Exhibit 10.1


 


CONSOLIDATED GRAPHICS, INC.


STOCK OPTION AGREEMENT


 


[DATE]


 


Consolidated Graphics, Inc. (the “Company”) hereby grants,
effective as of [DATE]  (the “Grant Date”) to [NAME] (the “Optionee”),
an employee of the Company or any of its subsidiaries, the Option (the “Option”)
to purchase from the Company up to, but not exceeding in the aggregate, [NUMBER] shares of the Company’s Common Stock, par value
$.01 per share, (the “Stock”), at a price per share equal to the closing price
per share of Stock as reported by the New York Stock Exchange on the last
trading day immediately preceding the Grant Date (the “Exercise Price”), such
number of shares and such price per share being subject to adjustment as
provided in paragraph 14(b) of the Consolidated Graphics, Inc. Long-Term
Incentive Plan, as amended from time to time (the “Plan”), and further subject
to the following terms and conditions:


 


1.                                       This
Option is issued in accordance with and subject to all of the terms, conditions
and provisions of the Plan and administrative interpretations, if any, which
have been duly adopted and are in effect on the date hereof. Except as defined
herein, capitalized terms shall have the same meanings ascribed to them under
the Plan.


 


2.                                       (a)           This
Option shall be exercisable as follows:


 


(i)                                     Provided
that Optionee has provided continuous service as an employee of the Company or
any of its subsidiaries since the Grant Date, this Option shall be exercisable from
and after [DATE] for any number of shares up to and including, but not in
excess of, 20% of the aggregate number of shares subject to this Option;


 


(ii)                                  Provided
that Optionee has provided continuous service as an employee of the Company or
any of its subsidiaries since the Grant Date, this Option shall be exercisable from
and after [DATE] for any number of shares up to and including, but not in
excess of, 40% of the aggregate number of shares subject to this Option;


 


(iii)                               Provided
that Optionee has provided continuous service as an employee of the Company or
any of its subsidiaries since the Grant Date, this Option shall be exercisable from
and after [DATE] for any number of shares up to and including, but not in
excess of, 60% of the aggregate number of shares subject to this Option;


 


(iv)                              Provided
that Optionee has provided continuous service as an employee of the Company or
any of its subsidiaries since the Grant Date, this Option shall be exercisable from
and after [DATE] for any number of shares up to and including, but not in
excess of, 80% of the aggregate number of shares subject to this Option; and


 


(v)                                 Provided
that Optionee has provided continuous service as an employee of the Company or
any of its subsidiaries since the Grant Date; this Option shall be fully
exercisable from and after [DATE];


 


Provided that the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of shares previously
purchased pursuant to the terms hereof; and provided further that no additional
installments shall become exercisable after the Option terminates pursuant to Section 2(b) or
3 hereof.


 





















 


(b)                                 In
the event of termination of Optionee’s status as an employee of the Company or any
of its subsidiaries during the period following the Grant Date to [DATE] for
any reason, this Option shall immediately terminate and be of no force and
effect.


 


3.                                       Unless
earlier terminated pursuant to Section 2(b) hereof, the Option hereby
granted shall terminate and be of no force and effect with respect to any
shares not previously purchased by the Optionee upon the earlier of (a) the
[NUMBER] anniversary of the Grant Date or (b) the expiration of [NUMBER] months after termination of the Optionee’s status
with the Company or any of its subsidiaries.


 


Notwithstanding the foregoing, if death of the Optionee occurs (i) after
the Optionee’s completion of 30 days of continued service as an employee of the
Company or any of its subsidiaries, following the
Grant Date and (ii) before the termination of this Option (whether before
or after termination of the Optionee’s status with the Company or any of its subsidiaries),
the Option shall not terminate, but shall be exercisable by the Optionee’s
heirs, estate or personal representatives, until the earlier of (a) the [NUMBER]
anniversary of the Grant Date or (b) one year following the death of the
Optionee, whereupon the Option shall terminate and be of no force and effect
with respect to any shares not previously purchased hereunder.


