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ConsolidatedGraphics

July 12, 2012

Dear Shareholder:

You are cordially invited to attend the 2012 Annual Meeting of Shareholders (the “Annual Meeting”) to be held at the Grand Hyatt San Antonio, 600 E. Market Street, San Antonio, Texas 78205, on Thursday, August 16, 2012, at 5:00 p.m., Central Daylight Time.  For those who cannot be present at this Annual Meeting, we urge that you participate by providing your voting instructions by internet or telephone or by indicating your choices on the enclosed proxy card and completing and returning it at your earliest convenience.  If you sign and return your proxy card without specifying your choices, it will be understood that you wish to have your shares voted in accordance with the Board of Directors’ recommendations.

This booklet includes the Notice of Annual Meeting of Shareholders and the Proxy Statement, which contains details of the business to be conducted at the Annual Meeting.  The Company’s Annual Report to Shareholders, which is not part of the Proxy Statement, is also enclosed and provides additional information regarding the financial results of the Company for the fiscal year ended March 31, 2012.

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

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

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VOTING THE PROXY CARD

Please complete, sign, date and return the accompanying proxy card promptly in the enclosed addressed envelope.  Postage need not be affixed to the envelope if mailed in the United States.  The immediate return of your proxy card will be of great assistance in preparing for the Annual Meeting and is therefore urgently requested, even if you plan to attend the Annual Meeting in person.  If you attend the Annual Meeting and make arrangements to vote in person, your proxy card will not be used.  Alternatively, you can vote your shares by telephone or internet as set forth in the proxy card.

IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON

The Annual Meeting will be held at 5:00 p.m., Central Daylight Time, on Thursday, August 16, 2012, at the Grand Hyatt San Antonio, 600 E. Market Street, San Antonio, Texas 78205.  Signs will direct you to the conference room where the Annual Meeting will be held.

If your shares are not registered in your own name and you plan to attend the Annual Meeting and vote your shares in person, you should contact your broker or agent in whose name your shares are registered to obtain a broker’s proxy and an account statement or a letter from the record holder indicating that you owned the shares on the record date, and bring same to the Annual Meeting in order to vote.  In addition, please bring a valid form of personal picture identification with you.

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ConsolidatedGraphics

Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Thursday, August 16, 2012
5:00 p.m. Central Daylight Time

To the Shareholders:

The 2012 Annual Meeting of Shareholders (the “Annual Meeting”) of Consolidated Graphics, Inc. (the “Company”) will be held at the Grand Hyatt San Antonio, 600 E. Market Street, San Antonio, Texas 78205, on Thursday, August 16, 2012, at 5:00 p.m., Central Daylight Time, for the following purposes:

Only shareholders of record as of the close of business on June 29, 2012, the record date, are entitled to receive notice of, and to vote at, the Annual Meeting and any adjournment(s) or postponement(s) thereof.  A list of such shareholders shall be open to the examination of any shareholder of record during normal business hours, for a period of ten days prior to the meeting, at the principal executive offices of the Company, located at 5858 Westheimer, Suite 200, Houston, Texas 77057, and shall also be open to examination at the Annual Meeting and any adjournment(s) or postponement(s) thereof.

IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS OF THE NUMBER OF SHARES YOU HOLD.  PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE EVEN IF YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, OR PROVIDE YOUR VOTING INSTRUCTIONS BY INTERNET OR TELEPHONE AS SET FORTH IN THE PROXY CARD.

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Important Notice Regarding Internet Availability of Proxy Materials for
the Shareholders Meeting Dated August 16, 2012

Our proxy materials relating to our 2012 Annual Meeting (notice, proxy statement, proxy and 2012 Annual Report to Shareholders) and our proxy materials relating to all future Annual Meetings of Shareholders will be available on our Web site at www.cgx.com.  For the date, time and location of the 2012 Annual Meeting and an identification of the matters to be voted upon at the 2012 Annual Meeting, please see the “Notice of Annual Meeting of Shareholders”. For the Board’s recommendations regarding those matters, please refer to “Proposal 1 — For the Election of Class I Directors”, “Proposal 2 — Shareholder Advisory Vote to Approve Executive Compensation”, “Proposal 3 — Ratify the Adoption of the Consolidated Graphics, Inc. 2012 Long Term Incentive Plan”, and “Proposal 4 — Ratify the Appointment of KPMG LLP as Company’s Independent Registered Public Accounting Firm”. For information on how to obtain directions to be able to attend the meeting and vote in person, please call the Grand Hyatt San Antonio at 210-224-1234.

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ConsolidatedGraphics

Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057

PROXY STATEMENT

INTRODUCTION

The accompanying proxy is solicited by and on behalf of the Board of Directors (the “Board”) of Consolidated Graphics, Inc., a Texas corporation (the “Company”), for use only at the 2012 Annual Meeting of Shareholders (the “Annual Meeting”) to be held at the Grand Hyatt San Antonio, 600 E. Market Street, San Antonio, Texas 78205, on Thursday, August 16, 2012, at 5:00 p.m., Central Daylight Time, and at any adjournment(s) or postponement(s) thereof.  The approximate date on which this Proxy Statement and accompanying proxy will first be made available or sent to shareholders is July 12, 2012.

Each proxy executed and returned by a shareholder may be revoked at any time before it is voted at the Annual Meeting by filing a written instrument revoking it with the Secretary at the Company’s executive offices, by execution and return of a later-dated proxy, or by appearing at the Annual Meeting and making arrangements to vote in person.  The executive offices of the Company are located at 5858 Westheimer, Suite 200, Houston, Texas 77057.

ACTION TO BE TAKEN UNDER PROXY

Proxies in the accompanying form will be voted in accordance with the specifications made thereon and, where no specifications are given, such proxies will be voted (i) FOR the election of the two nominees named herein to serve as Class I directors and if one or more of such nominees should become unavailable for election for any reason, then FOR the election of any substitute nominee(s) that the Board may propose, (ii) FOR a resolution in which the shareholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers as set forth in this Proxy Statement, (iii) FOR the ratification of the adoption of the Consolidated Graphics, Inc. 2012 Long Term Incentive Plan and (iv) FOR the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending March 31, 2013.

Management of the Company did not receive any shareholder proposals for inclusion in this Proxy Statement by the date prescribed therefor and is not aware of any other matters to be presented for action at the Annual Meeting.  If, however, any other matters properly come before the Annual Meeting, it is intended that the persons named in the accompanying proxy card will vote at their discretion pursuant to the proxy card in accordance with their best judgment on such matters.

RECORD DATE AND VOTING PROCEDURES

The Board has fixed the close of business on June 29, 2012 as the record date for the determination of shareholders entitled to receive notice of, and to vote at, the Annual Meeting and any adjournment(s) or postponement(s) thereof.  The issued and outstanding shares of Common Stock, par vote $0.01 per share (the “Common Stock”) of the Company as of the close of business on June 29, 2012, consisted of 9,976,253 shares, each of which is entitled to one vote on each matter to be voted on at the Annual Meeting.  Under the Company’s Third Amended and Restated By-laws, as amended (the “By-laws”) and in accordance with the Texas Business Organizations Code, the holders of a majority of the total issued and outstanding shares of Common Stock on the record date, present in person or represented by proxy and entitled to vote thereat, will constitute a quorum for the transaction of business at the Annual Meeting.  The persons whom we appoint to act as inspectors of election will determine whether a quorum exists.

If a quorum is not present at the Annual Meeting or if there are insufficient votes at the time of the Annual Meeting to approve any of the foregoing proposals, the Annual Meeting may be adjourned or postponed until such time and place as is determined by a vote of the holders of a majority of the shares of Common Stock represented in person or by proxy and entitled to vote at the Annual Meeting to permit further solicitation of proxies by the Company. Proxies

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given pursuant to this current solicitation and not subsequently revoked will be voted at any later continuance of the Annual Meeting in the manner set forth above.

The Restated Articles of Incorporation of the Company, as amended to date (the “Articles of Incorporation”), do not permit cumulative voting.  The affirmative vote of a majority of the shares of Common Stock, represented in person or by proxy, and entitled to vote at a meeting at which a quorum is present is required for the election of directors, the approval of “Say on Pay”, ratification of the adoption of the Company’s 2012 Long Term Incentive Plan and the ratification of appointment of the Company’s independent registered public accounting firm. Although the advisory votes on Proposal 2 is non-binding, as provided by law, our Board will review the results of the vote and will take it into account in making a determination concerning executive compensation.  If the appointment of the Company’s independent registered public accounting firm is not ratified by the shareholders, the Audit Committee and the Board may reconsider its appointment and endorsement, respectively. Even if the selection is ratified, the Audit Committee may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.

Shares that are entitled to be voted by a shareholder who is present, in person or by proxy, at the Annual Meeting but who abstains from voting or withholds a vote (collectively, “abstentions”), will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum.  “Broker nonvotes” are also treated as shares that are present for purposes of determining the presence of a quorum.  A broker nonvote occurs when a broker is present at the meeting or returns a proxy but does not have discretionary voting power to vote on a specific matter (such as non-routine matters) and has not received timely voting instructions from the beneficial owner with respect to such matter.  A broker has discretionary voting power (including the power to abstain) under the current rules of the exchange on which the Company’s shares are traded, The New York Stock Exchange, Inc. (“NYSE”), on the ratification of appointment of independent registered public accounting firm, which is considered a routine matter, but does not have discretionary voting power on non-routine matters such as the election of directors, “Say on Pay” and the ratification of the adoption of the Company’s 2012 Long Term Incentive Plan.

In determining the results of voting at the Annual Meeting, an abstention will have the same effect as a vote against the nominated directors, against “Say on Pay”, against the Company’s 2012 Long Term Incentive Plan and against the ratification of appointment of Company’s independent registered public accounting firm.  With respect to the election of directors, the approval of “Say on Pay” and the Company’s 2012 Long Term Incentive Plan, broker non-votes are not treated as entitled to vote and therefore will have no impact on such proposals.

PROPOSAL 1 - FOR THE ELECTION OF CLASS I DIRECTORS

Pursuant to the Company’s By-laws, the Board is currently comprised of six directors and is divided into three classes, with each class serving a three-year term.  At each annual meeting of shareholders, one class of directors is elected for a full term of three years to succeed that class of directors whose terms are expiring.  The Board currently consists of Larry J. Alexander, Brady F. Carruth, Gary L. Forbes, James H. Limmer, Todd A. Reppert and Joe R. Davis, with Messrs. Alexander and Carruth constituting the Class I directors, Messrs. Forbes and Limmer constituting the Class II directors and Messrs. Davis and Reppert constituting the Class III directors.  The term of the Class I directors expires at the Annual Meeting.  The terms of the other two classes of directors expire at the 2013 (Class II directors) and 2014 (Class III directors) annual meetings of shareholders.

Unless contrary voting instructions are set forth in the proxy card, it is intended that the individual named in the proxy will vote all shares of Common Stock represented by the proxy for the election of the nominees listed below as the Class I directors. The two Class I directors elected at the Annual Meeting will each serve for a term expiring on the date of the annual meeting of shareholders in 2015 and until his successor has been elected and qualified or until his earlier resignation or removal.  The affirmative vote of a majority of the shares of Common Stock, represented in person or by proxy, and entitled to vote at a meeting at which a quorum is present is required to elect directors.

