**Exhibit 10.1**

 

**CONSOLIDATED GRAPHICS,INC.**

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**INDEMNIFICATION AGREEMENT**

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This Agreement (the“Agreement”) is made and entered into by and between Consolidated Graphics,Inc., a Texas corporation (the “Corporation”), and the undersigned individual(“Indemnitee”).

 

RECITALS:

 

A.                                   Highly competent persons are becomingmore reluctant to serve corporations as directors, executive officers or inother capacities unless they are provided with adequate protection throughinsurance or adequate indemnification against inordinate risks of claims andactions against them arising out of their service to and activities on behalfof the Corporation.

 

B.                                     The Board of Directors of the Corporation(the “Board”) has determined that the inability to attract and retain such personswould be detrimental to the best interests of the Corporation and itsshareholders and that the Corporation should act to assure such persons thatthere will be increased certainty of such protection in the future.

 

C.                                     The Board has also determined that it isreasonable, prudent and necessary for the Corporation to contractually obligateitself to indemnify the current and future directors and certain executiveofficers to the fullest extent permitted by applicable law as an inducement forsuch individuals to serve or continue to serve the Corporation free from undueconcern that they will not be so indemnified, and the Corporation acknowledgesthat the Indemnitee is relying upon this Agreement as a condition to serving insuch capacities.

 

D.                                    Indemnitee is a director or executiveofficer of the Corporation and is willing to continue to serve the Corporationon the condition that Indemnitee be so indemnified.

 

In consideration of themutual covenants herein contained, the parties agree as follows:

 

# **ARTICLE 1**

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# **Certain Definitions**

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As used herein, thefollowing words and terms shall have the following respective meanings (whethersingular or plural):

 

“Change in Control”means a change in control of the Corporation, which will be deemed to haveoccurred if at any time after the Effective Date any of the following eventsshall occur: (i) the Corporation is merged, consolidated, converted orreorganized into or with another corporation or other legal entity, and as aresult of such merger, consolidation, conversion or reorganization less than amajority of the combined voting power of the then outstanding securities of theCorporation or such corporation or other legal entity immediately after suchtransaction are held in the aggregate by the holders of Voting Stock (ashereinafter defined) of

 

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the Corporation immediatelyprior to such transaction and/or such voting power is not held by substantiallyall of such holders in substantially the same proportions relative to eachother; (ii) the Corporation sells (directly or indirectly) all or substantiallyall of its assets (including, without limitation, by means of the sale of thecapital stock or assets of one or more direct or indirect subsidiaries of theCorporation) to any other corporation or other legal entity, of which less thana majority of the combined voting power of the then outstanding votingsecurities (entitled to vote generally in the election of directors or personsperforming similar functions on behalf of such other corporation or legal entity)of such other corporation or legal entity is held in the aggregate by theholders of Voting Stock of the Corporation immediately prior to such saleand/or such voting power is not held by substantially all of such holders insubstantially the same proportions relative to each other; (iii) any person (asthe term “person” is used in Section 13(d)(3) or Section 14(d)(2) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes(subsequent to the Effective Date) the beneficial owner (as the term“beneficial owner” is defined under Rule 13d–3 or any successor rule orregulation promulgated under the Exchange Act) of securities representing fiftypercent (50%) or more of the combined voting power of the then–outstandingsecurities entitled to vote generally in the election of directors of theCorporation (“Voting Stock”); (iv) the Corporation files a report or proxystatement with the Securities and Exchange Commission pursuant to the ExchangeAct disclosing in response to Form 8–K, Schedule 14A or Schedule 14C (or anysuccessor schedule, form or report or item therein) that a change in control ofthe Corporation has occurred; (v) if during any one (1) year period,individuals who at the beginning of any such period constitute the directors ofthe Corporation cease for any reason to constitute at least a majority thereof,unless the election, or the nomination for election by the Corporation’sshareholders, of each director of the Corporation first elected during suchperiod was approved by a vote of at least two–thirds of (a) the directors ofthe Corporation then still in office who were directors of the Corporation atthe beginning of any such period or (b) directors referenced in clause (a)immediately preceding plus directors of the Corporation whose nomination and/orelection was approved by the directors referenced in clause (a) immediatelypreceding; or (vi) the shareholders of the Corporation approve a plancontemplating the liquidation or dissolution of the Corporation.

 

“Claim” means anactual or threatened claim or request for relief.

 

“Corporate Status”means the status of a person who is or was a director, officer, partner,employee, agent or fiduciary of the Corporation or of any other corporation,partnership, joint venture, trust, employee benefit plan or other enterprisewhich such person is or was serving in such capacity at the request of theCorporation, provided, that the approval of such position in a resolutionadopted by the Board or the board of directors (or its functional equivalent)of any of the Corporation’s subsidiaries shall for all purposes qualify asserving or having served at the request of the Corporation.

 

“Court” shall meana court of competent jurisdiction.

 

“DisinterestedDirector” means a director of the Corporation who is not a named defendantor respondent to the Proceeding or subject to a Claim in respect of whichindemnification is sought by Indemnitee.

 

“Effective Date”means the date of this Agreement.

 

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“Expenses” meansall reasonable attorneys’ fees, retainers, court costs, transcript costs, feesof experts, witness fees, travel expenses, duplicating costs, printing andbinding costs, telephone charges, postage, delivery service fees and all otherdisbursements or expenses of the types customarily incurred in connection withprosecuting, defending, preparing to prosecute or defend, investigating orbeing or preparing to be a witness in a Proceeding.

