<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ENNIS BUSINESS FORMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
ENNIS BUSINESS FORMS, INC.
107 NORTH SHERMAN
ENNIS, TEXAS 75119
TELEPHONE (972) 872-3100
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1998
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Ennis
Business Forms, Inc., a Texas corporation (the "Company"), will be held in the
Parisian Room, Fairmont Hotel, 1717 N. Akard Street, Dallas, Texas at 10:00
a.m., Central Daylight Time, on Thursday, June 18, 1998 for the following
purposes:
1. To elect three directors for terms ending in 2001;
2. To consider the selection of KPMG Peat Marwick LLP as independent
auditors of the Company for the fiscal year ending February 28, 1999;
3. To consider adoption and approval of the Ennis Business Forms, Inc. 1998
Option and Restricted Stock Plan; and
4. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on April 20, 1998 are
entitled to notice of, and to vote at, the meeting or any adjournment or
adjournments thereof. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting, for purposes of
determining the presence or absence of a quorum for the transaction of business.
Neither abstentions nor broker non-votes are counted as voted either for or
against a proposal.
If you do not expect to be present at the meeting, please date and sign the
enclosed form of Proxy and return it promptly in the enclosed envelope. No
postage need be affixed if mailed in the United States.
A copy of the Company's Annual Report for the fiscal year ended February 28,
1998, which contains financial statements and other information of interest to
shareholders, is being mailed to you herewith.
By Order of the Board of Directors,
VICTOR DITOMMASO
SECRETARY
Ennis, Texas
May 21, 1998
<PAGE>
ENNIS BUSINESS FORMS, INC.
107 NORTH SHERMAN
ENNIS, TEXAS 75119
TELEPHONE (972) 872-3100
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1998
10:00 A.M. CDT
THE PARISIAN ROOM AT THE FAIRMONT HOTEL
1717 N. AKARD STREET, DALLAS, TEXAS
FIRST MAILED TO SHAREHOLDERS ON MAY 21, 1998
The holders of the Company's Common Stock of record at the close of business
on April 20, 1998 are entitled to vote at the Annual Meeting of Shareholders,
which will be held on June 18, 1998. A form of Proxy is enclosed for use at such
meeting if you are unable to attend in person. The persons named therein as
proxies were selected by the Board of Directors of the Company. THE PROXY IS
SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY AND IS REVOCABLE AT ANY TIME
BEFORE IT IS EXERCISED. THE PROXY MAY BE REVOKED BY WRITTEN INSTRUCTION
ADDRESSED TO THE SECRETARY OF THE COMPANY, OR IF A SHAREHOLDER ATTENDS THE
MEETING AND WISHES TO VOTE HIS SHARES IN PERSON HE MAY SO DIRECT THE PROXY
JUDGES EITHER IN WRITING OR ORALLY.
The cost of preparing, assembling and mailing the Notice of Annual Meeting,
Proxy Statement and form of Proxy and the cost, which is estimated to be
nominal, of further solicitation hereinafter referred to, is to be borne by the
Company. In addition to the use of the mails, it may be necessary to conduct
some solicitation by telephone, facsimile machine or personal interview. Any
such solicitation will be done by the directors, officers and regular employees
of the Company; and, in addition, banks, brokerage houses and other custodians,
nominees or fiduciaries will be requested to forward proxy soliciting material
to their principals to obtain authorization for the execution of proxies on
their behalf. The Company will not pay such persons any compensation for
soliciting proxies, but such persons will be reimbursed by the Company for their
out-of-pocket expenses incurred in connection therewith.
OUTSTANDING VOTING SECURITIES OF THE COMPANY
At the close of business on April 20, 1998, the Company had issued and
outstanding 16,437,668 shares of Common Stock, each share being entitled to one
vote except in the election of directors. No other class of stock was then or is
now outstanding.
1
<PAGE>
PRINCIPAL SHAREHOLDERS
The following persons own more than five percent of the outstanding voting
securities of the Company:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP CLASS
- ----------------- ------------------------------------------------------------- ------------------- -----------
<S> <C> <C> <C>
Common Stock Franklin Resources, Inc. 1,249,700 shares 7.6%
777 Mariners Island Blvd.,
P. O. Box 7777
San Mateo, California 94403-7777
Common Stock David L. Babson and Company Incorporated 1,169,200 shares 7.1%
One Memorial Drive
Cambridge, Massachusetts 02142-1300
Common Stock Royce & Associates, Inc. 1,051,900 shares 6.4%
1414 Avenue of the Americas
New York, New York 10019
</TABLE>
The following table lists, as of the close of business on April 20, 1998,
the Company's stock beneficially owned by each director, each of the most highly
compensated executive officers, and all directors and executive officers as a
group:
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIAL OWNERSHIP
------------------------------------------------------------------
NUMBER OF SHARES
---------------------------------------------------
OBTAINABLE PERCENT OF
DIRECTLY INDIRECTLY THROUGH STOCK OUTSTANDING
NAME/GROUP OWNED OWNED OPTION EXERCISE TOTAL SHARES
- ----------------------------------------------- --------- ------------ --------------- --------- -------------
<S> <C> <C> <C> <C> <C>
James B. Gardner............................... 10,125 -- -- 10,125 *
Harold W. Hartley.............................. -- 28,350(1) -- 28,350 *
Kenneth A. McCrady............................. 187,559 98,384(2) 28,750(3) 314,693 1.9%
Robert L. Mitchell............................. 59,581 -- -- 59,581 *
Thomas R. Price................................ 11,500 -- -- 11,500 *
Pat G. Sorrells................................ 313,750 -- -- 313,750 1.9%
Ewell L. Tankersley............................ 2,625 -- -- 2,625 *
Keith S. Walters............................... -- -- -- (3) -- *
Nelson Ward.................................... -- 8,279(4) 5,500(3) 13,779 *
All Directors and Executive Officers as a Group
(9 persons).................................. 585,140 135,013 34,250 754,403 4.6%
</TABLE>
- ------------------------
(1) Shares held in trust of which Mr. Hartley is one of two trustees with shared
voting power.
(2) Includes 77,625 shares held in trust of which Mr. McCrady is trustee and has
retained beneficial ownership until June 6, 1998 and 20,759 shares held by
the Trustee of Ennis Business Forms, Inc. Employee Stock Ownership Plan.
(3) Excludes presently unexercisable options for 1,250 shares, 20,000 shares and
20,750 shares held by Messrs. McCrady, Walters and Ward, respectively.
(4) Shares held by the Trustee of the Ennis Business Forms, Inc. Employee Stock
Ownership Plan.
* Indicates less than 1%.
Except as set forth above, management of the Company is not aware of any
other person or group of persons that owns in excess of 5% of the outstanding
Common Stock. Management is not aware of any
2
<PAGE>
change in control of the Company that has taken place since the beginning of the
last fiscal year and is not aware of any contractual arrangements or pledges of
securities the operation of the terms of which may at a subsequent date result
in a change in control of the Company.
ELECTION OF DIRECTORS (PROPOSAL 1)
Provided a quorum is present, a plurality of the votes cast in person or by
proxy by the holders of shares entitled to vote is required to elect directors.
With respect to the election of directors, shareholders have cumulative voting
rights, which means that each shareholder entitled to vote (a) has the number of
votes equal to the number of shares held by such shareholder multiplied by the
number of directors to be elected and (b) may cast all such votes for one
nominee or distribute such shareholder's votes among the nominees as the
shareholder chooses. The right to cumulate votes may not be exercised until a
shareholder has given written notice of the shareholder's intention to vote
cumulatively to the corporate secretary on or before the day preceding the
election. If any shareholder gives such written notice, then all shareholders
entitled to vote may cumulate their votes. Upon such written notice, the persons
named in the accompanying form of Proxy may cumulate their votes if additional
persons are nominated at the Annual Meeting for the election of directors. As a
result, the Board of Directors is soliciting discretionary authority to cumulate
votes.
The proxies named in the accompanying form of Proxy have been designated by
the Board of Directors, and they intend to vote for the election of the persons
named below to the Board of Directors. Two of the nominees have previously been
elected by the shareholders. Should any of the nominees become unavailable for
any reason, the shares represented by proxy will be voted for an alternate
nominee who will be designated by management of the Company. Management has no
reason to believe that any of the nominees will be unavailable for election or
service as a director.
The following table sets forth certain information concerning each nominee
and continuing director. Except as set forth therein, none of the nominees or
continuing directors is an officer or director of any other publicly-owned
corporation or entity.
