**7. ****Method of Payment****.**Subject to applicable provisions of the Plan, the Option Priceupon exercise of the Option shall be payable to the Company in full either: (i) in cash or itsequivalent; (ii) subject to prior approval by the Committee in its discretion, by tenderingpreviously acquired, unrestricted Shares having an aggregate Fair Market Value (as defined in thePlan) at the time of exercise equal to the total Option Price; (iii) subject to prior approval bythe Committee in its discretion, by withholding Shares which otherwise would be acquired onexercise having an aggregate Fair Market Value at the time of exercise equal to the total OptionPrice; or (iv) any other permitted method pursuant to the applicable terms and conditions of thePlan and applicable law.As soon as practicable after receipt of a written notification of exercise and full payment,the Company shall deliver to or on behalf of the Optionee, in the name of the Optionee or otherappropriate recipient, Share certificates or other evidence of ownership for the number of Sharespurchased under the Option.**8. ****Restrictions on Exercise****.**The Option may not be exercised if the issuance of suchShares or the method of payment of the consideration for such Shares would constitute a violationof any applicable federal or state securities or other laws or regulations, or any rules orregulations of any stock exchange on which the Common Stock may be listed. In addition, Optioneeunderstands and agrees that the Option cannot be exercised if the Company determines that suchexercise, at the time of such exercise, will be in violation of the Company’s insider tradingpolicy.**9. ****Termination of Directorship Service****.**Voluntary or involuntary termination of theOptionee’s service as a director of the Company shall affect Optionee’s rights under the Option asfollows:(a) *Other than due to Death*. If Optionee’s service as a director of theCompany is terminated for any reason other than due to his death pursuant toSection 9(b) below, then (i) the non-vested portion of the Option shall immediatelyexpire on the termination date and (ii) the vested portion of the Option shall expire to theextent not exercised within 90 days from the date of such termination of directorship. Inno event may the Option be exercised after the earlier of (i) the expiration of the OptionPeriod or (ii) 90 days from the date of such termination even if Optionee becomes deceasedduring such period.(b) *Death*. If Optionee’s service as a director is terminated due to his death,then (i) the non-vested portion of the Option shall immediately expire on the terminationdate and (ii) the vested portion of the Option shall expire on the one (1) year anniversarydate of the termination date (to the extent not previously exercised by Optionee) or, in thecase of death, by the person or persons to whom Optionee’s rights under the Option havepassed by will or by the laws of descent and distribution. In no event may the Option beexercised by anyone on or after the earlier of (i) the expiration of the Option Period or(ii) one (1) year after the date of termination due to Optionee’s death.**10. ****Independent Legal and Tax Advice****.**Optionee acknowledges that the Company hasadvised Optionee to obtain independent legal and tax advice regarding the grant and exercise of theOption and the disposition of any Shares acquired thereby.**11. ****Reorganization of Company****.**The existence of the Option shall not affect in anyway the right or power of the Company or its shareholders to make or authorize any or alladjustments, recapitalizations, reorganizations or other changes in Company’s capital structure orits business, or any merger or consolidation of the Company, or any issue of bonds,debentures, preferred or prior preference stock ahead of or affecting the Shares or the rightsthereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or anypart of its assets or business, or any other corporate act or proceeding, whether of a similarcharacter or otherwise.
 
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**12. ****Adjustment of Shares****.**In the event of stock dividends, spin-offs of assets orother extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers,consolidations, reorganizations, liquidations, issuances of rights or warrants and similartransactions or events involving Company, appropriate adjustments shall be made to the terms andprovisions of the Option as provided in the Plan.**13. ****No Rights in Shares****.**Optionee shall have no rights as a shareholder in respect ofthe Shares until the Optionee becomes the record holder of such Shares.**14. ****Investment Representation****.**Optionee will enter into such written representations,warranties and agreements as Company may reasonably request in order to comply with any federal orstate securities law. Moreover, any stock certificate for any Shares issued to Optionee hereundermay contain a legend restricting their transferability as determined by the Company in itsdiscretion. Optionee agrees that Company shall not be obligated to take any affirmative action inorder to cause the issuance or transfer of Shares hereunder to comply with any law, rule orregulation that applies to the Shares subject to the Option.**15. ****No Guarantee of Directorship****.**The Option shall not confer upon Optionee any rightto any continued directorship or other relationship with the Company or any affiliate thereof.**16. ****Optionee Confidentiality Obligations****.**In accepting the Option, Optioneeacknowledges that Optionee is obligated under Company’s policy and applicable law to protect andsafeguard the confidentiality of trade secrets and other proprietary and confidential informationbelonging to the Company and its affiliates, and that such obligations continue beyond thetermination of directorship.**17. ****Withholding of Taxes****.**The Company shall have the right to (a) make deductionsfrom the number of Shares otherwise deliverable upon exercise of the Option in an amount sufficientto satisfy withholding of any federal, state or local taxes that is required by law, or (b) takesuch other action as may be necessary or appropriate to satisfy any such tax withholdingobligations.**18. ****General****.**(a) *Notices*. All notices under this Agreement shall be mailed or delivered byhand to the parties at their respective addresses set forth beneath their signatures belowor at such other address as may be designated in writing by either of the parties to oneanother, or to their permitted transferees if applicable. Notices shall be effective uponreceipt.
 
