Document:

Filed by Bowne Pure Compliance

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”), dated effective as of May 22, 2008, is entered
into by and between CONSOLIDATED GRAPHICS, INC., a Texas corporation having its principal place of
business in Houston, Harris County, Texas (“CGX”), and JOE R. DAVIS (the “Executive”); other
capitalized terms used in this Agreement are defined and shall have the meanings set forth in
Section 18 or elsewhere herein.

W I T N E S S E T H:

WHEREAS, Executive is employed as Chief Executive Officer of CGX;

WHEREAS, Executive and CGX are parties to that certain Employment Agreement, effective
February 13, 2006 (the “Prior Employment Agreement”) and the Change in Control Agreement;

WHEREAS, in connection with his employment, Executive has been and will continue to be
provided by CGX with specialized training and access to confidential information;

WHEREAS, it is the desire of the Board of Directors of CGX (the “Board”) to enter into this
Agreement with Executive, which shall supersede the Prior Employment Agreement and the Change in
Control Agreement, to ensure Executive’s continued employment with CGX and its subsidiaries; and

WHEREAS, Executive is willing to enter into this Agreement with 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 continues the employment of Executive, and Executive hereby accepts
such continued employment with CGX, on the terms and conditions set forth in this Agreement.

2. Employment Period. The term of Executive’s employment pursuant to the terms of this
Agreement shall commence upon the Effective Date and shall continue until the fifth anniversary of
the Effective Date (the original five-year term, and any automatic extension thereof, hereby
referred to as the “Employment Period”). On the fifth, sixth, seventh, eighth and ninth
anniversaries of the Effective Date, the Employment Period shall be automatically extended for one
(1) additional year unless CGX provides, at least ninety (90) days in advance of the anniversary of
the Effective Date, written notice to Executive that the Employment Period will not be so extended.
Notwithstanding the above, the Employment Period will expire upon the tenth anniversary of the
Effective Date or upon Executive’s termination in accordance with Section 15 or Section 16 below.

 

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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 insider trading policies (a copy of which has been
delivered to Executive) and the other policies of CGX in effect from time to time (collectively,
the “CGX Policies”); provided, however, that to the extent such CGX Policies may contradict the
express provisions of this Agreement, the provisions of this Agreement shall govern.  Executive
shall devote his full business time, efforts and attention to the business of CGX during the
Employment Period consistent with past practice and, without the prior written consent of the
Board, Executive shall not during the Employment Period render any services of a business,
commercial or professional nature to any person or organization other than CGX and the Affiliates
or be engaged in any other business activity, other than those activities described in Section 12
below.

4. Compensation. During the Employment Period, Executive shall be compensated for Executive’s
services as follows:

(a) Executive shall be paid a base salary not less than the rate of base salary paid to
Executive immediately prior to the Effective Date. The base salary shall be subject to any
and all customary payroll deductions, including deductions for the Federal Insurance
Contributions Act and other federal, state and local taxes, and shall be reviewed by the
Board at least once per annum.

(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) such vacation time as Executive may determine in his discretion; provided, however,
that such vacation time shall not unreasonably interfere with the execution by Executive of
his Duties hereunder and Executive shall neither accumulate vacation time nor be entitled to
carryover into subsequent periods or be paid any compensation in addition to his stated
salary for any vacation time planned but not taken, regardless of the reason therefor; and
provided, further, that the Board in its sole discretion shall have the right at any time to
implement vacation guidelines applicable to the Executive not less than generally applicable
CGX policy then in effect.

(c) Executive shall be eligible to participate, to the extent that Executive meets all
eligibility requirements of general application, in and receive the Employee Benefits
provided by CGX in which employees and senior executives of CGX generally are eligible to
participate.

5. Bonus. In addition to the other compensation set forth herein, Executive shall be eligible
to participate in the CGX Annual Incentive Compensation Plan at a target bonus award level of 100%
of Executive’s base salary. If Executive is employed on the last day of a fiscal year, the bonus
for such fiscal year, if any, shall be deemed earned as of such date and payable whether or not
employment continues beyond such date.  The bonus, if any, shall be paid on June 15 following the
fiscal year in which such bonus was earned.

 

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6. Equity Awards. In addition to the other compensation set forth herein, Executive shall
receive:

(a) Effective on April 1, 2009 and April 1, 2010, restricted stock grant units (“RS
Units”) covering that number of shares of CGX common stock being the greater of (i) 12,500
shares or (ii) the number of shares obtained by dividing a number as determined by the
Compensation Committee, but not less than $500,000, by the closing price per share of CGX
common stock as reported on the New York Stock Exchange (or if not reported on the New York
Stock Exchange, such other national exchange or quotation system on which CGX common stock
is then quoted) on the last trading day immediately preceding such effective date. Such RS
Units shall (i) vest on the annual anniversary of the date of grant in equal increments from
the date of grant over a period of no greater than five years and no less than three years
and (ii) shall otherwise be granted in accordance with and subject to the terms set forth on
the form of CGX Restricted Stock Grant Unit approved by the Compensation Committee pursuant
to the Consolidated Graphics, Inc. Long-Term Incentive Plan, as amended (the “LTIP”).

