CONSOLIDATED GRAPHICS INC /TX/
DEF 14A, 1996-07-11
COMMERCIAL PRINTING
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                            SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ]  Preliminary Proxy Statement
[ ]  Confidential, for Use of the Commission Only (as permitted by Rule
     14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to ^240.14a-11(c) or ^240.14a-12

                          CONSOLIDATED GRAPHICS, INC.
                (Name of Registrant as Specified In Its Charter)

     ______________________________________________________________________
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
     Item 22(a)(2) of Schedule 14A.
[ ]  $500 per each party to the controversy pursuant to Exchange Act Rule
     14a-6(i)(3).
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     1)  Title of each class of securities to which transaction applies:
     ___________________________________________________________________________
     2)  Aggregate number of securities to which transactions applies:
     ___________________________________________________________________________
     3)  Per unit price or other underlying value of transaction computed
     pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
     filing fee is calculated and state how it was determined):
     ___________________________________________________________________________
     4)  Proposed maximum aggregate value of transaction:
     ___________________________________________________________________________
     5)  Total fee paid:
     ___________________________________________________________________________
     [ ]  Fee paid previously with preliminary materials.

    [ ]  Check box if any part of the fee is offset as provided by Exchange Act
    Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
    paid previously. Identify the previous filing by registration statement
    number, or the Form or Schedule and the date of its filing.

     1)  Amount Previously Paid:
     ___________________________________________________________________________
     2)  Form, Schedule or Registration Statement No.:
     ___________________________________________________________________________
     3)  Filing Party:
     ___________________________________________________________________________
     4)  Date Filed:
     ___________________________________________________________________________
<PAGE>
                          CONSOLIDATED GRAPHICS, INC.
                             2210 W. DALLAS STREET
                              HOUSTON, TEXAS 77019

                       [CONSOLIDATED GRAPHICS LETTERHEAD]

                                                                   July 10, 1996

Dear Shareholder:

     You are cordially invited to attend the Annual Meeting of Shareholders to
be held at The Museum of Printing History located at 1324 West Clay, Houston,
Texas, 77019, on Monday, August 5, 1996 at 5:00 p.m., Central Daylight Time. For
those of you who cannot be present at this Annual Meeting, we urge that you
participate by indicating your choices on the enclosed proxy and completing and
returning it at your earliest convenience.

     This booklet includes the notice of the meeting and the proxy statement,
which contains information about the Board of Directors and its committees and
personal information about each of the nominees for the Board. Also included in
the proxy statement is a description of the Company's Long-Term Incentive Plan
and a proposal to increase the number of shares available for issuance under
this plan.

     It is important that your shares are represented at the meeting, whether or
not you are able to attend personally. Accordingly, please sign, date and mail
promptly the enclosed proxy in the envelope provided.

     On behalf of the Board of Directors, thank you for your cooperation and
continued support.

                                    /s/   JOE R. DAVIS
                                          CHAIRMAN
                                            AND CHIEF EXECUTIVE OFFICER
<PAGE>
                          [CONSOLIDATED GRAPHICS LOGO]

                            2210 WEST DALLAS STREET
                              HOUSTON, TEXAS 77019

                            ------------------------

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                        TO BE HELD MONDAY, AUGUST 5, 1996

To the Shareholders:

     The Annual Meeting of Shareholders of Consolidated Graphics, Inc. (the
"Company") will be held at The Museum of Printing History located at 1324 West
Clay, Houston, Texas, 77019, on Monday, August 5, 1996 at 5:00 p.m., Central
Daylight Time, for the following purposes:

          1.  To elect nine directors to serve until the next Annual Meeting of
     Shareholders or until their successors are elected and qualified.

          2.  To adopt the First Amendment to the Consolidated Graphics, Inc.
     Long-Term Incentive Plan (the "Incentive Plan") and the related
     reservation of an additional 600,000 shares of Common Stock to be available
     for issuance as provided for under the Incentive Plan.

          3.  To transact such other business as may properly come before the
     meeting or any adjournments thereof.

     Only shareholders of record as of the close of business on June 19, 1996
are entitled to receive notice of and to vote at the meeting. A list of such
shareholders shall be open to the examination of any shareholder during ordinary
business hours, for a period of ten days prior to the meeting, at the principal
executive offices of the Company, 2210 West Dallas Street, Houston, Texas 77019
and shall also be open to examination at the Annual Meeting.

                                          By Order of the Board of Directors

                                    /s/   MARY K. COLLINS
                                          SENIOR VICE PRESIDENT AND
                                            SECRETARY

Houston, Texas
July 10, 1996

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO FILL
IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
RETURN ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE YOUR SHARES OF
COMMON STOCK PERSONALLY EVEN IF YOU HAVE PREVIOUSLY SUBMITTED THE PROXY.
<PAGE>
                          [CONSOLIDATED GRAPHICS LOGO]

                            2210 WEST DALLAS STREET
                              HOUSTON, TEXAS 77019

                            ------------------------

                                PROXY STATEMENT

                            ------------------------

                                  INTRODUCTION

     The accompanying proxy is solicited by and on behalf of the Board of
Directors of Consolidated Graphics, Inc., a Texas corporation (the "Company"),
for use only at the Annual Meeting of Shareholders (the "Annual Meeting") to
be held at The Museum of Printing History at 1324 West Clay, Houston, Texas,
77019, on Monday, August 5, 1996 at 5:00 p.m., Central Daylight Time, and at any
adjournments thereof. The approximate date on which this Proxy Statement and
accompanying proxy will first be given or sent to shareholders is July 10, 1996.