3
<PAGE>
NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF NOMINEE OR BACKGROUND AND SERVICE AS A
CONTINUING DIRECTOR STOCK BENEFICIALLY OWNED AGE DIRECTOR BEGAN
- --------------------- --------------------------------------------------------------------- --- -----------------
<S> <C> <C> <C>
Harold W. Hartley Investments. 74 1971
Mr. Hartley retired in December 1985 and since that time has managed
his private investments. From June 1984 to December 1985, he served
as a consultant to Tenneco Financial Services, Inc. From February
1981 to June 1984 Mr. Hartley served as Executive Vice-President of
Tenneco Financial Services, Inc. Beneficial owner of 28,350 shares.
Pat G. Sorrells Ranching and Investments. 59 1995
Mr. Sorrells has been engaged in the ranching and private investment
businesses for more than five years. Mr. Sorrells previously served
as a director of the Company from June 1982 to April 1989. Beneficial
owner of 313,750 shares.
James C. Taylor Principal, The Anderson Group Inc., Bloomfield Hills, Michigan, a 56 --
private investment firm engaged in the acquisition and management of
businesses in a variety of industries. Since joining The Anderson
Group Inc. in 1989, Mr. Taylor has served as the President and Chief
Executive Officer of three businesses affiliated with The Anderson
Group Inc.: Burwood Products Company, a wall decor and clock
manufacturer (February 1995 to the present); The Bargeman Company, a
supplier of proprietary products to the recreational vehicle and
utility trailer industries (January 1992 to December 1994); and
Advance Stamping Company, a supplier of metal stampings to the
automotive, electrical and hardware industries (January 1989 to
September 1991). Prior to 1989, Mr. Taylor was with United
Technologies Corporation for 19 years, primarily in manufacturing
operations, including 7 years as a Group Vice President. Benefitical
owner of 2,000 shares.
</TABLE>
4
<PAGE>
CONTINUING DIRECTORS FOR THREE-YEAR TERMS EXPIRING IN 1999
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF NOMINEE OR BACKGROUND AND SERVICE AS A
CONTINUING DIRECTOR STOCK BENEFICIALLY OWNED AGE DIRECTOR BEGAN
- -------------------- --------------------------------------------------------------------- --- -----------------
<S> <C> <C> <C>
Keith S. Walters Vice Chairman of the Board and Chief Executive Officer of the 48 1997
Company. Mr. Walters joined the Company in August 1997 as Vice
President--Commercial Printing Operations and was appointed Vice
Chairman of the Board and Chief Executive Officer in November 1997.
Prior to joining the Company, Mr. Walters was with Atlas/Soundolier,
a division of American Trading and Production Company, for 8 years,
most recently as Vice President of Manufacturing. Prior to that time,
Mr. Walters was with the Automotive Division of United Technologies
Corporation for 15 years, primarily in manufacturing and operations.
James B. Gardner Managing Director of Service Asset Management Company, a financial 63 1970
services firm, since May 1994. Mr. Gardner served as President and
Chief Executive Officer, Pacific Southwest Bank, F.S.B. from November
1991 to May 1994 and served as Chairman of the Board and President of
Elm Interests, Inc., from August 1990 to November 1991. Mr. Gardner
has also been a director of Century Telephone Enterprises, Inc. since
1981 and serves as a director of NAB Asset Corporation. Beneficial
owner of 10,125 shares.
Nelson Ward President and Chief Operating Officer of the Company. Mr. Ward was 56 1996
elected to his current position in September 1996. Prior to that time
he served as Vice President--Sales and Marketing beginning in
September 1992 and has been continuously employed by the Company
since 1971. Beneficial owner of 13,779 shares.
</TABLE>
<TABLE>
<CAPTION>
CONTINUING DIRECTORS FOR THREE-YEAR TERMS EXPIRING IN 2000
YEAR IN WHICH
NAME OF NOMINEE OR BACKGROUND AND SERVICE AS A
CONTINUING DIRECTOR STOCK BENEFICIALLY OWNED AGE DIRECTOR BEGAN
- ---------------------- -------------------------------------------------------------------- --- -----------------
<S> <C> <C> <C>
Robert L. Mitchell Retired President and Chief Operating Officer of the Company. Mr. 64 1985
Mitchell retired in December 1989. Prior to that date, he served as
President and Chief Operating Officer of the Company from April
1985, and was continuously employed by the Company beginning in
1969. Beneficial owner of 59,581 shares.
Thomas R. Price Owner and President of Price Industries, Inc., Ennis, Texas. Mr. 59 1989
Price has been engaged in his present occupation since 1975 and is a
director of Price Bros. Co., Dayton, Ohio. Beneficial owner of
11,500 shares.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
CONTINUING DIRECTORS FOR THREE-YEAR TERMS EXPIRING IN 2000
YEAR IN WHICH
NAME OF NOMINEE OR BACKGROUND AND SERVICE AS A
CONTINUING DIRECTOR STOCK BENEFICIALLY OWNED AGE DIRECTOR BEGAN
- ---------------------- -------------------------------------------------------------------- --- -----------------
<S> <C> <C> <C>
Ewell L. Tankersley Ranching and Investments. 65 1988
Since his retirement from KPMG Peat Marwick LLP (formerly Peat,
Marwick, Mitchell & Co.) in June 1985, Mr. Tankersley has engaged in
the business of ranching, private investing, and, until early 1992,
in the private consulting business. Mr. Tankersley served as an
audit partner with KPMG Peat Marwick LLP from 1966 until his
retirement in 1985. Beneficial owner of 2,625 shares.
</TABLE>
BOARD COMPENSATION
Non-employee directors receive an annual $14,400 retainer plus $1,000 for
each board meeting attended and $1,000 for each committee meeting attended other
than in conjunction with a board meeting. Travel and accommodation expenses of
directors incurred with respect to board and committee meetings are also
reimbursed by the Company. Members of the Board of Directors who are officers of
the Company or its subsidiaries do not receive any fees for serving on the Board
of Directors or its committees.
MEETINGS OF BOARD AND COMMITTEES
The Company's Board held six meetings during the fiscal year ended February
28, 1998. The Board's Audit and Executive Compensation and Stock Option
committees each held two meetings. The Board's Nominating Committee held one
meeting. No committee members missed a meeting.
COMMITTEES OF THE BOARD
AUDIT COMMITTEE. This committee meets with the independent certified public
accountants twice a year to review the annual audit plan and the results of
their audit examination. The committee reviews the effectiveness of the
Company's internal control policies and procedures, the activities of the
Company's internal audit function and considers any issues raised by the
independent certified public accountants. The committee currently consists of
Mr. Tankersley (Chairman), Mr. Hartley and Mr. Mitchell.
EXECUTIVE COMPENSATION AND STOCK OPTION COMMITTEE. See Executive
Compensation for a discussion of the purpose of the Committee and the names of
the directors who serve on this Committee.
NOMINATING COMMITTEE. This committee considers and makes recommendations to
the Board of Directors regarding any nominee submitted for election to the
Board, whether submitted by management, by other members of the Board of
Directors or by shareholders. Although no nominee has ever been submitted by
shareholders, in the event any shareholder wishes to nominate a candidate for
director, the Board of Directors, through this committee, would consider such a
nomination upon receipt of a written nomination, including the business history
of the candidate, mailed to the attention of the Board of Directors or upon an
oral presentation of the candidate's qualifications to the Board of Directors or
the committee. The committee currently consists of Mr. Price (Chairman), Mr.
Gardner and Mr. Tankersley.
EXECUTIVE COMMITTEE. At a meeting of the Board of Directors on April 22,
1998, the Board established an Executive Committee. The committee is authorized
to exercise all the powers of the Board of Directors in the management of the
business and affairs of the Company, except in instances in which action of the
full Board of Directors is required by the Articles of Incorporation of the
Company or by applicable law. The committee currently consists of Mr. Gardner
(Chairman), Mr. Sorrells and Mr. Price.
6
<PAGE>
EXECUTIVE COMPENSATION
BOARD COMPENSATION COMMITTEE REPORT
The Executive Compensation and Stock Option Committee of the Board of
Directors is composed of the three non-employee directors listed below. Under
the supervision of the Committee, the Company develops and implements
compensation plans for the Company's executive officers. The Committee sets the
salaries and bonuses of the Chief Executive Officer and the Chief Operating
Officer, reviews and approves salary changes and bonus plans for other Company
executive officers, administers the Company's stock option plan, and approves
stock option grants for officers and key employees. The decisions of the
Committee with respect to the compensation of the executive officers are
submitted to and subject to ratification by the Board of Directors prior to
implementation.