(b) Effective in May 2008, options to purchase 450,000 shares of CGX common stock (the
“Options”). Such Options shall (x) vest in 20% annual increments beginning on the first
anniversary of the date of grant and continuing thereafter, (y) expire on the earlier of
(1) the 180th day following termination of employment or (2) the tenth
anniversary of the date of grant, and (z) otherwise be granted in accordance with and
subject to the terms of the form of CGX Stock Option Agreement approved by the Compensation
Committee pursuant to the LTIP. Notwithstanding any provision of this Agreement to the
contrary, the Options and any other outstanding stock options held by Executive shall be
fully vested and exercisable upon a Trigger Date.

7. Executive Expenses. During the Employment Period, Executive shall be entitled to be
reimbursed for reasonable normal business expenses directly incurred in the performance of the
Duties hereunder and in accordance with CGX Policies in effect from time to time. Such
reimbursements shall be paid no later than the end of the calendar year following the calendar year
in which the expenses were incurred.

8. No Competing Business. In consideration for the benefits and Confidential Information
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, shareholder, 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 (a) whether the
Competitive Business has its office or other business facilities within CGX’s Market, (b) whether
any of the activities of Executive referred to above occur or are performed within CGX’s Market or
(c) 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:

 

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(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

(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. 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.

11. Consideration for Restrictions. Executive acknowledges that the restrictions imposed
under Sections 3, 8, 9 and 10 are supported by the consideration to be received by Executive
pursuant to the terms of this Agreement.

12. Permitted Activities. The restrictions set forth in Sections 3, 8 and 9 of this Agreement
shall not apply to Permitted Activities (as defined in Section 18 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 10 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.

 

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15. Termination Without Change in Control.

(a) The “Termination Date” shall mean the date in which the first of the following
occur:

	 	(i)	 	the tenth anniversary of the Effective Date;

	 
	 	(ii)	 	Executive’s death;

	 
	 	(iii)	 	the Disability (as defined below) of Executive;

	 
	 	(iv)	 	termination by CGX of Executive for Cause (as defined below);

	 
	 	(v)	 	termination by CGX of Executive without Cause;

	 
	 	(vi)	 	the resignation of Executive for any reason
other than Good Reason (as defined below), which shall take effect
immediately upon CGX’s receipt of such resignation, or

	 
	 	(vii)	 	the resignation of Executive for Good Reason,
which shall take effect immediately upon CGX’s receipt of such
resignation;

(each of clauses (i), (ii), (iii), (iv), (v), (vi), and (vii) are referred to herein
as a “Termination”).

(b) If a Termination occurs pursuant to clause (ii), (iii), (v) or (vii) of Section
15(a) and is not during the Post-Change in Control Period (as defined below), then CGX shall
(i) deliver or provide to Executive or Executive’s estate (1) within five days following the
Termination Date (subject to compliance with Section 31 hereof), in a lump-sum payment, an
amount equal to four times Executive’s annual base salary as in effect immediately prior to
the Termination, (2) an amount equal to the Executive’s bonus earned under the Annual
Incentive Compensation Plan for the fiscal year in which the Termination occurs based on
attainment of the applicable performance goals for such bonus, pro-rated for the number of
days Executive was employed during such fiscal year, payable on the date that is two and
one-half months after the end of such fiscal year, and (3) if Executive so elects, COBRA
benefits, provided, however, that Executive shall be responsible for the costs thereof, and
(ii) take such action as may be required to (1) accelerate vesting of any then unvested
Equity Awards and (2) remove all sale restrictions imposed on Equity Awards held by the
Executive, whether such Equity Awards have been exercised before such Termination Date or
are subsequently exercised.

 

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(c) If a Termination occurs pursuant to clause (iv) or (vi), then CGX shall deliver to
Executive (i) Executive’s base salary through the Termination Date to the extent not already
paid and (ii) any other amounts earned, accrued or owing as of such Termination Date, but
not yet paid by CGX to Executive.  Any Equity Awards held by Executive which are not vested
as of the Termination Date shall expire or be forfeited or cancelled as of the Termination
Date. In addition, all sale restrictions imposed on Equity Awards held by the Executive
shall not be accelerated but shall be removed in accordance with the terms and schedule
applicable to such Equity Awards.

(d) Termination of employment under this Section 15 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 under this Section 15 shall not relieve Executive of his
obligations under Section 10 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 10 hereof shall relieve CGX of its obligation to pay any of the
amounts or provide any of the benefits as contemplated in this Agreement, including those
set forth in this Section 15, except as otherwise required by law.

16. Termination After Change in Control.

(a) During the period commencing on the date on which a Change in Control occurs and,
subject only to the provisions of this Section 16, continuing until the expiration of the
third anniversary of the date of the occurrence of the Change in Control (the “Post-Change
in Control Period”), Executive shall receive the same compensation and benefits provided in
Sections 4, 5 and 6 at the levels and at rates not less than that of the Executive with
respect to any calendar year during the three (3) calendar years immediately preceding the
year in which the Change in Control occurred, or at such higher levels and/or rates as may
be determined from time to time by the Board. If and to the extent Employee Benefits are
not payable or provided to Executive under any such policy, plan, program or arrangement as
a result of the amendment or termination thereof subsequent to a Change in Control, then CGX
shall itself pay or provide such Employee Benefits. Nothing in this Agreement shall
preclude improvement or enhancement of any such Employee Benefits, provided that no such
improvement shall in any way diminish any other obligation of CGX under this Agreement.