     Each proxy executed and returned by a shareholder may be revoked at any
time before it is voted at the meeting by filing an instrument revoking it with
the Secretary, by execution and return of a later-dated proxy, or by appearing
at the meeting and voting in person.

     Proxies in the accompanying form will be voted in accordance with the
specifications made and, where no specifications are given, such proxies will be
voted FOR the election as directors of the nominees named herein and if any one
or more of such nominees should become unavailable for election for any reason,
then FOR the election of any substitute nominee that management of the Company
may propose and FOR the adoption of the First Amendment to the Consolidated
Graphics, Inc. Long-Term Incentive Plan (the "Incentive Plan") and the
reservation of an additional 600,000 shares of Common Stock to be available for
issuance as provided for under the Incentive Plan.

     In the discretion of the proxy holders, the proxies will also be voted FOR
or AGAINST such other matters as may properly come before the meeting.
Management of the Company is not aware of any other matters to be presented for
action at the meeting.

                       RECORD DATE AND VOTING SECURITIES

     The Board of Directors has fixed the close of business on June 19, 1996 as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting. The issued and outstanding stock of the
Company on June 19, 1996 consisted of 5,936,060 shares of Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), each of which is
entitled to vote. Under the Company's By-Laws as well as the Texas Business
Corporation Act, the holders of a majority of the total issued and outstanding
shares of Common Stock, whether present in person or represented by proxy, will
constitute a quorum for the transaction of business at the meeting.

     The affirmative vote of a plurality of the votes entitled to be cast by the
outstanding shares of Common Stock present, in person or by proxy, and entitled
to vote at the meeting, is required for the election of directors. The
affirmative vote of a majority of the votes entitled to be cast by the
outstanding shares of Common Stock present, in person or by proxy, and entitled
to vote at the meeting is required to approve the amendment to the Incentive
Plan.

     Abstentions and "broker nonvotes" (i.e., shares held by a broker or
nominee as to which instructions have not been received from the beneficial
owners or persons entitled to vote) will be

                                       1

treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. In determining the results of voting on
the election of directors, abstentions and broker nonvotes have no effect since
only a plurality vote is required for approval; however, in determining the
results of voting on the amendment to the Incentive Plan, abstentions and broker
nonvotes in effect constitute a vote against the proposal since a majority of
the shares represented in person or by proxy and entitled to vote is required.

                         SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth as of June 19, 1996 information with respect
to beneficial ownership of shares of Common Stock by (i) the chief executive
officer and each of the other executive officers of the Company, (ii) each of
the directors and nominees, (iii) all persons known to the Company to be the
beneficial owners of 5% or more thereof and (iv) all officers and directors as a
group. All persons listed have sole voting and investment power with respect to
their shares unless otherwise indicated.


                                               AMOUNT OF
                                        BENEFICIAL OWNERSHIP(1)
                                        ------------------------
                                        NUMBER OF     PERCENTAGE
      NAME OF BENEFICIAL OWNER          SHARES(2)      OF CLASS
- -------------------------------------   ---------     ----------

Joe R. Davis(3)......................   1,348,836        22.7%
J. P. Morgan & Co.,
Incorporated(4)......................     621,980        10.5
Hugh N. West.........................     117,500         2.0
James H. Limmer......................      67,250         1.1
Brady F. Carruth.....................      44,100          *
Gary L. Forbes.......................      13,491          *
Mary K. Collins......................      12,650          *
G. Christopher Colville..............       6,400          *
Clarence C. Comer....................       6,000          *
Thomas E. Smith......................       6,000          *
W. D. Hawkins........................       2,990          *
Larry J. Alexander...................       1,000          *
All directors and executive officers
  as a group (11 persons, including
  the directors and executive
  officers named above)..............   1,626,217        27.4
- ------------
   *  Less than 1%.

  (1) In accordance with the Securities and Exchange Commission ("SEC")
      regulations, shares are deemed to be "beneficially owned" by a person if
      such person directly or indirectly has or shares the power to vote or
      dispose of the shares, regardless of whether such person has any economic
      interest in the shares. In addition, a person is deemed to own
      beneficially any shares of which such person has the right to acquire
      beneficial ownership within 60 days, including upon exercise of a stock
      option or conversion of a convertible security.

  (2) Includes options to purchase shares of the Company's Common Stock
      exercisable within 60 days of June 19, 1996, as follows: Mr. Davis, 100
      shares; Mr. Forbes, 2,000 shares; Ms. Collins, 12,300 shares; Mr.
      Colville, 3,100 shares; Mr. Comer, 6,000 shares; and Mr. Smith, 6,000
      shares.