 

“Independent Counsel”means a law firm, or a member of a law firm, that is experienced in matters ofcorporation law and neither contemporaneously is, nor in the five yearstheretofore has been retained to represent: (a) the Corporation or Indemnitee in any matter material to eithersuch party, (b) any other party to the Proceeding giving rise to a claimfor indemnification hereunder or (c) the beneficial owner, directly orindirectly, of securities of the Corporation representing 30% or more of thecombined voting power of the Corporation’s then outstanding votingsecurities.  Notwithstanding theforegoing, the term “Independent Counsel” shall not include any person who,under the applicable standards of professional conduct then prevailing, wouldhave a conflict of interest in representing either the Corporation orIndemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

“person” shallhave the meaning ascribed to such term in Sections 3(a)(9), 13(d) and14(d) of the Exchange Act.

 

“Proceeding” meansany threatened, pending or completed action, suit, arbitration, investigation,administrative hearing or any other proceeding whether civil, criminal,administrative or investigative (except one initiated by Indemnitee pursuant toArticle 6 of this Agreement to enforce Indemnitee’s rights under thisAgreement), and any appeal in or related to any such action, suit, arbitration,investigation, hearing or proceeding and any inquiry or investigation thatcould lead to such an action, suit, proceeding or arbitration.

 

“TBCA” means theTexas Business Corporation Act and any successor statute thereto as either ofthem may from time to time be amended.

 

# **ARTICLE 2**

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# **Services by Indemnitee**

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Indemnitee agrees toserve as a director or executive officer, as applicable, of theCorporation.  Indemnitee from time totime may agree to serve, as the Corporation may request from time to time, as adirector, officer, partner, employee, agent or fiduciary of any othercorporation, partnership, joint venture, trust, employee benefit plan or otherenterprise in which the Corporation has an interest.  Indemnitee and the Corporation each acknowledge that they haveentered into this Agreement as a means of inducing Indemnitee to serve theCorporation in such capacities, and the Corporation acknowledges that theIndemnitee is relying upon this Agreement as a condition to serving in suchcapacities.  Indemnitee may at any timeand for any reason resign from such position or positions (subject to any othercontractual obligation or any obligation imposed by operation of law).  The Corporation shall have no obligationunder this Agreement to continue Indemnitee in any such position or positions.

 

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# **ARTICLE 3**

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# **Indemnification and Contribution**

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## Section 3.1                                      General.  TheCorporation shall indemnify, and advance Expenses to, Indemnitee to the fullestextent permitted by applicable law in effect on the date hereof and to suchgreater extent as applicable law may thereafter from time to time permit,without regard to when the event, circumstance, action or claim giving rise toa right of indemnification hereunder arose, whether before or after theEffective Date of this Agreement.  Therights of Indemnitee provided under the preceding sentence shall include, butshall not be limited to, the right to be indemnified and to have Expensesadvanced in all Proceedings to the fullest extent permitted byArticle 2.02-1 of the TBCA, but subject to the terms of Section 4.3below.  The provisions set forth in thisAgreement are provided in addition to and as a means of furtherance andimplementation of, and not in limitation of, the obligations expressed in thisArticle 3. No requirement, condition to or limitation of any right toindemnification under this Article 3, or to advancement of Expenses underArticles 3 and 4 shall in any way limit the rights of Indemnitee underSection 7.3.

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## Section 3.2                                      Additional Indemnity of the Corporation. Indemnitee shall be entitled to indemnification pursuant to thisSection 3.2, if by reason of Indemnitee’s Corporate Status, Indemnitee is,or is threatened to be made, a party to any Proceeding (except to the extentlimited by Section 3.3).  Pursuantto this Section 3.2, Indemnitee shall be indemnified against Expenses,judgments, penalties (including excise or similar taxes), fines and amountspaid in settlement actually and reasonably incurred by Indemnitee or onIndemnitee’s behalf in connection with such Proceeding or any Claim therein, if(a) Indemnitee conducted himself in good faith; (b) Indemnitee wasreasonably believed (i) in the case of conduct in Indemnitee’s officialcapacity, that Indemnitee’s conduct was in the Corporation’s best interest; and(ii) in all other cases, that Indemnitee’s conduct was at least notopposed to the Corporation’s best interests and, (c) in the case of anycriminal Proceeding, had no reasonable cause to believe Indemnitee’s conductwas unlawful.  Nothing in thisSection 3.2 shall limit the benefits of Section 3.1 or any otherSection hereunder.

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## Section 3.3                                      Limitation on Indemnity. The indemnification otherwise available to an Indemnitee under Sections3.1 and 3.2 shall be limited to the extent set forth in thisSection 3.3.  In the event that anIndemnitee is found liable to the Corporation or is found liable on the basisthat personal benefit was improperly received by the Indemnitee, whether or notthe benefit resulted from an action taken in Indemnitee’s official capacity,the Indemnitee shall, with respect to the Claim in the Proceeding in which suchfinding is made, be indemnified only against reasonable Expenses actuallyincurred by him in connection with that Claim. Notwithstanding the foregoing, no indemnification against Expenses shallbe made in respect of any Claim in such Proceeding (i) in which judgement isrendered against Indemnitee for an accounting of profits made from the purchaseor sale by Indemnitee of securities of the Corporation pursuant to theprovisions of Section 16(b) of the Exchange Act and amendments thereto orsimilar provisions of any federal, state or local statutory law, (ii) where afinal decision by a Court (as hereinafter defined) shall determine that suchindemnification is not lawful or (iii) as to which Indemnitee shall have beenadjudged to be liable for willful or intentional misconduct in the performanceof Indemnitee’s duty to the Corporation; *provided, however*, that, if applicable lawso permits,

 

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indemnification against suchExpenses shall nevertheless be made by the Corporation in such event if andonly to the extent that the court in which such Proceeding shall have beenbrought or is pending, shall determine.