 

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(b) If a Termination occurs pursuant to clause (ii), (iii), (v) or (vii) of Section
15(a) and is during the Post-Change in Control Period, then CGX shall:

	 	(i)	 	deliver or provide to Executive or Executive’s
estate, within five days following the Termination Date (subject to
compliance with Section 31 hereof), in a lump-sum payment, (A) an
amount equal to the aggregate base salary (at the rate as in effect
immediately prior to the Termination or, if greater, at the rate not
less than that of the Executive with respect to any calendar year
during the three calendar years immediately preceding the year in which
the Change in Control occurred) Executive would have received from the
Termination Date through the date specified in Section 15(a)(i), but
not less than six times Executive’s annual base salary as in effect
immediately prior to the Termination or the Change in Control,
whichever is greater, and (B) an amount equal to the target bonus award
for Executive under the Annual Incentive Compensation Plan for the
fiscal year in which the Termination occurs pro-rated for the number of
days Executive was employed during such fiscal year;

	 
	 	(ii)	 	(A) for the remainder of the Post-Change in
Control Period CGX shall arrange to provide the Executive with Employee
Benefits identical to those which the Executive was receiving or
entitled to receive immediately prior to the Termination Date (and if
and to the extent that such benefits shall not or cannot be paid or
provided under any policy, plan, program or arrangement of CGX solely
due to the fact that the Executive is no longer an officer or employee
of CGX, then CGX shall itself pay to the Executive and/or the
Executive’s dependents and beneficiaries, such Employee Benefits) and
(B) without limiting the generality of the foregoing, the remainder of
the Post-Change in Control Period shall be considered service with CGX
for the purpose of service credits under CGX’s retirement income,
supplemental executive retirement and other benefit plans applicable to
the Executive and/or the Executive’s dependents and beneficiaries
immediately prior to the Termination Date. Without otherwise limiting
the purposes or effect of Section 22 hereof, Employee Benefits payable
to the Executive pursuant to this Subsection 16(c)(ii) by reason of any
“welfare benefit plan” of CGX (as the term “welfare benefit plan” is
defined in Section 3(1) of the Employee Retirement Income Security Act
of 1974, as amended) shall be reduced to the extent comparable welfare
benefits are actually received by the Executive from another employer
during such period following the Executive’s Termination Date until the
expiration of the Post-Change in Control Period.

	 

 

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	 	(iii)	 	In addition to all other compensation due to
the Executive hereunder, the following shall occur immediately prior to
the occurrence of a Change in Control that satisfies the requirements
of Section 409A(a)(2)(A)(v) of the Code (1) all Equity Awards held by
the Executive prior to a Change in Control that are options shall
become exercisable, regardless of whether or not the
vesting/performance conditions set forth in the relevant agreements
shall have been satisfied in full; (2) all unvested Equity Awards held
by Executive shall be immediately vested and eligible to be converted
immediately into shares of CGX’s common stock otherwise pursuant to the
terms thereof and all restrictions on the sale by the Executive of any
 shares of CGX’s common stock, including those pursuant to the exercise
of any Equity Award imposing such restrictions, shall be removed and
the securities shall become freely transferable; (3) all restrictions
on any Equity Awards granted by CGX to the Executive prior to a Change
in Control that are restricted securities 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; (4) the
Executive shall have an immediate right to receive all performance
 shares, if any, granted prior to a Change in Control, and such
performance shares, if any, 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; and (5) all performance units, if any,
granted to the Executive prior to a Change in Control shall become
immediately payable in cash or Common Stock, at the Executive’s sole
option, 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; provided, that if the terms of any plan or agreement providing
for such Equity Awards 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.

(c) Termination of employment under this Section 16 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 under this Section 16 shall not relieve Executive of his
obligations under Section 10 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 10 hereof shall relieve CGX of its obligation to pay any of the
amounts or provide any of the benefits as contemplated in this Agreement, including those
set forth in this Section 16, except as otherwise required by law.

 

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17. 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 or Section 16 of this
Agreement or otherwise, but determined without regard to any additional payments required
under this Section 17) (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,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. The Gross-Up Payment to Executive shall be made no earlier than the date of the
Payment to which such Gross-Up Payment relates and no later than December 31st of the year
following the year during which Executive remits the related taxes.

(b) Subject to the provisions of Section 17(c) below, all determinations required to be
made under this Section 17, 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 17, shall be paid by CGX
to Executive within five (5) days of the receipt of the Accounting Firm’s determination but
no later than December 31st of the year following the year during which Executive remits the
taxes related to the Payment.  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 17(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 no later than
December 31st of the year following the year during which Executive remitted the related
taxes.