  (3) The address of Mr. Davis is 2210 West Dallas Street, Houston, Texas 77019.

  (4) The address of J. P. Morgan & Co., Incorporated is 60 Wall Street, New
      York, New York 10260.

                                       2

               COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers to
file with the SEC and The Nasdaq Stock Market initial reports of ownership and
reports of changes in ownership of Common Stock. Based solely on a review of the
copies of such reports furnished to the Company and written representations that
no other reports were required, the Company believes that all of its directors
and officers during fiscal 1996 complied on a timely basis with all applicable
filing requirements under Section 16(a) of the Exchange Act.

                             ELECTION OF DIRECTORS

     Unless contrary instructions are set forth in the proxy card, it is
intended that the persons named in the proxy will vote all shares of Common
Stock represented by the proxy for the election of the persons listed below as
directors, all of whom are presently members of the Board of Directors of the
Company. The nine directors elected at the meeting will each serve for a term
expiring on the date of the Annual Meeting in 1997. Directors of the Company are
elected annually and hold office until their successors have been elected and
qualified or their earlier resignation or removal. Should any nominee become
unavailable for election, the Board of Directors of the Company may designate
another nominee, in which case the persons acting under the duly executed
proxies will vote for the election of the replacement nominee. Management is
currently unaware of any circumstances likely to render any nominee unavailable
for election. A shareholder may, in the manner set forth in the enclosed proxy
card, instruct the proxy holder not to vote that shareholder's shares for one or
more of the named nominees.

     The Company's By-Laws currently provide for a Board of Directors of nine
persons. Nine persons currently serve on the Board and are expected to continue
to serve until the Annual Meeting. The proxies solicited hereby cannot be voted
for a number of persons greater than the number of nominees named below.

BOARD RECOMMENDATION

     The Board believes that the election of the persons listed below as
directors of the Company is in the best interest of the Company and its
shareholders. THE BOARD THEREFORE RECOMMENDS A VOTE FOR THE NOMINEES AND IT IS
INTENDED THAT THE PROXIES NOT MARKED TO THE CONTRARY WILL BE SO VOTED. The
Restated Articles of Incorporation of the Company, as amended to date, do not
permit cumulative voting. A plurality of the holders of the outstanding shares
of Common Stock of the Company represented at a meeting at which a quorum is
present may elect directors.

     The following sets forth information concerning each of the nominees for
election to the Board of Directors, including the name, age, principal
occupation or employment during at least the past five years and the period
during which such person has served as a director of the Company.

                NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
           FOR A ONE YEAR TERM EXPIRING AT THE ANNUAL MEETING IN 1997

     JOE R. DAVIS has been the President, Chief Executive Officer and Chairman
of the Board of the Company since he founded it in 1985. Prior to forming the
Company, Mr. Davis was Vice President of Finance and Administration for a
division of International Paper Company. He had previously served as a partner
with Arthur Andersen LLP, an accounting firm, where he was active in the mergers
and acquisition practice. Mr. Davis is a certified public accountant. Mr. Davis
serves on the Executive Committee and is 53 years of age.

     LARRY J. ALEXANDER retired from the San Antonio Spurs in May 1996, where he
was the Vice President -- Administration and Communications since August 1994.
Prior to joining the Spurs, he spent 27 years with SBC Communications Inc. in
various positions. He served as Senior Vice President -- External Affairs from
July 1993 to July 1994. From December 1990 to July 1993, he

                                       3

served as Senior Vice President -- Corporate Communications. Prior to that, he
served as Vice President -- Public Relations for Southwestern Bell Telephone's
Texas Division and Vice President -- Advertising and Communications for
Southwestern Bell Telephone in St. Louis, Missouri. From 1990 to 1994, Mr.
Alexander served on the board of directors of several Southwestern Bell
subsidiaries, including Southwestern Bell Printing Company. Mr. Alexander has
been a director since May 1995, and is 54 years of age.

     BRADY F. CARRUTH has been President of Gulf Coast Capital Corporation, a
commercial landscaping business, since 1987. He also serves on the board of
directors of American General Corporation, a diversified insurance company. Mr.
Carruth has been a director of the Company since 1985 and serves on the Audit
Committee. Mr. Carruth is 38 years of age.

     CLARENCE C. COMER has served as President and Chief Executive Officer of
Southdown, Inc., a cement and ready-mix concrete producer, since February 1987.
He is also a director of Southdown, Inc. Mr. Comer has been a director of the
Company since 1993 and serves on the Audit Committee. Mr. Comer is 48 years of
age.

