-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fz3fxpoHLVIV7biWvF08oS7w4kTDDP/g+jteZt0b6oQgQb9YjDslqPTB1cxgz3RD aruJHcx6CR/CfcYpoGYq3w== 0000890566-96-002107.txt : 19961225 0000890566-96-002107.hdr.sgml : 19961225 ACCESSION NUMBER: 0000890566-96-002107 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961224 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED GRAPHICS INC /TX/ CENTRAL INDEX KEY: 0000921500 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL PRINTING [2750] IRS NUMBER: 760190827 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18741 FILM NUMBER: 96685724 BUSINESS ADDRESS: STREET 1: 2210 W DALLAS ST CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135294200 S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1996 Registration No. 333-...... - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------- CONSOLIDATED GRAPHICS, INC. (Exact name of registrant as specified in its charter) TEXAS 2210 W. DALLAS STREET 76-0190827 (State or other jurisdiction of HOUSTON, TEXAS 77019 (I.R.S. Employer Incorporation or organization) (713) 529-4200 Identification Number) (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) JOE R. DAVIS PRESIDENT AND CHIEF EXECUTIVE OFFICER CONSOLIDATED GRAPHICS, INC. 2210 W. DALLAS STREET HOUSTON, TEXAS 77019 (713) 529-4200 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------- COPY TO: R. CLYDE PARKER, JR. WINSTEAD SECHREST & MINICK P.C. 910 TRAVIS STREET, SUITE 1700 HOUSTON, TEXAS 77002 ------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this Registration Statement becomes effective. If the only securities being registered on this Form are to be offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (the "Securities Act"), other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| ------------------- CALCULATION OF REGISTRATION FEE
=========================================================================================================== PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE - ----------------------------------------------------------------------------------------------------------- Common Stock, par value $0.01 per share....... 176,280 $49.625 $8,747,895 $2,650.88 ===========================================================================================================
(1) Including shares to be issued pursuant to a 2-for-1 split of the Common Stock to be distributed in the form of a stock dividend on January 10, 1997 to shareholders of record at the close of business on December 31, 1996. (2) Calculated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and based upon the average of the high and low sales prices of the Common Stock as reported by the Nasdaq National Market on December 20, 1996. ------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- PROSPECTUS 176,280 SHARES CONSOLIDATED GRAPHICS, INC. COMMON STOCK ------------------- This Prospectus has been prepared for use in connection with the proposed sale by the holders thereof (the "Selling Shareholders") of an aggregate of 176,280 shares (the "Shares") of common stock, par value of $.01 per share (the "Common Stock"), of Consolidated Graphics, Inc., a Texas corporation (the "Company"). The Shares may be sold from time to time by or for the account of the Selling Shareholders in the over-the-counter market, on the Nasdaq National Market or otherwise at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, directly or through agents designated from time to time, or through dealers or underwriters to be designated or in negotiated transactions. The Shares may be sold by any one or more of the following methods: (a) a block trade (which may involve crosses) in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (c) exchange distributions and/or secondary distributions in accordance with the rules of the Nasdaq National Market; (d) ordinary brokerage transactions and transactions in which the broker solicits purchasers; (e) through the writing of options on Shares (whether such options are listed on an options exchange or otherwise); or (f) privately negotiated transactions. To the extent required by applicable law, the specific Shares to be sold and the names of the Selling Shareholders will be set forth in an accompanying Prospectus Supplement. See "Plan of Distribution." The Common Stock is traded on the Nasdaq National Market under the symbol "COGI." On December 20, 1996, the last reported sale price for the Common Stock on the Nasdaq National Market was $49.00 per share. The Company will receive no portion of the proceeds of the sale of the Shares offered hereby and will bear certain of the expenses incident to their registration. See "Plan of Distribution" and "Selling Shareholders." ------------------- PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS," BEGINNING ON PAGE 3. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------- THE DATE OF THIS PROSPECTUS IS DECEMBER 24, 1996. 1 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"), which can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549 and at the regional offices of the Commission at Citicorp Center, 13th Floor, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed rates. The Company has filed with the Commission a registration statement (the "Registration Statement") on Form S-3 under the Securities Act with respect to the shares of Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information with respect to the Company and such Common Stock, reference is made to such Registration Statement and to the exhibits and schedules thereto. Statements contained in this Prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. A copy of the Registration Statement may be obtained at the public reference facilities maintained by the Commission as provided in the preceding paragraph. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by the Company with the Commission pursuant to the Exchange Act (File No. 0-24068), are incorporated in this Prospectus by reference and shall be deemed to be a part hereof: (a) The Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1996 as amended by the Company's Form 10-K/A, filed July 11, 1996 amending certain financial statements and supplementary data. (b) The Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996. (c) The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996. (d) The Company's Form 8-K, filed July 10, 1996 in connection with the press release issued on July 10, 1996 regarding the completion of the acquisition of Garner Printing. (e) The Company's Form 8-K, filed July 18, 1996 in connection with the acquisition of Garner Printing on July 3, 1996. (f) The Company's Form 8-K, filed July 24, 1996 in connection with the acquisition of Eagle Press of Sacramento, California on July 12, 1996, the press release issued on July 18, 1996 regarding the completion of the acquisition of Eagle Press, the press release issued on July 24, 1996 regarding the announcement of the Company's first quarter results, and a press purchase incentive agreement entered into between the Company and Komori America Corporation. (g) The Company's Form 8-K/A, filed August 13, 1996 containing pro forma financial statements of the Company and the financial statements of Garner Printing. (h) The Company's Form 8-K/A, filed August 14, 1996 containing pro forma financial statements of the Company and the financial statements of Eagle Press. 2 (i) The Company's Form 8-K, filed September 13, 1996 in connection with the press release issued on September 6, 1996 regarding the letter of intent to acquire Mobility, Inc. ("Mobility") of Richmond, Virginia. (j) The Company's Form 8-K, filed October 31, 1996 in connection with the press release issued on October 30, 1996 regarding the announcement of the Company's second quarter results. (k) The Company's Form 8-K, filed November 4, 1996 in connection with the press release issued on November 4, 1996 regarding the completion of the acquisition of Mobility. (l) The Company's Form 8-K, filed November 6, 1996 in connection with the press release issued on November 6, 1996 regarding the letter of intent to acquire Direct Color of Long Beach, California and Theo Davis Sons near Raleigh-Durham, North Carolina. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made hereby shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of the filing of such documents. Any statement contained in this Prospectus, in a supplement to this Prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed supplement to this Prospectus or in any document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company hereby undertakes to provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, on the written or oral request of any such person, a copy of any or all of the documents referred to above which have been or may be incorporated in this Prospectus by reference, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference in such documents). Written or telephone requests for such copies should be directed to the Company at its principal executive offices located at 2210 W. Dallas Street, Houston, Texas 77019, Attention: Secretary (telephone number: (713) 529-4200). --------------------- 3 RISK FACTORS In addition to other information in this Prospectus, prospective investors should consider carefully the following information before investing in the Common Stock offered hereby. NATURE OF PRINTING BUSINESS The Company's quarterly operating results have fluctuated as a result of a number of factors, including overall trends in the economy, acquisitions of new businesses and customer buying patterns. The Company competes in the general commercial and financial printing sectors, which are characterized by individual orders from customers for specific printing projects rather than long-term contracts, with continued engagement for successive jobs dependent upon the