PHILOSOPHY
The compensation philosophy of the Company is to develop and implement
policies that will encourage and reward outstanding financial performance, and
thereby increase shareholder value. The Company believes stock ownership by
employees strengthens the mutual interest of the Company and its shareholders,
and therefore it has implemented an employee stock ownership plan which covers
all Company employees and an incentive stock option plan for officers and key
employees. The Company historically has valued and rewarded sustained
performance, and has designed its compensation programs to achieve this goal.
Maintaining competitive compensation levels in order to attract and retain
executives who bring valuable experience and skills to the Company is a
fundamental consideration within the overall compensation philosophy.
COMPENSATION STRUCTURE
The annual compensation of the executive officers consists of an annual
salary and participation in a cash bonus plan based on sales and earnings in
relation to predetermined targets approved by the Committee. Discretionary cash
bonuses are sometimes paid to executive officers based on performance in
relation to other objectives.
Long-term compensation of executive officers consists of participation,
along with all Company employees, in an employee stock ownership plan and
options granted under an incentive stock option plan in which Company officers
and key employees participate.
All other compensation of executive officers consists of participation in a
defined benefit retirement plan, a non-qualified plan and income protection
plans which provide death and disability benefits to key employees. The
non-qualified plan adopted in 1994 is a replacement benefit for those members of
management whose prospective retirement income benefit accruals were reduced as
a result of an amendment to the defined benefit retirement plan effective
February 28, 1994.
EXECUTIVE OFFICER COMPENSATION
To ensure competitive levels of compensation, the Committee sets executive
officer salaries by reference to salary range midpoints recommended to the
Company by Hay Management Consultants, a nationally recognized compensation
consulting firm, and adjusted annually by the Company for changes in the
Consumer Price Index. The midpoints adopted by the Company approximate the 10th
percentile of the base salary practices of the approximately 500 industrial
companies included in the Hay Compensation Comparison. The Committee has
determined that salaries set at these levels attract and retain career-oriented
employees who perform successfully within the Company's compensation policy,
which emphasizes broad-based compensation plans that reward sustained
performance.
Stock options are granted periodically to reward sustained performance, to
motivate officers and key employees to continue to build shareholder value, and
to increase employee stock ownership.
7
<PAGE>
CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER COMPENSATION
In setting the salary and periodic stock option grants of the Chief
Executive Officer, the Committee considers the Company's degree of success in
achieving acceptable financial results and expanding business operations through
internal development and strategic acquisitions.
At the June 1997 annual meeting of the Board of Directors, the Committee
established Mr. McCrady's annual salary as Chairman of the Board and Chief
Executive Officer at $180,000, the same rate that has been in effect since June
1991. The Committee believes that it could reasonably have justified a higher
salary for Mr. McCrady, since his salary is 81% of the maximum for his position
in the Company's salary administration system; however, Mr. McCrady had formally
requested for personal reasons that his annual compensation not be increased
above the level set by the Committee at its June 1991 annual meeting and that he
not participate in any bonus plan other than the Employee Stock Ownership Plan
in which all Company employees participate. In November 1997, Mr. McCrady's
annual salary was adjusted to $125,000 to reflect his relinquishment of Chief
Executive Officer responsibilities.
In November 1997, Mr. Walters was named Vice Chairman and Chief Executive
Officer at an annual salary of $165,000 (74% of the maximum for his position in
the Company's salary administration system). His annual salary was subsequently
adjusted to $185,000 (83% of such maximum) at the December 1997 board meeting.
No performance bonus was paid to Mr. Walters for the year ended February 28,
1998.
In setting the salary and the discretionary bonus, if any, of the Chief
Operating Officer, the Committee considers the recommendations of the Chief
Executive Officer, which are based on an evaluation of the performance of the
Chief Operating Officer in relation to his objectives and the position of his
salary in relation to the midpoint.
At the June 1997 annual meeting of the Board of Directors, Mr. Ward's annual
salary was set at $120,000 (68% of the maximum). In November 1997, Mr. Ward's
annual salary was adjusted to $130,000 (72% of the maximum). At the December
1997 board meeting his annual salary was adjusted to $150,000 (83% of the
maximum). No performance bonus was paid to Mr. Ward for the year ended February
28, 1998.
The Committee believes the actions taken regarding executive compensation
were appropriate in view of individual and corporate performance.
James B. Gardner - Chairman Thomas R. Price Pat G. Sorrells
8
<PAGE>
SUMMARY COMPENSATION TABLE *
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
NUMBER OF
ANNUAL COMPENSATION (B) SECURITIES
----------------------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION(A) YEAR SALARY BONUS OTHER OPTIONS COMPENSATION(C)
- -------------------------------------------- --------- ---------- ----------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth A. McCrady.......................... 1998 $ 162,019(d) -- -- -- $ 12,871
Chairman of the Board 1997 180,000 -- -- -- 12,767
1996 180,000 -- -- -- 12,352
Keith S. Walters............................ 1998 $ 79,423(e) -- -- 20,000 --
Vice Chairman of the Board
and Chief Executive Officer
Nelson Ward................................. 1998 $ 126,731 -- -- -- $ 5,133
President and Chief 1997 103,423 -- -- 20,000 5,092
Operating Officer 1996 90,100 -- -- -- 4,926
</TABLE>
- ------------------------
* There were no Restricted Stock Awards, SARs or LTIP Payouts during the three
most recent fiscal years.
(a) This table includes the Chief Executive Officer and all other executive
officers whose compensation exceeded $100,000 for the most recent fiscal
year.
(b) All amounts are for fiscal years ended February 28 or 29.
(c) Amounts under "All Other Compensation" represent dividend pass-through
payments from the Company's Employee Stock Ownership Plan. The Employee
Stock Ownership Plan was approved by the shareholders on May 29, 1975.
Approximately 1,450 directors, officers and employees of the Company and its
subsidiaries are eligible to participate. Contributions may be made in the
Company's Common Stock or in cash which must be invested by the Trustee in
Common Stock of the Company within 30 days of the contribution. There were
no contributions to the Plan for any officer or director during the three
most recent fiscal years.
(d) Mr. McCrady served as Chairman of the Board and Chief Executive Officer
until November 1997, when he assumed his current position.
(e) Mr. Walters joined the Company in August 1997 as Vice President--Commercial
Printing Operations and served in that position until being named Vice
Chairman of the Board and Chief Executive Officer in November 1997.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/ SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/ EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
SARS GRANTED (1) FISCAL YEAR PER SHARE DATE 5% 10%
---------------------- ------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Keith S. Walters....... 20,000 47.1% $ 11.34(2) 09/10/07 $ 142,600 $ 361,400
</TABLE>
- ------------------------
(1) Total number of options granted to employees during fiscal 1998 was 42,500.
(2) Options become exercisable in increments of 25% per year (cumulative)
beginning September 10, 1999.
Note: No stock options were granted to Mr. McCrady or Mr. Ward during the last
fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN- THE-MONEY
UNDERLYING UNEXERCISED
OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END
-------------------------- ----------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------- ----------- ------------- --------------- -----------------
<S> <C> <C> <C> <C>
Kenneth A. McCrady........................................ 28,750 1,250 $ -- $ --
Keith S. Walters.......................................... -- 20,000 -- --
Nelson Ward............................................... 5,500 20,750 -- --
</TABLE>
- ------------------------
Note: No shares were acquired upon the exercise of a stock option during the
last fiscal year.
PENSION PLAN TABLE (1)
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
REMUNERATION 15 20 25 30 35
- ----------------------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$125,000................................................... $ 19,392 $ 25,856 $ 32,321 $ 38,785 $ 45,249
150,000................................................... 24,080 32,106 40,133 48,160 56,186
175,000................................................... 28,767 38,356 47,946 57,535 67,124
200,000................................................... 33,455 44,606 55,758 66,910 78,061
</TABLE>
- ------------------------
(1) The Company has a noncontributory retirement plan that covers substantially
all of the employees of the Company and certain of its subsidiaries. The
plan provides for retirement benefits on a formula based on the average pay
of the highest five consecutive compensation years during active employment,
integration of certain Social Security benefits, length of service and a
normal retirement age of sixty-five. All forms of remuneration, including
overtime, shift differentials and bonuses, are covered by the plan. However,
due to restrictions imposed by the Revenue Reconciliation Act of 1993,
effective March 1, 1997, the maximum annual compensation covered by the plan
is limited to $160,000. Future years' maximum can be increased for
inflation. The table above sets forth approximate annual retirement benefits
that would be received under the plan, computed on the basis of the
specified average annual earnings and years of service. The table presents
annual benefit amounts for remuneration above the current $160,000 since (a)
the $160,000 maximum can increase with inflation and (b) prior to 1994 the
maximum annual compensation limitation was more than $160,000.