     GARY L. FORBES has been a Vice President and a director of Equus Capital
Corporation since November 1991. He also has been a Vice President and director
of Equus Capital Management Corporation and a Vice President of Equus II
Incorporated, a public investment company, since 1991. Mr. Forbes was President
of Coal & Timber, Inc., a natural resource investment company, from January 1991
to November 1991. From 1988 to 1990, Mr. Forbes was Vice President and the Chief
Financial Officer of Elders Resources North America, Inc., a United States-based
subsidiary of an Australian public company that made investments in natural
resources. Mr. Forbes also serves on the board of directors of NCI Building
Systems, Inc., a manufacturer of prefabricated metal buildings and Drypers
Corporation, a manufacturer of disposable diapers and related products. Mr.
Forbes is a certified public accountant and has been a director of the Company
since 1993. He serves on the Executive Committee and is 52 years of age.

     W. D. HAWKINS, a private investor since 1980, founded Industrial Towel &
Uniform Co., a company which he developed through acquisitions into a major
industrial laundry in Texas. The company was sold to Cintas Corporation in 1980.
Mr. Hawkins has been a director of the Company since 1985 and serves on the
Compensation Committee. Mr. Hawkins is 83 years of age.

     JAMES H. LIMMER has been a partner with the law firm of Tekell, Book,
Matthews & Limmer, L.L.P., in Houston, Texas, which specializes in all phases of
insurance defense, since July 1973. Mr. Limmer has been a director of the
Company since 1985 and serves on the Compensation Committee. Mr. Limmer is 54
years of age.

     THOMAS E. SMITH has been President of High Island Oil Corp., an oil and gas
exploration and production company, since 1992. He has also served as a Vice
President of Smith Investments, an investment company with interests in mortgage
banking, oil and gas, and other businesses, since 1986. Mr. Smith has been a
director of the Company since 1993 and serves on the Audit Committee. Mr. Smith
is 38 years of age.

     DR. HUGH N. WEST, M.D., retired from his radiology practice in 1996. For
more than the prior five years he was a partner in Heights Radiology Associates
and a member of the Heights Hospital staff, both located in Houston, Texas. Dr.
West has been a director of the Company since 1985 and serves on the
Compensation Committee. Dr. West is 50 years of age.

COMMITTEES

     During the fiscal year ended March 31, 1996, the Board held meetings and
acted by unanimous consent seven times. Each of the directors attended at least
75% of the meetings of the Board and of each committee on which he served.

     The Board of Directors of the Company has established an Executive
Committee, an Audit Committee and a Compensation Committee. The Executive
Committee reviews and develops strategies

                                       4

and policies of the Company and recommends changes thereto. During the fiscal
year ended March 31, 1996, the Executive Committee acted by unanimous consent
six times. The Executive Committee currently consists of Mr. Davis and Mr.
Forbes.

     The Audit Committee's functions include recommending to the Board of
Directors the engagement of the Company's independent public accountants,
reviewing with such accountants the plans for and the results and scope of their
auditing engagement and certain other matters, including the independence of
such accountants. The Audit Committee is composed solely of independent
directors. During the fiscal year ended March 31, 1996, the Audit Committee had
two meetings. The Audit Committee currently consists of Mr. Carruth, Mr. Comer
and Mr. Smith.

     The Compensation Committee determines the compensation of directors,
executive officers and key employees and is composed solely of independent
directors. It also administers the Incentive Plan. During the fiscal year ended
March 31, 1996, the Compensation Committee met or acted by unanimous consent
five times. The Compensation Committee currently consists of Mr. Hawkins, Mr.
Limmer and Dr. West.

EXECUTIVE COMPENSATION

     SUMMARY COMPENSATION TABLE.  The following table sets forth certain
information regarding the compensation earned by or awarded to the Chief
Executive Officer ("CEO") of the Company and the other executive officers of
the Company for each of the three fiscal years ended March 31, 1996, 1995 and
1994.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                        LONG-TERM COMPENSATION
                                                                                AWARDS
                                            ANNUAL COMPENSATION         ----------------------
              NAME AND                  ----------------------------    SECURITIES UNDERLYING
         PRINCIPAL POSITION             YEAR     SALARY       BONUS            OPTIONS
- -------------------------------------   ----   -----------   -------    ----------------------
<S>                                     <C>    <C>           <C>                <C>
Joe R. Davis.........................   1996   $   228,000   $  -                 -
  President and Chief                   1995       228,000      -                  100
  Executive Officer                     1994       230,622      -                 -

Mary K. Collins......................   1996        75,000    50,000             8,000
  Senior Vice President,                1995        75,000    40,000             9,100
  Treasurer and Secretary               1994        61,622    28,760              -

G. Christopher Colville..............   1996        70,528    50,000             7,500
  Vice President -- Mergers and         1995        36,193      -                  100
  Acquisitions, Chief Financial and
  Accounting Officer
</TABLE>
                                       5

     STOCK OPTION GRANTS TABLE.  The following table shows information
concerning the grant of stock options pursuant to the Incentive Plan during the
fiscal year ended March 31, 1996, as to the executive officers named in the
Summary Compensation Table.