customers' satisfaction with the services provided. As such, the Company is unable to predict, for more than a few months in advance, the number, size and profitability of printing jobs in a given period. Consequently, the timing of projects in any quarter could have a significant impact on financial results in that quarter. Quarterly results in the future may be influenced by these or other factors and, accordingly, there may be significant variations in the Company's quarterly operating results. IMPLEMENTATION OF ACQUISITION STRATEGY A significant element of the Company's growth strategy is to expand by acquiring printing companies located in major metropolitan areas. While there are numerous such companies in the United States, there can be no assurance that the Company will be able to identify and acquire suitable companies on terms acceptable to the Company, nor that it will be able to finance significant acquisitions in the future. Further, any acquisition may initially have an adverse effect upon the Company's operating results while the acquired businesses are adopting the Company's management practices. In addition, there can be no assurance that the Company will be able to establish, maintain or increase profitability of an entity once it has been acquired. COMPETITION The printing industry is extremely competitive and fragmented. The Company competes with numerous large and small printing companies, some of which have greater financial resources than the Company. The Company competes on the basis of ongoing customer service, quality of finished products and price. DEPENDENCE UPON KEY PERSONNEL The Company believes that its continued success will depend to a significant extent upon its senior management, particularly Joe R. Davis, the Company's founder, President and Chief Executive Officer. The loss of the services of Mr. Davis or other key personnel could have a material adverse effect on the Company's business and prospects. The Company's continued success also depends upon its ability to attract and retain qualified employees. The Company maintains insurance policies of $8.0 million on Mr. Davis. CONTROL Based upon the latest information available to the Company, Joe R. Davis and J.P. Morgan & Co. Incorporated ("Morgan") beneficially own approximately 16.25% and 11.03%, respectively, of the outstanding Common Stock. As a result, Mr. Davis and Morgan, acting in concert, could have the ability to substantially influence the election of the Company's Board of Directors and other matters requiring shareholder approval. GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS The Company is subject to the environmental laws and regulations of the United States and the states in which its subsidiaries have operations concerning emissions into the air, discharges into waterways and the generation, handling and disposal of waste materials. While the Company believes it is currently in substantial 4 compliance with these laws and regulations, there can be no assurance that future changes in such laws and regulations will not have a material effect on the Company's operations. DIVIDEND POLICY The Company currently intends to retain all future earnings to finance the continuing development of its business and does not anticipate paying cash dividends on the Common Stock in the foreseeable future. SHARES ELIGIBLE FOR FUTURE SALE Sales of approximately 1,236,114 shares of Common Stock held by affiliates of the Company may be subject to the volume limitations of Rule 144 ("Rule 144") under the Securities Act of 1933, as amended (the "Securities Act"). Rule 144 permits an affiliate to sell, within any three-month period, a number of shares not exceeding the greater of 1% of the then outstanding shares of the Company's Common Stock or the average weekly trading volume during the four weeks preceding the date of filing of notice of the proposed sale with the Commission pursuant to Rule 144. In addition to such shares, 218,863 shares are eligible for sale pursuant hereto or to the Company's registration statement filed on Form S-3 with the Commission on June 17, 1996. As of November 30, 1996, the Company had reserved 874,100 shares of Common Stock for issuance upon the exercise of stock purchase options or stock awards. Of these shares of Common Stock, 388,650 shares are reserved for options or stock awards which have not yet been granted or issued. Pursuant to its acquisition of Emerald City Graphics Inc. ("Emerald City") on February 15, 1996 (the "Emerald City Acquisition"), the Company is contingently obligated at certain times and under certain circumstances, depending on the performance and operating results of Emerald City for three consecutive one-year periods beginning January 1, 1996, to issue, for all periods in the aggregate, up to a total of 75,000 shares of Common Stock to the former shareholders of Emerald City, in equal amounts unless they agree otherwise, and pursuant to its acquisition of Precision Litho, Inc. ("Precision") on February 23, 1996, the Company is contingently obligated, at certain times and under certain circumstances, depending on the performance and operating results of Precision for three consecutive one-year periods beginning April 1, 1996, to issue, for all periods in the aggregate, up to a total of 20,000 shares of Common Stock to Dennis L. Rampe. The Board of Directors, without further action by the shareholders, is authorized to issue up to five million shares of the Company's Preferred Stock, par value $1.00 per share (the "Preferred Stock"), in one or more series and to fix and determine as to any series all the relative rights and preferences of shares in such series, including, without limitation, preferences, limitations or relative rights with respect to redemption rights, conversion rights, if any, voting rights, if any, dividend rights and preferences on liquidation. The dividend, liquidation and voting rights of any such Preferred Stock issued could be superior to the rights of the holders of Common Stock. The issuance of shares of Preferred Stock, or the issuance of rights to purchase such shares, could be used to discourage an unsolicited acquisition proposal that some, or a majority, of the shareholders might believe to be in the best interests of the Company or in which shareholders might receive a premium for their stock over the then market price of such stock. In addition, under certain circumstances, the issuance of Preferred Stock could adversely affect the voting power of the holders of the Common Stock. Future sales of significant numbers of shares of Common Stock in the public market could adversely affect the prevailing market price of the Common Stock and also could impair the Company's ability to raise capital through subsequent offerings of securities. --------------------- 5 THE COMPANY The Company's principal executive offices are located at 2210 W. Dallas Street, Houston, Texas 77019, and its telephone number is (713) 529-4200. USE OF PROCEEDS The Company will not receive any of the proceeds from the sale of the Common Stock offered by the Selling Shareholders. RECENT DEVELOPMENTS On October 31, 1996, the Company acquired the assets and business of Mobility, Inc. and certain affiliates in Richmond, Virginia. On November 6, 1996, the Company announced the signing of a letter of intent to acquire Melin Enterprises, Inc., d/b/a Direct Color, in Long Beach, California and a letter of intent to acquire Theo Davis Sons, Inc. serving the Raleigh-Durham, North Carolina area. The Company expects to complete these acquisitions in December 1996 or January 1997. The foregoing may contain forward looking information. Readers are cautioned that such information involves risks and uncertainties, including the possibility that events may occur which preclude completion of the Company's pending acquisitions. On December 18, 1996, the Company announced a 2-for-1 split of its Common Stock. The stock split will be in the form of a stock dividend and will be distributed on January 10, 1997 to shareholders of record at the close of business on December 31, 1996. Shareholders will receive one share of Common Stock for each share of Common Stock held on the record date. SELLING SHAREHOLDERS This Prospectus covers offers and sales from time to time by the Selling Shareholders of the Shares owned by the Selling Shareholders. Set forth below are (i) the names of the Selling Shareholders and (ii) the number of shares of Common Stock held as of the date of this Prospectus by the Selling Shareholders, which number is also the number of Shares which may be offered by each Selling Shareholder pursuant to this Prospectus. Each person named below has sole voting and investment power with respect to the Shares indicated. Any or all of the Shares listed below may be offered for sale by the Selling Shareholders from time to time. PERCENTAGE OF COMMON STOCK OUTSTANDING NUMBER OF SHARES OF AT NOVEMBER 30, 1996 COMMON STOCK HELD HELD PRIOR TO ANY SALES AND OFFERED PURSUANT MADE PURSUANT TO TO THIS PROSPECTUS THIS PROSPECTUS Robert Garner 35,256 * B.C. (Bernie) Nevins 35,256 * Gerald Ross 35,256 * Thomas Kruger 35,256 * John Duro 35,256 * - ----------------- * less than 1% Because the Company does not know how many Shares may be sold by the Selling Shareholders pursuant to this Prospectus, no estimate can be given as to the number of the Shares that will be held by the Selling Shareholders upon termination of this offering. The Company issued the 176,280 Shares to Messrs. Garner, Nevins, Ross, Kruger and Duro in connection with the acquisition of Garner Publishing Co. ("GPC"). Pursuant to the acquisition, GPC became a wholly owned subsidiary of the Company and the Company entered into employment agreements with Messrs. Garner, Ross, Kruger and Duro. 6 PLAN OF DISTRIBUTION The Shares may be sold from time to time by or for the account