Exhibit 10.5
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated effective as of July 25,
2000, is entered into by and between CONSOLIDATED GRAPHICS, INC., a Texas
corporation having its principal place of business in Houston, Harris County,
Texas ("CGX"), and CHARLES WHITE (the "EXECUTIVE"); other capitalized terms used
in this Agreement are defined and shall have the meanings set forth
in Section 17 or elsewhere herein.
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W I T N E S S E T H:
WHEREAS, Executive is to be employed as President and Chief Operating
Officer of CGX;
WHEREAS, in connection with his employment, Executive will be provided by
CGX with specialized training and given access to confidential information;
WHEREAS, it is the desire of the Board of Directors of CGX (the "BOARD") to
engage Executive as an executive officer of CGX and its subsidiaries pursuant to
the terms of this Agreement; and
WHEREAS, Executive is desirous of committing himself to serve CGX on the
terms herein provided.
NOW, THEREFORE, in consideration of the premises, representations and
mutual covenants hereinafter set forth, the parties hereby covenant and agree as
follows:
1. EMPLOYMENT. CGX hereby employs Executive, and Executive hereby
accepts employment with CGX, on the terms and conditions set forth in this
Agreement.
2. EMPLOYMENT PERIOD. The term of Executive's employment (the
"EMPLOYMENT PERIOD") pursuant to the terms of this Agreement shall commence upon
the Effective Date and shall continue until the Termination Date (as defined
below).
3. DUTIES. Executive shall (i) serve under the direction of the Board
and Joe R. Davis, the Chief Executive Officer of CGX (the "CEO"), as the
President and Chief Operating Officer of CGX, (ii) have all the rights, powers
and duties associated with his positions, and (iii) faithfully, to the best of
Executive's ability, perform the duties and other reasonably related services
assigned to Executive by the Board and/or CEO from time to time (the "DUTIES").
Executive shall be subject to, and shall comply with, CGX insider trading
policies (a copy of which has been delivered to Executive) and the other
policies of CGX in effect from time to time (collectively, the "CGX POLICIES");
provided, however, that to the extent such CGX Policies may contradict the
express provisions of this Agreement, the provisions of this Agreement shall
govern. Executive shall devote his full business time, efforts and attention to
the business of CGX during the Employment Period consistent with past practice
and, without the prior written consent of the Board, Executive shall not during
the Employment Period render any services of a business, commercial or
professional nature, to any person or organization other than CGX and
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the Affiliates or be engaged in any other business activity, other than those
activities described in Section 12 below. Executive represents and warrants
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that Executive is not a party to or bound by any agreement or contract or
subject to any restrictions, including without limitation in connection with any
previous employment, which might prevent Executive from entering into and
performing Executive's obligations under this Agreement.
4. COMPENSATION. During the Employment Period, Executive shall be
compensated for Executive's services as follows:
(a) Executive shall be paid a base monthly salary of not less
than $29,166.67, subject to any and all customary payroll deductions,
including deductions for the Federal Insurance Contributions Act and
other federal, state and local taxes. Such monthly salary shall be
increased during the Employment Period at the same time and on at
least as favorable a basis as other officers of CGX.
(b) Except to the extent such policies may contradict the
express provisions of this Agreement, in which case the provisions of
this Agreement shall govern, Executive shall be eligible to receive
(i) fringe benefits on the same basis as other management employees of
CGX pursuant to CGX Policies in effect from time to time, including
holiday time and (ii) three (3) weeks paid vacation; provided,
however, that earned but unused vacation or other compensated absences
shall not be carried forward for use or payment in subsequent periods;
and provided, further, that CGX will act reasonably to continue in
effect comparable medical benefits to those currently in effect at the
Company.
(c) Executive shall be eligible to participate, to the extent
that Executive meets all eligibility requirements of general
application, in each of the employee benefit plans maintained by CGX
or in which employees of CGX generally are eligible to participate,
including as of the date hereof, group hospitalization, medical,
dental, and short and long term disability and life plans.