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## Section 3.4                                      Contribution. If the indemnification provided in Sections 3.1 and 3.2 isunavailable and may not be paid to Indemnitee for any reason other than thoseset forth in paragraphs (i), (ii) and (iii) of Section 3.3, then inrespect to any Proceeding in which the Corporation is jointly liable withIndemnitee (or would be if joined in such Proceeding), the Corporation shallcontribute to the amount of Expenses, judgments, fines and amounts paid insettlement actually and reasonably incurred and paid or payable by Indemniteein such proportion as is appropriate to reflect (i) the relative benefitsreceived by the Corporation on the one hand and by the Indemnitee on the otherhand from the transaction from which such Proceeding arose, and (ii) therelative fault of the Corporation on the one hand and of the Indemnitee on theother hand in connection with the events which resulted in such Expenses,judgments, fines or settlement amounts, as well as any other relevant equitableconsiderations.  The relative fault ofthe Corporation on the one hand and of the Indemnitee on the other hand shallbe determined by reference to, among other things, the parties’ relativeintent, knowledge, access to information and opportunity to correct or preventthe circumstances resulting in such Expenses, judgments, fines or settlementamounts.  The Corporation agrees that itwould not be just and equitable if contribution pursuant to thisSection 3.4 were determined by pro rata allocation or any other method ofallocation which does not take account of the foregoing equitableconsiderations.

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# **ARTICLE 4**

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# **Expenses**

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## Section 4.1                                      Expenses of a Party Who Is Wholly orPartly Successful.  Notwithstanding any other provision of thisAgreement, Indemnitee shall be indemnified against all Expenses actually andreasonably incurred by Indemnitee in connection with any Proceeding to whichIndemnitee is a party by reason of Indemnitee’s Corporate Status and in whichIndemnitee is successful, on the merits or otherwise.  In the event that Indemnitee is not wholly successful, on themerits or otherwise, in a Proceeding but is successful, on the merits or otherwise,as to any Claim in such Proceeding, the Corporation shall indemnify Indemniteeagainst all Expenses actually and reasonably incurred by Indemnitee or onIndemnitee’s behalf relating to each such Claim.  For purposes of this Section 4.1 and without limitation, thetermination of a Claim in a Proceeding by dismissal, with or without prejudice,shall be deemed to be a successful result as to such Claim.

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## Section 4.2                                      Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extentthat Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness orotherwise participates in any Proceeding at a time when Indemnitee is not namedas a defendant or respondent in the Proceeding, Indemnitee shall be indemnifiedagainst all Expenses actually and reasonably incurred by Indemnitee or onIndemnitee’s behalf in connection therewith.

 

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## Section 4.3                                      Advancement of Expenses. Except as set forth below, the Corporation shall pay all reasonableExpenses incurred by or on behalf of Indemnitee in connection with anyProceeding or Claim, whether brought by the Corporation or otherwise, inadvance of any determination respecting entitlement to indemnification pursuantto Article 5 hereof within 10 days after the receipt by the Corporation ofa written request from Indemnitee requesting such payment or payments from timeto time, whether prior to or after final disposition of such Proceeding orClaim.  Such statement or statementsshall reasonably evidence the Expenses incurred by Indemnitee. Indemniteehereby undertakes and agrees that Indemnitee will reimburse and repay theCorporation for any Expenses so advanced to the extent that it shall ultimatelybe determined by a Court in a final adjudication from which there is no furtherright of appeal, that Indemnitee is not entitled to be indemnified against suchExpenses. Notwithstanding anything in this Agreement to the contrary,Indemnitee shall not be entitled to the advancement of expenses under theAgreement if a determination has been made by a judicial authority orgovernmental entity or agency or, absent such determination, any suchauthority, entity or agency has taken a position or issued any guidancestating, that the advancement of expenses to an indemnitee in a manner similarto that contemplated in this Agreement constitutes a personal loan incontravention of Section 402 of the Sarbanes-Oxley Act of 2002 or any similarlaw or regulation.  In addition, inlight of the foregoing, Indemnitee agrees that he or she shall not be entitledto, and Indemnitee hereby waives, the right to the advancement of expenses inconnection with any indemnification rights permitted under the Corporation’sRestated Articles of Incorporation or By-laws, or under the laws of the Stateof Texas or otherwise, if a determination has been made by a judicial authorityor governmental entity or agency or, absent such determination, any suchauthority, entity or agency has taken a position or issued any guidance stating,that the advancement of expenses to an indemnitee in a manner similar to thatcontemplated in this Agreement constitutes a personal loan in contravention ofSection 402 of the Act or any similar law or regulation.  If the advancement of Expenses to theIndemnitee is restricted by applicable law as set forth in this Section, suchrestriction shall not otherwise affect the Corporation’s obligations toindemnify or make contributions to the Indemnitee, as applicable, ascontemplated in this Agreement.

