<PAGE>   1
                                                                   EXHIBIT 10.08



                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is entered into as of the 14th
day of December, 1998, by and between Crescent Real Estate Equities, Ltd., a
Delaware corporation ("Employer"), and Jerry Ray Crenshaw, Jr. ("Employee").

                                    RECITALS

     A.   Employer is a wholly-owned subsidiary of Crescent Real Estate
Equities Company, a Texas real estate investment trust ("CREE"), and the
general partner of Crescent Real Estate Equities Limited Partnership, a
Delaware limited partnership (the "Operating Partnership"). CREE is the owner
of a majority of the limited partnership interests in the Operating
Partnership. CREE, the Operating Partnership and their affiliated companies are
referred to collectively herein as "Affiliates," and the term "affiliates," as
used herein, shall mean and include any entity or person directly or indirectly
controlling, controlled by or under common control with the person or entity in
question.

     B.   Employee is currently an employee of Employer. Effective on the date
of this Agreement and subject to the terms and conditions hereof, (1)
Employee's title will be "Vice President-Finance," (2) Employee's "Salary" (as
defined herein) has been raised, (3) Employee has been granted the "Options"
(as defined herein), and (4) Employee has been given access to additional
information regarding Employer and Affiliates including information regarding
the nature of their business, business plans, opportunities and other
"Confidential Information" (as defined herein) to which Employee has not
heretofore had access.

     C.   In light of the consideration to Employee set forth herein and
summarized in Recital B, and in order to induce Employer to enter into this
Agreement and grant said consideration, Employee has agreed that the
restrictions and other provisions contained in this Agreement regarding
Employee's (1) use of Confidential Information and (2) solicitation of
employees of Employer or Affiliates (or other "Employer Related Persons," as
defined herein) are all fair and reasonable to Employee, as more fully set
forth in this Agreement.

                                    AGREEMENT

     NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

     1.   EMPLOYMENT. Employer hereby employs Employee and Employee hereby
accepts employment with Employer upon the terms and conditions hereinafter set
forth.

     2.   DUTIES. Subject to the power of the Board of Directors of Employer
(the "Board") to elect and remove officers, and the power delegated by the
Board or otherwise to the

<PAGE>   2

Chief Executive Officer ("CEO") of Employer to appoint and remove officers,
Employee will serve Employer and CREE as Vice President-Finance, and will
perform, faithfully and diligently, the services and functions relating to such
office or otherwise reasonably incident to such office as may be designated from
time to time by the CEO. Employee will devote his full 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 Affiliates and will not,
without the prior written consent of the CEO, 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 Agreement.
The CEO may designate another senior officer of Employer to supervise Employee
pursuant hereto and take such actions as specified herein to be taken by the CEO
or the Employer (except that the CEO shall not designate any other person to
make the determination of whether "Cause" exists as provided in Section 10). The
duties to be performed by Employee hereunder shall be those typically performed
by a controller and senior officer in the finance department for real estate
companies of the size and status of CREE and the Operating Partnership. Without
limiting the generality of the foregoing, Employee shall perform such specific
duties as may be reasonably delegated from time to time by the CEO which are
generally consistent with Employee's then current skill and competencies.

     3.   TERM. Unless sooner terminated pursuant to the provisions hereof, the
term of this Agreement (together with any renewals pursuant to this Section,
the "Term") shall be for a term commencing on the date of this Agreement and
terminating April 30, 2002; provided, however, that the Term shall be
automatically extended for a period of one (1) year (thereby terminating on
April 30, 2003) unless either Employer or Employee gives the other written
notice that this Agreement will not be extended not less than ninety (90) days
prior to April 30, 2002.

     4.   COMPENSATION. As compensation for his services rendered under this
Agreement, Employee will be entitled to receive the following:

          (a)   Salary. During the Term, Employee will be paid an annual salary
of $180,000.00, payable on the same pay cycle as similarly situated employees
(the "Salary"). At any time and from time to time the Salary may be increased
if so determined by the CEO, in his sole and absolute discretion, after a
review of Employee's performance of his duties hereunder and whether or not
Employee has accomplished the goals, targets and/or objectives established for
Employee by Employee and Employer from time to time.