of the Selling Shareholders pursuant to this Prospectus or pursuant to Rule 144 under the Securities Act. Sales of Shares pursuant to this Prospectus may be effected in the over-the-counter market, on the Nasdaq National Market or otherwise at prices and on terms then prevailing or at prices related to the then current market price (in each case as determined by the relevant Selling Shareholder), directly or through agents designated from time to time, or through dealers or underwriters to be designated or in negotiated transactions. The Shares may be sold by any one or more of the following methods: (a) a block trade (which may involve crosses) in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (c) exchange distributions and/or secondary distributions in accordance with the rules of the Nasdaq National Market; (d) ordinary brokerage transactions and transactions in which the broker solicits purchasers; (e) through the writing of options on Shares (whether such options are listed on an options exchange or otherwise); or (f) privately negotiated transactions. To the extent required by applicable law, the specific Shares to be sold and the names of the Selling Shareholders will be set forth in an accompanying Prospectus Supplement. Each Selling Shareholder may effect such transactions by selling Shares directly to other purchasers, through agents or through broker-dealers, and any such agents or broker-dealers may receive compensation in the form of underwriting discounts, concessions or commissions from such Selling Shareholder, from purchasers of Shares for whom they act as agents, or from both sources (and are not expected to be in excess of customary commissions). The Selling Shareholders and any broker-dealers that participate in the distribution of the Shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales, and any commissions, and any profit on the resale of Shares, received by the Selling Shareholders and any such broker-dealers may be deemed to be underwriting discounts and commissions. The Company will bear all costs and expenses incurred by it in connection with the offering and sale of Shares pursuant to this Prospectus, but will not be responsible for any commissions, underwriting discounts or similar amounts payable in respect of any such sale. Notwithstanding the foregoing, the Company, on the one hand, and each Selling Shareholders, on the other hand, have agreed to indemnify each other from certain liabilities relating to the offering made hereby, including liabilities under the Securities Act. DESCRIPTION OF CAPITAL STOCK The Company's authorized capital stock consists of 20,000,000 shares of Common Stock of which 6,154,840 shares were issued and outstanding as of November 30, 1996, and 5,000,000 shares of Preferred Stock, par value $1.00 per share, issuable in series, no shares of which were issued and outstanding as of the date of this Prospectus. COMMON STOCK Holders of Common Stock are entitled to one vote per share in the election of directors and on all other matters on which shareholders are entitled or permitted to vote. Such holders are not entitled to vote cumulatively for the election of directors. Holders of Common Stock have no redemption, conversion, preemptive or other subscription rights. In the event of the liquidation, dissolution or winding up of the Company, holders of Common Stock are entitled to share ratably in all of the assets of the Company remaining, if any, after satisfaction of the debts and liabilities of the Company and the preferential rights of the holders of the Preferred Stock, if any, then outstanding. The outstanding shares of Common Stock are validly issued, fully paid and nonassessable. Holders of Common Stock are entitled to receive dividends when and as declared by the Board of Directors of the Company out of funds legally available therefor only after payment of, or provision for, full dividends (on a cumulative basis, if applicable) on all outstanding shares of any series of Preferred Stock and after the Company has made provision for any sinking or purchase funds for any series of Preferred Stock. The Company has not paid any cash dividends on the Common Stock since its incorporation and does not anticipate paying cash dividends in the foreseeable future. 7 PREFERRED STOCK The Preferred Stock is issuable by the Board of Directors in one or more series, with the number of shares of each series and the rights, preferences and limitations of each series to be determined by the Board of Directors are: the annual rate of dividends; the redemption price, if any; the terms of a sinking or purchase fund, if any; the amount payable in the event of any voluntary liquidation, dissolution or winding up of the affairs of the Company; conversion rights, if any; and voting powers, if any. All series of Preferred Stock rank equally and are identical in all respects except as may otherwise be provided in the Statement or Statements of Resolution establishing such series. The Board of Directors of the Company, without obtaining stockholder approval, may issue shares of the Preferred Stock with voting rights or conversion rights which could affect the voting power of the holders of Common Stock. The issuance of any shares of Preferred Stock could be utilized, under certain circumstances, in an attempt to prevent the acquisition of the Company. There are no shares of Preferred Stock outstanding as of the date of this Prospectus, and the Company has no present intention to issue any shares of Preferred Stock. CERTAIN ANTI-TAKEOVER PROVISIONS Certain provisions of the Certificate of Incorporation and By-laws summarized in the following paragraph may have the effect of discouraging, delaying or preventing an acquisition proposal that a shareholder might consider favorable, including a proposal that might result in the payment of a premium over the market price for the shares held by shareholders. The Company's authorized capital stock consists of 20,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock, all of which shares of Preferred Stock are undesignated as of the date of this Prospectus. The authorized but unissued (and in the case of Preferred Stock, undesignated) stock may be given voting rights and privileges and issued by the Board of Directors in one or more transactions. Such rights and privileges, when exercised, may make it more difficult for a shareholder or any group of shareholders to obtain control of the Company. LEGAL OPINION The validity of the issuance of the shares of the Common Stock offered hereby will be passed upon for the Company by Winstead Sechrest & Minick P.C., Houston, Texas. EXPERTS The financial statements incorporated by reference in this Prospectus and elsewhere in the Registration Statement as indicated in their reports with respect thereto, have been audited by Arthur Andersen LLP, independent public accountants, and are incorporated herein by reference in reliance upon the authority of said firm as experts in accounting and auditing. 8 NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING SHAREHOLDER OR UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME AND ANY SALE MADE HEREUNDER DOES NOT IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ---------- TABLE OF CONTENTS PAGE AVAILABLE INFORMATION..................................................... 2 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.................................................... 2 RISK FACTORS.............................................................. 4 THE COMPANY............................................................... 6 USE OF PROCEEDS........................................................... 6 RECENT DEVELOPMENTS....................................................... 6 SELLING SHAREHOLDERS...................................................... 6 PLAN OF DISTRIBUTION...................................................... 7 DESCRIPTION OF CAPITAL STOCK.............................................. 7 LEGAL OPINION............................................................. 8 EXPERTS .................................................................. 8 176,280 SHARES Consolidated Graphics, Inc. COMMON STOCK ---------- PROSPECTUS ---------- DECEMBER 24, 1996 9 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses to be paid by the Company in connection with this offering are as follows: Securities and Exchange Commission registration fee...........................................$ 2,650.88 Accounting fees and expenses................................. 1,000.00 Legal fees and expenses, including Blue Sky.................. 12,000.00 Miscellaneous................................................ 