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# **ARTICLE 5**

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# **Procedure for Determination of Entitlementto Indemnification**

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## Section 5.1                                      Request by Indemnitee. To obtain indemnification under this Agreement, Indemnitee shall submitto the Corporation a written request, including therein or therewith such documentationand information as is reasonably available to Indemnitee and is reasonablynecessary to determine whether and to what extent Indemnitee is entitled toindemnification.  The Secretary or anAssistant Secretary of the Corporation shall, promptly upon receipt of such arequest for indemnification, advise the Board in writing that Indemnitee hasrequested indemnification.

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## Section 5.2                                      Determination of Request. Upon written request by Indemnitee for indemnification pursuant to thefirst sentence of Section 5.1 hereof, a determination, if required byapplicable law, with respect to Indemnitee’s entitlement thereto shall be madein the specific case:  (a) if aChange in Control shall have occurred, by Independent Counsel in a written

 

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opinion to the Board, a copy ofwhich shall be delivered to Indemnitee, unless Indemnitee shall request thatsuch determination be made in accordance with Article 2.02-1F(1) or (2) ofthe TBCA; (b) if a Change in Control shall not have occurred, inaccordance with Article 2.02-1 of the TBCA.  If it is so determined that Indemnitee is entitled toindemnification hereunder, payment to Indemnitee shall be made within 10 daysafter such determination.  Indemniteeshall cooperate with the person making such determination with respect toIndemnitee’s entitlement to indemnification, including providing to such personupon reasonable advance request any documentation or information that is notprivileged or otherwise protected from disclosure and that is reasonablyavailable to Indemnitee and reasonably necessary to such determination.  Any costs or expenses (including attorneys’fees and disbursements) incurred by Indemnitee in so cooperating with theperson making such determination shall be borne by the Corporation(irrespective of the determination as to Indemnitee’s entitlement toindemnification) and the Corporation hereby agrees to indemnify and holdharmless Indemnitee therefrom.

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## Section 5.3                                      Independent Counsel. If a Change in Control shall have occurred and Indemnitee elects thatthe determination as to indemnification is to be made by Independent Counsel,the Independent Counsel shall be selected by Indemnitee, and Indemnitee shallgive written notice to the Corporation within 10 days advising it of theidentity of the Independent Counsel so selected (unless Indemnitee shallrequest that such selection be made by the Board, in which event theCorporation shall give written notice to the Indemnitee within 10 days after receiptof Indemnitee’s request for indemnification advising Indemnitee of the identityof the Independent Counsel so selected). In either event, Indemnitee or the Corporation, as the case may be,within seven days after such written notice of selection shall have been given,may deliver to the Corporation or to Indemnitee, as the case may be, a writtenobjection to such selection.  Anyobjection to selection of Independent Counsel pursuant to this Section 5.3may be asserted only on the ground that the Independent Counsel so selecteddoes not meet the requirements of the definition of “Independent Counsel” inArticle 1 hereof, and the objection shall set forth with particularity thefactual basis of such assertion.  Ifsuch written objection is timely made, the Independent Counsel so selected maynot serve as Independent Counsel unless and until a Court has determined thatsuch objection is without merit.  In theevent of a timely written objection to a choice of Independent Counsel, theparty originally selecting the Independent Counsel shall have seven days tomake an alternate selection of Independent Counsel and to give written noticeof such selection to the other party, after which time such other party shallhave five days to make a written objection to such alternate selection.  If, without 30 days after submission byIndemnitee of a written request for indemnification pursuant to Section 5.1hereof, no Independent Counsel shall have been selected and not objected to,either the Corporation or Indemnitee may petition a Court for resolution of anyobjection that shall have been made by the Corporation or Indemnitee to theother’s selection of Independent Counsel and/or for the appointment asIndependent Counsel of a person selected by the Court or by such other personas the Court shall designate, and the person with respect to whom an objectionis so resolved or the person so appointed shall act as Independent Counselunder Section 5.2 hereof.  TheCorporation shall pay any and all reasonable fees and expenses of IndependentCounsel incurred by such Independent Counsel in connection with acting pursuantto Section 5.2, and the Corporation shall pay all reasonable fees andexpenses incident to the procedures of this Section 5.3, regardless of themanner in which such Independent Counsel was selected or appointed.  Upon the due commencement of any judicialproceeding or arbitration pursuant to Section 6.1(c) of this Agreement,Independent Counsel shall be discharged and

 

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relieved of any furtherresponsibility in such capacity (subject to the applicable standards ofprofessional conduct then prevailing).

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## Section 5.4                                      Presumptions and Effect of CertainProceedings.

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### (a)                                  If a Change in Control shall haveoccurred, Indemnitee shall be presumed (except as otherwise expressly providedin this Agreement) to be entitled to indemnification under this Agreement uponsubmission of a request for indemnification under Section 5.1, andthereafter the Corporation shall have the burden of proof in overcoming thatpresumption in reaching a determination contrary to that presumption.  The presumption shall be used by IndependentCounsel (or other person or persons determining entitlement to indemnification)as a basis for a determination of entitlement to indemnification unless theCorporation provides information sufficient to overcome such presumption byclear and convincing evidence or the investigation, review and analysis ofIndependent Counsel (or such other person or persons) convinces him or them byclear and convincing evidence that the presumption should not apply.