          (b)   Bonus. In addition to the Salary, Employee may be awarded and
receive such bonuses (up to the amounts indicated in the following sentence) as
determined by the CEO, in his sole and absolute discretion, after a review of
Employee's performance of his duties hereunder and whether or not Employee has
accomplished the goals, targets and/or objectives established for Employee by
Employee and Employer from time to time. The bonus attributable to any of the
following years will not exceed the following amounts unless otherwise
determined by the CEO in his sole discretion: 65% of annual Salary for 1999;
50% of annual Salary for 2000 and beyond.



                                        2
<PAGE>   3


          (c)   Benefits. During the Term, Employee will be entitled to receive
such group benefits as Employer may provide to its corporate officers with the
title of senior vice president (or a successor title for the group of officers
having comparable responsibilities).

          (d)   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 Agreement, on a monthly basis upon
submission of a detailed monthly statement and reasonable documentation. Said
reimbursement will be consistent with the then existing policies and procedures
of Employer which are applicable to corporate officers with the title of senior
vice president (or a successor title for the group of officers having
comparable responsibilities).

     5.   CONFIDENTIALITY.

          (a)   Acknowledgment of Proprietary Interest. Employee recognizes the
proprietary interest of Employer and Affiliates in any Confidential Information
(as hereinafter defined). 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 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 Affiliates. As used
herein, "Confidential Information" means all confidential and proprietary
information of Employer and 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, methods of conducting business, methods or strategies of negotiations,
target markets, target properties and information relating to same and all
other concepts, ideas, materials, or information prepared or performed for or
by Employer and/or Affiliates. "Confidential Information" also includes
information related to the business, products or sales of Employer and/or
Affiliates, or any of their respective customers; however, it does not include
information which is or becomes generally available to the public other than as
a result of a disclosure by Employee.

          (b)   Covenant Not-to-Divulge Confidential Information. Employee
acknowledges and agrees that Employer and 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 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/or
Affiliates to further the business of Employer and/or Affiliates, and not to
use the Confidential Information except in the pursuit of the business of
Employer and/or Affiliates, without the prior written



                                       3
<PAGE>   4

consent of Employer (which consent may be withheld in Employer's sole
discretion), including any 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.

     6.   NON-SOLICITATION. During the period beginning on the date hereof and
ending eighteen (18) months after the termination of this Agreement for any
reason, Employee will not solicit or hire or participate in the solicitation or
hiring of any "Employer Related Person" (as defined herein) to perform any
services, directly or indirectly, which are the same or similar to the services
such Employer Related Person performed for the Employer or Affiliate, or which
would or could require the Employer Related Person to use any Confidential
Information, without the express written consent of the CEO or his designee,
which consent may be withheld in the sole discretion of the CEO or said
designee. As used herein, the term "Employer Related Person" means any person
or entity employed or otherwise engaged by Employer or any Affiliate on a full
or part time basis during the Term of this Agreement.

     7.   [INTENTIONALLY OMITTED.]

     8.   ENFORCEMENT. Employee agrees that (a) the obligations contained in
Sections 5 and 6 (regarding Confidential Information and Non Solicitation) are
unique, are necessary to protect the Employer and Affiliates (including,
without limitation, the continuity of the business of Employer and Affiliates
and their goodwill) and that any remedy at law for breach or threatened breach
of any of the obligations would be inadequate. Consequently, Employee agrees
that (a) Employer and each Affiliate (each Affiliate being an intended
beneficiary hereof) may enforce specific performance of the terms of said
Sections, (b) Employer and each Affiliate shall have the right to obtain a
temporary restraining order, temporary injunction and permanent injunction to
secure performance thereof and to prevent the breach or threatened breach of
such provisions and (c) Employee waives, foregoes and agrees to confirm that
Employee waives and foregoes any right to require that Employer or any
Affiliate post a bond or any other security in any proceeding to enforce its
rights hereunder, whether or not such action is seeking a temporary restraining
order, a temporary or permanent injunction or any other equitable relief.