The Board has appointed a Nominating and Governance Committee and delegated to it the responsibility for evaluating candidates and recommending nominees for election to the Company’s Board of Directors.  The Nominating and Governance Committee determined in its business judgment that the election of I.T.  Corley and Brady F. Carruth as the Class I directors of the Company is in the best interest of the Company and its shareholders. Mr. Corley was recommended to the Nominating and Governance Committee by Mr. Davis.  The Board subsequently affirmed the recommendation of the Nominating and Governance Committee.

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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.  Of the Class I director nominees, Mr. Carruth is currently serving as a director on the Board, and Mr. Corley will replace Mr. Alexander, who will not stand for re-election to the Board. Mr. Alexander’s decision was not based on any disagreement with the Company.  Each of the nominees has indicated his willingness to serve in such capacity, if elected, but should the candidacy of Mr. Carruth and/or Mr. Corley for any reason be withdrawn or either nominee becomes unavailable for election, the Nominating and Governance Committee may recommend a replacement nominee and, if such nominee is affirmed by the Board, the individual 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 either nominee unavailable for election.

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

Nominees for Election as Class I Directors

The following information is furnished with respect to the Class I nominees, who, if elected, will serve on the Board until the 2015 annual meeting of shareholders and until their respective successors are elected and qualified or until the earlier of their resignation or removal.

Brady F. Carruth has been President of Gulf Coast Capital Corporation, a commercial landscaping business, since 1987 and President and Chief Executive Officer of Saratoga Financial Group, an insurance holding company, since 2001.  Mr. Carruth has been a director of the Company since 1985 and serves on the Compensation Committee and the Nominating and Governance Committee.  Mr. Carruth is 54 years of age.

Mr. Carruth has decades of public company experience as a director.  In addition, he has extensive experience in operational, strategic and leadership matters, derived from his decades of experience in senior management positions for privately held companies.  Through his many years of service on the Company’s Board, Mr. Carruth has also acquired significant knowledge of the commercial printing industry.

I.T. Corley was President and Chief Executive Officer of Strategic Materials, Inc., a privately-held recycling company, from its inception in 1995 until his retirement in 2009.  From 1990 through 1995, Mr. Corley served as the Chief Financial Officer and Chief Operating Officer, and board member of an NYSE-listed public company and the predecessor entity to Strategic Materials, Inc.  Mr. Corley served as a director of Apria Healthcare Group, Inc., an NYSE-listed public company, from 2003 through 2008, and he was the Chairman of the Audit Committee from 2006 until 2008.  Mr. Corley also serves on the board of the Container Recycling Institute,  is a certified public accountant and is 67 years of age.

Mr. Corley has extensive financial and accounting experience, managerial and operational experience as the former Chief Financial Officer and Chief Operating Officer of a public company and as the former Chief Executive Officer of a privately-held company, experience as a director of various public companies, and considerable experience in corporate finance and mergers and acquisition transactions.  If elected, the Board will determine, with the assistance of the Nominating and Governance Committee, Mr. Corley’s committee participation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RE-ELECTION OF MR. CARRUTH AND THE ELECTION OF MR. CORLEY AS CLASS I DIRECTORS OF THE COMPANY.  PROXIES THAT ARE RETURNED BUT NOT MARKED TO THE CONTRARY WILL BE SO VOTED.

Continuing Class II Directors

The following information is furnished regarding the Class II directors who will continue to serve on the Board until the 2013 annual meeting of shareholders and until their respective successors are elected and qualified or until the earlier of their resignation or removal.

Gary L. Forbes was Senior Vice President of Equus Total Return, Inc., a publicly traded investment company, from 1991 to March 2010.  Mr. Forbes serves on the board of directors of NCI Building Systems, Inc., a publicly traded manufacturer of prefabricated metal buildings, and serves on its audit committee.  Mr. Forbes previously served on the board of directors of Carriage Services, Inc., a publicly traded death care company, from 2007 to 2009.  Mr. Forbes is a certified public accountant and has been a director of the Company since 1993.  He serves on the Audit Committee and the Executive Committee and is 68 years of age.

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Mr. Forbes has decades of public company experience as a director, as well as experience in public and private equity investment management.  Mr. Forbes also has significant experience serving on other public company boards and committees.  Through his many years of service on the Company’s Board, he has also acquired significant knowledge of the commercial printing industry.

James H. Limmer retired from the law firm of Tekell, Book, Matthews & Limmer, L.L.P., in Houston, Texas, in July 2007, where he practiced for 34 years.  Tekell, Book, Matthews & Limmer, L.L.P. specializes in all phases of personal injury and property damage defense.  Mr. Limmer has been a director of the Company since 1985 and serves on the Compensation Committee and the Nominating and Governance Committee.  Mr. Limmer is 70 years of age.

Mr. Limmer has decades of public company experience as a director.  In addition, Mr. Limmer has particular knowledge of operations, risk assessment and legal matters due to his decades of experience as a professional litigation attorney.  Through his many years of service on the Company’s Board, he has also acquired significant knowledge of the commercial printing industry.

Continuing as Class III Directors

The following information is furnished with respect to the Class III directors, who will continue to serve on the Board until the 2014 annual meeting of shareholders and until their respective successors are elected and qualified or until the earlier of their resignation or removal.

Joe R. Davis has been the Chief Executive Officer and Chairman of the Board of Directors of the Company since it was founded in 1985.  Mr. Davis serves on the Executive Committee. Mr. Davis previously served on the board of directors of Carriage Services, Inc., a publicly traded death care company, from 2003 to 2009.  Mr. Davis is 69 years of age.

Mr. Davis has more than 27 years of experience in the commercial print industry, and as the Company’s founder, has been intimately involved in the formation, growth and leadership of the Company since its inception.  Mr. Davis also has decades of public company experience, including experience serving on another public company board and its committees.

Todd A. Reppert has served as the President and as a member of the investment committee of Main Street Capital Corporation since 2007. Since 2002, Mr. Reppert has been a senior managing director of Main Street Mezzanine Management, LLC and Main Street Capital Partners, LLC, both of which are now subsidiaries of Main Street Capital Corporation. Mr. Reppert has also been a senior managing director of the general partner for Main Street Capital II, LP, a small business investment company he co-founded, since January 2006.  From 2000 to 2002, Mr. Reppert was a senior managing director of the predecessor entity of Main Street Mezzanine Fund.  Prior to that, Mr. Reppert was with a national accounting firm where he assisted in several industry consolidation initiatives, as well as numerous corporate finance and merger/acquisition initiatives. Mr. Reppert has been a director of the Company since 2011 and serves on the Audit Committee and the Nominating and Governance Committee. Mr. Reppert is 43 years of age.

Mr. Reppert has extensive finance and accounting experience, managerial and operational experience as the President and Chief Financial Officer of a public company, experience as a director of a public company, and considerable experience in corporate finance, mergers and acquisitions and investments.

PROPOSAL 2 — ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT

Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are providing shareholders with a vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this Proxy Statement.  The vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our compensation philosophy, policies and practices, as disclosed below under “Executive Compensation.”  As disclosed in the Compensation Discussion and Analysis below, the Company believes that its executive compensation program is reasonable, competitive, focused on pay-for-performance principles and aligns compensation with the Company’s overall business strategy, values and management initiatives.  The goals of the Company’s executive compensation program are designed to:

·                  reward individuals for long-term strategic management and enhancement of shareholder value;

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·                  support a performance-oriented environment that rewards achievement of internal Company goals and generally recognizes the Company’s overall performance;

·                  attract and retain individuals whose abilities are considered essential to the long-term future and competitiveness of the Company; and

·                  align the financial interests of the Company’s executive officers with those of the shareholders.

Accordingly, we are asking our shareholders to indicate their support for our named executive officers’ compensation by voting FOR the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2012 Summary Compensation Table and the other related tables and disclosures in this Proxy Statement.”

The “Say on Pay” vote is an advisory vote only, and therefore it will not bind the Company, the Compensation Committee or our Board, nor will it overrule any decisions made by the Board or the Compensation Committee, and will not require the Board or the Compensation Committee to take any action.  Although the vote is non-binding, the Board and the Compensation Committee value the opinions of our shareholders, and will carefully consider the outcome of the vote when making future compensation decisions for the executive officers.  In particular, to the extent there is any significant vote against the executive compensation as disclosed in this Proxy Statement, we will consider our shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ADVISORY RESOLUTION RELATING TO THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

PROPOSAL 3 — RATIFY THE ADOPTION OF THE COMPANY’S 2012 LONG TERM INCENTIVE PLAN

General

Our management recommended to the Compensation Committee and the Board of Directors that it consider the adoption of the Consolidated Graphics, Inc. 2012 Long Term Incentive Plan (the “2012 Plan”) for several reasons, including supporting the Company’s ability to incentivize key employees through the continued issuance of incentive stock awards.  The Company’s existing equity based compensation plan, the 1994 Plan, only has 235,104 shares available for issuance as of June 29, 2012.  Moreover, as of that date, 1,079,397 of the 1,305,397 outstanding stock options are “underwater” (i.e., the exercise price of such stock options exceed the current stock price), and the outstanding stock options had a weighted average exercise price of $46.77.  Management is concerned that the Company’s employees may discount the value of their outstanding option grants because of the increased likelihood that they will expire before being “in the money” given the current price per share of the Company’s Common Stock, the volatility in the global equity markets and the current economic outlook.  This perception by the Company’s employees defeats the primary goal of such awards, which is to incentivize employees and align their interests with the long-term growth and performance of the Company, which is in the best interests of our shareholders.  In addition, management believes that the 2012 Plan contains terms and conditions that are customary and more closely follow the current best practices for long-term equity incentive plans, as compared to the 1994 Plan, which has been amended multiple times since its original adoption.  For these reasons, management and the Board of Directors believes that adopting the 2012 Plan is in the best interests of the Company’s employees and shareholders alike.

At a meeting held on July 11, 2012, upon the recommendation of the Compensation Committee, the Board of Directors adopted the 2012 Plan, subject to the approval of the shareholders of the Company.  At the Annual Meeting, shareholders will be asked to approve and ratify the adoption of the 2012 Plan.  The Board of Directors believes that the approval of the 2012 Plan is in the best interests of the Company and its shareholders.  The 2012 Plan will authorize the Compensation Committee of the Board of Directors to grant incentive awards at any time following the effective date of the 2012 Plan.  Accordingly, shareholder approval of the 2012 Plan will constitute approval of all awards made under the 2012 Plan without further approval from the shareholders, except as may be required by the 2012 Plan.

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Any person who is an employee or a non-employee director of the Company and its subsidiaries is eligible to be considered for awards (including stock awards, such as restricted stock units) under the 2012 Incentive Plan, except that non-employee directors are not eligible to receive incentive stock options. Therefore the executive officers and directors have a direct interest in the ratification of the 2012 Incentive Plan because they are participants in such Plan. The amount of future awards (including stock awards, such as restricted stock units) to be granted under the 2012 Incentive Plan to current or future directors, officers or employees has not yet been decided and cannot be determined at this time.  As of June 29, 2012, there are approximately 5,480 employees (including executive officers) who would be eligible to participate in the 2012 Incentive Plan, in addition to our non-employee directors.

The following is a summary of the principal features of the 2012 Plan and its operation.  For additional details regarding the 2012 Plan, you should refer to the full text of the 2012 Plan, a copy of which is attached to this Proxy Statement as Exhibit A.