1,000.00 Total....................................................... $16,650.88 ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article 2.02-1 of the Texas Business Corporation Act provides that a corporation may indemnify any director or officer who was, is or is threatened to be made a named defendant or respondent in a proceeding because he is or was a director or officer, provided that the director or officer (i) conducted himself in good faith, (ii) reasonably believed (a) in the case of conduct in his official capacity, that his conduct was in the corporation's best interests, and (b) in all other cases, that his conduct was at least not opposed to the corporation's best interests and (iii) in the case of any criminal proceeding, had no reasonable cause to believe his conduct was unlawful. Subject to certain exceptions, a director or officer may not be indemnified if the person is found liable to the corporation or if the person is found liable on the basis that he improperly received a personal benefit. Under Texas law, reasonable expenses incurred by a director or officer may be paid or reimbursed by the corporation in advance of a final disposition of the proceeding after the corporation receives a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification and a written undertaking by or on behalf of the director or officer to repay to the corporation if it is ultimately determined that the director or officer is not entitled to indemnification by the corporation. Texas law requires a corporation to indemnify an officer or director against reasonable expenses incurred in connection with the proceeding in which he is named defendant or respondent because he is or was a director or officer if he is wholly successful in defense of the proceeding. Texas law also permits a corporation to purchase and maintain insurance or another arrangement on behalf of any person who is or was a director or officer against any liability asserted against him and incurred by him in such a capacity or arising out of his status as such a person, whether or not the corporation would have the power to indemnify him against that liability under Article 2.01-1. The Company's Second Amended and Restated By-Laws, as amended (the "By-Laws"), provide for the indemnification of its officers and directors, and the advancement to them of expenses in connection with proceedings and claims, to the fullest extent permitted under the Texas Business Corporation Act. Such indemnification may be made even though directors and officers would not otherwise be entitled to indemnification under other provisions of the By-Laws. The Company has entered into indemnification agreements with its directors and certain of its officers that contractually provide for indemnification and expense advancement. Both the By-Laws and the agreements include related provisions meant to facilitate the indemnitees' receipt of such benefits. These provisions cover, among other things: (i) specification of the method of determining entitlement to indemnification and the selection of independent counsel that will in some cases make such determination, (ii) specification of certain time periods by which certain payments or determinations must be made and actions must be taken and (iii) the establishment of certain presumptions in favor of an indemnitee. The benefits of certain of these provisions are available to an indemnitee only if there has been a change in control (as defined). In addition, the Company may, in the future, purchase directors and officers liability insurance policies for its directors and officers. II-1 The above discussion of Article 2.02-1 of the Texas Business Corporation Act and of the Company's Bylaws is not intended to be exhaustive and is respectively qualified in its entirety by such statute and the Bylaws. Reference is made to the form of the Registration Rights Agreement, filed as Exhibit 10.1 hereto, which contains provisions for indemnification of the Company, its directors officers, and any controlling persons by the Selling Shareholders against certain liabilities for certain information furnished by the Selling Shareholders. ITEM 16. EXHIBITS The following exhibits are filed herewith or incorporated herein by reference: EXHIBIT NO. DESCRIPTION OF EXHIBIT *3.1 - Restated Articles of Incorporation of the Company filed with the Secretary of State of the State of Texas on July 27, 1994 (Consolidated Graphics, Inc. Form 10-Q (June 30, 1994) SEC File No. 0-24068, Exhibit 4(a)). *3.2 - By-Laws of the Company (Consolidated Graphics, Inc. Form 10-K (May 31, 1995) SEC File No. 0-24068, Exhibit 3.2). *4 - Specimen Common Stock Certificate (Consolidated Graphics, Inc., Form S-1 (June 7, 1994) Reg. No. 33-77468, Exhibit 4.1). 5 Opinion of Winstead Sechrest & Minick P.C. regarding the legality of the securities being offered. 10.1 - Registration Rights Agreement by and among the Company, Robert Garner, B.C. (Bernie) Nevins, Gerald Ross, Thomas Kruger and John W. Duro, dated as of July 3, 1996. 23.1 - Consent of Winstead Sechrest & Minick P.C. (set forth in Exhibit 5). 23.2 - Consent of Arthur Andersen LLP. *24 - Powers of Attorney (Consolidated Graphics, Inc. Form S-8 (December 20, 1996) Reg. No. 333-19435, Exhibit 24). *Incorporated by reference. ITEM 17. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraph (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement. II-2 (2) That, for the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, the State of Texas, on December 23, 1996. CONSOLIDATED GRAPHICS, INC. By: /s/ JOE R. DAVIS Joe R. Davis President, Chief Executive Officer and Chairman of the Board of Directors II-3 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. SIGNATURE TITLE DATE /s/ JOE R. DAVIS President, Chief Executive December 23, 1996 (Joe R. Davis) Officer and Director (Principal Executive Officer) /s/ G. CHRISTOPHER COLVILLE Vice President - Mergers and December 23, 1996 (G. Christopher Colville) Acquisitions and Chief Financial and Accounting Officer /s/ LARRY J. ALEXANDER Director December 23, 1996 (Larry J. Alexander) /s/ BRADY F. CARRUTH Director December 23, 1996 (Brady F. Carruth) /s/ CLARENCE C. COMER Director December 23, 1996 (Clarence C. Comer) /s/ GARY L. FORBES Director December 23, 1996 (Gary L. Forbes) Director December 23, 1996 (W. D. Hawkins) Director December 23, 1996 (James H. Limmer) /s/ THOMAS E. SMITH Director December 23, 1996 (Thomas E. Smith) /s/ HUGH N. WEST Director December 23, 1996 (Hugh N. West) * By: /s/ G. CHRISTOPHER COLVILLE (G. Christopher Colville, Attorney-in-Fact) II-4 EX-5 2 EXHIBIT 5 [Winstead Letterhead] December 23, 1996 Consolidated Graphics, Inc. 2210 W. Dallas Street Houston, Texas 77019 Gentlemen: This opinion is given in connection with the filing by Consolidated Graphics, Inc. (the "Company") with the Securities and Exchange Commission under the Securities Act of 1933, as amended, of a Registration Statement on Form S-3 with respect to an aggregate of 176,280 shares of the common stock, $.01 par value, of the Company (the "Common Stock"). All of such shares (the "Shares") are being sold by selling stockholders. We have acted as counsel for the Company in connection with the filing of the Registration Statement. In so acting, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives as we have deemed relevant and necessary as a basis for the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to this opinion that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company. Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that the Shares being registered pursuant to the Registration Statement are validly issued, fully paid and nonassessable. We consent to the use of this opinion as an exhibit to the Registration Statement. We further consent to the reference to our firm under the caption "Legal Matters" in the prospectus which is a part of the Registration Statement. This opinion is rendered solely for your benefit in connection with the transactions described above. Except as set forth above, this opinion may not be used or relied upon by any other person and may not be disclosed, quoted, filed with a governmental agency or otherwise referred to without our prior written consent. Very truly yours, /s/ WINSTEAD SECHREST & MINICK WINSTEAD SECHREST & MINICK EX-10.1 3 EXHIBIT 10.1 REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of July 3, 1996, by and among Consolidated Graphics, Inc., a Texas corporation (the "Company"), Robert Garner, B.C. (Bernie) Nevins, Gerald Ross, Thomas Kruger and John W. Duro (individually a "Holder" and collectively the "Holders"); W I T N E S S E T H : WHEREAS, it is a condition to the consummation of the transactions contemplated by that certain Agreement and Plan of Reorganization dated as of July 1, 1996 (the "Reorganization Agreement"), among the Company, Garner Acquisition Co., an Iowa corporation, Garner Publishing Company, an Iowa corporation, and the Holders that this Agreement be executed and delivered by the Company and the Holders; NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Holders agree as follows: Section 1. DEFINITIONS. As used in this Agreement, the following terms have the meanings indicated below: AGENT shall mean any Person acting for or on behalf of a Holder of Registrable Securities with respect to the holding or sale of such Registrable Securities. AGREEMENT shall mean this Registration Rights Agreement. BUSINESS DAY shall mean any day other than a Saturday, Sunday, or legal holiday for banks in the State of Texas. COMMISSION shall mean the Securities and Exchange Commission. COMMON STOCK shall mean the Company's common stock, par value $.10 per share, or any successor class of the Company's common stock. COMPANY shall mean Consolidated Graphics, Inc. DEMAND REGISTRATION shall mean the registration, upon demand by either or both of the Holders, with the Commission of the offer and sale of Registrable Securities under and in accordance with the provisions of the Securities Act. EXCESS DEMAND REGISTRATION shall mean the registration upon demand of the Excess Requested Shares with the Commission of the offer and sale of the Excess Requested Shares under and in accordance with the provisions of the Securities Act. EXCESS REQUESTED SHARES shall mean Registrable Securities that were requested to be included in the Demand Registration, but were not so included pursuant to the terms of this Agreement. EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended. HOLDER shall mean Robert Garner, B.C. (Bernie) Nevins, Gerald Ross, Thomas Kruger or John W. Duro. HOLDERS shall mean Robert Garner, B.C. (Bernie) Nevins, Gerald Ross, Thomas Kruger and John W. Duro, collectively. INSPECTORS shall mean any Holder of Registrable Securities, any underwriter participating in any disposition of Registrable Securities pursuant to a Demand Registration, and any attorney, accountant or other agent retained by such Holder or underwriter. LIABILITIES shall mean all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation). NEW