     9.   OPTIONS TO PURCHASE STOCK. Employer shall cause CREE to grant to
Employee an option (the "Option") to purchase stock of CREE (the "Stock")
pursuant to the "Second Amended and Restated 1995 Crescent Real Estate Equities
Company Stock Incentive Plan" (the "Plan") and the form of option agreement
presently in use by CREE for its corporate officers with the title of senior
vice president (or a successor title for the group of officers having
comparable responsibilities) (the "Option Agreement") as follows:



                                       4
<PAGE>   5

          (a)   Number of Shares and Exercise Price. The total number of shares
of Stock subject to the Option shall be 125,000, exercisable as follows: 75,000
shares at $22.00 per share; 15,000 shares at $25.00 per share; 20,000 shares at
$27.00 per share; and 15,000 shares at $28.00 per share.

          (b)   Vesting. The Option shall vest and Employee may exercise the
same on the schedule of twenty percent (20%) per year, beginning on December
21, 1999; provided that (i) upon termination of this Agreement pursuant to
Section 10(a)(i) or 10(a)(iv), below, the right to purchase any portion of the
Stock which has not theretofore vested shall terminate, (ii) upon termination
of this Agreement pursuant to Sections 10(a)(ii) or 10(a)(iii), below, the
rights of Employee shall be subject to the terms of the Plan and Option
Agreement, and (iii) upon termination of this Agreement pursuant to Section 10
(a)(v) below, Employee's rights to purchase the Stock, or any other stock
underlying any previously granted option or options, shall be fully vested.
Nothing in this Agreement shall be construed as affecting the vesting of any of
Employee's options in the event that this Agreement is renewed or Employee
continues in the employment of Employer following the termination of this
Agreement.

          (c)   Type of Option. The Option granted hereby shall be a
Non-qualified Stock Option, pursuant to Article V of the Plan, to the maximum
extent possible and, to the extent applicable, the limitations and conditions
of the Plan shall govern the Options except as otherwise modified or affected
by the Option Agreement.

     10.  TERMINATION.

          (a)   Events Causing Termination. This Agreement and the employment
relationship created hereby will terminate upon the occurrence of any of the
following events:

                (i)   The expiration of the Term as set forth in Section 3
above;

                (ii)  The death of Employee;

                (iii) The "Disability" (as hereinafter defined) of Employee;

                (iv)  Written notice to Employee from Employer of termination
for "Cause" (as hereinafter defined);

                (v)   Written notice to Employee from Employer of termination
for any reason other than as set forth in Sections 10(a)(i), 10(a)(ii),
10(a)(iii) or 10(a)(iv) or written notice to Employee from Employer of a change
in duties such that the duties to be performed by Employee are (A) not
consistent with those described in Section 2 or (B) to be performed at a
location which is sixty (60) miles or more from Employer's principal office at
the date of execution of this Agreement; or



                                       5
<PAGE>   6

                (vi)  The election by Employee of the Severance Package
pursuant to (and as defined in) Section 11.

For purposes of Section 10(a)(iii), the "Disability" of Employee will have the
same meaning given such term in the Plan. For purposes of Section 10(a)(iv),
"Cause" shall mean Employee shall commit any act or omit to take any action in
bad faith and to the detriment of Employer or Employee shall fail to perform
the duties reasonably required of Employee in accordance with Section 2 of this
Agreement, in the reasonable determination of the CEO.

          (b)   Survival; Payments Upon Termination. Subject to the provisions
of Section 11 but otherwise notwithstanding anything to the contrary in this
Agreement, the provisions of Sections 5, 6 and 8 will survive any termination,
for whatever reason (except Employee's election of the Severance Package
pursuant to Section 11), of Employee's employment under this Agreement and the
Term of this 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 and
the rights set forth in Section 9 (b), if any, except that if Employee's
employment is terminated pursuant to Section 10(a)(v), Employee or his estate,
as the case may be, will be entitled to receive within five (5) calendar days
from the date of notice of termination or a change in duties as specified in
Section 10(a)(v) a lump-sum payment equal to one year's Salary at the rate in
effect immediately prior to the termination on the date of termination together
with the other benefits the Employee is entitled to pursuant to Section 4(c)
for a period of one (1) year following termination.