5. BONUS. In addition to the other compensation set forth herein,
Executive shall be entitled to receive an annual cash bonus payment in an amount
to be determined in the sole discretion of the CEO and approved by the Board or
the Compensation Committee of the Board; provided, however, that the sum of
Executive's annual base salary (as paid monthly pursuant to Section 4(a) hereof)
plus annual cash bonus payment shall equal or exceed the sum of the annual base
salary plus annual cash bonus of each CGX employee working at CGX's corporate
headquarters other than that of the CEO.
6. STOCK OPTIONS. In addition to the other compensation set forth
herein, Executive shall be provided with options to purchase CGX shares as
follows:
(a) 200,000 shares to be granted effective as of the Effective
Date at an exercise price equal to the closing price per share of CGX
common stock as reported on the New York Stock Exchange on July 26,
2000; and
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(b) 25,000 shares on each anniversary date of the Effective Date
during the Employment Period; such options shall have an exercise
price equal to the closing price per share of CGX common stock as
reported on the New York Stock Exchange (or other applicable national
exchange on which the common stock of CGX is then listed) on the day
immediately preceding the effective date of the grant of such option.
All options granted pursuant to the terms of this Agreement shall be granted
pursuant to and subject to the terms of the form CGX Stock Option Agreement
attached hereto as Exhibit "A".
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7. EXECUTIVE EXPENSES. During the Employment Period, Executive shall be
entitled to be reimbursed for reasonable normal business expenses incurred in
the performance of the Duties hereunder in accordance with CGX Policies in
effect from time to time; provided, however, that documentation supporting such
expenses must be submitted to and approved by the CEO or the Board before such
reimbursement is paid to Executive.
8. NO COMPETING BUSINESS. In consideration for the benefits received by
Executive pursuant to this Agreement, during the Noncompetition Period,
Executive shall not, except as permitted by Section 12 of this Agreement,
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directly or indirectly own, manage, operate, control, invest or acquire an
interest in, or otherwise engage or participate (whether as a proprietor,
partner, employee, stockholder, member, director, officer, executive, joint
venturer, investor, consultant, agent, sales representative, broker or other
participant) in any Competitive Business operating in or soliciting business
from CGX's Market, without regard to (i) whether the Competitive Business has
its office or other business facilities within CGX's Market, (ii) whether any of
the activities of Executive referred to above occur or are performed within
CGX's Market or (iii) whether Executive resides, or reports to an office, within
CGX's Market.
9. NO INTERFERENCE WITH THE BUSINESS. In consideration for the benefits
received by Executive pursuant to this Agreement, during the Noncompetition
Period, Executive shall not:
(a) directly or indirectly solicit, induce or intentionally
influence any third party sales representative, agent, supplier,
lender, lessor or any other person which has a business relationship
with CGX and/or any Affiliate or which had on the date of this
Agreement a business relationship with CGX and/or any Affiliate to
discontinue, reduce the extent of, discourage the development of or
otherwise harm such relationship with CGX and/or any Affiliate;
(b) directly or indirectly attempt to induce any known customer
to terminate any contract or otherwise divert from CGX and/or any
Affiliate any trade or business being conducted by any such customer
with CGX and/or any Affiliate or directly or indirectly attempt to
solicit, induce or intentionally influence any prospective or past
customer of CGX and/or any Affiliate to discontinue, reduce the extent
of, or not conduct business with CGX and/or any Affiliate;
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(c) directly or indirectly recruit, solicit, induce or influence
any executive, employee or sales agent of CGX and/or any Affiliate to
discontinue such sales, employment or agency relationship with CGX
and/or any such Affiliate;
(d) employ, seek to employ or cause any other person or entity
to employ or seek to employ as a sales representative or Executive any
person who is then (or was at any time since the Effective Date)
employed by CGX and/or any of the Affiliates; or
(e) directly or indirectly denigrate or in any manner undertake
to discredit CGX, any Affiliate or any successor thereof or any
person, operation or entity associated with CGX or any Affiliate.
10. CONSIDERATION FOR RESTRICTIONS. Executive acknowledges that the
restrictions imposed under Sections 3, 8, 9, and 11 are supported by the
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consideration to be received by Executive pursuant to the terms of this
Agreement.