Number of Shares.  The 2012 Plan provides for a total of 350,000 shares.  Shares that are forfeited or terminated, expire unexercised, are settled in cash or in a manner that all or some shares covered by an award are not issued, will again be available for incentive awards under the 2012 Plan.  The number of shares that may be issued upon exercise of incentive stock options is 150,000. No shares may be granted as SARs, restricted stock awards, restricted stock units or other stock based awards.  Unless the 2012 Plan is amended with shareholder approval, all the shares reserved for issuance under the 2012 Plan can only be used for grants of stock options.  The maximum amount of shares that may be granted (in the case of stock options and stock appreciation rights (“SARs”) or that may vest (in the case of restricted stock, restricted stock units or other stock-based awards) in any calendar year pursuant to any incentive award for any individual grantee shall be 200,000 shares.

Types of Awards.  Stock options, SARs, restricted stock awards, restricted stock units, other stock based awards, and related supplemental payments.

Administration.  The 2012 Plan is administered by the Compensation Committee which has the power to select the persons eligible to receive awards, the type and amount of incentive awards to be awarded, and the terms and conditions of such awards.  To the extent permitted by the 2012 Plan and applicable law, the Committee may delegate its authority to officers or other employees of the Company.

Eligibility.  Any employee, consultant or third-party service provider of the Company is eligible to participate in the 2012 Plan.  Non-employee directors are also eligible to participate.  Incentive stock options may be granted only to employees.  No employee who holds more than 10% of the voting power of the Company shall be eligible for the grant of an incentive stock option unless the exercise price is at least 110% the fair market value on the date of grant and the option is not exercisable after ten years from the date of grant.

Award Agreements and Term.  Awards under the 2012 Plan will be authorized by the Committee and evidenced by an award agreement.  No stock options may be exercisable for more than ten years from the date of grant.  In no event may an incentive stock option be granted after the expiration of ten years from the effective date of the 2012 Plan.

Stock Options.  The Committee is authorized to grant nonstatutory stock options to employees, consultants and outside directors and incentive stock options to employees.  The aggregate fair market value of the common shares with respect to which incentive stock options become first exercisable by any participant during any calendar year cannot exceed $100,000.  The exercise price must be at least equal to the fair market value of the Company’s common shares on the date of grant, or, in the case of incentive stock options granted to an employee who owns or is deemed to own more than 10% of the Company’s common shares, 110% of the fair market value of the Company’s common shares on the grant date.  The total exercise price for common shares acquired on exercise of a stock option may be paid in cash, or, if approved by the Committee, the withholding of shares that would otherwise be issuable upon exercise or by tender of previously acquired shares which are equal in value to the exercise price of the stock option, or by a combination of the three methods.  Cashless exercise is permitted.  Each stock option shall have a term of not more than ten years from the date of grant.  Vesting may be subject to performance criteria as specified in the agreement (see below for a description of applicable performance criteria)

Stock Appreciation Rights (SARs).  The grant of a SAR provides the holder with the right to receive a “spread” equal to the excess of the fair market value of a specified number of common shares on the date the SAR is exercised over a SAR price specified in the applicable award agreement.  The spread is paid in cash or shares or a combination as provided in the award agreement.  The SAR price specified in an award agreement must be equal to the fair market value of the Company’s common shares on the date of grant of the SAR.  The term of each SAR is determined by the Committee

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subject to a limit of ten years from the date of grant, as set forth in the applicable award agreement.  As adopted by the Board, no SARs are presently allowed to be granted under the 2012 Plan.

Restricted Stock.  The award agreement for restricted stock will specify the time or times within which such award may be subject to forfeiture and any performance goals which must be met in order to remove any restrictions on such award.  Except for the right to vote the shares (unless otherwise provided in the applicable award agreement) and limitations on transfer or limitation set forth in the applicable award agreement, holders of restricted stock have all of the rights of a shareholder of the Company, including, if provided in the applicable award agreement, the right to receive any dividends thereon.  As adopted by the Board, no restricted stock awards are presently allowed to be granted under the 2012 Plan.

Restricted Stock Units.  Restricted stock units may be granted to participants in such number, and upon such terms as determined by the Committee.  A grant of restricted stock units will not represent the grant of common shares but will represent a promise to deliver a corresponding number of shares based upon the completion of service, performance conditions, or such other terms and conditions as specified in the applicable award agreement.  A participant will have no voting rights with respect to any restricted stock units or to the shares corresponding to any such restricted stock units. As presently adopted by the Board, no restricted stock units may be granted under the 2012 Plan.

Other Stock-Based Awards.  The Committee may grant other stock-based awards in amounts and subject to such terms and conditions as the Committee determines.  Such awards may involve the transfer of actual shares to participants, or payment in cash or otherwise of amounts based on the value of shares.  Payment, if any, with respect to cash-based awards and other stock-based award will be made in accordance with the terms of the applicable award agreement, in cash, shares or a combination of both, as determined by the Committee and set out in the award agreement.  The Committee may also specify performance criteria for vesting and payment. As presently adopted by the Board, no other stock-based awards may be granted under the 2012 Plan.

Supplemental Payment.  The Committee at the time of grant or vesting of an incentive award under the 2012 Plan may provide for a supplemental payment by the Company to the holder to pay federal and state tax payable upon vesting.

Performance Criteria.  As determined by the Committee at the time of grant, a performance-based award may be subject to performance objectives within the meaning of Section 162(m) of the Internal Revenue Code.  These criteria are:

·                  profits (including, but not limited to, profit growth, net operating profit or economic profit);

·                  profit-related return ratios;

·                  return measures (including, but not limited to, return on assets, capital, equity, investment or sales);

·                  cash flow (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital or investments);

·                  net sales growth (measured either in dollars or in same-store sales growth);

·                  gross, operating or net profit margins;

·                  productivity ratios;

·                  share price (including, but not limited to, growth measures and total shareholder return);

·                  turnover of assets, capital, or inventory;

·                  expense targets;

·                  margins;

·                  measures of health, safety or environment;

·                  operating efficiency;

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·                  market share;

·                  credit quality;

·                  working capital targets;

·                  earnings, either in the aggregate or on a per-share basis, reflecting such dilution of shares as the Committee deems appropriate, including operating earnings, pre-tax earnings, earnings before interest and taxes, and earnings before interest, taxes, depreciation and amortization;

·                  gross or net revenue;

·                  financial return ratios (e.g., return or net return on one or more of the following: assets, net assets, equity, invested capital, revenue);

·                  margins, including net, operating or pre-tax margins;

·                  financial ratios (e.g., debt to capitalization or debt to equity);

·                  growth in financial measures or ratios (e.g., revenue, earnings, cash flow, stockholders’ equity, margins); or

·                  customer service or satisfaction, based on specified objective goals, or a customer survey sponsored by the Company, an affiliate, or one or more business units of the Company or an affiliate, as applicable.

Under the Internal Revenue Code, the general performance criteria must be approved in advance by shareholders every five years.  A performance-based award may provide for adjustment for any specified event or charge such as write-downs or impairment charges, litigation, changes in tax laws or accounting principles, accruals and charges for reorganization and restructuring programs, acquisition or divestitures, foreign exchange gains and losses and extraordinary nonrecurring items.  The Committee otherwise has no discretion to increase a performance-based award, but does retain negative discretion to reduce an award.

Termination of Employment, Death, Disability and Retirement.  Unless otherwise provided in an award agreement, upon the termination of a participant’s employment, the non-vested portions of all outstanding awards will terminate immediately.  Subject to different provisions in an award agreement, the period during which vested awards may be exercised following a termination of employment are:

·                  If a participant’s employment is terminated for any reason other than as a result of death, disability, retirement or for cause, the vested portion of such award is exercisable until the earlier of (1) the expiration date set forth in the applicable award agreement or (2) ninety (90) days after the date of termination.

·                  In the event of the termination of participant’s employment for cause, all vested awards immediately expire.

·                  Upon a participant’s retirement, any vested award will expire on the earlier of (1) the expiration date set forth in the award agreement for such award or (2) six (6) months after the date of retirement (three (3) months in the case of incentive stock options).

·                  Upon the death or disability of a participant, any vested award will expire on the earlier of (1) the expiration date set forth in the award agreement or (2) the one (1) year anniversary date of the participant’s termination of employment due to death or disability.

Change in Control.  Unless provided otherwise in the applicable award agreement, in the event of a change in control of the Company, all stock options and SARs will become 100% vested and all restrictions and conditions of any restricted stock awards, restricted stock units and any other stock-based awards shall be deemed satisfied and the restricted period shall be deemed to have expired.  All performance-based awards shall become fully vested.  Awards shall be payable as of the day immediately preceding the change in control.

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A “change in control” generally means the occurrence of any one or more of the following events:

·                  The acquisition by any individual, entity or group of beneficial ownership of 50% or more of the Company’s common shares or combined voting power; or

·                  Individuals who constitute the Board of Directors of the Company as of the effective date of the 2012 Plan, or successors to such members approved by the Board of Directors, cease for any reason to constitute at least a majority of the Board of Directors; or

·                  the Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, disclosing in response to Form 8-K, Schedule 14A or Schedule 14C (or any successor schedule, form or report or item therein) that a change in control of the Company has occurred; or

·                  the consolidation, merger or the sale or other disposition of at least 50% of the assets of the Company or the adoption of any plan or proposal for the liquidation of the Company.

Federal Income Tax Consequences

The following is a general summary as of the date of this proxy statement of the United States federal income tax consequences associated with the grant of incentive awards under the 2012 Plan.  This summary does not purport to address all aspects of federal income taxation and does not describe state, local, or foreign tax consequences.  This summary is based upon provisions of the Internal Revenue Code and the treasury regulations issued thereunder (the “Treasury Regulations”), and judicial and administrative interpretations under the Internal Revenue Code and Treasury Regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis).  The federal, state and local tax consequences for any participant will depend upon his or her individual circumstances.  Also, this information may not be applicable to employees of foreign subsidiaries or to participants who are not residents of the United States.  Participants have been and are encouraged to seek the advice of a qualified tax advisor regarding the tax consequences of participation in the 2012 Plan.

Stock Options, SARs, Restricted Stock Unit Awards, and Other Stock-Based Awards.  A participant generally is not required to recognize income on the grant of a stock option, SAR, restricted stock unit award, or other stock-based award. Instead, ordinary income generally is required to be recognized on the date the option or SAR is exercised (but see ISO discussion below), or in the case of restricted stock unit awards or other stock-based awards, upon the issuance of shares and/or the payment of cash pursuant to the terms of the award when the award vests. In general, the amount of ordinary income required to be recognized is:  (a) in the case of an option, an amount equal to the excess, if any, of the fair market value of the shares on the exercise date over the exercise price; (b) in the case of a SAR, the fair market value of any shares or cash received upon exercise; and (c) in the case of restricted stock unit awards or other stock-based awards, the amount of cash and/or the fair market value of any shares received in respect thereof.