     11.  MERGERS AND REORGANIZATIONS; CHANGE OF CONTROL. Upon merger or
reorganization or change of control within the meaning of Sections 1.9(a) and
(b) of the Plan or upon sale of all or substantially all of the Operating
Partnership's assets or other significant reorganization or corporate
combination, Employee shall have the right to elect either (a) the rights and
benefits to which Employee may be entitled pursuant to this Agreement upon
termination hereof pursuant to Section 10(a)(v) (the "Contract Rights") or (b)
substantially the same rights and substantially the same treatment afforded to
corporate officers with the title of senior vice president (or a successor
title for the group of officers having comparable responsibilities) (the
"Severance Package"). The election of either (a) or (b) shall be made in
writing by Employee at such time as may be required pursuant to the terms of
the Severance Package but, in any event, not more than ten (10) days after
Employee has been given written notice of the material terms of the Severance
Package. If Employee fails to notify Employer in writing of his election of
either the Contract Rights or the Severance Package within the time set forth
herein, the Employee will be conclusively deemed to elected the Contract
Rights. Upon election of the Severance Package and Employee's acceptance
thereof in accordance with its terms, this Agreement shall terminate in its
entirety with no further action required by Employer or Employee and,
notwithstanding anything to the contrary contained herein, Employee shall be
entitled to the benefits of and be bound to the obligations imposed by the
Severance Package and



                                       6
<PAGE>   7

neither Employee nor Employer shall have any further rights or obligations
pursuant to this Agreement.

     12.  NOTICES. Any notices, consents, demands, requests, approvals and
other communications to be given under this 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 777 Main Street, Suite 2700,
Fort Worth, Texas 76102, Attention: CEO; or if to Employee, to Jerry Ray
Crenshaw, Jr. 5405 Janet Lane, Colleyville, Texas 76034. Notices delivered
personally will be deemed communicated as of actual receipt; mailed notices
will be deemed communicated as of three days after mailing.

     13.  ENTIRE AGREEMENT. This 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.

     14.  GOVERNING LAW; VENUE. This 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
conflicts of laws thereof. The parties agree that this Agreement shall be
performable in Tarrant County, Texas.

     15.  PARTIES BOUND; ASSIGNMENT. This Agreement and the rights and
obligations hereunder will be binding upon and inure to the benefit of Employer
and Employee, and their respective heirs, personal representatives, successors
and assigns. Employer will have the right to assign this Agreement to CREE, the
Operating Partnership or any other Affiliate functioning as a real estate
company of the size and status of CREE and the Operating Partnership, 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 stock, 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. Without limitation of the foregoing, Employee's agreements set forth in
Sections 5, 6 and 8 shall inure to the benefit of Employer, Affiliates and
their respective successors and assigns.

     16.  CHOICE OF FORUM. Subject to the provisions of Section 24 regarding
arbitration of disputes, the parties hereto agree that should any suit, action
or proceeding arising out of this 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 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 persona jurisdiction of any state
or federal court in Tarrant County, Texas and waives any objection to the venue
of any such suit, action or proceeding. The parties hereto recognize that
courts outside Tarrant County, Texas may also have jurisdiction over suits,
actions or proceedings arising out of this Agreement, and in the event that any
party hereto



                                       7
<PAGE>   8

shall institute a proceeding involving this Agreement in a jurisdiction outside
Tarrant County, Texas, the party instituting such proceeding shall indemnify
any other party hereto for any attorneys fees, 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 any 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.

     17.  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
Agreement may be made in the manner and to the address set forth in Section 12
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.

     18.  ENFORCEABILITY. In addition to the provisions of Section 8, above,
the parties agree that if, for any reason, any provision contained in this
agreement should be held invalid in part through arbitration or by a court of
competent jurisdiction, then it is the intent of each of the parties hereto
that the balance of this Agreement be enforced to the fullest extent permitted
by applicable law. Accordingly, should an arbitration panel or 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 the
arbitration panel or court should reform such covenant to such narrower scope
as it determines enforceable.

     19.  WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach by any party.

     20.  CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.

     21.  COSTS. Subject to Section 24 regarding arbitration of disputes, if
any action at law or in equity is necessary to enforce or interpret the terms
of this 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.