The number of full years of continuous service as of February 28, 1998 for
Mr. McCrady and Mr. Ward were 27 and 26, respectively.
10
<PAGE>
FIVE-YEAR PERFORMANCE COMPARISON (1)
The graph below provides an indicator of cumulative total shareholder
returns for the Company compared with the S&P 500 Stock Index and a Peer Group
(2).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 ENNIS BUSINESS FORMS, INC. PEER GROUP
<S> <C> <C> <C>
Feb. 1993 $100 $100 $100
Feb.1994 $108 $91 $107
Feb. 1995 $116 $84 $109
Feb. 1996 $157 $72 $144
Feb. 1997 $198 $74 $186
Feb. 1998 $267 $76 $195
</TABLE>
<TABLE>
<CAPTION>
2/28/93 2/28/94 2/28/95 2/29/96 2/28/97 2/28/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
S&P 500........................................... $ 100 $ 108 $ 116 $ 157 $ 198 $ 267
Ennis Business Forms, Inc......................... $ 100 $ 91 $ 84 $ 72 $ 74 $ 76
Peer Group........................................ $ 100 $ 107 $ 109 $ 144 $ 186 $ 195
</TABLE>
Assumes $100 invested on February 28, 1993 in Ennis Business Forms, Inc.
Common Stock, the S&P 500 Index and Peer Group common stock.
Total shareholder returns assume reinvestment of dividends.
- ------------------------
(1) The data to prepare this performance comparison was obtained from Standard &
Poor's Compustat Services, Inc.
(2) The Peer Group consists of the following publicly-held business forms
manufacturers: Moore Corporation Ltd., The Standard Register Company,
Wallace Computer Services, Inc., American Business Products, Inc., New
England Business Services, Inc., The Reynolds & Reynolds Company and Ennis
Business Forms, Inc. Duplex Products, Inc. was acquired in 1996 by The
Reynolds & Reynolds Company but remains a part of the Peer Group for prior
years.
11
<PAGE>
CERTAIN TRANSACTIONS
There were no significant transactions between the Company and any directors
or officers during the past fiscal year.
SELECTION OF AUDITORS (PROPOSAL 2)
Independent auditors are to be selected at the meeting and it is intended
that persons named in the accompanying form of Proxy will vote for KPMG Peat
Marwick LLP, Certified Public Accountants, who have served continuously as
auditors of the Company since fiscal 1959. The members of the Audit Committee of
the Board of Directors, Messrs. Hartley, Mitchell, and Tankersley, join with the
remaining members of the Board of Directors in recommending the selection of
KPMG Peat Marwick LLP as the Company's independent auditors for the fiscal year
ending February 28, 1999. Representatives of the firm will be present at the
Annual Meeting of shareholders to answer questions and to make any statements
they wish to make regarding the Company's financial statements. Ratification of
the selection of auditors requires the affirmative vote of the holders of a
majority of the shares voting at the Annual Meeting.
PROPOSAL TO ADOPT AND APPROVE ENNIS BUSINESS FORMS, INC.
1998 OPTION AND RESTRICTED STOCK PLAN (PROPOSAL 3)
The Board of Directors on March 2, 1998, adopted as of that date the Ennis
Business Forms, Inc. 1998 Option and Restricted Stock Plan (the "1998 Plan"),
subject to shareholder approval. The vote required for approval is the
affirmative vote of the holders of a majority of the voting shares present or
represented by proxy at the Annual Meeting, provided a quorum is present. The
1991 Incentive Stock Option Plan, which was approved by shareholders in 1991,
has remaining only 12,500 shares with respect to which options may be granted.
The following is a brief summary of the principal provisions of the 1998
Plan and is qualified in its entirety by reference to a copy of such plan, the
full text of which is attached to this Proxy Statement as an Appendix.
DESCRIPTION OF 1998 PLAN
The purpose of the 1998 Plan is to promote the long-term success of the
Company and its subsidiaries by providing a means through which the Company and
its subsidiaries can attract and retain key executive and managerial employees,
consultants and non-employee directors who can contribute materially to that
success. This purpose will be accomplished under the 1998 Plan by the award of
Incentive Stock Options and Non-Qualified Stock Options (collectively referred
to as "Options") to purchase shares of the Common Stock, par value $2.50 per
share, of the Company ("Shares") as well as the award of restricted shares of
the Common Stock, par value $2.50 per share, of the Company ("Restricted
Shares").
The authority to manage and control the operation and administration of the
1998 Plan is vested in the Executive Compensation and Stock Option Committee of
the Board of Directors.
Under the 1998 Plan, grants of Options and Restricted Shares under the Plan
shall be confined to those persons whom the Committee, in its sole discretion,
determines to be key executive and managerial employees, consultants and
non-employee directors of the Company and its subsidiaries (including officers
who are also employees of the Company) and who can make a meaningful
contribution to the Company's success. It is not possible to determine in
advance the exact number or identity of the persons who will be granted awards
under the 1998 Plan, but the Committee is expected to consider approximately 50
individuals (including 5 executive officers and 6 non-employee directors) of a
total of 1,469 employees for awards in 1998. The size and composition of the
group of eligible employees may be different in future years.
12
<PAGE>
The 1998 Plan covers a maximum number of 820,000 Shares subject to
adjustment in the event of certain changes in the capital structure of the
Company. Such Shares may be authorized but unissued shares or treasury shares.
If Options or Restricted Shares expire, are forfeited or terminate before being
exercised, the Shares covered thereby will be available for subsequent awards
within the maximum number stated above.
The purchase price of Shares acquired upon exercise of an Option under the
1998 Plan may not be less than the greater of the Fair Market Value of such
Shares on the date the Option is granted or the par value of such Shares on such
date. As used in the 1998 Plan (unless a different method of calculation is
required by applicable law), "Fair Market Value" on any date will mean (a) if
the Shares are listed on a national securities exchange, the closing price on
the Shares on a given date; (b) if the Shares are traded on an exchange or
market in which prices are reported on a bid and asked price, the average of the
mean between the bid and asked price for the Shares on a given date; and (c) if
the Shares are not listed on a national securities exchange nor traded on the
over-the-counter market, such value as the Committee, in good faith, shall
determine. The closing price of the Shares on the New York Stock Exchange on May
13, 1998 was $12.25.
Unless otherwise established by the Committee at the time of grant, the term
of an Option granted under the 1998 Plan is ten years except in the case of
termination of employment. Each option may only be exercised to the extent that
the Participant (as defined in the 1998 Plan) is vested in such Options.
Participants vest separately in each Option granted in accordance with a
schedule determined by the Committee, which, unless otherwise determined by the
Committee, is as follows:
<TABLE>
<CAPTION>
NUMBER OF YEARS OF SERVICE
AS AN EMPLOYEE, CONSULTANT
OR NON-EMPLOYEE DIRECTOR PERCENT
FOLLOWING THE GRANT OF A STOCK OPTION VESTED
- ----------------------------------------------------------------------------------------------- -----------
<S> <C>
Less than two.................................................................................. 0%
At least two but less than three............................................................... 25%
At least three but less than four.............................................................. 50%
At least four but less than five............................................................... 75%
Five or more................................................................................... 100%
</TABLE>
Notwithstanding the above schedule, unless otherwise determined by the
Committee, a Participant becomes 100% vested in each Option upon termination of
employment by reason of death, disability, or retirement at or after age 65; or
if the Committee determines, in its sole discretion, that acceleration of the
Option vesting schedule would be desirable for the Company. Options can also
become 100% vested in certain circumstances upon a change in control (as defined
in the 1998 Plan) of the Company.
Options may be exercised with cash or by the exchange of Common Stock
previously acquired by the Participant.
Participants vest separately in the Restricted Shares awarded in accordance
with a schedule determined by the Committee, which unless otherwise determined
by the Committee is as follows:
<TABLE>
<CAPTION>
NUMBER OF YEARS OF SERVICE AS AN
EMPLOYEE, CONSULTANT OR NON-EMPLOYEE
DIRECTOR OF THE COMPANY FOLLOWING EXTENT TO WHICH THE
THE GRANT OF RESTRICTED STOCK RESTRICTIONS LAPSE
- ----------------------------------------------------------------------------------- ---------------------
<S> <C>
Less than two...................................................................... 0%
At least two but less than three................................................... 25%
At least three but less than four.................................................. 50%
At least four but less than five................................................... 75%
Five or more....................................................................... 100%
</TABLE>
13
<PAGE>
Notwithstanding the above schedule, unless otherwise determined by the
Committee, a Participant becomes 100% vested in each award of Restricted Shares
upon termination of employment or service by reason of death, disability, or by
retirement at or after age 65; or if the Committee determines, in its sole
discretion, that acceleration of the restriction lapse schedule would be
desirable for the Company. Restricted Shares can also become 100% vested in
certain circumstances upon a change in control (as defined in the 1998 Plan) of
the Company.