11. NO DISCLOSURE OF CONFIDENTIAL INFORMATION. Executive shall not
directly or indirectly knowingly disclose to anyone or use or otherwise exploit
for Executive's own benefit or for the benefit of anyone other than CGX and/or
any of the Affiliates any Confidential Information. Executive shall not
disclose the terms of this Agreement to anyone other than a representative or
agent of Executive.
12. PERMITTED ACTIVITIES. The restrictions set forth in Sections 3, 8 and
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9 of this Agreement shall not apply to Permitted Activities (as defined below).
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13. REDUCTION OF RESTRICTIONS BY COURT ACTION. If the length of time,
type of activity, geographic area or other restrictions set forth in the
restrictions of Sections 3, 8, 9, or 11 are deemed unreasonable in any court
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proceeding, the parties hereto agree that the court may reduce such restrictions
to ones it deems reasonable to protect the substantial investment of CGX and the
Affiliates in their businesses and the goodwill attached thereto.
14. REMEDIES. Executive understands that CGX and the Affiliates will not
have an adequate remedy at law for the breach or threatened breach by Executive
of any one or more of the covenants set forth in this Agreement and agrees that
in the event of any such breach or threatened breach, CGX or any Affiliate may,
in addition to the other remedies which may be available to it, file a suit in
equity to enjoin Executive from the breach or threatened breach of such
covenants. In the event either party commences legal action to enforce its or
his rights under this Agreement, the prevailing party in such action shall be
entitled to recover all of the costs and expenses in connection therewith,
including reasonable attorney's fees.
15. TERMINATION.
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(a) The "TERMINATION DATE" shall mean the date in which the
first of the following occur:
(i) the fifth anniversary of the Effective Date or any
date subsequent thereto provided one party has given
notice to the other at least one (1) year in advance
of such date of his/its election to terminate this
Agreement on such date;
(ii) Executive's death;
(iii) the Disability (as defined below) of Executive;
(iv) termination by CGX of Executive for Cause (as
defined below);
(v) termination by CGX of Executive without Cause;
(vi) the resignation of Executive for any reason (other
than Good Reason (as defined below)), which shall
take effect immediately upon CGX's receipt of such
resignation,
(vii) the resignation of Executive for Good Reason, which
shall take effect immediately upon CGX's receipt of
such resignation; or
(viii) a Change in Control (as defined in the Change in
Control Agreement).
(each of (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) are
referred to herein as a "TERMINATION").
(b) If a Termination occurs pursuant to subparagraphs (v), or
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(vii), then during the Severance Period (as defined below), (i)
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Executive shall receive Executive's monthly salary in effect
immediately prior to the Termination in accordance with Section 4(a)
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and (ii) Executive shall continue to receive and/or be able to elect
to receive benefits under CGX welfare plans or substantially
equivalent welfare plans at CGX's expense, including but not limited
to, medical/hospital, dental, life, and disability, in accordance with
the terms of such plans in effect at the time; provided, however, that
Executive shall be responsible for the costs of such benefits to the
same extent he was responsible (or would have been responsible had he
then been a participant) for such costs prior to the Termination Date.
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(c) If a Termination occurs pursuant to subparagraphs (i), (ii),
(iii), (iv), (vi) or (viii), then Executive or Executive's estate
shall receive (i) Executive's monthly salary in effect immediately
prior to the Termination in accordance with Section 4(a) through the
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date of such Termination and (ii) any other amounts earned, accrued or
owing as of such Termination Date, but not yet paid by CGX to
Executive.
(d) Termination of employment hereunder shall not relieve
Executive of his obligations under Sections 8 and 9 hereof,
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notwithstanding the termination of Executive's compensation or the
termination of the other terms and conditions of this Agreement. In
addition, termination of employment hereunder shall not relieve
Executive of his obligations under Section 11 hereof which are
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intended to continue indefinitely, notwithstanding the termination of
Executive's compensation or the termination of the other terms and
conditions of this Agreement. Executive's violation of any of his
obligations under Sections 8, 9 or 11 hereof shall relieve CGX of its
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obligation to pay any of the benefits as contemplated in this Section
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15.