(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 set forth in reasonable
detail 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-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:

 

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	 	(i)	 	give CGX any information reasonably requested
by CGX relating to such claim,

	 	(ii)	 	take such action in connection with contesting
such claim as CGX shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by CGX,

	 	(iii)	 	cooperate with CGX in good faith to
effectively contest such claim, and

	 	(iv)	 	permit CGX to participate in any proceedings
relating to such claim;

provided, however, that CGX shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 17(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 sue
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 sue for a refund, CGX shall
advance the amount of such payment to Executive on an interest-free basis and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to such advance; and provided
further, that any extension of the statute of limitations relating to payment of taxes for
the taxable year of Executive with respect to which such contested amount is claimed to be
due is limited solely to such contested amount. Furthermore, CGX’s control of the contest
shall be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by Executive of an amount advanced by CGX pursuant to this
Section 17, 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 17) 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 17, 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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18. 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 (i) an intentional act of material fraud, embezzlement or theft in
connection with the Executive’s Duties or in the course of the Executive’s employment with
CGX; (ii) intentional, wrongful damage to material property of CGX; (iii) intentional,
wrongful disclosure of material secret processes or Confidential Information; or (iv)
intentional wrongful engagement in any activity prohibited by Section 8 hereof; and any such
act shall have been materially harmful to CGX. For purposes of this Agreement, no act, or
failure to act, on the part of the Executive shall be deemed “intentional” if it was due
primarily to an error in judgment or negligence, but shall be deemed “intentional” only if
done, or omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s action or omission was in the best interest of CGX.
Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for
“Cause” hereunder unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than three-quarters of the
Board then in office at a meeting of the Board called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, the Executive has committed an act set forth above in this Subsection 18(b)
and specifying the particulars thereof in detail. Nothing herein shall limit the right of
the Executive or the Executive’s beneficiaries to contest the validity or propriety of any
such determination.

(c) For purposes of this Agreement, a Change in Control will be deemed to have occurred
on the date any of the following events shall occur:

	 	(i)	 	CGX 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 CGX 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 CGX 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;

 

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	 	(ii)	 	CGX 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 CGX) 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 CGX 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;

	 	(iii)	 	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
Effective 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 twenty
percent (20%) or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the election
of directors of CGX (“Voting Stock");

	 	(iv)	 	CGX 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 CGX has occurred;

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

	 	(vi)	 	The shareholders of CGX approve a plan
contemplating the liquidation or dissolution of CGX.

 

12

 

Notwithstanding the foregoing provisions of Subsection 18(c)(iii) or 18(c)(iv) hereof, a
“Change in Control” shall not be deemed to have occurred for purposes of this Agreement
solely because (A) CGX, (B) a corporation or other legal entity in which
CGX directly or indirectly beneficially owns 100% of the voting securities of such entity,
or (C) any employee stock ownership plan or any other employee benefit plan of CGX or any
wholly-owned subsidiary of CGX, 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, or because
CGX reports that a change in control of CGX has occurred by reason of such beneficial
ownership.

(d) Change in Control Agreement shall mean that certain Employment and Change in
Control Agreement dated July 25, 2000, as amended on February 13, 2006, between CGX and
Executive.

(e) 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.

(f) CGX’s Market shall mean the United States.

(g) Code shall mean the Internal Revenue Code of 1986, as amended.

(h) 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.

(i) 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.

(j) 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) for a total period of one hundred eighty (180) days, whether or not such days are
consecutive, during any consecutive twelve (12) month period.

(k) Effective Date shall mean the execution date of this Agreement.

(l) Employee Benefits shall mean perquisites, benefits and service credit for benefits
as provided under any and all employee retirement income and welfare benefit policies,
plans, programs or arrangements, including without limitation any stock option, stock
purchase, stock appreciation, savings, pension, supplemental executive retirement or other
retirement income or welfare benefit, deferred compensation, incentive compensation, group
and/or executive life, accident, health, dental, medical/hospital or
other insurance (whether funded by actual insurance or self-insured by CGX),
disability, salary continuation, expense reimbursement and other employee benefit policies,
plans, programs or arrangements.

 

13

 

(m) Employment Period shall mean that period of time set forth in Section 2 of this
Agreement.

(n) Equity Awards shall mean any award of stock options, stock appreciation rights or
stock award relating to CGX common stock that are granted by CGX pursuant to a long-term
incentive plan, including, but not limited to, the RS Units and the Options.

