectively, the Outstanding Corporation CommonStock and Outstanding Corporation Voting Securities (each as defined in theLTIP) immediately prior to such Business Combination beneficially own, directlyor indirectly, more than 60%, respectively, of the then outstanding shares ofcommon stock and the combined voting power of the then outstanding votingsecurities entitled to vote generally in the election of directors of thecorporation resulting from such Business Combination (including, withoutlimitation, a corporation which as a result of such transaction owns theCompany, or all or substantially all of the Company’s assets either directly orthrough one or more

 

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subsidiaries)in substantially the same proportions as their ownership, immediately prior tosuch Business Combination, of the Outstanding Corporation Common Stock andOutstanding Corporation Voting Securities, as the case may be, or (B) theacquisition by any National Competitor (or any group (as defined in the LTIP)of which a National Competitor is a controlling (within the meaning of Rule12b-2 promulgated under the Securities Exchange Act of 1934) member of thegroup) of beneficial ownership (within the meaning of Rule 13d-3 promulgatedunder the Securities Exchange Act of 1934) of 40% or more of either theOutstanding Corporation Common Stock or the Outstanding Corporation VotingSecurities.  By way of clarification,any transaction with a National Competitor that constitutes a Change in Controlas defined in the LTIP shall be considered a Change in Control for all purposesunder this Agreement.

 

(ii)           “NationalCompetitor” 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 orWithin Two Years After a Change in Control**.  After a Change in Control and on or beforethe second anniversary of such Change in Control, conditioned on theeffectiveness of a Release signed by you or your legal representative, you willbe entitled to the following compensation from the Company upon termination ofyour employment (including a termination resulting from the delivery of aNon-Renewal Notice by the Company or you during such two-year period), whichshall be in lieu of any other severance pay or employment benefits to which youmight otherwise be entitled (whether contractual, under a severance plan, theWARN Act, any other applicable law, or otherwise):

 

(a)           Death or Disability.  If your employment is terminated by reasonof your death or Disability, the Company will pay you or your legalrepresentative, as applicable, (A) in a cash lump sum within thirty (30) daysafter the effective date of the Release, the following amounts:  (1) the Accrued Obligations; and (2) theamount of any unpaid Annual Bonus that was awarded to you prior to the date oftermination; (B) the Accrued Investments, which amounts will be payable inaccordance with the terms and conditions of the Investment Plans; (C) theAccrued Welfare Benefits, which amounts will be payable in accordance with theterms and conditions of the Welfare Plans; and (D) an amount equal to your ProRata Bonus, which will be paid at such time as the Company pays its othermembers of the Executive Officer Committee their annual cash incentive bonuseswith respect to the calendar year in which termination of your employmentoccurs.  Except as described in this Section5(a), in the event of your termination by reason of your death orDisability, you and your legal representatives, as applicable, will forfeit allrights to any other compensation.

 

(b)           For Cause;Resignation by You Without Good Reason; Non-Renewal Election by You or theCompany.  If your employment isterminated by us for Cause or by you without Good Reason or due to aNon-Renewal election by us or you, we will have no further obligations to youother than as set forth in Section 3(e), if applicable, and forpayment of (i) Accrued Obligations (which will be payable within the timeperiod set forth in Section 5(a)(A) above), (ii) the AccruedInvestments and the Accrued Welfare Benefits (which will be payable inaccordance with the terms and conditions of the Investment Plans and theWelfare Plans, as applicable), and (iii) the amount of any unpaid Annual Bonusthat was awarded to you prior to

 

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the date of termination (which will be payable within the time periodset forth in Section 5(a)(A) above).  Except as described in this Section 5(b) or in Section3(e), if applicable, in the event of your termination by the Company forCause or due to your resignation without Good Reason or a Non-Renewal electionby us or you, you will forfeit all rights to any other compensation.