COMMON STOCK shall mean the shares of Common Stock to be acquired by the Holders pursuant to the Reorganization Agreement, together with any Related Securities. PERSON shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or a political subdivision, agency or instrumentality thereof or other entity or organization of any kind. PIGGYBACK REGISTRATION shall mean the registration of Registrable Securities pursuant to a registration statement filed by the Company under the Securities Act as set forth in Section 2 of this Agreement. RECORDS shall mean all financial and other records, pertinent corporate documents and properties of the Company. REGISTRABLE SECURITIES shall mean the New Common Stock and the Related Securities, until such time as the New Common Stock and the Related Securities have been (a) distributed to the public pursuant to a registration statement covering such securities that has been declared effective under the Securities Act, (b) distributed to the public in accordance with the provisions of Rule 144 (or any similar provision then in force) under the Securities Act or (c) repurchased by the Company. REGISTRATION EXPENSES shall mean all expenses incident to the Company's performance of or compliance with the Demand Registration pursuant to this Agreement, including without limitation all Commission and securitites exchange or National Association of Securities Dealers, Inc. registration and filing fees, fees and expenses of compliance with securities or blue sky laws (including fees and disbursements of counsel in connection with blue sky qualifications of the 2 Registrable Securities), rating agency fees, printing expenses, messenger and delivery expenses, internal expenses (not including salaries and expenses of its officers and employees performing legal or accounting duties), the fees and expenses incurred in connection with the listing of the Registrable Securities to be registered on each securities exchange on which similar securities issued by the Company are then listed and fees and disbursements of counsel for the Company and its independent certified public accountants (including the expenses of any special audit or interim review or "cold comfort" letters required by or incident to such performance), the fees and expenses of any special experts retained by the Company in connection with such registration (including any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities) and any out-of-pocket expenses of the Holders of Registrable Securities. RELATED SECURITIES shall mean any securities issued in exchange for, as a dividend on or in replacement of, or otherwise issued in respect of (including securities issued in a stock dividend, split or recombination or pursuant to the exercise of preemptive rights), the New Common Stock. REORGANIZATION AGREEMENT shall mean that certain Agreement and Plan of Reorganization dated as of July 1, 1996 among the Company, Garner Acquisition Co., Garner Publishing Company and the Holders. SECURITIES ACT shall mean the Securities Act of 1933, as amended. Section 2. PIGGY-BACK REGISTRATION. a. If the Company proposes to file a registration statement under the Securities Act with respect to an offering by the Company for its own account or for the account of any other Person of any class of equity security, including any security convertible into or exchangeable for any equity security (other than a registration statement on Forms S-4 or S-8 (or their successor forms) or filed in connection with an exchange offer or an offering of securities solely to the Company's existing stockholders), then the Company shall in each case give written notice of such proposed filing to each of the Holders of Registrable Securities at least twenty days before the anticipated filing date, and such notice shall offer such Holders the opportunity to register such number of Registrable Securities as each such Holder may request. The Company shall use reasonable diligence to cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Holders of Registrable Securities requested to be included in the registration for such offering to include such securities in such offering on the same terms and conditions as any similar securities of the Company included therein. Notwithstanding the foregoing, if the managing underwriter or underwriters of such offering delivers a written opinion to the Holders of Registrable Securities that the total amount of securities which they or the Company and any other Persons intend to include in such offering is sufficiently large to materially and adversely affect the success of such offering, then the amount of Registrable Securities to be offered for the accounts of Holders of Registrable Securities shall be reduced to the extent necessary, in the opinion of such managing underwriter, to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter. 3 b. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not be required to include Registrable Securities in any registration statement if the proposed registration is (a) a registration of a stock option or other employee incentive compensation plan or of securities issued or issuable pursuant to any such plan, (b) a registration of securities issued or issuable pursuant to a stockholder reinvestment plan or other similar plan, (c) a registration of securities issued in exchange for any securities or any assets of, or in connection with a merger or consolidation with, an unaffiliated company, or (d) a registration of securities pursuant to a "rights" or other similar plan designed to protect the Company's stockholders from a coercive or other attempt to take control of the Company. c. The Company may withdraw any registration statement and abandon any proposed offering initiated by the Company without the consent of any Holder of Registrable Securities, notwithstanding the request of any such Holder to participate therein in accordance with this provision, if the Company determines, in good faith in its sole discretion, that such action is in the best interests of the Company and its stockholders (for this purpose, the interest of the Holders shall not be considered). Section 3. DEMAND REGISTRATION RIGHTS. a. Subject to the conditions stated herein, at any time after September 30, 1996, and on or before October 1, 1997, a majority of the Holders acting together may make a written request to the Company for registration with the Commission of the offer and sale of the Registrable Securities held by the Holders under and in accordance with the provisions of the Securities Act. Following receipt of such request, the Company shall, no later than ten (10) Business Days after receipt of such request, notify the Holders that it will file a registration statement covering the Registrable Securities for sale by the Holders; PROVIDED, HOWEVER, THAT the Company may, if necessary, delay the filing of any registration statement relating to the Demand Registration for such reasonable period of time, not to exceed 90 days, as is necessary to prepare the financial statements of the Company for the fiscal period most recently ended prior to such written request. If a Holder of Registrable Securities shall, within ten (10) days after receipt of such notice, withdraw such Holder's Registrable Securities from the Demand Registration, such Holder withdrawing such Registrable Securities from such Demand Registration shall not have any further rights under this Section 3, without regard to whether the Demand Registration becomes effective under the Securities Act. b. All requests made pursuant to this Section 3 will specify the amount of Registrable Securities to be registered and will also specify the intended methods of disposition thereof. c. The Holders (as a group) of Registrable Securities shall as a group be entitled to one Demand Registration. Such Demand Registration must become effective under the Securities Act to count as having occurred with respect to such Registrable Securities. The Registration Expenses of the Demand Registration, whether or not it becomes effective, shall be paid as set forth in Section 11 below. d. If the Demand Registration is an underwritten offering, the Holders of a majority of the Registrable Securities to be included in such demand registration will select a managing underwriter or underwriters to administer the offering. Such managing underwriter or 4 underwriters shall be acceptable to the Company, and such acceptance will not be unreasonably withheld or delayed. Section 4. COMPANY REGISTRATION. Notwithstanding the provisions of Section 3, the Company shall not be obligated to effect a registration requested pursuant to Section 3 if within 30 days after receiving the notice provided by any Holder under Section 3, the Company notifies all Holders of the Registrable Securities of its intention to file a registration statement for an underwritten public offering of Common Stock for the sole account of the Company and within 90 days after providing such notice, the Company files a registration statement for such offering. In such case, the Holders shall have all the rights provided herein as if no such demand registration had been requested, with the latest date by which a request for registration must be made delayed to a date 180 days after the effective date of such registration statement filed for an offering for the account of the Company that resulted in the application of this Section 4. If at any time the Company fails to pursue diligently any such registration statement or offering, the provisions of the preceding sentence shall not apply, and the Company shall be obligated to satisfy its obligations under Section 3 promptly following notice to do so from a Holder. With respect to such Company registration, the Company shall have the sole authority to select or terminate the employment of underwriters and