(o) Good Reason shall mean

	 	(i)	 	Except as provided in clause (ii) below, (A)
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, (B) failure to reelect the
Executive as a director of CGX (or any successor to parent entity
thereof) or the removal of the Executive as a director of CGX (or any
successor thereto); (C) an adverse change in the nature or scope of the
Executive’s authorities, powers, functions, responsibilities or Duties;
a reduction in the Executive’s base salary pursuant to Section 4 and/or
bonus pursuant to Section 5 received from CGX; or the termination of
the Executive’s rights to any Employee Benefits or a reduction in scope
or value thereof without the prior written consent of the Executive,
any of which is not remedied within ten (10) calendar days after
receipt by CGX of written notice from the Executive of such change,
reduction or termination, as the case may be; (D) a determination by
the Executive that as a result of a change in circumstances
significantly affecting the Executive’s position(s), including without
limitation, a change in the scope of the business or other activities
for which the Executive was responsible, the Executive has been
rendered substantially unable to carry out, has been substantially
hindered in the performance of, or has suffered a substantial reduction
in any of the Executive’s authorities, powers, functions,
responsibilities or Duties, which situation is not remedied within ten
(10) calendar days after written notice to CGX from the Executive of
such determination; (E) the liquidation, dissolution, merger,
consolidation or reorganization of CGX or transfer of all or a
significant portion of its business and/or assets (including, without
limitation, by means of the sale of the capital stock or assets of one
or more direct or indirect subsidiaries of CGX), unless the successor
(by liquidation, merger, consolidation, reorganization or otherwise) to
which all or a significant portion of its business and/or assets have
been transferred (directly or by operation of law) shall have assumed
all duties and obligations of
CGX under this Agreement pursuant to Section 21 hereof (in which
case, such entity shall be deemed to be “CGX” hereunder); (F) CGX
shall require (1) that the principal place of work of the Executive
be changed to any location which is in excess of forty (40) miles
from the previous location thereof or (2) that the Executive travel
away from the Executive’s office in the course of discharging the
Executive’s responsibilities or Duties hereunder more (in terms of
either consecutive days or aggregate days in any calendar year) than
was previously required of the Executive, without, in either case,
the Executive’s prior consent.

 

14

 

	 	(ii)	 	During a Post-Change in Control, (A) 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, (B) failure to elect or reelect the
Executive to the office(s) which the Executive held immediately prior
to a Change in Control, or failure to elect or reelect the Executive as
a director of CGX (or any successor to parent entity thereof) or the
removal of the Executive as a director of CGX (or any successor
thereto), if the Executive shall have been a director of CGX
immediately prior to the Change in Control; (C) an adverse change in
the nature or scope of the authorities, powers, functions,
responsibilities or duties attached to the position(s) which the
Executive held immediately prior to the Change in Control; a reduction
in the Executive’s base pay and/or incentive pay received from CGX; or
the termination of the Executive’s rights to any Employee Benefits to
which the Executive was entitled immediately prior to the Change in
Control or a reduction in scope or value thereof without the prior
written consent of the Executive, any of which is not remedied within
ten (10) calendar days after receipt by CGX of written notice from the
Executive of such change, reduction or termination, as the case may be;
(D) a determination by the Executive that as a result of a change in
circumstances significantly affecting the Executive’s position(s),
including without limitation, a change in the scope of the business or
other activities for which the Executive was responsible immediately
prior to a Change in Control, the Executive has been rendered
substantially unable to carry out, has been substantially hindered in
the performance of, or has suffered a substantial reduction in any of
the authorities, powers, functions, responsibilities or duties attached
to the position(s) held by the Executive immediately prior to the
Change in Control, which situation is not remedied within ten (10)
calendar days after written notice to CGX from the Executive of such
determination; (E) the liquidation, dissolution, merger, consolidation
or reorganization of CGX or transfer of all or a significant portion of
its business and/or assets (including, without limitation, by means of
the sale of the
capital stock or assets of one or more direct or indirect
subsidiaries of CGX), unless the successor (by liquidation, merger,
consolidation, reorganization or otherwise) to which all or a
significant portion of its business and/or assets have been
transferred (directly or by operation of law) shall have assumed all
duties and obligations of CGX under this Agreement pursuant to
Section 19 hereof (in which case, such entity shall be deemed to be
“CGX” hereunder); (F) CGX shall require (1) that the principal place
of work of the Executive or the appropriate principal executive
office of CGX or CGX’s operating division or subsidiary for which the
Executive performed the majority of his services during the twelve
(12)-month period preceding the Change in Control be changed to any
location which is in excess of forty (40) miles from the location
thereof immediately prior to the Change in Control or (2) that the
Executive travel away from the Executive’s office in the course of
discharging the Executive’s responsibilities or Duties hereunder more
(in terms of either consecutive days or aggregate days in any
calendar year) than was required of the Executive prior to the Change
in Control, without, in either case, the Executive’s prior consent.

 

15

 

(p) Noncompetition Period shall mean the period beginning on the Effective Date and
ending (i) on the first anniversary of the Termination Date or (ii) if Executive’s
employment is terminated for any reason during the Post-Change in Control Period, on the
Termination Date.

(q) 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; (iii) service as a member of the board of directors of up to three entities that are
not Competitive Businesses; or (iv) 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.

(r) Trigger Date shall mean the third business day immediately preceding (1) the later
of the initial expiration date of a tender offer or exchange offer by any person, as the
term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act (other
than CGX, any subsidiary of CGX, any employee benefit plan of CGX or of any subsidiary of
CGX, and any person organized, appointed or established by CGX for or pursuant to the terms
of any such plan or for the purpose of funding any such plan or funding other employee
benefits for employees of CGX or any subsidiary of CGX), published or sent or given within
the meaning of Rule 14d-2(a) promulgated under the Exchange Act as then in effect, or any
later such expiration date established prior to such third business day, in each case if
upon consummation thereof, such person would be the beneficial owner of 10% or more of the
common stock; or (2) the record date for determining stockholders entitled to notice of, and
to vote at, an annual or special
meeting of stockholders at which at least two persons are standing, or have been
nominated, for election as directors of CGX whose election or nomination for election by the
stockholders of CGX was not approved by a vote of at least two-thirds of the members of the
Board of Directors then in office (other than any such person who is standing at the request
of, or who has been nominated by, the Executive or any affiliate of the Executive).