 

(c)           Without Cause;Resignation for Good Reason.  Ifyour employment is terminated by the Company without Cause or by you for GoodReason (taking into account in each such case the definition of Change inControl), then, in lieu of any other severance pay or benefits, and conditionedon the effectiveness of a Release signed by you, the Company will pay orprovide to you:

 

(i)            acash lump sum within thirty (30) days after the effective date of the Releaseequal to the aggregate of the following amounts:  (A) the Accrued Obligations; (B) an amount equal to two andone-half (2.5) multiplied by the sum of (x) the highest Annual Base Salary towhich you were entitled during the twelve months immediately preceding the dateof termination, and (y) the sum of (i) one-half of your average (mean) AnnualBonus awarded to you for the three years preceding termination (or the three yearspreceding the year to which the Annual Bonus in question relates if you resignfor 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 yourAnnual Bonus Target for the immediately preceding year if you resign for GoodReason as defined in the second clause (C)(i) of Section 3(d)), multipliedby the amount of your Annual Base Salary for the calendar year in which youremployment is terminated (or the highest Annual Base Salary to which you wereentitled during the twelve months immediately preceding the date of terminationif you resign for Good Reason as defined in the second clause (B) of Section3(d)); and (C) the amount of any unpaid Annual Bonus that was awarded to youprior to the date of termination; provided, however, that if the Company failsto 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 paymentthe Company is obligated to make pursuant to this Section 5(c)(i) shallautomatically be increased by twenty-five percent (25%);

 

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

 

(iii)          acash lump sum within thirty (30) days after the effective date of the Releaseequal to the sum of (1) the unvested portion of your Matching ContributionAccount under the Company’s Retirement Savings Plan, plus (2) the product of(x) two and one-half (2.5) multiplied times (y) the Matching Contribution youreceived for the calendar year ended prior to the calendar year in which theChange in Control occurs;

 

(iv)          ifyou are entitled on the date of termination to coverage under the healthcareportion of the Health Plan, continuation of such coverage for a period endingon the 180th day following the second (2nd)****anniversaryof the date of termination, at the active employee cost payable by you withrespect to those costs paid by you prior to such termination.  Provided, however, that this coverage willcount towards the depletion of any continued health care coverage rights thatyou and your dependents may have

 

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pursuant toCOBRA.  Provided further, that you oryour dependents’ rights to continued health care coverage pursuant to thisSection will terminate at the time you or your dependents become covered, asdescribed in COBRA, under another group health plan, and will also terminate asof the date the Company ceases to provide coverage to its senior executivesgenerally under any such Health Plan;

 

(v)           anamount equal to your Pro Rata Bonus, which will be paid at such time as theCompany pays its other members of the Executive Officer Committee their annualcash incentive bonuses with respect to the calendar year in which terminationoccurs; and

 

(vi)          uponyour request and at the Company’s sole cost and expense, your enrollment in anoutplacement program with a placement agency selected by the Company, andreasonably acceptable to you, for a period of up to twelve months, commencingon the effective date of the Release.

 

Notwithstanding the provisions of any plan oragreement governing such an Award and without limiting Section 2(c), (A)the Company will also continue to vest all of your outstanding Awards grantedon or after a Change in Control that would have otherwise vested during theeighteen (18) month period beginning on the date of termination and such Awardswill continue to vest and, if applicable, be exercisable during such eighteen(18) month period and (B) all of your outstanding Awards that are vestedimmediately prior to the date of termination shall be exercisable during the eighteen(18) month period beginning on the date of termination; provided, however, thatnothing set forth herein shall result in an extension of the term of any Awardbeyond the term of the Award that would be applicable absent any termination ofyour employment; provided, further, however, that, in the case of a terminationof your employment pursuant to this Section 5(c), if the terms of theplan or agreement governing such Award are more favorable to you as to vestingor exercisability than the terms of this paragraph, then the more favorableterm(s) of such Award agreement or plan (in lieu of the corresponding lessfavorable term(s) in this paragraph) shall govern the vesting orexercisability, 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 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.

 

**6.****             Other Provisions Relating to Termination**.

 

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

 

(b)           Cause.  Upon the Company learning of any eventdescribed in the definition of Cause, we may terminate your employment forCause by giving a Notice of

 

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Termination (describing, if applicable, the action required to cure thebasis for termination) to you within 60 days thereafter. If we do not give youa Notice of Termination within 60 days after learning of an event giving riseto Cause, then this Agreement will remain in effect and, without any furtheract on our part, we will have waived our right to terminate your employment forCause in respect of such event.

 

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

 

(d)           Release and OtherAgreements.  Notwithstanding anyother provision in this Agreement to the contrary, as a condition to receivingthe benefits described in this Agreement, upon any termination of youremployment hereunder you hereby agree to execute (and not revoke) a release insubstantially the form attached hereto as Exhibit A (the “Release”) andsuch other documents and agreements as required by the Company, in the form andpursuant to the procedures reasonably established by the Company.  For purposes of this Agreement, the Releasewill be considered to have been executed by you if it is signed by your legalrepresentative in the case of your legal incompetence or on behalf of yourestate in the case of your death.  Uponyour execution and delivery of the Release, the Company will also promptlyexecute and deliver the Release.