No Participant shall have any rights as a shareholder of the Company with
respect to any Shares prior to the date of issuance of the certificate or
certificates for such Shares. Neither the 1998 Plan nor any Option granted or
Restricted Shares awarded under the 1998 Plan shall constitute a contract of
employment nor confer upon any Participant any right to continue in the
employment of the Company.
The 1998 Plan is unlimited in duration; however, no awards of Incentive
Stock Options may be made after March 1, 2008. The Plan provisions will continue
after termination for the purpose of governing Options and Restricted Shares
theretofore granted. Incentive Stock Options and, during the period of
restriction, Restricted Shares granted under the 1998 Plan are nontransferable
except as designated by the Participant by will or by the laws of descent and
distribution. If provided in the option agreement, Non-Qualified Stock Options
may be transferred by the Participant to Permitted Transferees (as defined in
the 1998 Plan).
The Board of Directors may amend or terminate the 1998 Plan at any time
except that no amendment shall, without the approval of the shareholders of the
Company, increase the total number of Shares with respect to which Options or
Restricted Shares may be granted, materially increase the benefits under the
1998 Plan or materially modify the eligibility requirement of the 1998 Plan, if
shareholder approval of such an amendment is a condition of Securities and
Exchange Commission Rule 16b-3 or the Internal Revenue Code of 1986, as amended,
at the time such amendment is adopted. The Board may not, without the consent of
the holder of an Option or Restricted Shares, alter or impair any Option or
Restricted Shares previously granted under the 1998 Plan.
TAX CONSEQUENCES:
A Participant does not recognize income on the grant of an Incentive Stock
Option. Subject to the effect of the alternative minimum tax, discussed below,
if a Participant exercises an Incentive Stock Option in accordance with the
terms of the option and does not dispose of the Shares acquired within two years
from the date of the grant of the option or within one year from the date of
exercise, the Participant will not realize any income by reason of the exercise
and the Company will be allowed no deduction by reason of the grant or exercise.
The Participant's basis in the Shares acquired upon exercise will be the amount
paid upon exercise. Provided the Participant holds the Shares as a capital asset
at the time of sale or other disposition of the Shares, the Participant's gain
or loss, if any, recognized on the sale or other disposition will be a capital
gain or loss. The amount of the Participant's gain or loss will be the
difference between the amount realized on the disposition of the Shares and the
Participant's basis in the Shares.
If a Participant disposes of the Shares within two years from the date of
grant of the option or within one year from the date of exercise (an "Early
Disposition"), the Participant will realize ordinary income at the time of such
Early Disposition which will equal the excess, if any, of the lesser of (i) the
amount realized on the Early Disposition, or (ii) the Fair Market Value of the
Shares on the date of exercise, over the Participant's basis in the Shares. The
Company will be entitled to a deduction in an amount equal to such income. The
excess, if any, of the amount realized on the Early Disposition of such Shares
over the Fair Market Value of the Shares on the date of exercise will be
long-term, mid-term or short-term capital gain, depending upon the holding
period of the Shares, provided the participant holds the Shares as a capital
asset at the time of Early Disposition. If a Participant disposes of such Shares
for less than the Participant's basis in the Shares, the difference between the
amount realized and his basis will be a long-
14
<PAGE>
term or short-term capital loss, depending upon the holding period of the
Shares, provided the Participant holds the Shares as a capital asset at the time
of disposition.
The excess of the Fair Market Value of the Shares at the time the Incentive
Stock Option is exercised over the exercise price for the Shares is an amount
included in a Participant's alternative minimum taxable income.
Non-Qualified Stock Options require that the Participant recognize ordinary
income at the time of exercise equal to the difference between the option price
and the Fair Market Value of the Shares on the date of exercise. Depending upon
the length of time the shares are held, the Participant will recognize either a
short-term, mid-term or long-term capital gain or short-term or long-term
capital loss upon sale of the Shares. The gain or loss is measured as the
difference between the amount realized upon the sale of the Shares and the
Participant's basis in the Shares sold. The aggregate basis of a Participant in
the Participant's Shares is the sum of option exercise price plus income
recognized for income tax purposes upon exercise of the option. The corporation
is entitled to a deduction equal to the amount of ordinary income recognized by
the Participant at the time of exercise.
A Participant generally will not recognize taxable income and the Company
will not be entitled to a deduction upon the grant of Restricted Shares. When
the shares are no longer subject to a substantial risk of forfeiture, the
Participant must recognize taxable income in an amount equal to the Fair Market
Value of the Shares at that time, less the amount paid, if any, for such Shares,
and the Company will be entitled to a corresponding deduction. A Participant
may, however, elect to recognize taxable income in the year the Restricted
Shares are awarded in an amount equal to the Fair Market Value of the Shares at
that time, determined without regard to any of the restrictions. If such an
election is made, the Company will be entitled to a corresponding deduction at
that time. If the election is made and the Participant subsequently forfeits the
Restricted Shares, he will not be entitled to a deduction as a consequence of
the forfeiture, and the Company will have to include as income the amount it
previously deducted in the year of grant with respect to such Shares. The
election must be made by the Participant within 30 days of the transfer of the
Restricted Shares. Participants should consult their tax advisors regarding the
described election.
Any dividends with respect to Restricted Shares that are paid or made
available to the Participant (who has not elected to be taxed on the date of the
grant) while the Restricted Shares remain forfeitable are treated as additional
compensation and are taxed as ordinary compensation income to the Participant
and are deductible by the Company. If the Participant elects to be taxed on the
receipt of Restricted Shares as of the date the shares are granted, any
dividends will be considered ordinary dividend income, not deductible by the
Company.
The Board of Directors believes the Company's previous incentive programs
have contributed significantly to the growth and profitability of the Company
and its participating subsidiaries by providing incentives to key management and
other employees. Only limited awards may be granted under the 1998 Plan. The
Board considers it important for the continuing success of the Company to offer
incentive compensation on a basis comparable to the incentive programs of other
companies with which the Company competes in attracting and retaining executive
and management personnel and consultants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING RESOLUTION WHICH
WILL BE PRESENTED AT THE MEETING:
"RESOLVED, That the Ennis Business Forms, Inc. 1998 Option and
Restricted Stock Plan, the text of which is set forth in the Appendix to
the Proxy Statement for this meeting, be and the same hereby is adopted
and approved."
MISCELLANEOUS
Management is not aware of any other matters that may be presented for
action at the meeting. If any other matters should be presented at the meeting
for which a vote may properly be taken, then the
15
<PAGE>
enclosed form of Proxy will be voted in such manner as the persons named in the
Proxy shall in their discretion determine.
THE COMPANY WILL UPON WRITTEN REQUEST FURNISH TO ANY SHAREHOLDER, WITHOUT
CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
FEBRUARY 28, 1998 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH
WRITTEN REQUEST SHOULD BE DIRECTED TO MR. VICTOR DITOMMASO, SECRETARY, ENNIS
BUSINESS FORMS, INC., 107 NORTH SHERMAN, ENNIS, TEXAS 75119.
If you do not expect to attend the meeting, please date, sign and return the
Proxy at your earliest convenience. No postage is required for mailing in the
United States. A prompt return of your Proxy will be appreciated as it will save
the expense of further mailing.
SHAREHOLDER PROPOSALS
In order for proposals of shareholders to be considered for inclusion in the
proxy statement and form of Proxy for the 1999 Annual Meeting of Shareholders,
such proposals must be received by the Secretary of the Company not less than
120 days in advance of May 21, 1999.
By Order of the Board of Directors
Ennis, Texas
May 21, 1998
16
<PAGE>
APPENDIX
ENNIS BUSINESS FORMS, INC.
1998 OPTION AND RESTRICTED STOCK PLAN
I. GENERAL
1. PURPOSE. This Ennis Business Forms, Inc. 1998 Option and Restricted
Stock Plan (this "1998 Plan") has been established by ENNIS BUSINESS FORMS, INC.