 

16

 

19. Notices. All notices, demands or other communications required or provided hereunder
shall be in writing and shall be deemed to have been given and received when delivered in person or
transmitted by facsimile transmission (telecopy), cable or telex to the respective parties or seven
(7) days after dispatch by registered or certified mail, postage prepaid, addressed to the parties
at the addresses set forth below or at such other addresses as such parties may designate by notice
to the other parties:

	 	 	 	 	 
	 

	 	If to CGX:
	 	Consolidated Graphics, Inc.
	 

	 	 	 	5858 Westheimer, Suite 200
	 

	 	 	 	Houston, Texas 77057
	 

	 	 	 	Attention: Chairman of the Compensation Committee
	 
	 	 	 	 
	 

	 	If to Executive:
	 	Joe R. Davis
	 

	 	 	 	c/o Consolidated Graphics, Inc.
	 

	 	 	 	5858 Westheimer, Suite 200
	 

	 	 	 	Houston, Texas 77057

20. Legal Fees and Expenses. It is the intent of CGX that the Executive not be required to
incur the expenses associated with the enforcement of the Executive’s rights under this Agreement
by litigation or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to the Executive hereunder. Accordingly, if it
should appear to the Executive that CGX has failed to comply with any of its obligations under this
Agreement or in the event that CGX or any other person takes any action to declare this Agreement
void or unenforceable, or institutes any litigation designed to deny, or to recover from, the
Executive the benefits intended to be provided to the Executive hereunder, CGX irrevocably
authorizes the Executive from time to time to retain counsel of the Executive’s choice, at the
expense of CGX as hereafter provided, to represent the Executive in connection with the litigation
or defense of any litigation or other legal action, whether by or against CGX or any director,
officer, shareholder or other person affiliated with CGX, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between CGX and such counsel, CGX irrevocably
consents to the Executive’s entering into an attorney-client relationship with such counsel, and in
connection therewith CGX and the Executive agree that a confidential relationship shall exist
between the Executive and such counsel. CGX shall pay or cause to be paid and shall be solely
responsible for any and all attorneys’ and related fees and expenses incurred by the Executive as a
result of CGX’s failure to perform this Agreement or any provision thereof or as a result of CGX or
any person contesting the validity or enforceability of this Agreement or any provision thereof as
aforesaid. CGX shall pay such fees and related expenses promptly (but in no event later than
December 31st of the year following the year in which such fees and expenses were incurred) after a
statement or statements, prepared by such counsel in accordance with such counsel’s customary
billing practices, therefor are
received by CGX. Amounts eligible for reimbursement under this Section are only those amounts
incurred prior to the second anniversary of the Termination Date. The maximum aggregate amount
payable by CGX under this Section 20 shall not exceed $100,000.00.

 

17

 

21. Successors; Assignment.

(a) 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.

(b) CGX shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business
and/or assets of CGX, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent CGX would be required to perform if no such succession had
taken place.

(c) This Agreement shall be binding upon and inure to the benefit of any successor or
assignee thereof and any such successor or assignee shall be deemed substituted for CGX
under the terms of this Agreement and all references to “CGX” shall be deemed to mean such
successor or 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.

(d) This Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees and/or legatees.

(e) This Agreement is personal in nature and neither of the parties hereto shall,
without the consent of the other, assign, transfer or delegate this Agreement or any rights
or obligations hereunder except as expressly provided in Subsection 21(a) hereof. Without
limiting the generality of the foregoing, the Executive’s right to receive payments
hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of
a security interest or otherwise, other than by a transfer by the Executive’s will or by the
laws of descent and distribution and, in the event of any attempted assignment or transfer
contrary to this Subsection 21(e), CGX shall have no liability to pay any amount so
attempted to be assigned, transferred or delegated.

(f) CGX and the Executive recognize that each party will have no adequate remedy at law
for breach by the other of any of the agreements contained herein and, in the event of any
such breach, CGX and the Executive hereby agree and consent that the other shall be entitled
to a decree of specific performance, mandamus or other appropriate remedy to enforce
performance of this Agreement.

 

18

 

22. 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 all such amounts and the provision of all such 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.

23. 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.

24. 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.

25. 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.

26. 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.

27. Effective Date. This Agreement shall become effective only upon and as of the Effective
Date.

28. 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.

29. 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.

30. Prior Agreements. This Agreement is voluntarily entered into and expressly supersedes and
takes the place of any prior employment and/or change in control agreements between the parties
hereto, including, but not limited to, the Prior Employment Agreement and the Change in Control
Agreement; provided, however, that the sale restrictions on the option awarded pursuant to Section
6(c) of the Prior Employment Agreement shall remain applicable as described therein. As of the
Effective Date, the parties hereto expressly agree and hereby declare
that any and all prior change in control agreements between the parties, including, but not
limited to, the Prior Employment Agreement and the Change in Control Agreement, are terminated and
of no force or effect.