Incentive Stock Options (ISOs).  ISOs granted under the 2012 Plan are intended to meet the definitional requirements of Section 422 of the Internal Revenue Code for “incentive stock options.”  An employee receiving a grant of ISOs will not recognize income and the Company will not be allowed a deduction at the time such an option is granted.  When a participant exercises an ISO while employed by the Company or its subsidiary, or within the three-month (one year for disability) period after termination of employment, no ordinary income will be recognized by the participant at that time (and no deduction will be allowed to the Company) but the excess of the fair market value of the shares acquired by such exercise over the option price will be taken into account in determining the participant’s alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to individuals.  If the shares acquired upon exercise are not disposed of before (i) two years after the date of grant and (ii) one year after the date of transfer of the shares to the participant (statutory holding periods), the excess of the sale proceeds over the aggregate option price of such shares will be long-term capital gain, and the Company will not be entitled to any federal income tax deduction.  Except in the event of death, if the shares are disposed of prior to the expiration of the statutory holding periods (a “Disqualifying Disposition”), the excess of the fair market value of such shares at the time of exercise over the aggregate option price (but not more than the gain on the disposition if the disposition is a transaction on which a loss, if sustained, would be recognized) will be ordinary income at the time of such Disqualifying Disposition (and the Company or its subsidiary will be entitled to a federal tax deduction in a like amount), and the balance of the gain, if any, will be capital gain (short-term or long-term depending upon whether the participant held the shares for more than one (1) year following the exercise of the option).  To the extent that the aggregate fair market value of stock (determined on the date of grant) with respect to

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which ISOs become exercisable for the first time during any calendar year exceeds $100,000, such excess options will be treated as non-statutory options.

Payment Using Shares.  If a participant pays the exercise price of a nonstatutory or incentive stock option with previously-owned common shares of the Company (and the transaction is not a Disqualifying Disposition of an ISO), the shares received equal to the number of shares surrendered are treated as having been received in a tax-free exchange.  The shares received in excess of the number surrendered will not be taxable if an ISO is being exercised, but will be taxable as ordinary income to the extent of their fair market value if a nonstatutory stock option is being exercised.  The participant does not recognize income and the Company receives no deduction as a result of the tax-free portion of the exchange transaction.  If the use of previously acquired ISO shares to pay the exercise price of another ISO constitutes a Disqualifying Disposition, the tax results described in the ISO discussion (above) will apply.  The income treatment will apply to the shares disposed of, but will not affect the favorable tax treatment of the shares received.

Restricted Stock.  A participant receiving a grant of restricted stock under the 2012 Plan will not recognize income, and the Company will not be allowed a deduction at the time such award is granted, unless the participant makes the election described below with respect to restricted stock.  While a restricted stock award remains unvested or otherwise subject to a “substantial risk of forfeiture,” the participant will recognize compensation income equal to the amount of any dividends received and the Company will be allowed a deduction in a like amount.  When an award vests or otherwise ceases to be subject to a substantial risk of forfeiture, the excess of the fair market value of the award on the date of vesting or the cessation of the substantial risk of forfeiture over the amount paid, if any, by the participant for the award will be ordinary income to the participant and will be claimed as a deduction for federal income tax purposes by the Company.  Upon disposition of the shares received, the gain or loss recognized by the participant will be treated as capital gain or loss, and the capital gain or loss will be short-term or long-term depending upon whether the participant held the shares for more than one year following the vesting or cessation of the substantial risk of forfeiture.  However, by filing a Section 83(b) election with the Internal Revenue Service within thirty (30) days after the date of grant of restricted stock, a participant’s ordinary income and commencement of holding period and the deduction will be determined as of the date of grant.  In such a case, the amount of ordinary income recognized by such a participant and deductible by the Company will be equal to the excess of the fair market value of the award as of the date of grant over the amount paid, if any, by the participant for the award, and the participant will not be required to recognize additional ordinary income when the shares vest.

ERISA.  The Company believes that the 2012 Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).  The 2012 Plan is not a qualified plan under Section 401(a) of the Internal Revenue Code.

Gain or Loss on Sale or Exchange of Shares.  In general, gain or loss from the sale or exchange of shares granted or awarded under the 2012 Plan will be treated as capital gain or loss, provided that the shares are held as capital assets at the time of the sale or exchange.

Performance Based Compensation.  In general, under Section 162(m) of the Internal Revenue Code, remuneration paid by a public corporation to certain “covered employees” is not deductible to the extent it exceeds $1 million per year for the covered employee.  Taxable payments or benefits under the 2012 Plan may be subject to this deduction limit.  However, under Section 162(m), qualifying performance-based compensation, including income from stock options, SARs and other performance-based awards that are made under shareholder-approved plans and meet certain other requirements, are generally exempt from this deduction limitation.  The 2012 Plan has been designed so that the Committee in its discretion may grant qualifying exempt “performance-based” compensation under the 2012 Plan.  We believe that awards intended and structured as such by the Committee will meet the requirements for “performance-based” compensation under Section 162(m), and that the amount of ordinary income to the participant with respect to such awards generally will be allowed as a deduction for federal income tax purposes to the Company.  Other awards that may be subject to the attainment of performance measures but that do not meet the requirements of Section 162(m) will not qualify as “performance-based” compensation and, in such event, would be subject to Section 162(m)’s deduction limit.

Parachute Payments.  Under the so-called “golden parachute” provisions of Section 280G of the Internal Revenue Code, the accelerated vesting of options and benefits paid under other awards in connection with a change of control of a corporation, as described under Section 280G, may be required to be valued and taken into account in determining whether participants have received compensatory payments, contingent on the change of control, in excess of certain limits under Section 280G.  If these limits are exceeded, a portion of the amounts payable to the participant may be subject to an additional 20 percent federal tax and may be nondeductible to the corporation.  If an individual’s rights under the 2012 Plan are accelerated as a result of a change of control and the individual is a “disqualified individual” under Section 280G,

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the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an “excess parachute payment” under Section 280G.

Tax Withholding.  Incentive awards under the 2012 Plan may be subject to tax withholding.  When an award results in income subject to withholding, the Company may require the participant to remit the withholding amount to the Company or cause shares of the Company to be withheld from issuance or sold in order to satisfy the tax withholding obligations.

Section 409A.  Section 409A of the Internal Revenue Code applies to compensation plans providing deferred compensation to employees, directors and consultants, and potentially could apply to the different types of incentive awards available under the 2012 Plan.  Generally, to the extent that deferrals of these awards fail to meet certain requirements under Section 409A, such awards will be subject to immediate taxation and tax penalties in the year they vest unless the requirements of Section 409A are satisfied.  It is the intent of the Company that awards under the 2012 Plan will be structured and administered in a manner that either complies with or is exempt from the requirements of Section 409A.  If any 2012 Plan provision or award under the 2012 Plan would result in the imposition of an applicable tax under Section 409A and related regulations and Treasury pronouncements, that 2012 Plan provision or award may be reformed to the extent permitted under Section 409A to avoid imposition of the applicable tax, and no action taken to comply with Section 409A shall be deemed to adversely affect the Participant’s rights to an award.

Securities Authorized for Issuance under Current Equity Compensation Plans

As of June 29, 2012, the record date, the Company had the following outstanding stock option awards, weighted-average option exercise price, unvested restricted stock unit awards, and remaining shares reserved for future issuance under the Company’s existing 1994 Amended and Restated Long-Term Incentive Plan (as amended, the “1994 Plan”):

Repricings Prohibited

The 2012 Plan provides that outstanding stock options and SARs will not be “repriced” for any reason without the prior approval of the Company’s shareholders.  For purposes of the 2012 Plan, a “repricing” means lowering the option price of an outstanding stock option or SAR or any other action that has the same effect or is treated as a repricing under generally accepted accounting principles, and includes a tandem cancellation of a stock option or SAR at a time when its option price exceeds the fair market value of the underlying Common Stock and exchange for another stock option, SAR, other incentive award, other equity security or a cash payment.  This prohibition does not prevent adjustments in the exercise price of options made pursuant to the provisions of the 2012 Plan dealing with recapitalizations of the Company, mergers or similar transactions.

Shareholder Approval

At the Annual Meeting, shareholders will be asked to approve and ratify the adoption of the 2012 Plan.  Such action requires 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 Annual Meeting, excluding broker non-votes.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE COMPANY’S 2012 LONG TERM INCENTIVE PLAN.

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SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

To the Company’s knowledge, the following table sets forth as of the close of business on June 29, 2012, information with respect to the shares of Common Stock beneficially owned by (i) the named executive officers of the Company, (ii) each of the directors and director nominees of the Company, (iii) all persons known to the Company to be the beneficial owners of 5% or more thereof and (iv) all named executive officers and directors as a group.  To the Company’s knowledge, all persons listed have sole voting and investment power with respect to the shares beneficially owned by them, unless otherwise indicated.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who own more than 10% of a registered class of the Company’s equity securities to file with the SEC and the NYSE certain reports of ownership, changes in ownership and annual statements of beneficial ownership of the Company’s Common Stock.  Executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all such forms they file.  Based solely on a review of the copies of such reports furnished to the Company and/or written representations from certain reporting persons that no other reports were required to be filed with the SEC by such persons, the Company believes that during the 2012 fiscal year all of the Company’s executive officers, directors and greater than 10% shareholders complied on a timely basis with all applicable filing requirements under Section 16(a) of the Exchange Act, except that (i) the delivery of certain vested shares (in connection with previously reported restricted stock awards) on April 1, 2011 was not reported on a timely filed Form 4 by Joe R. Davis, Chief Executive Officer, and (ii) the sale of shares of the Company’s Common Stock on April 1, 2011 was not reported on a timely filed Form 4 by James H. Limmer, a director.

CORPORATE GOVERNANCE INFORMATION

Board of Directors and Committees

As of the date of this Proxy Statement, the size of the Board of Directors was fixed at six members, divided into three classes as described under the caption “Election of Class I Directors” above.  Our Board has a standing Executive Committee, Audit Committee, Compensation Committee and Nominating and Governance Committee. The Board may also establish other committees from time to time as necessary to facilitate the management of the business and affairs of the Company and to comply with the NYSE corporate governance rules.

The Company’s Corporate Governance Guidelines (the “Governance Guidelines”), in compliance with the NYSE corporate governance rules, provide that the Board shall be comprised of a majority of non-management directors that meet the independence requirements of the NYSE. The Company’s non-management directors (Messrs. Alexander, Carruth, Forbes, Limmer and Reppert) comprise a majority of the Board and each is “independent” for purposes of Section 303A of the NYSE corporate governance rules. The Board has affirmatively determined that the non-management directors had no material business relationships with the Company and otherwise satisfied the criteria for independence set forth in the NYSE corporate governance rules.  The Board’s determination was based primarily on the directors’ general familiarity with each other and their backgrounds, the fact that no director previously reported a change in circumstances that could affect his independence and a review and discussion of the representations made by the directors in response to various questions regarding each of their (and their family’s) employment and compensation history, affiliations and business and other relationships.  The Board has also determined that Mr. Corley has no material business relationships with the Company and otherwise satisfies the criteria for independence set forth in the NYSE corporate governance rules based primarily on the Board’s discussions with Mr. Corley and the representations made by him in response to various questions regarding his (and his family’s) employment and compensation history, affiliations and business and other relationships.

During the fiscal year ended March 31, 2012, the Board met six times.  Each of the directors attended all of the meetings of the Board and of each committee on which he served.  In addition, pursuant to the Governance Guidelines, directors are expected to attend each annual meeting of shareholders.  All of the directors attended the 2011 annual meeting of shareholders.

Pursuant to the Governance Guidelines and the NYSE corporate governance rules, our independent directors are required to meet in executive sessions held at least quarterly.  The lead independent director (the “Lead Director”) who

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presides over those sessions is elected by the independent directors.  The Lead Director is also the independent Board member appointed to receive communications from interested parties, including shareholders, as set forth in “Communications with Directors” below.