(the "Company") to:
(a) attract and retain key executive and managerial employees,
consultants and non-employee directors;
(b) motivate participating employees, consultants and non-employee
directors by means of appropriate incentive, to achieve long-range
goals;
(c) provide incentive compensation opportunities that are competitive
with those of other major corporations; and
(d) further identify Participants' interests with those of the Company's
other shareholders through compensation alternatives based on the
Company's common stock;
and thereby promote the long-term financial interest of the Company and its
Subsidiaries, including the growth in value of the Company's equity and
enhancement of long-term shareholder return.
2. EFFECTIVE DATE. Subject to the affirmative vote of the holders of the
Shares possessing a majority of the voting power of the Company present in
person or by proxy at the Annual Meeting of the shareholders of the Company to
be held on or about June 18, 1998, this 1998 Plan shall be effective as of March
2, 1998, provided, however, that awards made under this 1998 Plan prior to such
approval of this 1998 Plan by the shareholders of the Company are contingent on
such approval of this 1998 Plan by the shareholders of the Company and shall be
null and void if such approval of the shareholders of the Company is withheld.
This 1998 Plan shall be unlimited in duration and, in the event of plan
termination, shall remain in effect as long as any awards under it are
outstanding; provided, however, that no awards of incentive stock options, as
described in Section 422(b) of the Code or any successor sections thereto
("Incentive Stock Options"), shall be made after March 1, 2008.
3. DEFINITIONS. The following definitions are applicable to this 1998
Plan.
"Award Agreement" has the meaning ascribed to it in paragraph I.12.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Executive Compensation and Stock Option Committee of
the Board.
"Disabled" means the inability of a Participant, by reason of a physical or
mental impairment, to engage in any substantial gainful activity, of which the
Board shall be the sole judge.
"Fair Market Value" of any Share means (a) if the Shares are listed on a
national securities exchange, the closing price on the Shares on a given date;
(b) if the Shares are traded on an exchange or market in which prices are
reported on a bid and asked price, the average of the mean between the bid and
asked price for the Shares on a given date; and (c) if the Shares are not listed
on a national securities exchange nor traded on the over-the-counter market,
such value as the Committee, in good faith, shall determine.
"1934 Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute.
1
<PAGE>
"Option Date" means, with respect to any Stock Option, the date on which the
Stock Option is awarded under this 1998 Plan.
"Participant" means any employee, consultant or non-employee director of the
Company or any Subsidiary who is selected by the Board to participate in this
1998 Plan.
"Permitted Transferees" means a member of an optionee's immediate family,
trusts for the benefit of such immediate family members, and partnerships in
which the optionee and/or such immediate family members are the only partners,
provided that no consideration is provided for the transfer. Immediate family
members shall include an optionee's descendants (children, grandchildren and
more remote descendants), and shall include step-children and relationships
arising from legal adoption.
"Related Company" means any corporation during any period in which it is a
Subsidiary, or during any period in which it directly or indirectly owns 50% or
more of the total combined voting power of all classes of stock of the Company
that are entitled to vote.
"Restricted Period" has the meaning ascribed to it in Part IV.
"Restricted Stock" has the meaning ascribed to it in Part IV.
"Retirement" means (i) termination of employment in accordance with the
retirement procedures set by the Company from time to time; (ii) termination of
employment or service as a consultant or non-employee director because a
participant becomes Disabled; or (iii) termination of employment voluntarily
with the consent of the Company (of which the Board shall be the sole judge).
"Share" or "Shares" means the Common Shares, $2.50 par value per share, of
the Company.
"Stock Option" means the right of a Participant to purchase Shares pursuant
to an Incentive Stock Option or Non-Qualified Option awarded pursuant to the
provisions of this 1998 Plan.
"Subsidiary" means any corporation during any period of which 50% or more of
the total combined voting power of all classes of shares entitled to vote is
owned, directly or indirectly, by the Company.
4. ADMINISTRATION. The authority to manage and control the operation and
administration of this 1998 Plan shall be vested in the Executive Compensation
and Stock Option Committee of the Board (the "Committee"). Subject to the
provisions of this 1998 Plan, the Committee will have authority to select
employees or other persons to receive awards of Stock Options and/or Restricted
Stock, to determine the time or times of receipt, to determine the types of
awards and the number of Shares covered by the awards and to establish the
terms, conditions, performance criteria, restrictions, and other provisions of
such awards. In making such award determinations, the Committee may take into
account the nature of services rendered by the respective employee or other
person, his or her present and potential contribution to the Company's success
and such other factors as the Committee deems relevant. The Committee is
authorized to interpret this 1998 Plan, to establish, amend, and rescind any
rules and regulations relating to this 1998 Plan, to determine the terms and
provisions of any agreements made pursuant to this 1998 Plan, and to make all
other determinations that may be necessary or advisable for the administration
of this 1998 Plan.
The Board, in its discretion, may revest any or all such authority, powers
and discretion under this Plan in itself at any time. The Committee shall
function as follows: a majority of the Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by all members of the Committee, shall
be the acts of the Committee, unless provisions to the contrary are embodied in
the Company's Bylaws or resolutions duly adopted by the Board. All actions taken
and decisions and determinations made by the Board or the Committee pursuant to
the Plan shall be binding and conclusive on all persons interested in the Plan.
No member of the Board or the Committee shall be liable for any action or
determination taken or made in good faith with respect to the Plan.
2
<PAGE>
5. PARTICIPATION. Subject to the terms and conditions of this 1998 Plan,
the Committee shall determine and designate, from time to time, the key
executives and managerial employees, consultants and non-employee directors of
the Company and/or its Subsidiaries who will participate in this 1998 Plan. In
the discretion of the Committee, an eligible employee or other person may be
awarded Stock Options or Restricted Stock or any combination thereof, and more
than one award may be granted to a Participant. Except as otherwise agreed to by
the Company and the Participant, any award under this 1998 Plan shall not affect
any previous award to the Participant under this 1998 Plan or any other plan
maintained by the Company or its Subsidiaries.
6. SHARES SUBJECT TO THIS 1998 PLAN. The Shares with respect to which
awards may be made under this 1998 Plan shall be either authorized and unissued
Shares or issued and outstanding Shares (including, in the discretion of the
Committee, Shares purchased in the market). Subject to the provisions of
paragraph I.10, the number of Shares available under this 1998 Plan for the
grant of Stock Options and Restricted Stock shall not exceed 820,000 Shares in
the aggregate. If, for any reason, any award under this 1998 Plan otherwise
distributable in Shares, or any portion of the award, shall expire, terminate or
be forfeited pursuant to the terms of this 1998 Plan and, therefore, any such
Shares are no longer distributable under the award, such Shares shall again be
available for award under this 1998 Plan. The maximum number of Shares with
respect to which options or rights may be granted each calendar year to each
Participant shall be 410,000. In addition, the maximum number of Shares with
respect to which options or rights may be granted to each Participant over the
life of this 1998 Plan shall also be 410,000.
7. COMPLIANCE WITH APPLICABLE LAWS AND WITHHOLDING OF
TAXES. Notwithstanding any other provision of this 1998 Plan, the Company shall
have no liability to issue any Shares under this 1998 Plan unless such issuance
would comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity. Prior to the issuance of any Shares under
this 1998 Plan, the Company may require a written statement that the recipient
is acquiring the Shares for investment and not for the purpose or with the
intention of distributing the Shares. All awards and payments under this 1998
Plan are subject to withholding of all applicable taxes, which withholding
obligations may be satisfied, with the consent of the Committee, through the
surrender of Shares which the Participant already owns, or to which a
Participant is otherwise entitled under this 1998 Plan. The Company shall have
the right to deduct from all amounts paid in cash in consequence of the exercise
of a Stock Option or in connection with an award of Restricted Stock under this
1998 Plan any taxes required by law to be withheld with respect to such cash
payments. Where an employee or other person is entitled to receive Shares
pursuant to the exercise of a Stock Option pursuant to this 1998 Plan, the
Company shall have the right to require the employee or such other person to pay
to the Company the amount of any taxes that the Company is required to withhold
with respect to such Shares, or, in lieu thereof, to retain, or sell without
notice, a sufficient number of such Shares to cover the amount required to be
withheld. Upon the disposition (within the meaning of Code Section 424(c)) of
Shares acquired pursuant to the exercise of an Incentive Stock Option prior to
the expiration of the holding period requirements of Code Section 422(a)(1), the
Participant shall be required to give notice to the Company of such disposition
and the Company shall have the right to require the Participant to pay to the
Company the amount of any taxes that are required by law to be withheld with
respect to such disposition. Upon termination of the Restricted Period with
respect to an award of Restricted Stock (or such earlier time, if any, as an
election is made by the Participant under Code Section 83(b), or any successor
provisions thereto, to include the value of such Shares in taxable income), the
Company shall have the right to require the employee or other person receiving
Shares in respect of such Restricted Stock award to pay to the Company the
amount of taxes that the Company is required to withhold with respect to such
Shares or, in lieu thereof, to retain or sell without notice a sufficient number
of Shares held by it to cover the amount required to be withheld. The Company
shall have the right to deduct from all dividends paid with respect to
Restricted Stock the amount of taxes that the Company is required to withhold
with respect to such dividend payments.