 


4.                                       Subject
to the limitations set forth herein and in the Plan, this Option may be exercised
by written notice provided to the Company as set forth in Section 5. Such
written notice shall (a) state the number of shares with respect to which
the Option is being exercised and (b) be accompanied by a check, cash or
money order payable to Consolidated Graphics, Inc. in the full amount of
the purchase price for any shares being acquired. In addition, unless the
options and shares covered by the Plan have been registered pursuant to the
Securities Act of 1933, as amended, the Company may, at its election, require
the Optionee to give a representation in writing in form and substance
satisfactory to the Company to the effect that he/she is acquiring such shares
for his/her own account for investment and not with a view to, or for sale in
connection with, the distribution of such shares or any part thereof.


 


If any law or regulation requires the Company to take any action with
respect to the shares specified in such notice, the time for delivery thereof,
which would otherwise be as promptly as possible, shall be postponed for the
period of time necessary to take such action.


 


5.                                       Notice
of exercise of the Option must be made in the following manner, using such
forms as the Company may from time to time provide:


 


(a)                                  by
registered or certified United States mail, postage prepaid, to Consolidated
Graphics, Inc.. Attention: Chief Financial Officer, 5858 Westheimer, Suite 200,
Houston, Texas 77057, in which case the date of exercise shall be the date of
mailing; or


 


(b)                                 by
hand delivery, fax or otherwise to Consolidated Graphics, Inc.,
Attention:  Chief Financial Officer, 5858
Westheimer, Suite 200, Houston, Texas 77057, in which case the date of
exercise shall be the date when receipt is acknowledged by the Company.


 


6.                                       The
Optionee’s rights under the Plan and this Stock Option Agreement are personal;
no assignment or transfer of the Optionee’s rights under and interest in this
Option may be made by the Optionee otherwise than by will or by the laws of
descent and distribution; and this Option is exercisable during his/her
lifetime only by the Optionee.


 


7.                                       No
certificates representing shares of Stock purchased hereunder shall be
delivered to or in respect of an Optionee unless the amount of all federal,
state and other governmental withholding tax requirements imposed upon the
Company with respect to the issuance of such Stock has been remitted to the
Company or unless provisions to pay such withholding requirements have been
made to the satisfaction of the Committee pursuant to Section 10 of the
Plan. The Committee may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with
this Option.


 





















 


With the Committee’s approval, the Optionee may pay all or any portion
of the taxes required to be withheld by the Company or paid by the Optionee in
connection with the exercise of all or any portion of this Option by electing
to have the Company withhold shares of stock, or by delivering previously owned
shares of Stock, having a fair market value determined in accordance with
paragraph 10 of the Plan, equal to the amount required to be withheld or
paid.  The Optionee must make the
foregoing election on or before the date that the amount of tax to be withheld
is determined.


 


8.                                       The
Option is intended to qualify as an “incentive stock option” within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”),
except where prior stock option grants to Optionee make incentive stock option
status unavailable and provided that nothing in this Agreement shall be
interpreted as a  representation,
guarantee, or other understanding on the part of the Company that the Option is
or will be determined to be an “incentive stock option” within the meaning of
that or any other section of the Code. 
Optionee shall notify the Company (i) of any “disqualifying
disposition” (within the meaning of Section 421 of the Code) of the Stock
acquired upon exercise of the Option (specifically, a sale of such Stock within
two years from the date the Option was granted or within one year from the date
the Option was exercised) and (ii) of such other events or circumstances
relating to the Option or the Stock as are specified by the Committee. Such
notice(s) shall be provided at such time and in such manner as is specified by
the Committee.