 

19

 

31. Section 409A of the Code. This Agreement is intended to comply with Section 409A of the
Code and any ambiguous provision will be construed in a manner that is compliant with or exempt
from the application of Section 409A of the Code. If any provision of this Agreement (or of any
award of compensation, including equity compensation or benefits) would cause Executive to incur
any additional tax or interest under Section 409A of the Code and accompanying Treasury regulations
and guidance, CGX shall, after consulting with Executive, reform such provision to comply with
Section 409A of the Code, to the extent permitted under Section 409A of the Code; provided,
however, that CGX agrees to maintain, to the maximum extent practicable, the original intent and
economic benefit to Executive of the applicable provision without violating the provisions of
Section 409A of the Code. Notwithstanding any provision to the contrary in this Agreement, if
Executive has a Termination (other than by reason of death), is deemed on his Termination Date to
be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code
and CGX is a public company, then the payments and benefits under this Agreement that are subject
to Section 409A of the Code shall be made or provided as soon as practicable but not prior to the
later of (A) the payment date set forth in this Agreement or (B) the date that is the earliest of
(i) the expiration of the six-month period measured from the Termination Date or (ii) the date of
Executive’s death, in either case without interest for such delay.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	/s/ Joe
R. Davis	 
	 	JOE R. DAVIS 	 
	 
	 	CGX:

CONSOLIDATED GRAPHICS, INC.

 	 
	 	By:  	/s/ Larry
J. Alexander	 
	 	 	Name:  	Larry J. Alexander 	 
	 	 	Title:  	Chairman of the Compensation Committee

of the Board of Directors 	 
	 

 

20Filed by Bowne Pure Compliance

Exhibit 10.2

CONSOLIDATED GRAPHICS, INC.

ANNUAL INCENTIVE COMPENSATION PLAN

(Effective as of April 1, 2008)

1. Objective. The Consolidated Graphics, Inc. Annual Incentive Compensation Plan (the “Plan”)
is designed to retain selected executive officers of Consolidated Graphics, Inc. (the “Company”), a
Texas corporation, and reward them for making significant contributions to the success of the
Company. These objectives are to be accomplished by making annual awards under the Plan and
thereby providing Participants with a financial interest in the overall performance and growth of
the Company. The Plan and Awards granted hereunder are intended to be exempt from the requirements
of Section 409A of the Code, and shall be interpreted and administered in a manner consistent with
that intent.

2. Definitions. As used herein, the terms set forth below shall have the following respective
meanings:

“Act” means the Securities Exchange Act of 1934, as amended.

“Affiliate” or “Affiliates” shall mean and refer to any direct or indirect subsidiaries
of the Company, or any other entity or entities through which the Company or any subsidiary
of the Company may conduct the Company’s business.

“Award” means an incentive compensation award payable in cash and granted to a
Participant pursuant to any applicable terms, conditions and limitations as the Committee
may establish in order to fulfill the objectives of the Plan.

“Award Agreement” means a written agreement between the Company and a Participant that
sets forth the terms, conditions and limitations applicable to an Award.

“Beneficiary” means such person or persons, or the trustee of an inter vivos trust for
the benefit of natural persons, designated by the Participant in a written election form
filed with the Committee as entitled to receive the Participant’s Award(s) in the event of
the Participant’s death, or if no such election form shall have been so filed, or if no
designated Beneficiary survives the Participant or can be located by the Committee, the
person or persons entitled thereto under the last will of such deceased Participant, or if
such decedent left no will, to the legal heirs of such decedent determined in accordance
with the laws of intestate succession of the state of the decedent’s domicile.

“Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board.

“Company” means Consolidated Graphics, Inc., a Texas corporation, or any successor
thereto.

 

 

 

“Effective Date” means April 1, 2008.

“Employment” means employment with the Company or an Affiliate.

“Fiscal Year” means April 1 through March 31.

“Participant” means an executive officer of the Company who receives an Award
Agreement.

“Performance Period” means the Fiscal Year or (such shorter period within the Fiscal
Year as may be determined by the Committee) during which the performance goals established
pursuant to Section 5 are measured.

“Plan” means this Consolidated Graphics, Inc. Annual Incentive Compensation Plan, as
set forth herein and as may be amended from time to time.

A pronoun or adjective in the masculine gender includes the feminine gender, and the singular
includes the plural unless the context clearly indicates otherwise.

3. Eligibility. Only executive officers of the Company are eligible to participate in this
Plan. The Committee, from time to time and in its sole discretion, shall select the Participants
in the Plan and participation in the Plan shall be evidenced by the execution of Award Agreements
under the Plan.

4. Plan Administration. The Plan shall be administered by the Committee, which shall have
full and exclusive power to interpret this Plan and to adopt such rules, regulations and guidelines
for carrying out this Plan as it may deem necessary or appropriate in its sole discretion. All
decisions of the Committee in the interpretation and administration of this Plan shall lie within
its sole and absolute discretion and shall be final, conclusive and binding on the Participants.
The Committee shall determine all terms and conditions of the Awards. No member of the Committee
shall be liable for anything done or omitted to be done by him or by any member of the Committee in
connection with the performance of any duties under this Plan, except for his own willful
misconduct or as expressly provided by statute.