     22.  OTHER OBLIGATIONS. Employee represents and warrants that he has not
as of the execution of this Agreement assumed any obligations inconsistent with
those contained herein.

     23.  COUNTERPARTS. This 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.



                                       8
<PAGE>   9

     24.  ARBITRATION. At the election of either party to this Agreement, any
Dispute arising pursuant hereto (the "Dispute") will be determined by
arbitration in accordance with the provisions hereof. If a Dispute arises,
Employer and Employee shall attempt to resolve the Dispute for a period of five
(5) business days following either party's delivery of a notice ("Preliminary
Notice") (said period called "Settlement Period") of its intent to submit the
Dispute to arbitration if not resolved prior to the expiration of the
Settlement Period. If the Dispute is not resolved at the end of the Settlement
Period after the prescribed mediation, either party may thereafter deliver a
written notice ("Arbitration Notice") to the other party and the American
Arbitration Association ("AAA") (Dallas Office) notifying both of its intent to
resolve the Dispute in accordance with the further provisions of this Section
and the Commercial Arbitration Rules of the AAA then in effect ("AAA Rules").
However, the provisions of this Section shall control over any contrary
provisions in the AAA Rules. Within five (5) days after the delivery of an
Arbitration Notice, each party shall deliver a written statement of a
resolution of the Dispute acceptable to it to the other party (each an
"Original Resolution") (and, if more than one issue is the subject of an
Arbitration Notice, each issue shall be the subject of a separate Resolution).
Employer's statement is hereafter called "Employer's Resolution" and Employee's
statement is hereafter called "Employee's Resolution." If either party fails to
timely deliver its Original Resolution, the Original Resolution of the other
party shall be binding on the parties and no further action shall be taken to
resolve the Dispute. The resolution of the Dispute shall be based upon the
determination of a panel of three arbitrators ("Arbitrators") selected in
accordance with the further provisions of this Section. All of the Arbitrators
shall be selected from the panel of arbitrators submitted by AAA. Within ten
(10) days after either party delivers an Arbitration Notice to the other party
and the AAA requesting arbitration in accordance with the provisions of this
subsection, AAA shall deliver a list ("Panel List") of qualified arbitrators to
Employer and Employee. Within ten (10) days after the delivery of the Panel
List, each party shall send written notice ("Party Selection Notice") to the
other party and the AAA indicating its choice of one arbitrator and indicating
up to two persons on the Panel List to which it objects ("Objectionable
Persons"). Within ten (10) days after its receipt of both Party Selection
Notices, the AAA shall select a third arbitrator from the Panel List by
delivering written notice ("AAA Selection Notice") of its selection to both
parties. The third arbitrator shall not be an Objectionable Person. The
Arbitrators shall be one person selected by each party and one person selected
by the AAA. Within five (5) days after the date of the delivery of the AAA
Selection Notice, Employer and Employee shall submit their respective
Resolution in writing (which may not be different from their respective
original Resolutions), together with the supporting data and facts used to
determine their Resolution, to the Arbitrators. Within twenty (20) days after
the Resolutions are submitted, the Arbitrators shall hold a hearing during
which Employer and Employee may present evidence in support of their respective
resolutions. Within fifteen (15) days after the date on which the hearing is
completed, the Arbitrators will determine a resolution ("Final Resolution")
based upon the parties' submissions and evidence presented. The Final
Resolution may but need not be either the Employer's Resolution or the
Employee's Resolution. The Arbitrator's determination shall be binding on each
party and may be enforced by a court of competent jurisdiction. The cost of
such arbitration shall be paid in accordance with the direction of the
Arbitrators.



                                       9
<PAGE>   10

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.

                                         EMPLOYER:


                                         CRESCENT REAL ESTATE EQUITIES,
                                         LTD., a Delaware corporation

                                         By:   /s/ DAVID M. DEAN
                                            ------------------------------------
                                         Name:     David M. Dean
                                              ----------------------------------
                                         Title:    Senior Vice President, Law
                                               ---------------------------------


                                         EMPLOYEE:

                                         /s/ TERRY RAY CRENSHAW, JR.
                                         ---------------------------------------
                                         Jerry Ray Crenshaw, Jr.


                                       10