Risk Management

The Audit Committee is responsible for overseeing the Company’s risk assessment and risk management policies.  Pursuant to its written Charter, the Audit Committee is responsible for (i) approving management’s overall risk management strategy for the Company; (ii) overseeing the establishment and implementation of the Company’s risk management system, which includes oversight of insurance programs to address risk, and other programs and policies as may be established from time to time to address risk or risk avoidance; (iii) ensuring that the Company identifies, reviews, and regularly updates the profile of the principal strategic, operational, financial, credit, and liquidity risks to which it is exposed and assessing the appropriateness of the steps management has taken to manage these risks; and (iv) reviewing at least annually the effectiveness of the Company’s implementation of its risk management system.

Executive Committee

The Executive Committee, currently consisting of Messrs. Davis and Forbes, is charged under its written charter to review, develop and recommend Company strategies and policies to the Board and approve certain acquisition transactions of the Company pursuant to authority delegated by the Board.  During the fiscal year ended March 31, 2011, the Executive Committee met two times.

Audit Committee

The Audit Committee currently consists of Messrs. Alexander, Forbes and Reppert.  Mr. Alexander will not stand for re-election at the Annual Meeting.  Accordingly, the Nominating and Corporate Governance Committee has nominated Mr. Corley for election to the Board. If elected, the Board will determine, with the assistance of the Nominating and Governance Committee, Mr. Corley’s committee participation. The Board has affirmatively determined that each current director of the Audit Committee, as well as the director nominee, meets the independence and financial literacy requirements of the applicable NYSE corporate governance rules and SEC rules and regulations.  The Board has also affirmatively determined that Messrs. Forbes and Reppert each qualify as an Audit Committee “financial expert” as defined in Item 407(d)(5) of Regulation S-K of the Exchange Act.

In addition to certain duties that may be prescribed by the NYSE corporate governance rules and SEC rules and regulations, the Audit Committee is charged under its written charter to, among other things, assist the Board in its oversight of the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements (including the reasonableness and adequacy of disclosure of related person transactions), the qualifications, independence, selection, compensation and performance of the registered independent public accounting firm engaged to conduct the external audit of the Company, the performance of the Company’s internal audit function, and the Company’s overall risk management program.  The Audit Committee is also responsible for preparing an audit committee report as required by the SEC for inclusion in this Proxy Statement.  During the fiscal year ended March 31, 2012, the Audit Committee met six times.

Compensation Committee

The Compensation Committee currently consists of Messrs. Carruth and Limmer, each of whom has been affirmatively determined by our Board to meet the independence requirements of the NYSE corporate governance rules.

In addition to certain duties that may be prescribed by the NYSE corporate governance rules and SEC rules and regulations, the Compensation Committee is charged under its written charter with, among other things, overseeing the effectiveness of the Company’s executive compensation policies applicable to the compensation of our directors and executive officers.  The Compensation Committee also provides executive administration of the Company’s 1994 Incentive Plan and 2008 Annual Incentive Compensation Plan (the “Annual Bonus Plan”) and, if approved by the shareholders, the new Company 2012 Long Term Incentive Plan. The Compensation Committee has sole authority to retain advisors, including compensation consultants, to assist the Committee with its duties.  The Compensation Committee is not authorized by its charter to delegate to anyone the authority to establish any compensation policies or programs for elected officers, including our executive officers, or directors.  Our Chief Executive Officer has the authority to establish compensation programs for non-executive officers and makes recommendations for the Compensation Committee’s consideration each year with respect to the appropriate compensation to be paid to our executive officers, including himself.  The Compensation Committee is also responsible for reviewing the “Compensation Discussion and

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Analysis” section of this Proxy Statement and issuing a compensation committee report as required by the SEC for inclusion in this Proxy Statement.  See “Executive Compensation - Compensation Discussion and Analysis” below for additional information on the Company’s procedures for the consideration and determination of director and executive officer compensation, as well as the use of compensation consultants in such process.

Compensation Committee Interlocks and Insider Participation

During the 2012 fiscal year, no member of the Compensation Committee was or formerly had been an officer or employee of the Company or any of its affiliates.  Also, during the 2012 fiscal year, no executive officer of the Company served on the compensation committee or the board of directors of any other entity which employed as an executive officer, or was otherwise affiliated with, one of the members of the Company’s Board or of its Compensation Committee.

Nominating and Governance Committee

The Nominating and Governance Committee currently consists of Messrs. Carruth, Limmer and Reppert. Each current director of the Nominating and Corporate Governance Committee has been affirmatively determined by our Board to meet the independence requirements of the NYSE corporate governance rules.  In addition to certain duties that may be prescribed by the NYSE corporate governance rules and SEC rules and regulations, the Nominating and Governance Committee is charged under its written charter with, among other things, assisting the Board in identifying individuals qualified to become Board members, evaluating and recommending for Board selection director nominees for election at each annual meeting of shareholders and generally assisting with filling Board vacancies, reviewing committee structures and member composition.  In addition, the Nominating and Governance Committee is responsible for overseeing the process by which significant shareholder relations matters are addressed, including prompt notice to the Nominating and Governance Committee of the Company’s receipt of any significant shareholder communications or shareholder proposals, establishing procedures requiring the Committee to be notified of potential violations and/or requests for waivers to the Company’s Governance Guidelines or Code of Ethics, including approval of related person transactions involving executive officers, directors or their immediate family members, and recommending to the Board any changes deemed necessary to the Company’s insider trading policies, Governance Guidelines or Code of Ethics.  During the fiscal year ended March 31, 2012, the Nominating and Governance Committee met three times.

Director Nomination Process

The Nominating and Governance Committee assists the Board by identifying, evaluating and recommending for Board affirmation potential candidates for election to the Board of Directors at each annual meeting of shareholders and, in accordance with our By-Laws, to fill vacancies on the Board that may occur between such annual meetings.

Pursuant to its charter, in reviewing prospective director nominees, the Nominating and Governance Committee considers the NYSE corporate governance rules and other factors deemed appropriate by the Committee, such as knowledge of the Company and the printing industry, business experience, any prior service as a Board member and other factors enumerated in the Company’s Corporate Governance Guidelines (which may change from time to time based on the Company’s and Board’s needs), with no one or more of these factors being deemed to be minimum criteria for qualification or more important than any other factor that the Nominating and Governance Committee may take into account in its discretion.  Although the Nominating and Governance Committee does not have a stand-alone policy with regard to consideration of diversity in identifying director nominees, it considers diversity in professional background, experience, expertise (including as to financial matters) and perspective (including as to age, gender and ethnicity) with respect to the Board composition as a whole when evaluating a director nominee. The resulting diversity of the Board allows each director an opportunity to provide specific input to Board decisions in his or her respective area of expertise and experience.  The Nominating and Governance Committee considers director nominees for the Board based on the recommendation of the Chairman of the Board and, if so requested, by the Company’s shareholders subject to and in the manner set forth below under “Shareholder Nominations for Directors.”  If necessary, the Nominating and Governance Committee may independently seek candidates and has the authority to retain and compensate consulting firms in connection with that search process.  Director candidates identified by the Chairman of the Board, the shareholders or the Nominating and Governance Committee itself will each be evaluated in the same manner and on the same basis by the Nominating and Governance Committee.

For purposes of the election of Class I directors at the Annual Meeting, the Nominating and Governance Committee reviewed the recommendation from Mr. Davis, the current Chairman of the Board and Chief Executive Officer, that Messrs. Carruth and Corley be considered for election as Class I directors.  No director candidates were submitted by shareholders for the Nominating and Governance Committee’s consideration.  Based on the Nominating and

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Governance Committee’s evaluation of the qualifications of such nominees, taking into consideration the factors described above and relevant elements from the Board’s annual self-assessment, the Nominating and Governance Committee recommended to the Board that Messers. Carruth and Corley be nominated for election to the Board, which the Board subsequently affirmed.

Shareholder Nominations for Directors

Pursuant to our By-laws, shareholders of the Company may nominate director candidates for election at the annual meeting of shareholders in accordance with the procedures set forth therein. To be properly brought for consideration at the annual meeting of shareholders, in addition to complying with the procedures in our By-laws, such nominations must comply with all of the requirements described under the caption “Shareholder Proposals” below, and must be accompanied by the following information:

·                  the name of the nominee and the address and principal occupation or employment of such nominee;

·                  description of all arrangements or understandings between the shareholder and each nominee and any person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder as required under our By-laws;

·                  the written consent of each nominee to serve if so elected;

·                  any other information related to such person that is required to be disclosed in a proxy statement soliciting proxies for election of directors, or as otherwise required pursuant to Regulation 14A under the Exchange Act;

·                  the name(s) and address(es) of the shareholder(s) making the nomination, as well as the beneficial owner(s), if any, on whose behalf the nomination is made, and the number of shares of the Company’s Common Stock which are directly or indirectly owned beneficially by such shareholder(s) and beneficial owner(s); and

·                  such other information and/or representations as may be required under the By-laws.

The Nominating and Governance Committee will consider candidates for director nominees properly submitted by shareholders of the Company in the same manner and on the same basis as other recommended nominees, as discussed above under “Director Nomination Process.”

Communications with Directors

Interested parties, including shareholders, wishing to communicate with the independent directors of the Board may contact the then Lead Director in the manner set forth on our Web site.  Our Lead Director presides over any executive sessions of Board meetings for our independent directors and is authorized to act on behalf of such directors in accordance with our Corporate Governance Guidelines.  Currently, our Lead Director is Gary L. Forbes, who may be contacted at P.O. Box 92496, Austin, Texas 78709.

Company Leadership Structure

The Board has determined that it is currently in the best interest of the Company for the position of Chairman of the Board to be filled by the Company’s Chief Executive Officer and believes that the Company benefits from the cohesive and consistent leadership resulting from this structure. Since the founding of the Company, the positions of Chairman of the Board and Chief Executive Officer have been held by Mr. Davis. The Board believes that this structure facilitates communications between the Board, its committees and management, creates the most efficient and productive relationship between the Board’s strategic role and management’s control of daily operations, and uses Mr. Davis’ knowledge of the Company’s business and commercial printing industry to the Company’s benefit and advantage.

To ensure a strong and independent Board of Directors, the Company also has a Lead Director. The Chairman of the Audit Committee, Gary Forbes, is currently designated to serve as Lead Director.  The Lead Director presides at executive sessions of the Board, serves as the liaison between the Chairman of the Board and the other directors, and advises the Chairman of the Board with respect to the schedule, agenda and information relevant for Board meetings.

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In connection with its annual self-evaluation, the Board considers whether the current leadership structure continues to be appropriate for the Company. The Board believes that directors should be responsive to the Company’s evolving circumstances and objectives and therefore may in the future modify the Board’s leadership structure when and as necessary.

Availability of Certain Committee Charters and Other Information

The charters for our Audit, Compensation, Nominating and Governance and Executive Committees, as well as our Corporate Governance Guidelines and Code of Ethics, can all be accessed, free of charge, on our Web site (www.cgx.com) under “Investor Relations - Governance.”  We will provide printed copies of these materials to any shareholder upon request directed to Consolidated Graphics, Inc., Attn:  Secretary, 5858 Westheimer, Suite 200, Houston, Texas 77057.  We intend to disclose on our Web site any changes to or waivers from the Code of Ethics that are also required under SEC rules and regulations to be disclosed under Item 5.05 of Form 8-K.  The information on our Web site is not, and shall not be deemed to be, a part of this Proxy Statement or incorporated into any other filings we make with the SEC.

We also make available on our Web site, free of charge, access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, as well as other documents that we file with or furnish to the SEC pursuant to Sections 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such documents are so filed with, or so furnished to, the SEC.