5. Awards and Limitations Thereon. An Award shall be paid only if specified performance goals
set forth in an Award Agreement have been achieved during the course of the relevant Performance
Period by an individual, the Company, an Affiliate, or one or more business units of the Company or
an Affiliate, as applicable. The amount of the Award shall be determined by reference to the
formula contained in the relevant Award Agreement, which shall describe the performance goal or
goals and the percentage of the potential Award to be paid depending upon what level of the
performance goal(s) is achieved. Performance goals shall be established no later than the earlier
to occur of (1) 90 days after the commencement of the period of service to which the performance
goal relates and (2) the lapse of 25% of the period of service (as scheduled in good faith at the
time the goal is established), and in any event while the outcome is still substantially uncertain.
Performance goals may include: (a) earnings, either in the aggregate or on a per-share basis,
reflecting such dilution of shares as the Committee deems appropriate, including operating
earnings, pre-tax earnings, earnings before interest and taxes, and earnings before interest,
taxes,

 

2

 

depreciation and amortization; (b) gross or net revenue;
(c) operating or net cash flow; (d) financial return ratios (e.g., return or net return on
one or more of the following: assets, net assets, equity, invested capital, revenue); (e) margins,
including net, operating or pre-tax margins; (f) total shareholder return; (g) financial ratios
(e.g., debt to capitalization or debt to equity); (h) growth in financial measures or ratios
(e.g., revenue, earnings, cash flow, stockholders’ equity, margins); or (i) customer satisfaction,
based on specified objective goals, or a customer survey sponsored by the Company, an Affiliate, or
one or more business units of the Company or an Affiliate, as applicable. Unless otherwise stated,
such a performance goal need not be based upon an increase or positive result under a particular
business criterion and could include, for example, maintaining the status quo or limiting economic
losses (measured, in each case, by reference to specific business criteria). In interpreting Plan
provisions applicable to performance goals, it is the intent of the Plan to conform with the
standards of Section 162(m) of the Code and Treasury Regulation §1.162-27(e)(2)(i), and the
Committee in establishing such goals and interpreting the Plan shall be guided by such provisions.
The maximum Award that may be paid to any Participant under this Plan for a Fiscal Year is an
amount equal to $5 million.

6. Payment.

(a) Payment shall be made to the Participant in accordance with the terms of the Award
Agreement, provided that (1) the performance goal or goals specified in the relevant Award
Agreement have been achieved and (2) the Committee has reviewed and approved the Award.

(b) If, during the course of a Performance Period, the Participant takes a position with the
Company or an Affiliate that is materially different from the position that he or she occupied at
the commencement of such Performance Period and the Committee determines that such new position
does not involve comparable or greater executive responsibilities than were enjoyed by such
Participant at the beginning of such Performance Period, then the relevant Award Agreement shall
automatically be terminated, unless otherwise provided in the Award Agreement. The Committee shall
decide, in its sole and absolute discretion, whether the Participant shall (1) receive a payment
equal to the amount of the Award for such Performance Period, pro-rated (according to the
Committee’s sole discretion) to recognize the duration of the Participant’s service in the capacity
to which the Award Agreement relates, or (2) forfeit any interest in any Award for such Performance
Period. Notwithstanding the foregoing, the payment of any such prorated Award shall be paid only
if the Committee determines that the relevant performance goals have been achieved.

(c) In the event that the Participant is not an employee on the later of (1) the last day of
the Performance Period or (2) the date on which the payment is made, the Award shall be forfeited,
unless otherwise specifically set forth in the Award Agreement (or any other agreement between the
Participant and the Company) in a manner that complies with Section 162(m)(4)(C) of the Code and
applicable authorities.

 

3

 

7. Tax Withholding. The Company shall deduct applicable taxes with respect to the payment of
any Award and take such other action as may be necessary to satisfy all obligations for withholding
of such taxes.

8. Non-Assignability. Unless otherwise determined by the Committee, no Award or any other
benefit under this Plan shall be assignable or otherwise transferable except to a Beneficiary or by
will, the laws of descent and distribution or a domestic relations order. The Committee may
prescribe other restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this Section 8 shall be null and void.

9. Amendment, Modification, Suspension or Termination. The Committee may amend, modify,
suspend or terminate this Plan for the purpose of meeting or addressing any changes in legal
requirements or for any other purpose permitted by law, except that (i) no amendment or alteration
that would adversely affect the rights of any Participant under any Award previously granted to
such Participant shall be made without the consent of such Participant and (ii) no amendment or
alteration shall be effective prior to its approval by the shareholders of the Company, to the
extent such approval is required by applicable legal requirements.

10. No Employment Guaranteed. No provision of this Plan or any Award Agreement hereunder
shall confer any right upon any executive officer to continued Employment.

11. Governing Law. This Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by mandatory provisions of the Act or other securities laws of
the United States, shall be governed by and construed in accordance with the laws of the State of
Texas, without reference to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction.

 

4

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