                         OPTIONS GRANTED IN FISCAL 1996
<TABLE>
<CAPTION>
                                                                                                    POTENTIAL REALIZABLE
                                                            INDIVIDUAL GRANTS                         VALUE AT ASSUMED
                                        ---------------------------------------------------------     ANNUAL RATES OF
                                        NUMBER OF      PERCENT OF                                       STOCK PRICE
                                        SECURITIES    TOTAL OPTIONS    EXERCISE OR                    APPRECIATION FOR
                                        UNDERLYING     GRANTED TO       BASE PRICE                     OPTION TERM(1)
                                         OPTIONS      EMPLOYEES IN      PER SHARE      EXPIRATION   --------------------
                NAME                     GRANTED       FISCAL 1996     ($/SHARE)(2)       DATE         5%         10%
- -------------------------------------   ----------    -------------    ------------    ----------   ---------  ---------
<S>                                        <C>             <C>            <C>            <C>          <C>        <C>
Mary K. Collins......................      8,000           5.53%          $12.00         5/1/2000     $20,688    $44,553

G. Christopher Colville..............      7,500           5.18            12.00         5/1/2000      19,395     41,769
</TABLE>
- ------------
  (1) The potential realizable value through the expiration date of options has
      been determined on the basis of the per share market price at the time the
      options were granted, compounded annually over ten years, net of the
      exercise price. These values have been determined based upon assumed rates
      of appreciation and are not intended to forecast the possible future
      appreciation, if any, of the price or value of the Company's Common Stock.

  (2) The exercise price per share for all options granted is equal to the
      market price of the underlying Common Stock as of the date of grant.

     STOCK OPTION EXERCISES AND YEAR-END VALUES TABLE.  The following table
shows, as to the executive officers named in the Summary Compensation Table,
information with respect to the unexercised options to purchase Common Stock
granted under the Incentive Plan and held as of March 31, 1996.

                        OPTION EXERCISES IN FISCAL 1996
                     AND VALUE OF OPTIONS AT MARCH 31, 1996
<TABLE>
<CAPTION>
                                                                    NUMBER OF SECURITIES
                                                                   UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
                                                                       OPTIONS HELD AT            IN-THE-MONEY OPTIONS
                                         SHARES                        MARCH 31, 1996             AT MARCH 31, 1996(1)
                                        ACQUIRED       VALUE     ---------------------------   ---------------------------
                NAME                   ON EXERCISE   REALIZED    EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
- -------------------------------------  -----------   ---------   -----------   -------------   -----------   -------------
<S>                                       <C>         <C>           <C>             <C>          <C>            <C>
Joe R. Davis.........................     -           $  -             100            -          $   600        $   -
Mary K. Collins......................     -              -          10,700          6,400         60,749         33,600
G. Christopher Colville..............     -              -           1,600          6,000          8,475         31,500
</TABLE>
- ------------
  (1) Options are "in-the-money" if the closing market price of the Company's
      Common Stock exceeds the exercise price of the options. The value of
      unexercised options represents the difference between the exercise price
      of such options and the closing market price of the Company's Common Stock
      on March 31, 1996 ($17.25).

INCENTIVE PLAN

     In March 1994, the Board of Directors and the shareholders of the Company
approved the adoption of the Incentive Plan. Pursuant to the Incentive Plan,
employees of the Company and directors who are not serving on the Compensation
Committee are eligible to receive awards consisting of stock options, stock
appreciation rights ("SARS"), restricted or nonrestricted stock, cash or any
combination of the foregoing. Stock options granted pursuant to the Incentive
Plan may either be incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified
stock options. To date, long-term incentive compensation has been awarded only
in the form of stock options. An aggregate of 367,500 shares of Common Stock
have been reserved for issuance pursuant to the Incentive Plan. At June 19,
1996, 31,150 shares were

                                       6

available for issuance pursuant to the Incentive Plan. The Board of Directors
has adopted, subject to approval by the shareholders of the Company, an
amendment to the Incentive Plan to increase the number of shares that can be
issued pursuant to the Incentive Plan from 367,500 to 967,500. See "Amendment
to Incentive Plan."

     Options forfeited or expired revert to shares available under the Plan.

     The Incentive Plan is administered by the Compensation Committee of the
Board of Directors. Subject to the provisions of the Incentive Plan, the
Compensation Committee is authorized to determine the type or types of awards
made to each participant and the terms, conditions and limitations applicable to
each award. In addition, the Compensation Committee has the exclusive power to
interpret the Incentive Plan, to grant waivers of restrictions thereunder and to
adopt such rules and regulations as it may deem necessary or appropriate in
keeping with the objectives of the Incentive Plan.

DIRECTOR COMPENSATION

     Each director who is not an employee of the Company is paid $250 for each
meeting attended and is reimbursed for expenses incurred in attending meetings
of the Board of Directors and committee meetings of the Board of Directors.
Directors who are not members of the Compensation Committee are eligible to
receive grants under the Incentive Plan. On January 29, 1996, Mr. Forbes was
granted an option to purchase 10,000 shares of Common Stock under the Incentive
Plan. On July 27, 1996, 20% of such option will become exercisable and an
additional 20% will become exercisable on each anniversary of the date of grant.
The option expires on January 29, 2001.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     Members of the Compensation Committee of the Board of Directors are Mr.
Hawkins, Mr. Limmer and Dr. West, all of whom are non-employee directors.