Director Compensation

Effective as of March 1, 2009, the non-employee directors voluntarily reduced their cash compensation for an undetermined length of time at their discretion.  The fees payable to such directors following such reductions are currently as follows:

·                  an annual retainer of $21,250, paid quarterly;

·                  $850 for each Board meeting attended;

·                  $850 to the chairperson of the Audit Committee for each Audit Committee meeting attended, whether or not the meeting is held on the same day as a meeting of the Board;

·                  $425 to each other member of the Audit Committee for each Audit Committee meeting attended, whether or not the meeting is held on the same day as a meeting of the Board; and

·                  $425 for each other Board committee meeting attended.

From time to time we may issue stock option awards to our non-employee directors under our equity compensation plans. In August 2011, the Company granted a stock option award to Mr. Reppert under the 1994 Incentive Plan for the purchase of 12,500 shares of the Company’s Common Stock (at $35.79 per share, the fair market value of such shares on the grant date) in connection with his service on our Board of Directors.  Such options vest ratably on each anniversary of the grant date through the fifth anniversary thereof.  If Mr. Corley is elected to the Board of Directors, the Company anticipates that he will be granted a similar stock option for the purchase of 12,500 shares of the Company’s Common Stock, with an exercise price equal to the closing stock price on the date of grant, and vesting ratably over a five year period.  We do not pay any additional compensation to our employees for serving as directors, but we reimburse all directors for out-of-pocket expenses they incur in connection with attending Board and Board committee meetings or otherwise in their capacity as directors.

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The table below summarizes the aggregate compensation paid to our non-employee directors during the year ended March 31, 2012.

2012 DIRECTOR COMPENSATION TABLE

(1)          Mr. Davis is not included in this table as he is an employee and is not entitled to receive additional compensation for his services as a director, other than reimbursement of certain out-of-pocket expenses.  The compensation Mr. Davis received in fiscal year 2012 is shown in the 2012 Summary Compensation Table.

EXECUTIVE OFFICERS

The names, ages, position and other information with respect to our named executive officers are set forth below.

Joe R. Davis has been the Chief Executive Officer and Chairman of the Board of Directors since the Company was founded in 1985.  Please refer to the caption “Proposal for Election of Class I Directors” above for additional information with respect to Mr. Davis’ background and experience.

Jon C. Biro has been Executive Vice President, Chief Financial and Accounting Officer, and Secretary of the Company since January 2008.  Mr. Biro is a certified public accountant.  Prior to that time, Mr. Biro was employed as the Chief Financial Officer and Treasurer of ICO, Inc., formerly a publicly traded company, and was employed by a predecessor of PricewaterhouseCoopers LLP.  Mr. Biro currently serves on the Board of Directors and Audit Committee of Crown Crafts, Inc. (NASDAQ: CRWS) and is 46 years of age.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis addresses the following topics:

·                  the structure and responsibilities of the Compensation Committee of the Board;

·                  the Compensation Committee process;

·                  overall compensation philosophy and policies;

·                  the components of our executive officer compensation program; and

·                  compensation paid to our executive officers (as defined below) for fiscal year 2012.

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Structure and Responsibilities of the Compensation Committee

Compensation Committee Members and Independence

Brady F. Carruth and James H. Limmer are the current members of the Compensation Committee.  Mr. Limmer, who has served on our Board of Directors for approximately 26 years, is the current chairman of the Compensation Committee. Each member of the Compensation Committee is an “independent director” and “non-employee director” in accordance with the rules of the SEC and the listing standards of the NYSE, as applicable.

Responsibilities of Committee

There are three primary purposes of the Compensation Committee: (1) to discharge the Board’s responsibilities relating to compensation of our executive officers and directors; (2) to issue annual reports of the Compensation Committee relating to our compensation discussion and analysis for inclusion in the proxy statements for our annual meetings; and (3) to provide executive administration of the Company’s incentive compensation plans, including recommending to the Board any necessary amendments to existing plans or adoption of new incentive compensation plans.  The Compensation Committee operates under a written charter adopted by the Board. A copy of the charter is available at www.cgx.com under “Investor Relations — Corporate Governance.”  Pursuant to the charter, the Compensation Committee has the resources necessary to discharge its duties and responsibilities, including the authority to retain outside counsel or other experts or consultants as it deems necessary. The following functions are among the key responsibilities and duties of the Compensation Committee, as set forth in the charter:

·                  negotiate, and recommend for approval by the Board, definitive employment and related agreements with the Chief Executive Officer of the Company;

·                  in conjunction with the Chief Executive Officer, negotiate and recommend for approval by the Board, definitive employment agreements with other executive officers;

·                  based on input from all directors, establish both general and specific goals and objectives for the Company which are relevant to the compensation of the Chief Executive Officer;

·                  in consultation with the Chief Executive Officer, establish both general and specific goals and objectives for the Company which are relevant to the compensation of any other executive officers, if applicable;

·                  as required under the terms of any definitive employment agreement(s) with the Chief Executive Officer and any other executive officers, establish target compensation levels based on the established goals and objectives;

·                  following the end of each fiscal year, evaluate the Chief Executive Officer based upon performance in relation to established goals and objectives, and approve annual and long-term compensation for such individual, taking various factors into account, including, at the discretion of the Compensation Committee, terms and conditions of employment, expectations of future contribution to the Company, consideration of the Company’s performance and shareholder return, the value of similar incentive awards to the similar position in similar companies, applicable tax laws, and other factors deemed relevant by the Compensation Committee;

·                  following the end of each fiscal year, in consultation with the Chief Executive Officer, evaluate any other executive officers based on performance in relation to established goals and objectives, and approve annual and long-term compensation for such individuals, taking various factors into account at the discretion of the Compensation Committee, including terms and conditions of employment, expectations of future contribution to the Company, consideration of the Company’s performance and shareholder return, the value of similar incentive awards to similar positions in similar companies, applicable tax laws, and other factors deemed relevant by the Compensation Committee;

·                  determine the types of awards or grants made to each participant of the Company’s incentive compensation plans and the terms, conditions and limitations, including performance goals, applicable to each award and grant, as well as to determine if such terms, conditions and limitations, including performance goals, have been satisfied;

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·                  interpret the Company’s incentive compensation plans and, as needed, grant waivers of restrictions thereunder;

·                  review and recommend for approval by the Board and pursuant to the Company’s incentive compensation plans, any amendments to such incentive compensation plans as may be deemed appropriate by the Compensation Committee;

·                  review and recommend for approval by the Board any new incentive compensation plans as may be deemed appropriate from time to time by the Compensation Committee;

·                  adopt such rules and regulations as the Compensation Committee may deem necessary or appropriate in keeping with the objectives of the Company’s incentive compensation plans and in keeping with compliance of applicable regulatory codes;

·                  review and discuss with Company management the Company’s annual compensation discussion and analysis, and if appropriate, recommend its inclusion in the Company’s annual proxy statement;

·                  issue the report of the Compensation Committee for inclusion in the Company’s annual proxy statement;

·                  review and recommend to the Board appropriate compensation for members of the Board and its committees;

·                  review and evaluate annually the adequacy of the Compensation Committee charter and report to the Board thereon; and

·                  review and evaluate annually the performance of the Compensation Committee and report to the Board thereon.

The Compensation Committee Process

Committee Meetings

The Compensation Committee meets as often as necessary to perform its duties and responsibilities and works with management to establish the agenda for each meeting. The Compensation Committee met two times during fiscal year 2012.

The Compensation Committee typically meets at least annually with our Chief Executive Officer and, where appropriate and as needed, other management, legal counsel and other outside advisors. The Compensation Committee also meets as needed in executive sessions without management, including at least annually, to evaluate the performance of our Chief Executive Officer and any other executive officers, to determine their non-equity incentive compensation and/or discretionary bonuses for the prior fiscal year.  The Compensation Committee will also meet as necessary in connection with establishing or negotiating the parameters of any new employment or other compensation agreements with our executive officers.

The Compensation Committee typically receives and reviews materials in advance of each meeting. These materials include information that our management believes will be helpful to the Compensation Committee, as well as materials that the Compensation Committee has specifically requested. Depending on the agenda for the particular meeting, this information may include:

·                  financial reports on year-to-date performance versus prior year performance;

·                  the Chief Executive Officer’s proposals for salary, non-equity incentive compensation and/or discretionary bonuses and long-term equity incentive compensation for himself and any other executive officers;

·                  materials setting forth the total compensation of the Chief Executive Officer and any other executive officers, including base salary, cash incentives, vested and unvested equity awards, value of benefits and perquisites, and amounts payable to these executives upon voluntary or involuntary termination or following a change-in-control of the Company; and

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·                  reports from compensation consultants engaged by the Compensation Committee in connection with the negotiation of any executive employment agreements, as applicable.

Role of the Executive Committee

Pursuant to the charter of the Executive Committee of the Board of Directors, such committee, among other duties and responsibilities, designates the Company’s “executive officers” for purposes of disclosures required by the SEC.  In this respect, the members of the Executive Committee consider the definition of “executive officer” in Rule 3b-7 of the Exchange Act, and based on their knowledge and familiarity of the Company, its operations, and members of the Company’s management team, as well as input from the Company’s Chief Executive Officer, determine in their best business judgment which individuals have responsibilities and perform at the “executive officer” level in accordance with the meaning and intent of Rule 3b-7 of the Exchange Act.  For the fiscal year ended March 31, 2012, the Executive Committee designated Joe R. Davis, Chairman of the Board and Chief Executive Officer, and Jon C. Biro, Executive Vice President, Chief Financial and Accounting Officer, and Secretary, as the Company’s “executive officers”.

Management’s Role in the Compensation-Setting Process

The Chief Executive Officer of the Company plays a key role in the executive compensation-setting process.  The most significant aspects of his role are:

·                  recommending annual base salary, equity and non-equity incentive compensation and discretionary bonus levels for himself and the other executive officers of the Company;

·                  recommending business performance targets and objectives for approval by the Compensation Committee in connection with incentive compensation plans; and

·                  evaluating other executive officer performance.

Compensation Consultants

From time to time, as contemplated in its Charter, the Compensation Committee may engage compensation consultants in connection with the executive compensation process.  However, neither the Compensation Committee nor the Company engaged compensation consultants for the fiscal year ended March 31, 2012.

Overall Compensation Philosophy and Policies

Our compensation philosophy regarding members of the Board and the Company’s executive officers is to maintain compensation policies which align compensation with the Company’s overall business strategy, values and management initiatives.  The policies are intended to (1) reward individuals for long-term strategic management and enhancement of shareholder value; (2) support a performance-oriented environment that rewards achievement of internal Company goals and generally recognizes the Company’s overall performance; (3) attract and retain individuals whose abilities are considered essential to the long-term future and competitiveness of the Company; and (4) align the financial interests of the Company’s directors and executive officers with those of the shareholders.

In an advisory vote held in 2011, our shareholders approved our executive compensation by a vote of 84% in favor. In view of the strong support from shareholders in 2011 of the compensation paid to our executive officers in fiscal year 2012, our Compensation Committee did not make any significant changes in our compensation practices or the principal features of our executive compensation program with respect to executive compensation for fiscal year 2013.

As a way to ensure that all parties have a clear “meeting of the minds”, as well as to assure that the objectives of our compensation philosophy are best able to be achieved, it has been our practice to enter into employment agreements with our executive officers.