8. TRANSFERABILITY. Incentive Stock Options, and, during the period of
restriction, Restricted Stock awarded under this 1998 Plan are not transferable
except as designated by the Participant by will or by the
3
<PAGE>
laws of descent and distribution. Incentive Stock Options may be exercised
during the lifetime of the Participant only by the Participant or his or her
guardian or legal representative. If provided in the Award Agreement,
Non-Qualified Stock Options may be transferred by a Participant to Permitted
Transferees, and may be exercised either by the Participant, his or her guardian
or legal representative, or by a Permitted Transferee.
9. EMPLOYMENT AND SHAREHOLDER STATUS. This 1998 Plan does not constitute a
contract of employment, and selection as a Participant will not give any
employee the right to be retained in the employ of the Company or any
Subsidiary. Subject to the provisions of paragraph IV.3(a), no award under this
1998 Plan shall confer upon the holder thereof any right as a shareholder of the
Company prior to the date on which he or she fulfills all service requirements
and other conditions for receipt of Shares. If the redistribution of Shares is
restricted pursuant to paragraph I.7, certificates representing such Shares may
bear a legend referring to such restrictions.
10. ADJUSTMENTS TO NUMBER OF SHARES SUBJECT TO THIS 1998 PLAN. In the
event of any change in the outstanding Shares of the Company by reason of any
share dividend, split, spinoff, recapitalization, merger, consolidation,
combination, exchange of Shares or other similar change, the aggregate number of
Shares with respect to which awards may be made under this 1998 Plan, the terms
and the number of Shares of any outstanding Stock Options or Restricted Stock,
and the purchase price of a Share under Stock Options, may be equitably adjusted
by the Committee in its sole discretion.
11. CHANGE IN CONTROL. The following provisions shall apply unless a
Participant's written agreement with the Company provides otherwise. If, while
any Stock Options or Restricted Shares are outstanding under this 1998 Plan,
there shall occur (a) a merger or consolidation of the Company with or into
another corporation in which the Company shall not be the surviving corporation
(other than any such merger or consolidation undertaken solely to change the
jurisdiction of incorporation of the Company), (b) a dissolution of the Company,
or (c) a transfer of all or substantially all of the assets of the Company in
one transaction or a series of related transactions to one or more other persons
or entities, then, with respect to each Stock Option and Restricted Stock
outstanding immediately prior to the consummation of such transaction, if
provision is not otherwise made in writing in connection with such transaction
for the substitution of securities of another corporation, and without the
necessity of any action by the Board of Directors, each such Stock Option or
grant of Restricted Stock shall terminate, but the holder of any outstanding
Stock Option shall be entitled, immediately prior to the effective date of such
transaction, to purchase the number of Shares that are then vested and
exercisable. The unexercised portion of any Stock Option, and all non-vested
Restricted Stock shall be deemed canceled, forfeited, and terminated as of the
effective date of such transaction.
12. AGREEMENT WITH COMPANY. At the time of any awards under this 1998
Plan, the Committee will require a Participant to enter into an agreement (each,
an "Award Agreement") with the Company in a form specified by the Committee,
agreeing to the terms and conditions of this 1998 Plan and to such additional
terms and conditions, not inconsistent with this 1998 Plan, as the Committee
may, in its sole discretion, prescribe.
13. AMENDMENT AND TERMINATION OF 1998 PLAN. Subject to the following
provisions of this paragraph I.13, the Committee may at any time and in any way
amend, suspend or terminate this 1998 Plan. No amendment of this 1998 Plan and,
except as provided in paragraph I.10, no action by the Committee shall, without
further approval of the shareholders of the Company, increase the total number
of Shares with respect to which awards may be made under this 1998 Plan,
materially increase the benefits accruing to Participants under this 1998 Plan
or materially modify the requirements as to eligibility for participation in
this 1998 Plan, if shareholder approval of such amendment is a condition of
Securities and Exchange Commission Rule 16b-3 or the Code at the time such
amendment is adopted. No amendment, suspension or termination of this 1998 Plan
shall alter or impair any Stock Option or share of Restricted Stock previously
awarded under this 1998 Plan without the consent of the holder thereof.
4
<PAGE>
II. INCENTIVE STOCK OPTIONS
1. DEFINITION. The award of an Incentive Stock Option under this 1998 Plan
entitles the Participant to purchase Shares at a price fixed at the time the
option is awarded, subject to the following terms of this Part II.
2. VESTING OF INCENTIVE STOCK OPTIONS. Each Incentive Stock Option granted
hereunder may be exercised only to the extent that the Participant is vested in
such Incentive Stock Option. A Participant shall vest separately in each
Incentive Stock Option granted hereunder in accordance with a schedule
determined by the Committee, in its sole discretion, which will be incorporated
in the Award Agreement. Unless otherwise determined by the Committee, each Award
Agreement will provide that the Incentive Stock Option vests in accordance with
the following schedule:
<TABLE>
<CAPTION>
NUMBER OF YEARS THE PARTICIPANT
HAS REMAINED IN THE EMPLOY OF EXTENT TO WHICH THE
THE COMPANY OR A SUBSIDIARY FOLLOWING INCENTIVE STOCK
THE GRANT OF AN INCENTIVE STOCK OPTION: OPTION IS VESTED:
- -------------------------------------------------------------------------- -------------------
<S> <C>
Less than two............................................................. 0%
At least two but less than three.......................................... 25%
At least three but less than four......................................... 50%
At least four but less than five.......................................... 75%
Five or more.............................................................. 100%
</TABLE>
Anything contained in this paragraph to the contrary notwithstanding, unless
otherwise determined by the Committee, a Participant shall become fully (100%)
vested in each of his or her Incentive Stock Options upon his or her termination
of employment with the Company for reasons of death, Disability or Retirement at
or after age 65, upon termination of employment incident to the Company's sale
of a Subsidiary or a change in control of the Company, or, if in the sole
discretion of the Committee, the Committee determines that acceleration of the
Incentive Stock Option vesting schedule would be desirable for the Company.
3. ELIGIBILITY. The Committee shall designate the Participants, all of
whom shall be employees of the Company or a Subsidiary, to whom Incentive Stock
Options, as described in section 422(b) of the Code or any successor section
thereto, are to be awarded under this 1998 Plan and shall determine the number
of option shares to be offered to each of them. In no event shall the aggregate
Fair Market Value (determined at the Option Date) of Shares with respect to
which Incentive Stock Options are exercisable for the first time by an
individual during any calendar year (under all plans of the Company and all
Related Companies) exceed $100,000.
4. PRICE. The purchase price of a Share under each Incentive Stock Option
shall be determined by the Committee; provided, however, that in no event shall
such price be less than the greater of (a) 100% of the Fair Market Value of a
Share as of the Option Date (or 110% of such Fair Market Value if the holder of
the option owns stock possessing more than 10% of the combined voting power of
all classes of stock of the Company or any Subsidiary) or (b) the par value of a
Share on such date. To the extent provided by the Committee, the full purchase
price of each Share purchased upon the exercise of any Incentive Stock Option
shall be paid in cash or in Shares (valued at Fair Market Value as of the day of
exercise), or in any combination thereof, at the time of such exercise and, as
soon as practicable thereafter, a certificate representing the Shares so
purchased shall be delivered to the person entitled thereto.
5. EXERCISE. Unless restricted by the Committee, Participants may elect to
pay the purchase price of Shares purchased upon the exercise of Incentive Stock
Options in cash or through the constructive delivery at the time of such
exercise of Shares (valued at Fair Market Value as of the day of exercise)
already owned by the Participant, or any combination thereof, equivalent to the
purchase price of such Incentive Stock Options, and, as soon as practicable
thereafter, a certificate representing the net number of Shares so
5
<PAGE>
purchased shall be delivered to the person entitled thereto. A Participant's
payment of the purchase price in connection with the exercise of an Incentive
Stock Option through actual or constructive delivery of Shares (the "ISO
Shares") that were acquired through the exercise of an Incentive Stock Option
and that have not been held for more than one year will be considered a
disposition (within the meaning of Code Section 424(c)) of the ISO Shares,
resulting in the disqualification of the ISO Shares from treatment as an
incentive stock option under Code Section 422, and the Participant's recognition
of ordinary income. Participants should consult with their tax advisors prior to
electing to exercise an Incentive Stock Option by this method.