REPORT OF COMPENSATION COMMITTEE

     The Compensation Committee of the Board of Directors reviews compensation
of directors and executive officers and also administers the Incentive Plan. The
Compensation Committee consists of three non-employee directors who met or acted
by unanimous consent five times during 1996.

     At current compensation levels, the Committee does not expect Internal
Revenue Service regulations regarding maximum deductibility of executive
compensation to have any application to the Company.

     COMPENSATION PHILOSOPHY AND COMPONENTS.  The Company's executive
compensation philosophy is to employ, retain and reward executives capable of
leading the Company in creating and preserving strong financial performance,
increasing the assets of the Company through acquisitions, positioning the
Company's assets and business operations in geographic markets offering
long-term growth opportunities, and enhancing shareholder value. The executive
compensation program is intended to provide an overall level of compensation
that the Compensation Committee believes, based on its own judgment and
experience, is competitive with levels of compensation provided by other
companies in the industry. The companies used for comparisons of compensation
levels are not necessarily the same companies included within the printing
company index reflected in the Performance Graph because certain of those
companies are not comparable with the Company or its subsidiaries for
compensation purposes due to their size and operating philosophy. The companies
which the Company considers to be comparable for compensation purposes are
generally printing companies or other companies in similar industries, most of
which are not public companies. The primary components of the Company's
executive compensation program are annual cash compensation (salary and bonuses)
and long-term incentive compensation (stock options).

     CASH COMPENSATION.  The cash compensation of executives is based on the
amount recommended to the Compensation Committee by the CEO based on his
subjective evaluation, including his

                                       7

perception of the individual's performance. The CEO generally determines his
recommendations by considering the potential impact of the individual on the
Company and its performance, the executive's performance as a team member, the
skills and experiences required by the position and the overall performance of
the Company. No one of the above factors is considered to be more important than
the others in all cases. Compensation for executives is maintained at levels
that the Compensation Committee believes, based upon its own judgment and
experience, are competitive in the industry.

     LONG-TERM INCENTIVE COMPENSATION.  Long-term incentives may be provided in
the form of stock options, stock appreciation rights, restricted or
nonrestricted stock, cash or any combination of the foregoing. To date,
long-term incentive compensation has been awarded only in the form of stock
options. One grant of stock options was made in fiscal 1996. The grant was made
to certain key employees on May 1, 1995, at $12.00, the market price per share
on the date of the grant. On May 31, 1995, 20% of the options became exercisable
and an additional 20% of the options become exercisable on each anniversary date
of the grant.

     Grants of stock options are made by the Compensation Committee. The
Compensation Committee considers all factors the members deem relevant,
including recommendations to the Committee by the CEO based on his subjective
evaluation and perception of the individual's performance. The CEO generally
determines his recommendations by considering the executive's contribution
toward Company performance and expected contribution toward meeting the
Company's long-term objectives and increasing value to shareholders. The value
received by the executives from option grants depends completely on increases in
the market price of the Company's Common Stock over the option exercise price.
Thus, this component of compensation is aligned directly with increases in value
to shareholders.

     CHIEF EXECUTIVE OFFICER COMPENSATION.  The Compensation Committee
considered a number of factors in approving the CEO's compensation for fiscal
1996. The factors considered by the Compensation Committee included, but were
not limited to, the Company's acquisitions of five companies in five new markets
as well as improving the Company's sales, income from ongoing operations and
operating cash flow. The CEO's cash compensation was judged by the Compensation
Committee to be fair and appropriate for the CEO taking into account a number of
factors, including the level of compensation paid to other executive officers of
the Company and the performance of the Company.

                                          W. D. Hawkins
                                          James H. Limmer
                                          Hugh N. West

                                       8

PERFORMANCE GRAPH

     Set forth below is a line graph comparing the yearly percentage change in
the Company's Common Stock against the cumulative total return of (i) the S&P
500 Stock Index and (ii) the Industry Index for Printing Companies published by
Media General Financial Services for the period commencing June 9, 1994 (the
date of the Company's initial public offering) and ending March 31, 1996.

                     COMPARISON OF CUMULATIVE TOTAL RETURN

                [LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]

                                                    Fiscal Year Ending
                                                  ----------------------
                                                  1994     1995     1996
                                                  ----     ----     ----
Consolidated Graphics .........................  100.00    97.87   146.81
Industry Index - Media General Index ..........  100.00   110.68   130.96
Broad Market - S & P ..........................  100.00   112.26   148.31

CERTAIN TRANSACTIONS

     None

                          AMENDMENT TO INCENTIVE PLAN

EXISTING LONG-TERM INCENTIVE PLAN

     In March 1994, the shareholders of the Company approved the adoption of the
Consolidated Graphics, Inc. Long-Term Incentive Plan (the "Incentive Plan"),
which provides for the granting to employees of the Company and its
participating subsidiaries and to non-employee directors of the Company other
than directors serving as members of the Compensation Committee of incentive
awards in the form of stock options, SARs, restricted and unrestricted stock and
cash. The Compensation Committee of the Board of Directors has discretion to
select the individuals to be granted awards, to determine the type, size and
terms of such awards, to determine the time when awards will be granted and to
prescribe the form of the instruments evidencing awards made under the Incentive
Plan.