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(e) In addition to all other compensation due to Executive
hereunder, the following shall occur immediately prior to the
occurrence of a Termination pursuant to subparagraphs (ii) or (iii) of
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Section 15;
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(i) all CGX stock options held by Executive prior to such a
Termination shall become exercisable, regardless of
whether or not the vesting/performance conditions set
forth in the relevant agreements shall have been
satisfied in full;
(ii) all restrictions on any restricted securities granted by
CGX to Executive prior to such a Termination shall be
removed and the securities shall become fully vested and
freely transferable, regardless of whether the
vesting/performance conditions set forth in the relevant
agreements shall have been satisfied in full;
(iii) Executive (or Executive's estate) shall have an immediate
right to receive all performance shares or bonuses
granted prior to such a Termination, and such performance
shares and bonuses shall become fully vested and freely
transferable or payable without restrictions, regardless
of whether or not specific performance goals set forth in
the relevant agreements shall have been attained;
(iv) all performance units granted to Executive prior to such
a Termination shall become immediately payable in cash or
common stock, at Executive's sole option (or at the sole
option of the executor of the Executive's estate),
regardless of whether or not the relevant performance
cycle has been completed, and regardless of
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whether any other terms and conditions of the relevant
agreements shall have been satisfied in full;
(v) provided, that if the terms of any plan or agreement
providing for such options, restricted securities,
performance shares or bonuses, or performance units do
not allow such acceleration or payment as described
above, CGX shall take or cause to be taken any action
required to allow such acceleration or payment or to
separately pay the value of such benefits.
16. GROSS-UP.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event a public accounting firm selected by Executive (the
"ACCOUNTING FIRM") shall determine that any payment, benefit, or
distribution by CGX to Executive (whether paid or payable or
distributed or distributable pursuant to the terms of Section 15 of
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this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 16) (each a "PAYMENT")
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is subject to the excise tax imposed by Section 4999 of the Code, or
any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "EXCISE
TAX"), then CGX shall pay to Executive an additional payment (a
"GROSS-UP PAYMENT") in an amount such that after payment by Executive
of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto), and the
Excise Tax imposed upon the Gross-Up Payment, Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(b) Subject to the provisions of Section 16(c) below, all
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determinations required to be made under this Section 16, including
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whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, shall be made by the Accounting Firm which shall
provide detailed supporting calculations both to CGX and Executive as
soon as possible following a request made by Executive or CGX. All
fees and expenses of the Accounting Firm shall be borne solely by CGX.
Any Gross-Up Payment, as determined pursuant to this Section 16, shall
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be paid by CGX to Executive within five (5) days of the receipt of the
Accounting Firm's determination. If the Accounting Firm determines
that no Excise Tax is payable by Executive, it shall furnish Executive
with a written opinion that failure to report the Excise Tax on
Executive's applicable federal income tax return would not result in
the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon CGX and Executive. As a
result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have
been made by CGX should have
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been made ("UNDERPAYMENT"), consistent with the calculations required to be
made hereunder. If CGX exhausts its remedies pursuant to Section 16(c)
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below and Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by CGX
to or for the benefit of Executive.
(c) Executive shall notify CGX in writing of any claim by the
Internal Revenue Service that, if successful, would require the
payment by CGX of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten (10) business days
after Executive is informed in writing of such claim and shall apprize
CGX of the nature of such claim and the date on which such claim is
requested to be paid. Executive shall not pay such claim prior to the
expiration of the ten (10)-day period following the date on which
Executive gives such notice to CGX (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due).
If CGX notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:
(i) give CGX any information reasonably requested by CGX
relating to such claim,
(ii) take such action in connection with contesting such claim
as CGX shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by CGX,
(iii) cooperate with CGX in good faith to effectively contest
such claim, and
(iv) permit CGX to participate in any proceedings relating to
such claim;
provided, however, that CGX shall bear and pay directly all costs
and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing
provisions of this Section 16(c), CGX shall control all
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proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a
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determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as CGX
shall determine; provided further, that if CGX directs Executive
to pay such claim and sue for a refund, CGX shall advance the
amount of such payment to Executive on an interest-free basis and
shall indemnify and hold Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to
such advance; and provided further, that any extension of the
statute of limitations relating to payment of taxes for the
taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, CGX's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would
be payable hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by
CGX pursuant to this Section 16, Executive becomes entitled to
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receive, and receives, any refund with respect to such claim,
Executive shall (subject to CGX's complying with the requirements of
this Section 16) promptly pay to CGX the amount of such refund
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(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of any amount
advanced by CGX pursuant to Section 16, a determination is made that
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Executive shall not be entitled to any refund with respect to such
claim and CGX does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30)
days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
17. DEFINITIONS. As used in this Agreement, terms defined in the preamble
and recitals of or elsewhere in this Agreement shall have the meanings set forth
therein and the following terms shall have the meanings set forth below:
(a) Affiliate or Affiliates shall mean and refer to any direct
or indirect subsidiaries of CGX, or any other entity or entities
through which CGX or any subsidiary of CGX may conduct CGX's Line of
Business.