 


9.                                       Notwithstanding
anything in this Stock Option Agreement to the contrary, immediately prior to
the occurrence of a Change in Control, this Option to the extent not previously
exercised or terminated shall become fully vested and immediately
exercisable.  For purposes of this Stock Option Agreement, a “Change
in Control” will be deemed to have occurred if at any time any of the following
events shall occur:


 


(a)                                  the
Company is merged, consolidated, converted or reorganized into or with another
corporation or other legal entity, and as a result of such merger,
consolidation, conversion or reorganization less than a majority of the
combined voting power of the then outstanding securities of the Company or such
corporation or other legal entity immediately after such transaction are held
in the aggregate by the holders of Voting Stock (as hereinafter defined) of the
Company immediately prior to such transaction and/or such voting power is not
held by substantially all of such holders in substantially the same proportions
relative to each other;


 


(b)                                 the
Company sells (directly or indirectly) all or substantially all of its assets
(including, without limitation, by means of the sale of the capital stock or
assets of one or more direct or indirect subsidiaries of the Company) to any
other corporation or other legal entity, of which less than a majority of the
combined voting power of the then outstanding voting securities (entitled to
vote generally in the election of directors or persons performing similar
functions on behalf of such other corporation or legal entity) of such other
corporation or legal entity is held in the aggregate by the holders of Voting
Stock of the Company immediately prior to such sale and/or such voting power is
not held by substantially all of such holders in substantially the same
proportions relative to each other;


 


(c)                                  any
person (as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) becomes
(subsequent to the Grant Date) the beneficial owner (as the term “beneficial
owner” is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing fifty
percent (50%) or more of the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors of the
Company (“Voting Stock”);


 


(d)                                 the
Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K,
Schedule 14A or Schedule 14C (or any successor schedule, form or
report or item therein) that a change in control of the Company has occurred;


 





















 


(e)                                  if
during any one (1)-year period, individuals who at the beginning of any such
period constitute the directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Company’s shareholders, of each director of the Company
first elected during such period was approved by a vote of at least two-thirds
of (i) the directors of the Company then still in office who were
directors of the Company at the beginning of any such period or (ii) directors
referenced in clause (i) immediately preceding plus directors of  the Company whose nomination and/or election
was approved by the directors referenced in clause (i) immediately
preceding; or


 


(f)                                    the
shareholders of the Company approve a plan contemplating the liquidation or
dissolution of the Company.


 


Notwithstanding the foregoing provisions of Subsection 9(c) or
9(d) hereof, a “Change in Control” shall not be deemed to have occurred
for purposes of this Agreement solely because (i) the Company, (ii) a
corporation or other legal entity in which the Company directly or indirectly
beneficially owns 100% of the voting securities of such entity, or (iii) any
employee stock ownership plan or any other employee benefit plan of the Company
or any wholly-owned subsidiary of the Company, either files or becomes
obligated to file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K, Schedule 14A or Schedule 14C
(or any successor schedule, form or report or item therein) under the Exchange
Act, disclosing beneficial ownership by it of shares of Voting Stock, whether
in excess of fifty percent (50%) or otherwise, or because the Company reports
that a change in control of the Company has occurred by reason of such
beneficial ownership.


 


10.                                 This
Agreement shall be governed by, construed and enforced in accordance with the
laws of the State of Texas.


 


	
   

  	
  CONSOLIDATED GRAPHICS, INC.

  
	
   

  	
  COMPENSATION COMMITTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
  Effective Date of Grant

  	
  By

  	
   

  	
   

  
	
  [DATE]

  	
   

  
	
  Exercise Price: [$PRICE]

  	
  Joe R. Davis, Chief Executive Officer

  
	
   

  	
  Authorized Representative

  



 


 


This Option has been accepted as of the above date by the undersigned,
subject to the terms and provisions of the Plan and administrative
interpretations thereof referred to above. 
I also hereby acknowledge receipt of the memorandum regarding Notice of
Disqualifying Dispositions and the Consolidated Graphics, Inc. Prospectus
dated October 22, 1998.


 


	
   

  	
   

  	
   

  
	
   

  	
  Name: [NAME]