Employment Agreement with Joe R. Davis

We previously entered into an employment agreement with Mr. Davis with the approval of our Compensation Committee.  The employment agreement is effective until May 22, 2013, provided that it will thereafter be automatically extended for five (5) consecutive one (1) year terms unless the Company provides ninety (90) days’ notice to Mr. Davis that the employment agreement will not be extended.  Notwithstanding the foregoing, the employment period under the

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employment agreement is set to expire on the tenth anniversary of its effective date, or May 22, 2018, unless otherwise terminated earlier in accordance with its terms.  Key compensation provisions of the employment agreement pursuant to which Mr. Davis was compensated in fiscal year 2012 include the following:

·                  Base annual salary of not less than $750,000 (however, see information regarding the voluntary 15% reduction in annual base salary below in Components of Executive Compensation, Base Salary), subject to an annual review by our Board;

·                  Eligibility to participate in the Annual Bonus Plan, with an annual target bonus award level equal to 100% of his annual base salary for a stated performance period, determined by reference to certain performance measures set by the Compensation Committee as set forth in an annual incentive award agreement (the “2012 Award Agreement”). For fiscal year 2012, the maximum bonus that could be earned under such Award Agreement, subject to achievement of the performance measures stated therein, was 225% of Mr. Davis’ annual base salary.  Mr. Davis earned no bonus under such 2012 Award Agreement for the fiscal period ended March 31, 2012.

Under the terms of his employment agreement, Mr. Davis is subject to a confidentiality covenant that will survive his termination of employment, and he may not compete or interfere with the Company’s business during his employment and for one year thereafter unless Mr. Davis is terminated during the three year period following a change in control as discussed below.

Employment Agreement with Jon C. Biro

We previously entered into an employment agreement (and related change in control agreement) with Jon C. Biro, effective as of January 14, 2008, to serve as our Executive Vice President, Chief Financial and Accounting Officer, and Secretary through August 31, 2013, unless terminated earlier pursuant to its terms.  The terms of those agreements were negotiated between Mr. Biro and Mr. Davis and were approved by the Compensation Committee.  Key compensation provisions of the employment agreement pursuant to which Mr. Biro was compensated in fiscal year 2012 include the following:

·                  Base annual salary of not less than $250,000 (however, see information regarding the voluntary 10% reduction in annual base salary below in Components of Executive Compensation, Base Salary); and

·                  Annual discretionary bonus based principally on Mr. Davis’ judgment of Mr. Biro’s performance and contribution to the Company, but nevertheless subject to the review and approval of the Compensation Committee or the Board.

Under the terms of his employment agreement, Mr. Biro is not permitted to compete or interfere with the Company’s business during his employment and for one year thereafter (generally regardless of the circumstances resulting in Mr. Biro’s termination of employment).

Components of Executive Compensation

The primary components of our executive compensation programs are annual base salaries, annual non-equity incentive compensation and discretionary cash bonuses and long-term equity incentive compensation. Under our current compensation structure, the Compensation Committee has not specifically allocated the mix of base salary, non-equity incentive compensation, discretionary cash bonuses and long-term equity compensation as targeted percentages of total compensation. There are no indirect or deferred compensation components to our executive compensation programs, other than limited perquisites available generally to all employees of the Company.  The Compensation Committee did not use benchmarking to set any components of executive compensation.

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Base Salary

The base salary paid to our named executive officers in fiscal year 2012 is set forth in the following table:

(1)  Messrs. Davis’ and Biro’s listed annual base salary reflects their voluntary reduction in base salary as described below.

Each of these amounts was determined and paid in accordance with the respective employment agreements of such executive officers in effect during such period, as previously discussed.  However, Mr. Davis voluntarily reduced his monthly salary by 15%, effective March 1, 2009, due to the then-current economic environment and the state of the commercial printing industry.  Similarly, Mr. Biro voluntarily reduced his monthly salary by 10%, effective May 1, 2009.  The voluntary salary reductions of Messrs. Davis and Biro are for indeterminate periods of time, at each executive officer’s discretion.

Annual Non-Equity Incentive Compensation Awards/Discretionary Bonuses

Pursuant to the terms of his employment agreement, Mr. Davis was granted an annual incentive award in May 2011 under the Annual Bonus Plan for the fiscal year 2012 performance period, as set forth in the 2012 Award Agreement.  The maximum bonus that could be earned under such award for that performance period, subject to achievement of the various performance measures stated therein, was 225% of Mr. Davis’ annual base salary.  Mr. Davis earned no bonus under such Award Agreement.

As contemplated under Mr. Davis’ employment agreement, the Compensation Committee granted Mr. Davis a non-equity incentive compensation award for the 2013 fiscal year performance period as set forth in an annual incentive award agreement (the “2013 Award Agreement”). The award was granted under the Annual Bonus Plan approved by our shareholders, and the payment of a cash bonus is conditioned on the achievement of certain performance measures intended to comply with Code Section 162(m), which would allow such payments to be deducted by the Company as compensation expense. Under the Internal Revenue Code, the general performance criteria must be approved in advance by shareholders every five years.  The Compensation Committee utilized the same performance measures set forth in the award granted to Mr. Davis for the fiscal year 2012 performance period, which are based on reaching various target levels of earnings per share growth pursuant to which Mr. Davis could earn between 50% and 150% of his annual base salary (based on the greater of (i) $750,000 or (ii) his annual rate of salary at the end of the performance period). Then, depending on achievement of various established target levels of return on equity, his potential bonus would be subject to an upward or downward adjustment based on a modifier ranging from 0.5x to 1.5x. For purposes of determining the cash bonus award, earnings per share means diluted earnings per share (as determined under US GAAP), adjusted to exclude the effect of non-cash charges, and return on equity means net income (as determined under US GAAP), adjusted to exclude the effect of non-cash charges, divided by the four-quarter average Shareholders’ Equity for the performance period. Mr. Davis will not receive an award under the 2013 Award Agreement if the Company experiences an earnings per share decline. The established performance goals are set forth below.

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By linking these performance measures in calculating the Chief Executive Officer’s potential annual bonus, the Compensation Committee believes that Mr. Davis interests will be aligned with those of our shareholders because it will cause the executive to focus on long-term capital management, and not solely on maximizing short-term results.  Mr. Davis’ targeted annual bonus award is equal to 100% of his annual base salary but, depending on the growth of the Company’s earnings per share and the Company’s return on equity as set forth above, Mr. Davis would have the ability to earn a bonus equal to 225% of his annual base salary, which the Compensation Committee believes is reasonable and competitive.

Upon recommendation by the Chief Executive Officer for recognition of Mr. Biro’s contributions during fiscal year 2012 and in consideration of the Company’s financial performance and other major accomplishments in fiscal year 2012, the Compensation Committee approved a discretionary cash bonus award to Jon C. Biro of $125,000 for fiscal year 2012.

Equity Incentive Compensation Awards

The Compensation Committee believes that equity incentive compensation is one of the most effective means of creating a link between the compensation provided to our employees, including executive officers, and gains realized by our shareholders.  Specifically, such compensation is viewed as an effective incentive vehicle because:

·                                          equity incentive compensation helps to align the interests of our executive officers with those of the Company’s shareholders, foster executive officer stock ownership, and contribute to the focus of the executive officers on increasing value for the Company’s shareholders; and

·                                          the vesting period encourages retention of the executive officers.

The Company does not have any program, plan or obligation to grant equity compensation to executive officers, other than grants set forth in the executive officers’ employment agreements, or to our directors on specified dates.  However, our Compensation Committee follows a policy of not granting equity incentives when material non-public information exists that may affect the short-term price of our common stock.  The Compensation Committee has the authority and discretion to grant equity compensation to the Company’s employees, including the executive officers, from time to time.

The equity incentive compensation awards granted to our named executive officers under our 1994 Incentive Plan during fiscal year 2012 were as follows:

(1)         The grant date fair value is computed in accordance with ASC Topic 718, based on a closing market price of our Common Stock ($50.14) on the date of grant in the case of stock option awards granted to Mr. Biro.

Additional Benefits Pursuant to Employment Agreements

The employment agreements entered into with our executive officers, Messrs. Davis and Biro, entitle such individuals to participate in the health and welfare benefit programs we make generally available to our other employees during their employment with us and, in certain cases discussed below, following their separation from the Company.

Severance, Death and Disability Benefits for Current Executive Officers

Our philosophy is to provide certain severance benefits to our executive officers through the terms and conditions of their employment agreements, generally as protection for such individuals against the unexpected loss of

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income and benefits in the event we terminate them without “cause” or they resign for “good reason”, as such terms are defined in the respective employment agreements.  We also provide certain benefits to our executive officers under their employment agreements in the event that their termination results from death or disability.

In respect of Mr. Davis, his employment agreement will terminate on the first to occur of May 22, 2018 or on his death, disability or resignation or termination by us.  If the employment agreement terminates because of Mr. Davis’ death, disability or his resignation for good reason or termination by us without cause, and such termination does not occur during the three year period following a change in control (please see “Change in Control” below), then we will be obligated to deliver to Mr. Davis (or his estate) (i) a lump sum payment in an amount equal to four (4) times his annual base salary in effect immediately prior to the termination and (ii) an amount equal to his bonus earned under the Annual Bonus Plan for the fiscal year in which the termination occurs based on the attainment of applicable performance goals for such bonus, prorated based on the number of days he was employed during the fiscal year.  In addition, we will be required to (i) accelerate vesting of any unvested equity awards held by Mr. Davis and (ii) remove all restrictions on equity awards held by him, whether or not exercised before or after such termination date.  Mr. Davis’ current voluntary salary reduction will not affect the Company’s severance obligations under his employment agreement.

If Mr. Davis’ employment is terminated for cause or he resigns without good reason, he will be entitled to payment of his annual base salary through the termination date, as well as payment of any other amounts owed to him as of such date.  Furthermore, any unvested awards shall be cancelled or forfeited on the termination date, and all sales restrictions on equity awards held by Mr. Davis will remain in place and will only be removed in accordance with the terms of such awards.

In respect of Mr. Biro, should he be terminated without cause or resign for good reason, then he will be entitled to a lump sum payment equal to his annual base salary, and receive benefits under the Company’s welfare plans at its expense (other than costs payable by him as a participant) for a one-year period, plus should he resign for good reason, die or become disabled, then he (or his estate) will be entitled to immediate vesting of any outstanding equity compensation awards and release of any restrictions thereon, as well as delivery or payment of other awards granted to him prior to such event. Mr. Biro’s current voluntary salary reduction will not affect the Company’s severance obligations under his employment agreement.

If Mr. Biro’s employment is terminated due to his death or disability, he resigns without good reason or is terminated for cause, he will be entitled to payment of his annual base salary through the termination date, as well as payment of any other amounts owed to him as of such date.

Based on a hypothetical termination event, other than a termination in connection with a change in control, obligating us to provide the maximum severance benefits possible and a hypothetical termination date of March 31, 2012, the estimated severance benefits for our current named executive officers are set forth in the table below.  The actual amounts to be paid or incurred can only be determined at the time of such executive’s actual separation from the Company.

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Retirement Plans

We maintain a 401(k) plan pursuant to which our named executive officers may contribute.  We do not make any matching or discretionary contributions on behalf of our employees, including executive officers.