     Options are rights to purchase a specified number of shares of Common Stock
at a price not less than the fair market value of the shares of Common Stock at
the time the option is granted, with cash or other shares of Common Stock owned
by the optionee or both. Options are exercisable at such time and upon such
terms as are determined by the Compensation Committee and may constitute either
incentive stock options within the meaning of Section 422 of the Code or
nonqualified options. SARs are rights to receive, without payment to the
Company, cash or shares of Common Stock or both in lieu

                                       9

of the purchase of shares of Common Stock under the related stock options to
which the SARs are attached. A restricted stock award is an award of shares of
Common Stock that may be subject to a restriction against transfer during a
period set by the Compensation Committee. During such period, the participant
generally has the right to vote and receive dividends on the shares covered by
the restricted stock awards.

     The Incentive Plan currently provides for the issuance of up to a total of
367,500 shares of the Company's Common Stock. Awards under the Incentive Plan
are subject to adjustment in the event of a stock dividend, stock split,
recapitalization or combination of the Common Stock. In the event of certain
mergers, consolidations, plans of exchange or other reorganizations of the
Company, outstanding awards under the Incentive Plan are subject to adjustment
to reflect the terms of such transaction.

     Awards under the Incentive Plan are not transferable except by will or by
the laws of descent and distribution or pursuant to a qualified domestic
relations order. The Incentive Plan allows for the satisfaction of a
participant's tax withholding in respect of an award by the withholding of cash
or shares of Common Stock issuable pursuant to the award or the delivery by the
participant of previously owned shares of Common Stock, in either case valued at
the fair market value thereof. On June 19, 1996, the last reported sales price
of the Common Stock on the Nasdaq National Market was $22 3/4 per share.

     The Incentive Plan may be amended by the Board of Directors, except that no
amendment may be made without shareholder approval to the extent such approval
is then required pursuant to Rule 16b-3 of the Securities Exchange Act of 1934,
as amended, in order to preserve the applicability of any exemption provided by
such rule to any award then outstanding (unless the holder of such award
consents) or to the extent shareholder approval is otherwise required, and no
amendment that adversely affects any right of a participant with respect to any
award previously granted may be made without the consent of the participant.

PROPOSED AMENDMENTS

     As noted above, the Incentive Plan currently provides for the issuance of
up to 367,500 shares of Common Stock. As of June 19, 1996, a total of 45,750
shares had been issued under the Incentive Plan and awards covering an
additional 290,600 shares were outstanding, leaving 31,150 shares available for
future awards. On April 29, 1996, the Board of Directors approved a proposed
amendment to the Incentive Plan that would increase the number of shares of
Common Stock subject to the plan by 600,000. The amendment will permit
additional awards to be granted to encourage the acquisition of Common Stock by
employees and non-employee directors and to strengthen the Company's ability to
attract, motivate and retain employees and non-employee directors with
appropriate experience and ability. Awards would be granted to enhance the
recruitment and retention of highly qualified employees and non-employee
directors and to strengthen the commonality of interest among employees,
directors and shareholders.

     The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present, in person or by proxy, and entitled to vote at the
meeting, is required to approve the amendment to the Incentive Plan. The Board
of Directors recommends a vote FOR the amendment to the Incentive Plan.

CERTAIN TAX CONSEQUENCES

     Options granted under the Incentive Plan may constitute either "incentive
stock options" within the meaning of Section 422 of the Code or nonqualified
options. In certain instances, the tax treatment under the Code of stock options
qualifying as incentive stock options is more favorable to employees than the
tax treatment accorded nonqualified options. Generally, upon the exercise of an
incentive stock option, the optionee will recognize no income for federal income
tax purposes. The difference between the exercise price of the incentive stock
option and the fair market value of the Common Stock at the time of purchase is,
however, an adjustment to alternative minimum taxable income that

                                       10

may require payment of an alternative minimum tax. On the sale of the shares
acquired by exercise of an incentive stock option (assuming that the sale does
not occur within two years from the date of grant of the option or within one
year from the date of exercise), any gain will be taxed to the optionee as
long-term capital gain. The Company will not be entitled to a tax deduction upon
the grant or exercise of an incentive stock option, except to the extent an
optionee recognizes ordinary income as a result of the disposition of the shares
prior to the expiration of the required holding period.

     Upon the exercise of a nonqualified option, the optionee recognizes taxable
income (subject to withholding) in an amount equal to the difference between the
fair market value on the date of exercise of the Common Stock purchased and the
exercise price. Upon any sale of shares acquired upon exercise of a nonqualified
option, any difference between the sales price and the fair market value of the
shares on the date of exercise of the nonqualified option will be treated
generally as capital gain or loss. Upon the exercise of a nonqualified option,
the Company is entitled to a deduction for federal income tax purposes in an
amount equal to the income recognized by the optionee.