to make all decisions in connection with the filing, effectiveness and consummation of the proposed offering, subject to the express provisions hereof. Section 5. LIMITATIONS ON OBLIGATIONS OF COMPANY. The obligations of the Company under Section 3 are subject to each of the following limitations, conditions and qualifications: a. The Company shall be entitled to postpone for a reasonable period of time (not exceeding 60 days) the filing (but not the preparation) of any registration statement otherwise required to be prepared and filed by it pursuant hereto if, at the time the Company receives a request for such registration, the Company is in possession of material non-public information that would be required to be disclosed in a registration statement, but that has not been and will otherwise not be disclosed to the public, and the Company deems disclosure not to be in the best interests of the Company and its stockholders (for this purpose, the interest of the Holders shall not be considered). The Company shall be entitled to postpone the filing of such a registration statement for additional 60-day periods (not to exceed in any event an aggregate of 120 days) if it delivers to the Holders of the Registrable Securities an opinion of counsel to the effect that there is a reasonable likelihood that the filing of a registration statement would result in the disclosure of material non-public information that would be required to be disclosed in a registration statement, the disclosure of which at such time appears not to be in the best interests of the Company and its stockholders (for this purpose, the interest of the Holders shall not be considered). b. The Company shall be entitled to postpone for a reasonable period of time (not exceeding 90 days) the distribution of preliminary or final prospectuses under any registration statement required to be prepared and filed by it pursuant hereto, if at the time such distribution would otherwise be made, the Company is engaged in an issuer tender offer within the meaning of Section 13(e) of the Exchange Act for securities of the same class (within the meaning of the 5 Exchange Act) as the Registrable Securities that are proposed to be registered, unless the Holders of the Registrable Securities proposed to be registered can obtain a no-action letter from the staff of the Commission to the effect that the staff would not recommend enforcement action to the Commission if offers or sales were made pursuant to a prospectus under such circumstances. c. The Company shall be entitled to postpone for a reasonable period of time (not exceeding 90 days) the effectiveness (but not the filing or preparation) of any registration statement otherwise required to be prepared and filed by it pursuant hereto if, within ten (10) Business Days after it receives a request for a registration pursuant hereto, the Company's investment banking firm determines (and the Company so notifies the Holders of the Registrable Securities) that in its judgment, such registration and offering would materially interfere with any financing, acquisition, corporate reorganization or other material transaction involving the Company that before such request was made the Board of Directors of the Company had agreed by resolution to pursue. d. If pursuant to a request for a Demand Registration the Company delivers to the Holders of Registrable Securities proposed to be registered, an opinion of counsel to the effect that sales of such Registrable Securities thereunder might cause the Company to lose a material amount of net operating losses or other tax carryforwards, the Company may postpone the filing of the registration statement otherwise required to be filed by it pursuant hereto, but only to the extent required to protect such carryforwards, and only if it is first determined that such protection cannot be effected by reducing the number of securities being registered. If the number of securities being registered is reduced pursuant to this subsection d, the Holders of the Excess Requested Shares shall be treated as if there had been no Demand Registration and shall be entitled to the benefit of Section 3 with respect to the Excess Requested Shares as if the Demand Registration had not been requested; PROVIDED, HOWEVER, THAT any Excess Demand Registration shall not be required to become effective within 180 days of the effective date of the Demand Registration or any Piggyback Registration hereunder. With respect to such an Excess Demand Registration relating to Excess Requested Shares subsequently initiated, only Excess Requested Shares shall be deemed Registrable Securities with respect thereto, and no Holder shall have any independent demand registration rights with respect to shares for which such Holder failed to request inclusion pursuant to Section 3 in the Demand Registration that became effective. Section 6. RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES. To the extent not inconsistent with applicable law, including insurance codes, each Holder of Registrable Securities that is included in a registration statement which registers Registrable Securities pursuant to this Agreement agrees not to effect any public sale or distribution of the issue being registered (or any securities of the Company convertible into or exchangeable or exercisable for securities of the same type as the issue being registered) during the 14 days before, and during the 90-day period beginning on, the effective date of a registration statement filed by the Company (except as part of such registration), but only if and to the extent requested in writing (with reasonable prior notice) by the managing underwriter or underwriters in the case of an underwritten public offering by the Company of securities of the same type as the 6 Registrable Securities; PROVIDED, HOWEVER, THAT the period of time for which the Company is required to keep such registration statement which includes Registrable Securities continuously effective shall be increased by a period equal to such requested holdback period. Section 7. RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees not to effect any public sale or distribution of any securities similar to those being registered, or any securities convertible into or exchangeable or exercisable for such securities, during the 14 days before, and during the 90-day period beginning on, the effective date of any registration statement in which the Holders of Registrable Securities are participating (except pursuant to such registration statement). Section 8. COOPERATION BY HOLDERS. The offering of Registrable Securities by any Holder shall comply in all respects with the applicable terms, provisions and requirements set forth in this Agreement, and such Holder shall timely provide the Company with all information and materials required to be included in a registration statement that (a) relate to the offering, (b) are in possession of such Holder and (c) relate to such Holder, and to take all such action as may be reasonably required in order not to delay the registration and offering of the securities by the Company. The Company shall have no obligation to include in such registration statement shares of a Holder who has failed to furnish such information which, in the written opinion of counsel to the Company, is required in order for the registration statement to be in compliance with the Securities Act. If a Holder of Registrable Securities which is the subject the Demand Registration or an Excess Demand Registration shall fail to furnish such information and such Demand Registration or Excess Demand Registration shall not become effective under the Securities Act, such Holder shall not have a right to request inclusion of such Holder's Registrable Securities in a future demand registration with respect to Registrable Securities. Section 9. REGISTRATION PROCEEDINGS. Whenever any Registrable Securities are to be registered pursuant to Sections 2 or 3 of this Agreement, the Company will use reasonable diligence to effect the registration of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable. In connection with any Piggyback Registration, Demand Registration or Excess Demand Registration, the Company will act as expeditiously as possible to: a. prepare and file with the Commission a registration statement which includes the Registrable Securities and use reasonable diligence to cause such registration statement to become effective; PROVIDED, HOWEVER, THAT before filing a registration statement or prospectus or any amendments or supplements thereto, including documents incorporated by reference after the initial filing of the registration statement, the Company will furnish to the Holders of the Registrable Securities covered by such registration statement and the underwriters, if any, draft copies of all such documents proposed to be filed at least five (5) Business Days prior thereto, which documents will be subject to the reasonable review of such Holders and underwriters, and the Company will not file any registration statement or amendment thereto or any prospectus or any supplement thereto (including such documents incorporated by reference) to which Holders of a majority of the Registrable Securities covered by such registration statement or the underwriters with respect to such Registrable Securities, if any, shall reasonably object, and will 7 notify each Holder of the Registrable Securities of any stop order issued or threatened by the Commission in connection therewith and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered; b. prepare and file with the Commission such amendments and post-effective amendments to the registration statement as may be necessary to keep the registration statement effective for a period of 180 days if the registration is pursuant to Section 2 or until October 1, 1998 