 

**7.****             Confidential Information**.

 

(a)           You acknowledge thatthe Company has trade, business and financial secrets and other confidentialand proprietary information regarding the Company and its business, in whateverform, tangible or intangible (collectively, the “Confidential Information”),and that during the course of your employment with the Company you havereceived, will receive or will contribute to the Confidential Information.  Confidential Information includes salesmaterials, technical information, processes and compilations of information,records, specifications and information concerning customers, prospectivecustomers or vendors, customer and prospective customer lists, and informationregarding methods of doing business. However, Confidential Information does not include information that(i) is obtained by you from a source other than the Company or itsaffiliates who is not under a duty of non-disclosure to the Company or suchaffiliate or (ii) becomes generally available to the public other thanthrough disclosure by you in violation of the provisions of this Agreement.

 

(b)           You are aware of thosepolicies implemented by the Company to keep its Confidential Informationsecret.  You acknowledge that the ConfidentialInformation has been developed or acquired by the Company through theexpenditure of substantial time, effort and money and provides the Company withan advantage over competitors who do not know or use such ConfidentialInformation.

 

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(c)           During and followingyour employment by the Company, you will hold in confidence and will notdirectly or indirectly disclose, use, copy, make lists of, or make available toothers any Confidential Information except in the good faith performance ofyour duties to the Company or to the extent authorized in writing by the Boardor 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 compeldisclosure) of any and all attempts to compel disclosure of any ConfidentialInformation, in such a manner so as to provide the Company with written noticewithin one (1) business day after you are informed that such disclosure isbeing or will be compelled.

 

(d)           You further agree notto use any Confidential Information for the benefit of any person or entityother than the Company.

 

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

 

(f)            Notwithstandinganything 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 taxstructure of the transactions contemplated in this Agreement and all materialsof any kind (including opinions and other tax analyses) that are provided toyou relating to such tax treatment and tax structure.  For this purpose, “tax structure” is limitedto facts relevant to the U.S. federal income tax treatment of the transactionscontemplated in this Agreement and does not include information relating to theidentity of the parties hereto.

 

**8.****             Non-Competition; Non-Solicitation**.

 

(a)           You acknowledge andagree that your use of Confidential Information and our lists of, andinformation concerning, customers and prospective customers in the conduct ofbusiness on behalf of a competitor of the Company would constitute unfaircompetition with the Company and would adversely affect the business goodwillof the Company.  Accordingly, as amaterial inducement to the Company to enter into this Agreement; to protect theCompany’s Confidential Information, including lists of, and informationconcerning, customers and prospective customers of the Company, that may bedisclosed or entrusted to you (the disclosure of which by you in violation ofthis Agreement would adversely affect the business goodwill of the Company),the business goodwill of the Company that may be developed in you and thebusiness opportunities that may be disclosed or entrusted to you by theCompany; in consideration for the compensation and other benefits payablehereunder to you, for the benefits to you of having access to ConfidentialInformation, including lists of, and information concerning, customers andprospective customers of the Company, during the Employment Period (thedisclosure of which by you in violation of this Agreement would adversely affectthe business goodwill of the Company); and for other good and valuableconsideration, you hereby covenant and agree that, during the Term ofNon-Competition, you will not directly or indirectly, individually or as anofficer, director, manager, employee, shareholder, consultant, contractor,partner, member, joint venturer, agent, equity owner or in any capacitywhatsoever:

 

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

 

(ii)           recruit,hire, assist in hiring, attempt to hire, or contact or solicit with respect tohiring any person who, at any time during the twelve (12) month period endingon the date of termination, was an employee of the Company; provided, that youmay hire any person that served as an administrative or clerical employee atthe time their employment with the Company terminates so long as you do notrecruit, contact or solicit such employee;

 

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

 

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

 

Notwithstandingthe foregoing, the Company agrees that you may own less than one percent of theoutstanding voting securities of any publicly traded company that is aCompeting Business so long as you do not otherwise participate in suchcompeting business in any way prohibited by this Section.