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### (b)                                 If the person or persons empowered orselected under Article 5 of this Agreement to determine whether Indemniteeis entitled to indemnification shall not have made a determination with 60 daysafter receipt by the Corporation of the request by Indemnitee therefor, therequisite determination of entitlement to indemnification shall be deemed tohave been made and Indemnitee shall be entitled to such indemnification, absent(i) a knowing misstatement by Indemnitee of a material fact, or knowingomission of a material fact necessary to make Indemnitee’s statement notmaterially misleading in connection with the request for indemnification, or(ii) a prohibition of such indemnification under applicable law; *provided,however*, that such 60-day period may be extended for a reasonabletime, not to exceed an additional 30 days, if the person making thedetermination with respect to entitlement to indemnification in good faithrequires such additional time for the obtaining or evaluating of documentationand/or information relating to such determination; and *provided, further*, that the60-day limitation set forth in this Section 5.4(b) shall not apply andsuch period shall be extended as necessary (i) if within 30 days afterreceipt by the Corporation of the request for indemnification underSection 5.1 the Board has resolved to submit such determination to theshareholders pursuant to Section 5.2(b) of this Agreement for theirconsideration at an annual meeting thereof to be held within 90 days after suchreceipt and such determination is made thereat, or a special meeting ofshareholders is called within 30 days after such receipt for the purpose ofmaking such determination, such meeting is held for such purpose within 60 daysafter having been so called and such determination is made thereat, or(ii) if the determination of entitlement to indemnification is to be madeby Independent Counsel pursuant to Section 5.2(a) of this Agreement, inwhich case the applicable period shall be as set forth in Section 6.1(c).

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### (c)                                  The termination of any Proceeding or ofany Claim by judgment, order, settlement or conviction, or upon a plea of *nolocontendere* or its equivalent, shall not (except as otherwiseexpressly provided in this Agreement) by itself adversely affect the right ofIndemnitee to indemnification or create a presumption that Indemnitee did notconduct himself in good faith and in a manner that Indemnitee reasonably believedin the case of conduct in Indemnitee’s official capacity, that was not in thebest interests of the Corporation or, in all other cases, that was not opposedto the best interests of the Corporation or, with respect to any criminalProceeding, that Indemnitee had reasonable cause to believe that Indemnitee’sconduct

 

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was unlawful.  Indemnitee shall be deemed to have beenfound liable in respect of any Claim only after Indemnitee shall have been soadjudged by a Court after exhaustion of all appeals therefrom.

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# **ARTICLE 6**

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# **Certain Remedies of Indemnitee**

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## Section 6.1                                      Indemnitee Entitled to Adjudication in anAppropriate Court.  In the event (a) a determination ismade pursuant to Article 5 that Indemnitee is not entitled toindemnification under this Agreement; (b) there has been any failure bythe Corporation to make timely payment or advancement of any amounts duehereunder; or (c) the determination of entitlement to indemnification isto be made by Independent Counsel pursuant to Section 5.2 and suchdetermination shall not have been made and delivered in a written opinionwithin 90 days after (i) such Independent Counsel’s being appointed,(ii) the overruling by the Court of objections to such counsel’s selectionor (iii) expiration of all periods for the Corporation or Indemnitee toobject to such counsel’s selection, Indemnitee shall be entitled to commence anaction seeking an adjudication in an appropriate Court of the State of Texas,or in any other Court, of Indemnitee’s entitlement to such indemnification oradvancement of Expenses.  Alternatively,Indemnitee, at Indemnitee’s option, may seek an award in arbitration to beconducted by a single arbitrator pursuant to the Commercial Arbitration Rulesof the American Arbitration Association. Indemnitee shall commence such action seeking an adjudication or anaward in arbitration within 180 days following the date on which Indemniteefirst has the right to commence such action pursuant to this Section 6.1,or such right shall expire.  TheCorporation agrees not to oppose Indemnitee’s right to seek any suchadjudication or award through arbitration proceedings.

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## Section 6.2                                      Adverse Determination Not to Affect anyJudicial Proceeding.  In the event that a determination shall havebeen made pursuant to Article 5 that Indemnitee is not entitled toindemnification, any judicial proceeding or arbitration commenced pursuant tothis Article 6 shall be conducted in all respects as a *de novo*trial or arbitration on the merits, and Indemnitee shall not be prejudiced byreason of such initial adverse determination. In any judicial proceeding or arbitration commenced pursuant to thisArticle 6, the Corporation shall have the burden of proving thatIndemnitee is not entitled to indemnification or advancement of Expenses, asthe case may be.

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## Section 6.3                                      Corporation Bound by DeterminationFavorable to Indemnitee in any Judicial Proceeding or Arbitration. If a determination shall have been made or deemed to have been madepursuant to Article 5 that Indemnitee is entitled to indemnification, theCorporation shall be bound by such determination in any judicial proceeding orarbitration commenced pursuant to this Article 6, absent a knowingmisstatement by Indemnitee of a material fact, or a knowing omission of amaterial fact necessary to make a statement by Indemnitee not materiallymisleading, in connection with the request for indemnification.

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## Section 6.4                                      Corporation Bound by the Agreement. The Corporation shall be precluded from asserting in any judicialproceeding or arbitration commenced pursuant to this Article 6 that theprocedures and presumptions of this Agreement are not valid, binding and

 

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enforceable and shall stipulatein any such court or before any such arbitrator that the Corporation is boundby all the provisions of this Agreement.