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(b) *Shares Reserved*. The Company shall at all times during the Option Periodreserve and keep available under the Plan such number of Shares as shall be sufficient tosatisfy the requirements of this Option.(c) *Transferability of Option*. The Option is transferable only to the extentpermitted under the Plan at the time of transfer (i) by will or by the laws of descent anddistribution, or (ii) by a qualified domestic relations order (as defined in Section 414(p)of the Internal Revenue Code). No right or benefit hereunder shall in any manner be liablefor or subject to any debts, contracts, liabilities, obligations or torts of Optionee or anypermitted transferee thereof.(d) *Amendment and Termination*. No amendment, modification or termination ofthis Agreement shall be made at any time without the written consent of Optionee andCompany.(e) *No Guarantee of Tax Consequences*. The Company makes no commitment orguarantee that any tax treatment will apply or be available to Optionee or any other person.The Optionee has been advised, and provided with the opportunity, to obtain independentlegal and tax advice regarding the grant and exercise of the Option and the disposition ofany Shares acquired thereby.(f) *Severability*. In the event that any provision of this Agreement shall beheld illegal, invalid, or unenforceable for any reason, such provision shall be fullyseverable, but shall not affect the remaining provisions of the Agreement, and the Agreementshall be construed and enforced as if the illegal, invalid, or unenforceable provision hadnot been included herein.(g) *Supersedes Prior Agreements*. This Agreement shall supersede and replaceall prior agreements and understandings, oral or written, between the Company and theOptionee regarding the grant of the Options covered hereby.(h) *Governing Law*. The Option shall be construed in accordance with the lawsof the State of Texas, without regard to its conflict of law provisions, to the extentfederal law does not supersede and preempt Texas law.**19. ****Definitions and Other Terms****.**The following capitalized terms shall have thosemeanings set forth opposite them: (a) Optionee:                      (b) Grant Date:                       (c) Shares:                     (_____) Shares of the Company’s Common Stock.  (d) Option Price:                      ($_____) per Share.
 
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 (e) Option Period:                      through                      (until 5:00 p.m. CST).  (f) Vesting Schedule: Options for _____% of the Sharescovered by this Option shall vest on the first anniversary of the Grant Date,and Options for the remaining Shares shall vest on each subsequent anniversaryof the Grant Date until fully vested, as follows:     **Vesting Date** **Options Vesting**                                                   Total        In the event of a “Change in Control” of the Company (as defined in AppendixA of this Agreement), the non-vested portion of the Option shall becomeimmediately 100% vested as of the Change in Control date. The Optionee muststill be a director of the Company on any particular vesting date in orderfor the applicable Options to become vested as of such date.[*Signature page follows*.]
 
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**IN WITNESS WHEREOF**, the Company, as of the Grant Date, has caused this Agreement to beexecuted on its behalf by its duly authorized officer and Optionee has hereunto executed thisAgreement as of the same date.         **CONSOLIDATED GRAPHICS, INC.**           By:              Name:                    Title:                    *Address for Notices*:           Consolidated Graphics, Inc.5858 Westheimer, Suite 200Houston, TX 77057Attn: Chief Financial Officer           **OPTIONEE**                Signature           *Address for Notices*:                                      *[Appendix A follows.]*
 
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**Appendix A*****Definition of “Change in Control”***1. For purposes of this Stock Option Agreement, a “Change in Control” will be deemed to haveoccurred if at any time any of the following events shall occur: (a) the Company is merged, consolidated, converted or reorganized into or withanother corporation or other legal entity, and as a result of such merger,consolidation, conversion or reorganization less than a majority of the combined votingpower of the then outstanding securities of the Company or such corporation or otherlegal entity immediately after such transaction are held in the aggregate by theholders of Voting Stock (as hereinafter defined) of the Company immediately prior tosuch transaction and/or such voting power is not held by substantially all of suchholders in substantially the same proportions relative to each other;  (b) the Company sells (directly or indirectly) all or substantially all of itsassets (including, without limitation, by means of the sale of the capital stock orassets of one or more direct or indirect subsidiaries of the Company) to any othercorporation or other legal entity, of which less than a majority of the combined votingpower of the then outstanding voting securities (entitled to vote generally in theelection of directors or persons performing similar functions on behalf of such othercorporation or legal entity) of such other corporation or legal entity is held in theaggregate by the holders of Voting Stock of the Company 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;  (c) any person (as the term “person” is used in Section 13(d)(3) orSection 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”) 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 regulationpromulgated under the Exchange Act) of securities representing fifty percent (50%) ormore of the combined voting power of the then-outstanding securities entitled to votegenerally in the election of directors of the Company (“Voting Stock”);  (d) the Company files a report or proxy statement with the Securities and ExchangeCommission 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 itemtherein) 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 suchperiod constitute the directors of the Company cease for any reason to constitute atleast a majority thereof, unless the election, or the nomination for election by theCompany’s shareholders, of each director of the Company first elected duringsuch period was approved by a vote of at least two-thirds of (i) the directors ofthe Company then still in office who were directors of the Company at the beginningof any such period or (ii) directors referenced in clause (i) immediately precedingplus directors of  the Company whose nomination and/or election was approved by thedirectors referenced in clause (i) immediately preceding; or  (f) the shareholders of the Company approve a plan contemplating the liquidation ordissolution of the Company.Notwithstanding the foregoing provisions of subsections (c) or (d) hereof, a “Change inControl” 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 orindirectly beneficially owns 100% of the voting securities of such entity, or (iii) anyemployee stock ownership plan or any other employee benefit plan of the Company or anywholly-owned subsidiary of the Company, either files or becomes obligated to file a reportor 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 achange in control of the Company has occurred by reason of such beneficial ownership.
 
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