(b) Cause shall mean and include without limitation (i) the
inability of Executive to perform his Duties hereunder due to a legal
impediment, including without limitation, the entry against Executive
of an injunction, restraining order or other type of judicial
judgment, decree or order which would prevent or hinder Executive from
performing his Duties; (ii) the willful failure by Executive to follow
material CGX Policies or the willful disregard of the reasonable and
material instructions of the CEO with respect to the performance of
Executive's
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Duties, other than any failure not occurring in bad faith
that is remedied by Executive promptly after receipt of notice thereof
from CGX; (iii) excessive absenteeism, flagrant neglect of work,
serious misconduct, conviction of a felony or fraud; or (iv) the
failure of Executive to devote substantially all of his full working
time and attention to performance of his Duties for CGX.
(c) Change in Control Agreement shall mean that certain Change
in Control Agreement dated July 25, 2000 between CGX and Executive.
(d) CGX's Line of Business shall mean general commercial
printing services, including digital imaging, offset lithography,
composition, electronic prepress, binding and finishing services,
fulfillment of printed materials and includes any products or services
manufactured, developed or distributed, including electronic products
and services, at any time by CGX and/or the Affiliates before or after
the Effective Date.
(e) CGX's Market shall mean the United States;
(f) Competitive Business shall mean any person or entity engaged
in a business that produces any of the products or performs any of the
services comprising CGX's Line of Business.
(g) Confidential Information shall mean trade secrets, customer
and supplier lists, marketing arrangements, business plans,
projections, financial information, training manuals, pricing manuals,
product and service development plans, market strategies, internal
performance statistics and other competitively sensitive information
belonging to and concerning CGX and/or any of the Affiliates and not
generally known by or available to the public, whether or not in
written or tangible form, as the same may exist at any time during the
Employment Period.
(h) Disability shall mean any illness, disability or incapacity
of such a character as to render Executive unable to perform his
Duties (which determination shall be made by the CEO) for a total
period of one hundred eighty (180) days, whether or not such days are
consecutive, during any consecutive twelve (12) month period.
(i) Effective Date shall mean the execution date of this
Agreement.
(j) Employment Period shall mean that period of time set forth
in Section 2 of this Agreement.
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(k) Good Reason shall mean (i) the material breach of this
Agreement by CGX, other than any failure not occurring in bad faith
that is remedied by CGX promptly after receipt of notice thereof from
Executive, (ii) the implementation by CGX of a condition to
Executive's continued employment
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with CGX that Executive's principal place of work be changed to
any location outside of the Houston metropolitan area, (iii)
a material diminution in the Executive's Duties or
cash compensation, (vi) the replacement of Joe R. Davis as
the CEO by any person other than Executive (provided that Executive
resigns his employment citing the replacement as "Good Reason" within
sixty (60) days following the date the Board selects a successor CEO
other than Executive), and (v) the termination by the Executive of the
Executive's employment with CGX upon the occurrence of any of the
events set forth in Section 4(b)(ii) to the Change of Control
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Agreement.
(l) Noncompetition Period shall mean a period beginning on the
Effective Date and continuing through the Employment Period and for
the greater of (i) the period of one (1) year after any Termination
pursuant to Section15(a)(i), (iii), (iv) or (vi) or (ii) the
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Severance Period.