 

## Section 6.5                                      Indemnitee Entitled to Expenses ofJudicial Proceeding.  In the event that Indemnitee seeks ajudicial adjudication of or an award in arbitration to enforce his rightsunder, or to recover damages for breach of, this Agreement, Indemnitee shall beentitled to recover from the Corporation, and shall be indemnified by theCorporation against, any and all Expenses actually and reasonably incurred byIndemnitee in such judicial adjudication or arbitration but only if Indemniteeprevails therein.  If it shall bedetermined in said judicial adjudication or arbitration that Indemnitee isentitled to receive part but not all of the indemnification or advancement ofexpenses or other benefit sought, the Expenses reasonably incurred byIndemnitee in connection with such judicial adjudication or arbitration shallbe reasonably prorated in good faith by counsel for Indemnitee.  Notwithstanding the foregoing, if a Changein Control shall have occurred, Indemnitee shall be entitled to indemnificationunder this Section 6.5 regardless of whether Indemnitee ultimatelyprevails in such judicial adjudication or arbitration, unless it is determinedin such adjudication or arbitration that such indemnification is not lawful.

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# **ARTICLE 7**

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# **Miscellaneous**

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## Section 7.1                                      Non-Exclusivity. The rights of Indemnitee to receive indemnification and advancement ofExpenses under this Agreement shall not be deemed exclusive of any other rightsto which Indemnitee may at any time be entitled under applicable law, theRestated Articles of Incorporation or By-laws of the Corporation, any otheragreement, vote of shareholders or a resolution of directors, or otherwise.  No amendment or alteration of the RestatedArticles of Incorporation or By-laws of the Corporation or any provisionthereof shall adversely affect Indemnitee’s rights hereunder and such rightsshall be in addition to any rights Indemnitee may have under the Corporation’sRestated Articles of Incorporation, By-laws and the TBCA or otherwise.  To the extent that there is a change in theTBCA (whether by statute or judicial decision) which allows greater indemnificationby agreement than would be afforded currently under the Corporation’s RestatedArticles of Incorporation or By-laws and this Agreement, it is the intent ofthe parties hereto that the Indemnitee shall enjoy by virtue of this Agreementthe greater benefit so afforded by such change.

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## Section 7.2                                      Insurance and Subrogation.

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### (a)                                  To the extent that the Corporationmaintains an insurance policy or policies providing liability insurance fordirectors, officers, employees, agents or fiduciaries of the Corporation or ofany other corporation, partnership, joint venture, trust, employee benefit planor other enterprise that such person serves or served at the request of theCorporation, Indemnitee shall be covered by such policy or policies inaccordance with its or their terms to the maximum extent of the coverageavailable for any such director, officer, employee, agent or fiduciarythereunder.

 

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### (b)                                 In the event of any payment by theCorporation under this Agreement, the Corporation shall be subrogated to theextent of such payment to all of the rights of recovery of Indemnitee, whoshall execute all papers required and take all action necessary to secure suchrights, including execution of such documents as are necessary to enable theCorporation to bring suit to enforce such rights.

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### (c)                                  The Corporation shall not be liable underthis Agreement to make any payment of amounts otherwise indemnifiable hereunderif and to the extent that Indemnitee has otherwise actually received suchpayment under any By-law, insurance policy, contract, agreement or otherwise.

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## Section 7.3                                      Self-Insurance of the Corporation.

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### (a)                                  The parties hereto recognize that theCorporation may, but is not required to, procure or maintain insurance or othersimilar arrangements, at its expense, to protect itself and any person,including the Indemnitee, who is or was a director, officer, employee agent orfiduciary of the Corporation or who is or was serving at the request of theCorporation as a director, officer, partner, venturer, proprietor, trustee,employee, agent or similar functionary of another corporation, partnership,joint venture, trust, employee benefit plan or other enterprise against anyexpense, liability or loss asserted against or incurred by such person, in sucha capacity or arising out of his or her status as such a person, whether or notthe Corporation would have the power to indemnify such person against suchexpense or liability.

###  

### (b)                                 In considering the cost and availabilityof such insurance, the Corporation, (through the exercise of the businessjudgment of its directors and officers), from time to time, may purchaseinsurance which provides for any and all of (i) deductibles,(ii) limits on payments required to be made by the insurer or (iii) coveragewhich may not be as comprehensive as that previously included in insurancepurchased by the Corporation or its predecessors.  The purchase of insurance with deductibles, limits on paymentsand coverage exclusions, even if in the best interest of the Corporation, maynot be in the best interest of the Indemnitee and the Indemnitee acknowledgessuch fact. As to the Corporation, purchasing insurance with deductibles, limitson payments and coverage exclusions is similar to the Corporation’s practice ofself-insurance in other areas. In order to protect Indemnitee who wouldotherwise be more fully or entirely covered under such policies, theCorporation shall indemnify and hold Indemnitee harmless to the extent(i) of such deductibles, (ii) of amounts exceeding payments requiredto be made by an insurer or (iii) that prior policies of officer’s anddirector’s liability insurance held by the Corporation or its predecessorswould have provided for payment to Indemnitee, if by reason of Indemnitee’sCorporate Status Indemnitee is or is threatened to be made a party to anyProceeding.  The obligation of theCorporation in the preceding sentence shall be without regard to whether theCorporation would otherwise be entitled to indemnify such officer or directorunder the other provisions of this Agreement, or under any law, agreement, voteof shareholders or directors or other arrangement.  Notwithstanding the foregoing provisions of thisSection 7.3, the Indemnitee shall not be entitled to indemnification forthe results of Indemnitee’s conduct that is intentionally adverse to theinterests of the Corporation.  Withoutlimiting the generality of any provision of this Agreement, the procedures inArticle 5 hereof shall, to the extent applicable, be used for determiningentitlement to indemnification under this Section 7.3.  This Agreement is authorized bySection 2.02-1(R) of the TBCA as in effect on the Effective Date,

 

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and further is intended toestablish an arrangement of self-insurance and an “other arrangement” pursuantto that section.