     The grant of a SAR will produce no U.S. federal tax consequences for the
participant or the Company. The exercise of a SAR results in taxable income to
the participant, equal to the difference between the exercise price of the
shares and the market price of the shares on the date of exercise, and a
corresponding tax deduction to the Company.

     A participant under the Incentive Plan who has been granted an award of
restricted shares of Common Stock will not realize taxable income at the time of
the grant, and the Company will not be entitled to a tax deduction at the time
of the grant, unless the participant makes an election to be taxed at that time.
When the restrictions lapse, the participant will recognize taxable income in an
amount equal to the excess of the fair market value of the shares at such time
over the amount, if any, paid for such shares. The Company will be entitled to a
corresponding tax deduction. Any dividends paid to the participant during the
restriction period will be compensation income to the participant and deductible
as such by the Company. The holder of a restricted stock award may elect to be
taxed at the time of the grant of the restricted stock award on the market value
of the shares, in which case (i) the Company will be entitled to a deduction at
the same time and in the same amount, (ii) any dividends paid to the participant
during the restriction period will be taxable as dividends to him and not
deductible by the Company, and (iii) there will be no further federal income tax
consequences when the restrictions lapse.

                         INDEPENDENT PUBLIC ACCOUNTANTS

     The Company has selected Arthur Andersen LLP as the Company's independent
public accountants to audit the Company's financial statements for the fiscal
year ending March 31, 1997. Representatives of Arthur Andersen LLP are expected
to be present at the Annual Meeting, with the opportunity to make a statement if
they desire to do so, and are expected to be available to respond to appropriate
questions.

                             SHAREHOLDER PROPOSALS

     Shareholders may present proposals for inclusion in the Company's 1997
proxy statement provided they are received by the Company no later than March 3,
1997, and are otherwise in compliance with applicable SEC regulations.

                                    GENERAL

     Management does not intend to bring any business before the meeting other
than the matters referred to in the accompanying notice. If, however, any other
matters properly come before the meeting, it is intended that the persons named
in the accompanying proxy will vote pursuant to the proxy in accordance with
their best judgment on such matters.

                                       11

                               OTHER INFORMATION

     The cost of solicitation of proxies will be borne by the Company. Proxy
cards and materials will also be distributed to beneficial owners of Common
Stock through brokers, custodians, nominees and other like parties, and the
Company expects to reimburse such parties for their charges and expenses.

     A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K WILL BE MADE
AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO: CONSOLIDATED GRAPHICS, INC.,
ATTENTION: INVESTOR RELATIONS, 2210 WEST DALLAS STREET, HOUSTON, TEXAS 77019.

                                          MARY K. COLLINS
                                          SENIOR VICE PRESIDENT AND
                                            SECRETARY

                                       12
<PAGE>
                          CONSOLIDATED GRAPHICS, INC.
                PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
        ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MONDAY, AUGUST 5, 1996

      The undersigned hereby appoints Joe R. Davis and Mary K. Collins, jointly
  and severally, proxies with full power of substitution and resubstitution and
  with discretionary authority to represent and to vote, in accordance with the
  instructions set forth on the reverse, all shares of Common Stock which the
  undersigned is entitled to vote at the 1996 Annual Meeting of Shareholders of
  Consolidated Graphics, Inc. and any adjournment thereof. In their discretion,
  the proxies may vote for the election of directors (other than any for whom
  authority to vote is withheld on the reverse), the proposal to approve an
  amendment to the Company's Long-Term Incentive Plan and upon such other
  business as may properly come before the meeting.

                 IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE

<PAGE>

 A [X] PLEASE MARK YOUR
       VOTES AS IN THIS
       EXAMPLE

 1. Election           FOR all nominees
    of Directors       listed to right           WITHHOLD AUTHORITY
                       except as marked            to vote for all
                       to the contrary         nominees listed to right
                             [ ]                         [ ]

                                                    Nominees: Joe R. Davis
                                                              Larry J. Alexander
                                                              Brady F. Carruth
                                                              Clarence C. Comer
                                                              Gary L. Forbes
                                                              W.D. Hawkins
                                                              James M. Limmer
                                                              Thomas E. Smith
                                                              Hugh N. West

 (INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
 a line through the nominee's name at right.)

 2. Proposal to approve an amendment to the      FOR    AGAINST    ABSTAIN
    Company's Long-Term Incentive Plan           [ ]      [ ]        [ ]

 UNLESS A CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
 DIRECTORS LISTED AT LEFT AND FOR ALL OTHER PROPOSALS

 SIGNATURE____________________  _________________________ Date: _______, 1996
                                Signature if held jointly

 NOTE: (If signing as Attorney, Administrator, Executor, Guardian, Trustee or
 Corporate Officer, please add your title as such.)





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