Exhibit 10.7
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, Xxxxxx County,
Texas ("CGX"), and XXX X. XXXXX (the "EXECUTIVE"); other capitalized terms used
in this Agreement are defined and shall have the meanings set forth in Section
17 or elsewhere herein.
W I T N E S S E T H:
WHEREAS, Executive is to be employed as Chief Executive 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
as Chief Executive 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 from time to time (the "DUTIES"). Executive shall be
subject to, and shall comply with, CGX xxxxxxx xxxxxxx 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 the Affiliates or be engaged in any other
business activity, other than those activities described in Section 12 below.
Executive represents and warrants that Executive is not a party to or bound by
any agreement or contract or subject to any restrictions, including without
limitation in
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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 $33,333.66, 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 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.
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) 300,000 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
(b) 50,000 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.
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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".
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 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,
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;
(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
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(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
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 9 of this Agreement shall not apply to Permitted Activities (as defined
below).
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
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.
(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);
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(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
(vii), then during the Severance Period (as defined below), (i)
Executive shall receive Executive's monthly salary in effect
immediately prior to the Termination in accordance with Section 4(a)
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.
(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
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,
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 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
obligation to pay any of the benefits as contemplated in this Section
15.
(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
Section 15;
(i) all CGX stock options held by Executive
prior to such a Termination shall become
exercisable, regardless of whether or not
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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 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
this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 16) (each a "PAYMENT")
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,
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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
determinations required to be made under this Section 16, including
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 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 been made ("UNDERPAYMENT"), consistent with the
calculations required to be made hereunder. If CGX exhausts its
remedies pursuant to Section 16(c) 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
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(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 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 xxx for a refund
or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a
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 xxx 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
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 (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 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.
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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 Board of Directors with respect to the performance
of Executive's 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 Board of
Directors) for a total period of one hundred eighty (180) days,
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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 of this Agreement.
(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 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 and (iv) 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 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 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 Board of Directors.
(n) Severance Period shall mean that period of time equal to
the shorter of (i) two (2) years following Termination or (ii) the
remainder of the Employment Period that would have been applicable
pursuant to Section 15(a)(i) but for the early Termination, if at the
time of such Termination either of the parties had notified the other
of its election to terminate the Employment Period pursuant to Section
15(a)(i).
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.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxx
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with a copy (which shall not
constitute notice) to: R. Xxxxx Xxxxxx, Xx., Esq.
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Executive: Xxx X. Xxxxx
c/o Consolidated Graphics, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
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
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)
and (f) hereof and to the extent Executive actually receives comparable welfare
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.
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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.
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/Xxx X. Xxxxx
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XXX X. XXXXX
CGX:
CONSOLIDATED GRAPHICS, INC.
By: /s/Xxx X. Xxxxx
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Name:Xxx X. Xxxxx
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Title:CEO
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12
EXHIBIT A
13