 

## Section 7.4                                      Certain Settlement Provisions. The Corporation shall have no obligation to indemnify Indemnitee underthis Agreement for amounts paid in settlement of a Proceeding or Claim withoutthe Corporation’s prior written consent. The Corporation shall not settle any Proceeding or Claim in any mannerthat would impose any fine or other obligation on Indemnitee withoutIndemnitee’s prior written consent. Neither the Corporation nor Indemnitee shall unreasonably withhold theirconsent to any proposed settlement.

##  

## Section 7.5                                      Exculpation of Directors. If Indemnitee is a director of the Corporation, Indemnitee shall, inIndemnitee’s capacity as a director of the Corporation, not be liable to theCorporation or its shareholders for monetary damages for an act or omission inIndemnitee’s capacity as a director, except that Indemnitee’s liability shallnot be eliminated or limited for; (a) a breach of Indemnitee’s duty ofloyalty to the Corporation or its shareholders; (b) an act or omission notin good faith that constitutes a breach of duty of a director to theCorporation or that involves intentional misconduct or a knowing violation ofthe law; (c) a transaction from which Indemnitee received an improperbenefit, whether or not the benefit resulted from an action taken within thescope of Indemnitee’s office; or (d) an act or omission for which theliability of Indemnitee is expressly provided for by statute.

##  

## Section 7.6                                      Duration of Agreement. This Agreement shall continue for so long as Indemnitee serves at therequest of the Corporation as a director, officer, employee, agent or fiduciaryof the Corporation or as a director, officer, partner, employee, agent orfiduciary of any other corporation, partnership, joint venture, trust, employeebenefit plan or other enterprise in which the Corporation has an interest, andthereafter shall survive until and terminate upon the last to occur of:(a) 20 years after the date that Indemnitee shall have ceased to serve asa director, officer, employee, agent or fiduciary of the Corporation and of anyother corporation, partnership, joint venture, trust, employee benefit plan orother enterprise which Indemnitee served at the request of the Corporation;(b) the final termination of all pending Proceedings in respect of whichIndemnitee is granted rights of indemnification or advancement of expenseshereunder and of any proceeding commenced by Indemnitee pursuant to Article 6relating thereto; or (c) the expiration of all statutes of limitationapplicable to possible Claims arising out of Indemnitee’s Corporate Status.

##  

## Section 7.7                                      Notice by Each Party. Indemnitee agrees to promptly notify the Corporation in writing uponbeing served with any summons, citation, subpoena, complaint, indictment,information or other document or communication relating to any Proceeding orClaim for which Indemnitee may be entitled to indemnification or advancement ofExpenses hereunder; provided that failure to provide such notice does notaffect Indemnitee’s rights to indemnification or advancement of expenseshereunder.  The Corporation agrees topromptly notify Indemnitee in writing, as to the pendency of any Proceeding orClaim which may involve a claim against the Indemnitee for which Indemnitee maybe entitled to indemnification or advancement of Expenses hereunder.

##  

## Section 7.8                                      Amendment.  ThisAgreement may not be modified or amended except by a written instrumentexecuted by or on behalf of each of the parties hereto.

 

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## Section 7.9                                      Waivers.  Theobservation of any term of this Agreement may be waived (either generally or ina particular instance and either retroactively or prospectively) by the partyentitled to enforce such term only by a writing signed by the party againstwhich such waiver is to be asserted. Unless otherwise expressly provided herein, no delay on the part of anyparty hereto in exercising any right, power or privilege hereunder shalloperate as a waiver thereof, nor shall any waiver on the part of any partyhereto of any right, power or privilege hereunder operate as a waiver of anyother right, power or privilege hereunder nor shall any single or partialexercise of any right, power or privilege hereunder preclude any other orfurther exercise thereof or the exercise of any other right, power or privilegehereunder.

##  

## Section 7.10                                Entire Agreement. This Agreement and the documents expressly referred to herein constitutethe entire agreement between the parties hereto with respect to the matterscovered hereby, and any other prior or contemporaneous oral or writtenunderstandings or agreements (including any prior indemnification agreementswith the Corporation) with respect to the matters covered hereby are expresslysuperseded by this Agreement; provided, however, that if the Indemnitee hadpreviously executed an indemnification agreement with the Corporation which isto be superceded by this Agreement, this Agreement shall expressly cover allevents and periods prior to the Effective Date to which the supercededagreement applied.