if the registration is pursuant to Section 3 (or such later date that results by adding the number of days by which the effectiveness of the registration statement is delayed as a result of any postponement permitted under subsections a through c of Section 5) or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold or withdrawn, but not before the expiration of the 90-day period referred to in Section 3(3) of the Securities Act and Rule 174 thereunder, if applicable; cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement or supplement to the prospectus; the Company shall not be deemed to have complied with its obligations hereunder to keep a registration statement effective during the applicable period if it voluntarily takes any action that would result in selling Holders of the Registrable Securities being prevented from selling such Registrable Securities during that period unless such action is required under applicable law; c. furnish to any Holder of Registrable Securities included in such registration statement and the underwriter or underwriters, if any, without charge, such number of conformed copies of the registration statement and any post-effective amendment thereto and such number of copies of the prospectus (including each preliminary prospectus) and any amendments or supplements thereto, and any documents incorporated by reference therein, as such Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities being sold by such Holder (it being understood that the Company consents to the use of the prospectus and any amendment or supplement thereto, provided by the Company to each Holder of Registrable Securities covered by the registration statement and the underwriter or underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by the prospectus or any amendment or supplement thereto); PROVIDED, HOWEVER, THAT before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to one counsel selected by the Holders of a majority of the Registrable Securities covered by such registration statement copies of all documents proposed to be filed which documents will be subject to the review of such counsel; d. notify each Holder of Registrable Securities included in such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, when the Company becomes aware of the happening of any event as a result of which the prospectus included in such registration statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances 8 under which they were made) not misleading and, as promptly as practicable thereafter, prepare and file with the Commission and furnish a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; e. use reasonable diligence to cause all Registrable Securities included in such registration statement to be listed, by the date of the first sale of Registrable Securities pursuant to such registration statement, on each securities exchange (including, for this purpose, NASDAQ) on which the Common Stock of the Company is then listed or proposed to be listed, if any; f. make generally available to its security holders an earnings statement satisfying the provisions of Section 11(a) of the Securities Act no later than forty-five days after the end of the twelve-month period beginning with the first day of the Company's first fiscal quarter commencing after the effective date of the registration statement, which earnings statement shall cover said twelve-month period, which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-Q, 10-K, and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act as soon as feasible; g. make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the registration statement at the earliest possible moment; h. if reasonably requested by the managing underwriter or underwriters or any Holder of Registrable Securities covered by the registration statement, promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters or such Holder requests to be included therein, including without limitation, with respect to the number of Registrable Securities being sold by such Holder to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and any other terms of the underwritten offering of such Registrable Securities, and promptly make all required filings of such prospectus supplement or post-effective amendment; i. as promptly as practicable after filing with the Commission of any document which is incorporated by reference into a registration statement, deliver a copy of such document to each Holder of Registrable Securities covered by such registration statement; j. on or before the date on which the registration statement is declared effective, use reasonable diligence to register or qualify, and cooperate with the Holders of Registrable Securities included in such registration statement, the underwriter or underwriters, if any, and their counsel, in connection with the registration or qualification of the Registrable Securities covered by the registration statement for offer and sale under the securities or blue sky laws of each state and other jurisdiction of the United States as any such Holder or underwriter 9 reasonably requests in writing, to use reasonable diligence to keep each such registration or qualification effective, including through new filings, or amendments or renewals, during the period such registration statement is required to be kept effective and to do any and all other acts or things necessary or advisable to enable the disposition in all such jurisdictions of the Registrable Securities covered by the applicable registration statement; PROVIDED that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject; k. cooperate with the Holders of Registrable Securities covered by the registration statement and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or such Holders may request, subject to the underwriters' obligation to return any certificates representing securities not sold; l. use reasonable diligence to cause the Registrable Securities covered by the registration statement to be registered with or approved by such other governmental agencies or authorities within the United States as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such securities; m. enter into such customary agreements (including an underwriting agreement in customary form) and take all such other reasonable actions as the Holders of a majority of the Registrable Securities being sold or the underwriters retained by Holders participating in an underwritten public offering, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; n. make available for inspection by the Inspectors such Records as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors, and employees to supply all Records reasonably requested by any such Inspector in connection with such registration statement; PROVIDED, HOWEVER, THAT with respect to any Records that are confidential, the Inspectors shall execute such confidentiality agreements as the Company may reasonably request in order to maintain the confidentiality of confidential Records; and o. use reasonable diligence in connection with any underwritten offering to obtain a "cold comfort" letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters may reasonably request. Each Holder, upon receipt of any notice from the Company of the happening of any event of the kind described in subsection d of this Section 9, will forthwith discontinue disposition of the Registrable Securities until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by subsection d of this Section 9 or until it is advised in writing by the 10 Company that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the prospectus, and, if so directed by the Company, such Holder will, or will request the managing underwriter or underwriters, if any, to, deliver to the Company (at the Company's expense) all copies in their possession or control, other than permanent file copies then in such Holder's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. If the Company shall give any such notice, the time periods mentioned in subsection b of this Section 9 shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by subsection d of this Section 9 hereof or the notice that they may resume use of the prospectus. Section 10. REFERENCE TO HOLDER IN REGISTRATION STATEMENT. If such registration statement refers to any Holder by name or otherwise as the holder of any securities of the Company, then such Holder shall have the right to require (a) the insertion therein of language, in form and substance satisfactory to such Holder, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation of such Holder of the investment quality of the Company's securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (b) if such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder. Section 11. DEMAND AND PIGGYBACK REGISTRATION EXPENSES. All Registration Expenses incident to the Company's performance of or compliance with the Demand Registration, Excess Demand Registration or Piggyback Registration pursuant to this Agreement, except underwriting fees, discounts or commissions attributable to the sale of Registrable Securities and any out-of-pocket expenses of the Holders of the Registrable Securities, will be borne by the Company. Section 12. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold harmless each Holder of Registrable Securities, its officers, directors, and each Person who controls such Holder (within the meaning of the Securities Act), and any Agent (as hereinafter defined), or investment advisor thereof against all Liabilities arising out of or based upon any untrue or alleged untrue statement of material fact contained in any registration statement, any amendment or supplement thereto, any prospectus or preliminary prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as any such Liabilities arise out of or are based upon any untrue statement or omission based upon information with respect to such indemnified Person furnished in writing to the Company by such indemnified Person expressly for use therein. In connection with an underwritten offering, the Company will indemnify the underwriters thereof, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Holders of Registrable Securities or to such other extent as the Company and such underwriters may agree. 