(m) Permitted Activities shall mean (i) owning not more than 1%
of the outstanding shares of a publicly-held Competitive Business
which has shares listed for trading on a securities exchange
registered with the Securities and Exchange Commission or through the
automated quotation system of a registered securities association;
(ii) owning capital stock of CGX; or (iii) those activities or actions
undertaken by Executive, to the extent, but only to the extent, such
activities or actions are expressly approved in writing by the CEO.
(n) Severance Period shall mean that period of time equal to the
shorter of (i) either (A), if Joe R. Davis is then the CEO, one (1)
year following Termination or (B), if Joe R. Davis is not then the
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CEO, two (2) years following Termination or (ii) the remainder of the
Employment Period that would have been applicable pursuant to Section
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15(a)(i) but for the early Termination, if at the time of such
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Termination either of the parties had notified the other of its
election to terminate the Employment Period pursuant to Section
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15(a)(i).
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18. NOTICES. All notices, demands or other communications required or
provided hereunder shall be in writing and shall be deemed to have been given
and received when delivered in person or transmitted by facsimile transmission
(telecopy), cable or telex to the respective parties or seven (7) days after
dispatch by registered or certified mail, postage prepaid, addressed to the
parties at the addresses set forth below or at such other addresses as such
parties may designate by notice to the other parties:
If to CGX: Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
Attention: Joe R. Davis
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with a copy (which shall not
constitute notice) to: R. Clyde Parker, Jr., Esq.
Winstead Sechrest & Minick P.C.
910 Travis, Suite 2400
Houston, Texas 77002
If to Executive: Charles White
c/o Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
19. ASSIGNMENT. CGX, but not Executive, may assign or delegate any of its
rights or obligations hereunder; provided, however, that without the consent of
Executive, CGX shall not be relieved of any of its obligations hereunder as a
result of any assignment to a third party; provided, further, that an assignment
made in accordance with this section shall not constitute a termination of
employment for purposes of this Agreement. This Agreement shall be binding upon
and inure to the benefit of any assignee thereof and any such assignee shall be
deemed substituted for CGX under the terms of this Agreement and all references
to the "CGX" shall be deemed to mean such assignee. As used in this Agreement,
the term "assignee" shall include any Affiliate or person, firm, partnership,
corporation or CGX which at any time, whether by merger, purchase or otherwise,
acquires all of the capital stock or substantially all of the assets or business
of CGX, and any assignee or successor thereof.
20. NO MITIGATION OBLIGATION. CGX hereby acknowledges that it will be
difficult, and may be impossible, for Executive to find reasonably comparable
employment following the Termination Date and that the noncompetition covenants
contained in Sections 8 and 9 hereof will further limit the employment
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opportunities for Executive. Accordingly, the parties hereto expressly agree
that the payment of the severance compensation and benefits by CGX to Executive
in accordance with the terms of this Agreement will be liquidated damages, and
that Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
Executive hereunder or otherwise, except as expressly provided in Sections 15(c)
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and (f) hereof and to the extent Executive actually receives comparable welfare
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benefits from another employer during the Severance Period.
21. AMENDMENT AND MODIFICATION. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of CGX.
22. GOVERNING LAW. This Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall be
governed by the laws of the State of Texas, without giving effect to the
principles of conflicts of laws thereof.
23. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without reference to
the others.
24. SEVERABILITY. If any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions and portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
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25. EFFECTIVE DATE. This Agreement shall become effective only upon and
as of the Effective Date.
26. WAIVER. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or relinquishment of any right granted hereunder or
of the future performance of any such term, covenant or condition.
27. CONSTRUCTION OF AGREEMENT. Headings of the sections in this Agreement
are for reference purposes only and shall not be deemed to have any substantive
effect. Unless the contents of this Agreement otherwise clearly requires,
references to the plural include the singular and the singular include the
plural. Whenever the context here requires, the masculine shall refer to the
feminine, the neuter shall refer to the masculine or feminine, the singular
shall refer to the plural, and vice versa.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
EXECUTIVE:
/s/ CHARLES WHITE
--------------------------------------------------
CHARLES WHITE
CGX:
CONSOLIDATED GRAPHICS, INC.
By: /s/Joe R. Davis
---------------------------------------------
Joe R. Davis, Chief Executive Officer
SIGNATURE PAGE TO EMPLOYMENT AGREEMENT
S-1
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