##  

## Section 7.11                                Severability. If any provision of this Agreement (including any provision within asingle section, paragraph or sentence) or the application of such provision toany person or circumstance, shall be judicially declared to be invalid,unenforceable or void, such decision will not have the effect of invalidatingor voiding the remainder of this Agreement or affect the application of suchprovision to other persons or circumstances, and the parties hereto agree thatthe part or parts of this Agreement so held to be invalid, unenforceable orvoid will be deemed to have been stricken herefrom and the remainder of thisAgreement will have the same force and effectiveness as if such part or partshad never been included herein; *provided, however*, that the parties shallnegotiate in good faith with respect to an equitable modification of theprovision or application thereof declared to be invalid, unenforceable orvoid.  Any such finding of invalidity orunenforceability shall not prevent the enforcement of such provision in anyother jurisdiction to the maximum extent permitted by applicable law

##  

## Section 7.12                                Notices.  Unlessotherwise expressly provided herein, all notices, requests, demands, consents,waivers, instructions, approvals and other communications hereunder shall be inwriting and shall be deemed to have been duly given if personally delivered toor mailed, certified mail, return receipt requested, first-class postage paid,addressed as follows:

##  

If to the Corporation:

 

Consolidated Graphics, Inc. 5858 Westheimer, Suite 200 Houston, Texas  77057Attention: Chief Executive Officer

 

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If toIndemnitee:

 

 

 

or to such other addressor to such other individuals as any party shall have last designated by noticeto the other parties.  All notices andother communications given to any party in accordance with the provisions ofthis Agreement shall be deemed to have been given when delivered or sent to theintended recipient thereof in accordance with the provisions of thisSection 7.12.

 

## Section 7.13                                Governing Law; Venue. This Agreement shall be construed in accordance with and governed by thelaws of the State of Texas without regard to the principles of conflict oflaws.  Venue for any and all purposeswith respect to a dispute hereunder or otherwise relating to this Agreementshall lie exclusively in the state and federal courts located in Houston,Harris County, Texas.

##  

## Section 7.14                                Headings.  The Articleand Section headings in this Agreement are for convenience of reference only,and shall not be deemed to alter or affect the meaning or interpretation of anyprovisions hereof.

##  

## Section 7.15                                Counterparts.  This Agreement may be executed in two or more counterparts, eachof which shall be deemed to be an original and all of which together shall bedeemed to be one and the same instrument.

##  

## Section 7.16                                Certain Persons Not Entitled toIndemnification.  Notwithstanding any other provisions of thisAgreement, Indemnitee shall not be entitled to indemnification or advancementof expenses hereunder with respect to any Proceeding or any Claim therein,brought or made by such person against the Corporation, except as specificallyprovided in Article 5 or Article 6 hereof.

##  

## Section 7.17                                Successors and Binding Agreement.

##  

### (a)                                  The Corporation shall require anysuccessor (whether direct or indirect, by purchase, merger, consolidation,reorganization or otherwise) to all or substantially all of the business and/orassets of the Corporation, to expressly assume and agree to perform thisAgreement in the same manner and to the same extent the Corporation would berequired to perform if no such succession had taken place. This Agreement shallbe binding upon and inure to the benefit of the Corporation and any successorto the Corporation, including without limitation, any persons acquiringdirectly or indirectly all or substantially all of the business and/or assetsof the Corporation whether by purchase, merger, consolidation, reorganizationor otherwise (and such successor shall thereafter be deemed the “Corporation”for the purposes of this Agreement). This Agreement shall not otherwise beassignable, transferable or delegable by the Corporation.

 

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### (b)                                 This Agreement shall be binding upon theCorporation and its successors and assigns and shall inure to the benefit ofIndemnitee and Indemnitee’s personal or legal representatives, executors,administrators, successors, heirs, distributees and/or legatees.

 

### (c)                                  This Agreement is personal in nature andneither of the parties hereto shall, without the consent of the other, assign,transfer or delegate this Agreement or any rights or obligations hereunderexcept as expressly provided in Subsection 7.7(a) hereof.

###  

### (d)                                 The Corporation and the Indemniteerecognize that each party will have no adequate remedy at law for breach by theother party of any of the agreements contained herein and, in the event of anysuch breach, the Corporation and the Indemnitee hereby agree and consent thatthe other shall be entitled to a decree of specific performance, mandamus orother appropriate remedy to enforce performance of this Agreement.

###  

Section 7.18                                Indemnificationfor Negligence, Gross Negligence, etc. **WITHOUT LIMITING THE GENERALITY OF ANYOTHER PROVISION HEREUNDER, IT IS THE EXPRESS INTENT OF THIS AGREEMENT THATINDEMNITEE BE INDEMNIFIED AND EXPENSES BE ADVANCED REGARDLESS OF INDEMNITEE’S ACTOF NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL OR WILLFUL MISCONDUCT TO THEEXTENT THAT INDEMNIFICATION AND ADVANCEMENT OF EXPENSES IS ALLOWED PURSUANT TOTHE TERMS OF THIS AGREEMENT.**

 

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IN WITNESS WHEREOF, this Agreement has beenduly executed and delivered on June 30, 2004, providing coverage for Claimsarising from and as of the date on which Indemnitee first became a director orofficer of the Corporation.

 

 
|   | CONSOLIDATED  GRAPHICS, INC. |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | By:                          |   |
|   | Name:                        |   |
|   | Title:                       |   |
|   |                         |
|   |                         |
|   | INDEMNITEE                   |
|   |                         |
|   |                         |
|        |                              |  |  |  |

 

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