 

(b)           You acknowledge thatthe geographic boundaries, scope of prohibited activities, and time duration ofthe preceding paragraphs in this Section are reasonable in nature and are nobroader than are necessary to maintain the goodwill of the Company and theconfidentiality of its Confidential Information and to protect the goodwill andother legitimate business interests of the Company, and also that the enforcementof such covenants would not cause you any undue hardship or unreasonablyinterfere with your ability to earn a livelihood.  If you violate the covenants and restrictions in this Section andthe Company brings legal action for injunctive or other equitable relief, youagree that the Company will not be deprived of the benefit of the full periodof the restrictive covenant, as a result of the time involved in obtaining suchrelief.  Accordingly, you agree that theprovisions in this Section will have a duration determined pursuant toSubsection (a) above, computed from the date the legal or equitable relief isgranted.

 

(c)           As used in thisAgreement:

 

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

 

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

 

(iii)          “GeographicArea” means the geographic area in which the Company or any of itsSubsidiaries 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 occurringprior to the date of termination of your employment and (B) as of the date oftermination of your employment in respect of the Term of Non-Competitionoccurring on and after the date of termination of your employment.

 

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

 

(A)          thedate of termination if your employment is terminated (1) by the Company for anyreason other than Cause, (2) by you for Good Reason, or (3) due to aNon-Renewal election by you or the Company at any time, or

 

(B)           thedate that is twelve (12) months after the date of termination if youremployment is terminated (1) by the Company for Cause or (2) by you for anyreason other than Good Reason (other than a Non-Renewal election made by you).

 

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

 

**9.****             Gross-Up for Certain Taxes**.  If any of the payments or benefits due toyou under this Agreement would otherwise result in your liability for anyexcise taxes pursuant to Internal Revenue Code (“Code”) Section 4999 (“ExciseTax”) (whether at the time of payment or upon a later IRS audit), theCompany and you agree to use commercially reasonable efforts to restructure, ina manner reasonably acceptable to the Company and you, such payments orbenefits due to you so that such Excise Tax is eliminated or minimized to theextent permitted by applicable law; provided, however, that, without creatingany implication as to whether or not, under all the circumstances it would beunreasonable for you to refuse to defer receipt for a shorter period, theCompany agrees that, regardless of the circumstances, it shall not beunreasonable for you to refuse to defer receipt of a material portion of thepayments or benefits due to you under this Section 9 for more than sixmonths after the date on which such payments or benefits would otherwise becomedue to you under this Agreement.  If,despite the use of commercially reasonable efforts, the Company and you areunable either to agree on any such restructuring or to restructure the paymentsor benefits due to you under this Agreement to eliminate such Excise Tax, theCompany 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 respectto payments made pursuant to this provision. Calculations for these purposes will assume the highest

 

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marginal rate for individuals applicable at the time ofcalculation.  The intent of this Section9 is that the Company will pay you an additional amount (the “Gross-UpPayment”) 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, imposed on theGross-Up Payment, will equal the amount of such payment or benefit reduced byall applicable taxes on such amount other than the Excise Tax.

 

**10.****          Successors; Binding Agreement**.

 

(a)           This Agreement may notbe assigned by you other than by will or by the laws of descent anddistribution.  This Agreement will inureto the benefit of and be enforceable by your personal and legalrepresentatives, executors, administrators, heirs, distributees, devisees andlegatees. This Agreement will inure to the benefit of and be binding upon theCompany and its successors and assigns.

 

(b)           The Company willrequire any successor to all or substantially all of the business and/or assetsof the Company, by a written agreement in form and substance reasonablysatisfactory to you, to assume expressly and agree to perform this Agreement inthe same manner and to the same extent that the Company would be required toperform it if no such succession had taken place.  Failure of the Company to obtain such agreement prior to theeffectiveness of any such succession will be considered grounds for you toterminate your employment for Good Reason, and if you do so terminate youremployment, you will be entitled to compensation from the Company in the sameamount and on the same terms as you would be entitled to pursuant to Section5 if you terminated your employment for Good Reason thereunder after, butbefore the second anniversary of, a Change in Control.  As used in this Agreement and after any suchsuccession, “Company” will mean the Company as hereinbefore defined and anysuccessor and/or assigns which assumes and agrees to perform this Agreement byoperation of law, or otherwise.

 

**11.****          Miscellaneous**.

 

(a)           Construction.  This Agreement will be deemed draftedequally by both the parties.  Anypresumption or principle that the language is to be construed against any partywill not apply.

 

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

 

(c)           Severability.  Except as otherwise provided in Section8(d), if any provision of this Agreement is held to be illegal, invalid orunenforceable, such provision will be fully severable; this Agreement will beconstrued and enforced as if such illegal, invalid or unenforceable provision hadnever comprised a portion of this Agreement; and the remaining provisions ofthis Agreement will remain in full force and effect and will not be affected bythe illegal, invalid or unenforceable provision or by its severance from thisAgreement.