11 Section 13. INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. In connection with any registration statement in which a Holder of Registrable Securities is participating, each such Holder will furnish to the Company in writing such information with respect to the name and address of such Holder and the amount of Registrable Securities held by such Holder and such other information as the Company shall reasonably request for use in connection with any such registration statement or prospectus, and agrees to indemnify, to the extent permitted by law, the Company, its directors and officers, and each Person who controls the Company (within the meaning of the Securities Act) against any losses, damages and expenses resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the registration statement or prospectus or any amendment thereof or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is based upon any information with respect to such Holder so furnished in writing by such Holder specifically for inclusion in any prospectus or registration statement. Section 14. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such Person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such Person may claim indemnification or contribution pursuant to this Agreement and, unless in the written opinion of counsel for such indemnified party a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, permit the indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to such indemnified party. Whether or not such defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel with respect to such claim, unless in the opinion of counsel for any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels. Section 15. CONTRIBUTION. If the indemnification provided for in Sections 12 and 13 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities, or expenses referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities, or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities, or expenses, as well as any other relative equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a 12 material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of any losses, claims, damages, liabilities, and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 14, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 15 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The obligations of the Company pursuant to Sections 12, 13, 14 and 15 shall be further subject to such additional express agreements of the Company as may be required to facilitate an underwritten offering, PROVIDED, HOWEVER, THAT no such agreement shall in any way limit the rights of the Holders of Registrable Securities under this Agreement, or create additional obligations of such Holders not set forth herein, except as otherwise expressly agreed in writing by any such Holders. Section 16. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's securities on the terms of and on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements (which shall be the Company in the case of an offering of securities by the Company), and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. Section 17. RULE 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder (or, if the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Securities, make publicly available other nonconfidential information so long as necessary to permit sales under Rule 144 under the Securities Act), and it will take such other action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. Section 18. RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this Agreement shall apply, to the full extent set forth herein, with respect to the Registrable Securities, to any and all shares of equity capital of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets, or otherwise) which may be issued in respect of, in 13 exchange for, or in substitution of the Registrable Securities, in each case as the amounts of such securities outstanding are appropriately adjusted for any equity dividends, splits, reverse splits, combinations, recapitalizations, and the like occurring after the date of this Agreement. Section 19. OPINIONS. When any legal opinion is required to be delivered hereunder, such opinion may contain such qualifications as may be customary or otherwise appropriate for legal opinions in similar circumstances. Section 20. NOTICES. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: IF TO COMPANY, TO: Consolidated Graphics, Inc. 2210 West Dallas Street Houston, Texas 77019 Attention: Joe R. Davis, Chief Executive Officer WITH A COPY TO: R. Clyde Parker, Jr. Winstead Sechrest & Minick, P.C. 910 Travis Street, Suite 1700 Houston, Texas 77002 IF TO THE HOLDERS, TO EACH: c/o Garner Publishing Company 1697 N.E. 53rd Avenue Des Moines, Iowa 50313 WITH A COPY TO: Lyle Simpson Dreher, Simpson & Jensen, P.C. 1200 Hub Tower 699 Walnut Street Des Moines, Iowa 50309 14 IF TO ANY PERSON OTHER THAN THE HOLDERS: to the address of such Person on the records of the transfer agent of the Company as of the date prior to the date of any notice by the Company or to such other address as any party may furnish to the others in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt, and that failure to copy legal counsel shall not invalidate notices otherwise properly given. Section 21. APPLICABLE 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. Section 22. AMENDMENT AND WAIVER. This Agreement may be amended, and the provisions hereof may be waived, only by a written instrument signed by (a) the Holders of a majority of the Registrable Securities and (b) the Company. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Section 23. REMEDY FOR BREACH OF CONTRACT. The parties agree that if there is any breach or asserted breach of the terms, covenants, or conditions of this Agreement, the remedy of the parties hereto shall be at law and in equity and injunctive relief shall lie for the enforcement of or relief from any provisions of this Agreement. If any remedy or relief is sought and obtained by any party against one of the other parties pursuant to this Section 23, the other party shall, in addition to the remedy of relief so obtained, be liable to the party seeking such remedy or relief for the reasonable expenses incurred by such party in successfully obtaining such remedy or relief, including the reasonable fees and expenses of such party's counsel. Section 24. SEVERABILITY. It is a desire and intent of the parties that the terms, provisions, covenants, and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law. If any such term, provision, covenant, or remedy of this Agreement or the application thereof to any Person or circumstances shall, to any extent, be construed to be invalid or unenforceable, in whole or in part, then such term, provision, covenant, or remedy shall be construed in a manner so as to permit its enforceability under the applicable law to the fullest extent permitted by law. In any case, the remaining provisions of this Agreement, or the application thereof to any Person or circumstances other than those to which they have been held invalid or unenforceable, shall remain in full force and effect. Section 25. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Section 26. HEADINGS. The section and paragraph headings have been inserted for purposes of convenience of reference only and shall not be used for interpretive purposes. 15 Section 27. BINDING EFFECT. Unless otherwise provided herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, and permitted assigns, and is not intended to confer upon any other Person any right or remedies hereunder; PROVIDED, HOWEVER, THAT a transferee of a Holder, other than as contemplated in (a), (b) or (c) of the definitions of Registrable Securities in Section 1, shall be deemed to be a Holder for purposes of obtaining the benefits or enforcing the rights of a Holder. Section 28. ENTIRE AGREEMENT. This Agreement, together with the other agreements referenced herein, constitutes the entire agreement and supersedes all prior agreements, understandings, both written and oral, among the parties with respect to the subject matter hereof. Section 29. INFORMATION. So long as each Holder owns Registrable Securities, such Holder agrees to deliver to the Company, upon request, such information about such Holder and such Holder's holdings of Registrable Securities as the Company may reasonably request as is necessary to permit the Company to prepare and file its annual report on Form 10-K and its proxy statements under the Exchange Act. 16 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. CONSOLIDATED GRAPHICS, INC. By: ___________________________________ Joe R. Davis, Chief Executive Officer ___________________________________ Robert Garner ___________________________________ B.C. (Bernie) Nevins ___________________________________ Gerald Ross ___________________________________ Thomas Kruger ___________________________________ John W. Duro 17 EX-23.2 4 Exhibit 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement on Form S-3, to be filed with the Securities and Exchange Commission on or around December 23, 1996, of our report dated June 30, 1996, included in the Consolidated Graphics, Inc. Annual Report on Form 10-K for the year ended March 31, 1996, and to all references to out Firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Houston, Texas December 23, 1996 -----END PRIVACY-ENHANCED MESSAGE-----