Change in Control

Our executive officers have been materially responsible for building our Company into the successful enterprise it is today, and will continue to be vital to its future success, and we believe that it is important to protect them in the event of a change in control.  Further, it is our belief that the interests of our executive officers should be aligned with our shareholders, and providing change in control benefits should eliminate, or at least reduce, their reluctance to pursue potential change in control transactions that may be in the best interests of shareholders.  Each of our executive officers, Mr. Davis and Mr. Biro, has entered into written employment and/or change in control agreements generally providing certain assurances of continued employment following a change in control of the Company or, alternatively, change in control termination benefits.  Mr. Davis’ employment agreement integrates his change in control agreement, while Mr. Biro has executed a change in control agreement that is separate from his employment agreement.

A “change in control” will generally be deemed to have occurred on any of the following:  (1) a merger or consolidation of our Company with any other entity that results in less than a majority of the combined voting power of our then outstanding voting securities (or of such other legal entity) immediately after such transaction being held in the aggregate by holders of our voting securities immediately prior to such transaction or such voting power is not held by substantially all of such holders in substantially the same proportions relative to each other; (2) the sale of all or substantially all of our assets to another person or entity, of which less than a majority of the combined voting power of the then outstanding voting securities of such other person or entity is held in the aggregate by the holders of voting securities of the Company immediately prior to such sale or such voting power is not held by substantially all of such holders in substantially the same proportions relative to each other; (3) the dissolution or liquidation of our Company; (4) any person or entity together with its affiliates becoming, directly or indirectly, the beneficial owner of voting securities representing 50% or more, in the case of Mr. Biro, or 20% or more, in the case of Mr. Davis, of the total voting power of the then outstanding voting securities of our Company or (5) with certain exceptions, if in a one year period individuals who at the beginning of such period constitute the directors of the Company cease for any reason to constitute at least a majority of the directors of the Company.

The current employment and change in control agreements for Messrs. Davis and Biro provide each of them with certain employment and minimum compensation rights for three years, in the case of Mr. Davis, and two years, in the case of Mr. Biro, following the occurrence of a change in control of the Company. Termination benefits will be paid following a change in control, in the case of Mr. Davis, upon his death or disability, his resignation for good reason or his termination by the Company without cause and, in the case of Mr. Biro, upon his death, his resignation under certain circumstances or his termination by the Company without cause, as set forth in their respective agreements.  The cash components of any change in control termination benefits for our executive officers would be paid in lump-sum amounts based on multiples of their respective highest paid annual base salaries (as set forth in their respective employment and/or change in control agreements) plus, in the case of Mr. Davis, a lump sum amount equal to his then targeted bonus award, prorated for any partial year based on the number of days he was employed during such year. Specifically, Mr. Davis (or his estate) would be entitled to the aggregate base salary he would have received from the termination date through May 22, 2018, but in no event less than six (6) times such annual base salary, and Mr. Biro would be entitled to two (2) times his base salary.  The Company believes that the bonus amounts payable to Mr. Davis and Mr. Biro will be deductible under Revenue Ruling 2008-13, because they are contingent upon the occurrence of a change in control. The Company also anticipates that such bonus payment formula will generally preserve the federal income tax deductibility of bonus payments under Section 162(m) of the Code.

Additional change in control termination benefits under their current agreements include continuation of health and other insurance benefits (or a lump-sum payment in lieu thereof) for up to three years, in the case of Mr. Davis, and up to two years, in the case of Mr. Biro, and immediate vesting of all previously granted but not as yet vested equity awards held by them, removal of any restrictions on all previously granted equity awards and payment or delivery of other awards granted to them prior to the termination.

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Mr. Davis’ employment agreement also provides for immediate vesting of equity awards held by him and the removal of restrictions on previously granted equity awards immediately prior to the occurrence of a change in control in certain circumstances, as well as immediate vesting of all stock options granted to him upon certain trigger dates, which generally means the third business day immediately preceding (i) the expiration date of a tender or exchange offer by any person (with certain exceptions) pursuant to which such person would be the beneficial owner of 10% or more of the Company’s common stock or (ii) the record date for determining shareholders entitled to notice of and to vote at an annual or special meeting of shareholders at which at least two persons are standing or have been nominated for election as directors of the Company that were not approved by a vote of at least two-thirds of the members of the Board then in office, with certain exceptions.

Furthermore, with respect to Mr. Davis, if his employment is terminated for any reason during the three year period following a change in control, the non-competition and non-solicitation covenants in his employment agreement will terminate upon the termination date.

In addition, the executive officers would be paid a tax gross-up for any excise taxes imposed by Section 4999 of the Code.  It is the Company’s current intent not to extend tax gross-ups to future compensation agreements, including any renewals or extensions of existing employment or change in control agreements, with executive officers or other employees.

Based on a hypothetical change in control event obligating us to provide the maximum change in control termination benefits possible and a hypothetical change in control date of March 31, 2012, the change in control termination benefits for our current named executive officers are set forth below.  The actual amounts to be paid or incurred can only be determined at the time of such executive’s actual separation from the Company.

Perquisites and Other Benefits

The Compensation Committee reviewed perquisites provided to our executive officers in 2012. There were no perquisites in 2012 requiring disclosure pursuant to applicable SEC rules.

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Effect of Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code generally disallows a deduction to public companies to the extent of excess annual compensation over $1 million paid to certain executive officers, except for qualified performance-based compensation.  For fiscal year 2012, the Company determined that the executive officer compensation for Mr. Davis did not exceed the $1 million limitation under Section 162(m).

Effect of ASC Topic718

Under ASC Topic 718, the Company is required to record stock compensation expense related to unvested equity awards based on fair value at date of grant.  As a result, it is possible that the Company will incur compensation expense for equity awards that are never realized by a grantee due to changes in value subsequent to the date of grant.

Policies Regarding Trading in our Securities by our Executive Officers

The Company has in effect a written Insider Trading Policy, which is applicable to all employees and non-employee directors.  The policy forbids trading in our securities at any time in which any such individual is in possession of material non-public information.  In addition, irrespective of whether the individual is in possession of material non-public information, the policy prohibits trading by our executive officers and directors, among others, at any time that the Company has closed its trading window.  One effect of the trading window is to significantly limit the period of time in any given year in which trading in our securities may be undertaken by the Company’s executive officers and directors.

Stock Ownership Policy

The Company does not currently have a written policy concerning share ownership by our executive officers and directors.

Recoupment Policy

We currently do not have a recovery policy applicable to annual incentive bonuses or equity awards.  The Compensation Committee will continue to evaluate the need to adopt such a policy in light of pending legislation.

Conclusion

Based upon its review of our overall executive compensation program, the Compensation Committee believes our executive compensation program, as applied to our executive officers, is appropriate and is necessary to reward such individuals who are essential to our continued development and success, to compensate them for their contributions and to enhance shareholder value.  The Compensation Committee believes that the total compensation opportunities provided to our executive officers creates a commonality of interest and alignment of our long-term interests with those of our shareholders.

REPORT OF THE COMPENSATION COMMITTEE

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

This report is furnished by the Compensation Committee of the Board of Directors.

The Compensation Committee members:               James H. Limmer, Chairman                                   Brady F. Carruth

Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, that incorporate future filings, including this Proxy Statement, in whole or in part, the foregoing Report of the Compensation Committee shall not be deemed to be filed with the SEC or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference.

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2012 Summary Compensation Table

The table below sets forth the total compensation awarded to, earned by, or paid to our named executive officers for each of the three fiscal years in the period ended March 31, 2012.

Grants of Plan-Based Awards

The following table is intended to supplement our 2012 Summary Compensation Table by providing additional information on the non-equity and equity incentive compensation awards granted to our named executive officers under our Annual Bonus Plan and 1994 Incentive Plan, respectively, for the fiscal year ended March 31, 2012.

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2012 Grants of Plan-Based Awards

Discussion of Summary Compensation and Plan Based Awards Tables

Our executive compensation policies and practices, pursuant to which the compensation set forth in the 2012 Summary Compensation Table and the 2012 Grants of Plan-Based Awards was paid or awarded, are described above under “Compensation Discussion and Analysis”.

Amended and Restated Long-Term Incentive Plan

The Board and the shareholders of the Company have previously approved the adoption of our 1994 Incentive Plan.  Pursuant to the 1994 Incentive Plan, employees and non-employee directors are eligible to receive awards consisting of stock options, SARs, restricted or non-restricted stock or stock units, cash or any combination of the foregoing.  To date, equity-based incentive compensation has been awarded only in the form of stock options and restricted stock units.  Stock options granted pursuant to the 1994 Incentive Plan may either be incentive stock options within the meaning and subject to the provisions of Section 422 of the Code, or nonqualified stock options.  During fiscal year 2012, the Company awarded 127,500 stock options and 16,719 vested stock options expired and/or were forfeited due to employee departures.  As of June 29, 2012, there were 235,104 shares of Common Stock available for future awards under the 1994 Incentive Plan, of which 37,500 were available for issuance as restricted stock units.

The Compensation Committee administers the 1994 Incentive Plan and, subject to the provisions thereof, is authorized by the Board to (i) determine the type or types of awards made to each participant and the terms, restrictions, conditions and limitations applicable to each award, such as exercise price, vesting period, forfeiture provisions, expiration date and other material conditions, (ii) interpret the 1994 Incentive Plan, (iii) grant waivers of restrictions thereunder and (iv) adopt such rules and regulations as it may deem necessary or appropriate in keeping with the objectives of the 1994 Incentive Plan, provided that the provisions of Section 422 of the Code governing the issuance of incentive stock options shall not be overridden.

For the year ended March 31, 2012, there were no material modifications made to the outstanding equity awards held by the executive officers.

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The following table contains information concerning our 1994 Incentive Plan as of March 31, 2012:

Annual Incentive Compensation Plan

The Board and the shareholders of the Company have approved our Annual Bonus Plan.  Under the terms of the Annual Bonus Plan, the Compensation Committee may designate executive officers to be participants in such Plan, which shall be evidenced by the execution of a written award agreement setting forth the terms and conditions of such award. Awards shall only be made in cash, and the maximum award that may be paid to any participant under the Annual Bonus Plan for any given fiscal year is an amount equal to $5 million.

A participant’s award shall be paid only if specified objective performance goals set forth in an award agreement have been achieved during the course of the relevant performance period by an individual, the Company, an affiliate, or one or more business units of the Company or an affiliate, as applicable. The amount of a participant’s award shall be determined by reference to a formula contained in the relevant award agreement, set by the Compensation Committee, which shall describe the performance goal or goals and the percentage of the potential award to be paid depending upon the level of the performance goal(s) achieved. It is intended that the Annual Bonus Plan and the performance goals conform to Section 162(m) of the Code (and therefore such awards would be tax deductible by the Company), which generally limits the deductibility, for federal income tax purposes, of certain types of compensation paid to certain executive officers of the Company to $1 million with respect to any such officer during any taxable year of the Company.

To date, the sole participant under the Annual Bonus Plan is Mr. Davis, our Chief Executive Officer. No bonus was paid to Mr. Davis under the annual bonus award granted to him for the performance period ended March 31, 2012.  For additional information with respect to the annual bonus awards granted to Mr. Davis, please refer to “Executive Compensation — Components of Executive Compensation, Annual Non-Equity Incentive Compensation Awards/ Discretionary Bonuses”.

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Outstanding Equity Awards

The following table sets forth information concerning outstanding equity awards of our named executive officers granted under our 1994 Incentive Plan as of March 31, 2012.

2012 Outstanding Equity Awards at Fiscal Year End

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Option Exercises and Stock Vested

The following table sets forth information concerning the exercise of stock option and vesting of restricted stock unit awards issued under our 1994 Incentive Plan to our named executive officers during the fiscal year ended March 31, 2012.

2012 Option Exercises and Stock Vested