 

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

 

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

 

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

 

(f)            Equitable and OtherRelief.  You acknowledge that moneydamages would be both incalculable and an insufficient remedy for a breach of Section7 or 8 by you and that any such breach would cause the Companyirreparable harm.  Accordingly, theCompany, 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, inconnection with a breach of Section 7 or 8 by you.  The parties agree that the onlycircumstances in which disputes between them will not be subject exclusively toarbitration pursuant to the provisions in Section 11(h) are inconnection with a breach of Section 7 or 8 by you.  If the Company files a pleading with a courtseeking immediate injunctive relief and this pleading is challenged by you andinjunctive relief sought is not awarded, the Company will pay all of your costsand attorneys’ fees.  The partiesconsent to venue in Dallas County, Texas and to the exclusive jurisdiction ofcompetent 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 forarbitration hereunder, with respect to the terms of, and the transactions andrelationships contemplated by, this Agreement.

 

(g)           Entire Agreement.  The provisions of this Agreement constitutethe entire and complete understanding and agreement between the parties withrespect to the subject matter hereof. The Company and you acknowledge that the Indemnification Agreement,dated August 27, 2002, by and between you and the Company shall remain in fullforce and effect, without limitation of your rights thereunder by the terms ofthis Agreement.

 

(h)           Arbitration.  Except as otherwise provided in Section11(f), in the event any claim, demand, cause of action, dispute, controversyor other matter in question (“Claim”) arises out of this Agreement (orits termination) or your employment (or termination of employment) by theCompany or its Subsidiaries, then, upon the written request of you or us, suchdispute or controversy will be submitted to binding arbitration.  Any arbitration will be conducted inaccordance with the Federal Arbitration Act (“FAA”) and, to the extentan issue is not addressed by the FAA or the FAA does not apply, with thethen-current National Rules for the Resolution of Employment Disputes of theAmerican Arbitration Association (“AAA”) or other rules of the AAA asapplicable to the claims asserted.  Theresults of arbitration will be binding and conclusive on the partieshereto.  All parties agree that venuefor arbitration will be in Dallas County, Texas.  If you are the prevailing party, then you will be entitled toreimbursement by the Company for reasonable attorneys fees, reasonable costsand other

 

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reasonable expenses pertaining to the arbitration.  All proceedings conducted pursuant to this Section11(h) will be kept confidential by all parties.  **THE ARBITRATORS SHALL HAVE NOAUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER IT BE EXEMPLARYDAMAGES, TREBLE DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE OFDAMAGES).  REGARDLESS OF WHETHER SUCHDAMAGES MAY BE AVAILABLE UNDER TEXAS LAW, YOU AND THE COMPANY EACH HEREBY WAIVETHE RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH ANYCLAIMS.  YOU AND THE COMPANY ACKNOWLEDGETHAT BY SIGNING THIS AGREEMENT YOU AND THE COMPANY ARE WAIVING ANY RIGHT THATYOU OR THE COMPANY MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS EXPRESSLYPROVIDED BY SECTION 11(f), A TRIAL BEFORE A JUDGE IN CONNECTION WITH, ORRELATING TO, A CLAIM.**

 

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

 

(j)            Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY ANDCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCETO 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 ormodified at any time except by a written instrument approved by the Board andexecuted by the Company and you.

 

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

 

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

 

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By signing and countersigning this Agreementin the appropriate space set forth below, we and you have agreed to be bound bythe terms and conditions set forth herein, effective as of January 9, 2004.

 
|                                   | Sincerely,                 |
|----------------------------------------|----------------------------|
|                                   |                       |
|                                   | **TRAMMELL CROW COMPANY**, |
|                                   | a Delaware  corporation    |
|                                   |                       |
|                                   | By:                        | /s/ ROBERT  E. SULENTIC |
|                                   | Name:                      | Robert E.  Sulentic |
|                                   | Title:                     | President  and Chief Executive Officer |
|                                   |                       |
|                                   | 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/ MICHAEL  J. LAFITTE                |                       |   |
| Name:  Michael J. Lafitte              |                       |
|                                   |                       |
| Address:                               | [XXXXXXXXXX]               |   |
|                                   | [XXXXXXXXXX]               |   |
|                                   | Telephone:                 |   |   |   |
|                                   | Fax:                       |   |   |   |
|                                        |                            |  |  |  |  |  |  |  |  |

 

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