6. OPTION EXPIRATION DATE. The "Expiration Date" with respect to an
Incentive Stock Option or any portion thereof awarded to a Participant under
this 1998 Plan means the earliest of:
(a) the date that is 10 years after the date on which the Incentive Stock
Option is awarded (or, if the Participant owns stock possessing more
than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary, the date that is 5 years after the date on
which the Incentive Stock Option is awarded);
(b) the date established by the Committee at the time of the award;
(c) the date that is one year after the Participant's employment with the
Company and all Related Companies is terminated by reason of the
Participant becoming Disabled or by reason of the Participant's
death; or
(d) the date that is three months after the date the Participant's
employment with the Company and all Related Companies is terminated
by reasons other than the Participant's becoming Disabled or the
Participant's death.
All rights to purchase Shares pursuant to an Incentive Stock Option shall cease
as of such option's Expiration Date.
III. NON-QUALIFIED STOCK OPTIONS
1. DEFINITION. The award of a Non-Qualified Stock Option under this 1998
Plan entitles the Participant to purchase Shares at a price fixed at the time
the option is awarded, subject to the following terms of this Part III.
2. VESTING OF NON-QUALIFIED STOCK OPTIONS. Each Non-Qualified Stock Option
granted hereunder may be exercised only to the extent that the Participant is
vested in such Non-Qualified Stock Option. A Participant shall vest separately
in each Non-Qualified Stock Option granted hereunder in accordance with a
schedule determined by the Committee, in its sole discretion, which will be
incorporated in the Award Agreement. Unless otherwise determined by the
Committee, each Award Agreement will provide that the Non-Qualified Stock Option
vests in accordance with the following schedule:
<TABLE>
<CAPTION>
NUMBER OF YEARS OF SERVICE AS AN EMPLOYEE,
CONSULTANT OR NON-EMPLOYEE DIRECTOR OF EXTENT TO WHICH THE
THE COMPANY OR A SUBSIDIARY FOLLOWING NON-QUALIFIED STOCK
THE GRANT OF A NON-QUALIFIED STOCK OPTION: OPTION IS VESTED:
- -------------------------------------------------------------------------- -------------------
<S> <C>
Less than two............................................................. 0%
At least two but less than three.......................................... 25%
At least three but less than four......................................... 50%
At least four but less than five.......................................... 75%
Five or more.............................................................. 100%
</TABLE>
Anything contained in this paragraph to the contrary notwithstanding, unless
determined by the Committee, a Participant shall become fully (100%) vested in
each of his or her Non-Qualified Stock Options upon his or her termination of
employment with the Company for reasons of death, Disability or Retirement at
6
<PAGE>
or after age 65, upon termination of employment incident to the Company's sale
of a Subsidiary or a change in control of the Company, or if in the sole
discretion of the Committee, the Committee determines that acceleration of the
Non-Qualified Stock Option vesting schedule would be desirable for the Company.
3. ELIGIBILITY. The Committee shall designate the Participants to whom
Non-Qualified Stock Options are to be awarded under this 1998 Plan and shall
determine the number of option shares to be offered to each of them.
4. PRICE. The purchase price of a Share under each Non-Qualified Stock
Option shall be determined by the Committee; provided, however, that in no event
shall such price be less than the greater of (a) one hundred percent (100%) of
the Fair Market Value of a Share as of the Option Date or (b) the par value of
such Share on such date. To the extent provided by the Committee, the full
purchase price of each Share purchased upon the exercise of any Non-Qualified
Stock Option shall be paid in cash or in Shares (valued at Fair Market Value as
of the day of exercise), or in any combination thereof, at the time of such
exercise and, as soon as practicable thereafter, a certificate representing the
Shares so purchased shall be delivered to the person entitled thereto. In
addition, unless restricted by the Committee, Participants may elect to pay the
purchase price of Shares purchased upon the exercise of Non-Qualified Stock
Options through the constructive delivery at the time of such exercise of Shares
(valued at Fair Market Value as of the day of exercise) already owned by the
Participant, equivalent to the purchase price of such Non-Qualified Stock
Options, and, as soon as practicable thereafter, a certificate representing the
net number of Shares so purchased shall be delivered to the person entitled
thereto. Participants also may elect to pay, unless restricted by the Committee,
the purchase price, in whole or in part, of Shares purchased upon the exercise
of Non-Qualified Options through the Company's withholding of Shares (valued at
Fair Market Value as of the day of exercise) that would otherwise be issuable
upon exercise of such options equivalent to the purchase price of such
Non-Qualified Stock Options and, as soon as practicable thereafter, a
certificate representing the net number of Shares so purchased shall be
delivered to the person entitled thereto.
5. OPTION EXPIRATION DATE. The "Expiration Date" with respect to a
Non-Qualified Stock Option or any portion thereof awarded to a Participant under
this 1998 Plan means the earliest of:
(a) the date established by the Committee at the time of the award;
(b) the date that is one year after the Participant's employment with the
Company and all Related Companies is terminated by reason of the
Participant becoming Disabled or by reason of the Participant's
death; or
(c) unless otherwise specified in the Award Agreement, the date that is
three months after the date the Participant's employment with the
Company and all Related Companies is terminated by reasons other than
death or becoming Disabled, or three months after the date the
Participant's service as a non-employee director or consultant of the
Company and all Related Companies is terminated for any reason.
All rights to purchase Shares pursuant to a Non-Qualified Stock Option shall
cease as of such option's Expiration Date.
7
<PAGE>
IV. RESTRICTED STOCK
1. DEFINITION. Restricted Stock awards are grants of Shares to
Participants, the vesting of which is subject to the following schedule (unless
otherwise determined by the Committee) and any other conditions established by
the Committee:
<TABLE>
<CAPTION>
NUMBER OF YEARS OF SERVICE AS AN
EMPLOYEE, CONSULTANT OR NON-EMPLOYEE EXTENT TO WHICH
DIRECTOR OF THE COMPANY OR A SUBSIDIARY THE RESTRICTIONS
FOLLOWING THE GRANT OF RESTRICTED STOCK: LAPSE:
- -------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Less than two............................................................................... 0%
At least two but less than three............................................................ 25%
At least three but less than four........................................................... 50%
At least four but less than five............................................................ 75%
Five or more................................................................................ 100%
</TABLE>
Anything contained in this paragraph to the contrary notwithstanding, unless
otherwise determined by the Committee, a Participant shall become fully (100%)
vested in each of his or her award of Restricted Stock upon his or her
termination of employment with the Company for reasons of death, Disability or
Retirement at or after age 65, upon termination of employment incident to the
Company's sale of a Subsidiary or a change in control of the Company, or, if in
the sole discretion of the Committee, the Committee determines that acceleration
of the above vesting schedule would be desirable for the Company.
2. ELIGIBILITY. The Committee shall designate the Participants to whom
Restricted Stock is to be awarded and the number of Shares that are subject to
the award.
3. TERMS AND CONDITIONS OF AWARDS. All Shares of Restricted Stock awarded
to Participants under this 1998 Plan shall be subject to the following terms and
conditions and to such other terms and conditions, not inconsistent with this
1998 Plan, as shall be prescribed by the Committee in its sole discretion and as
shall be contained in the agreement referred to in paragraph I.12.
(a) Restricted Stock awarded to Participants, and with respect to which
the restrictions have not lapsed pursuant to vesting, may not be
sold, assigned, transferred, pledged or otherwise encumbered, except
as herein provided. (The period during which such restrictions apply
to Shares is hereinafter referred to as the "Restricted Period" with
respect to such Shares.) Except for such restrictions, the
Participant as owner of such Shares shall have all the rights of a
shareholder, including but not limited to the right to vote such
Shares and, except as otherwise provided by the Committee, the right
to receive all dividends paid on such Shares.
(b) The Committee may in its discretion, at any time after the date of
the award of Restricted Stock, adjust the length of the Restricted
Period to account for individual circumstances of a Participant or
group of Participants, but in no case shall the length of the
Restricted Period be less than one year.
(c) Except as otherwise determined by the Committee in its sole
discretion, a Participant whose employment with the Company and all
Related Companies terminates prior to the end of the Restricted
Period for any reason shall forfeit all Shares of Restricted Stock as
to which the restrictions have not lapsed.
(d) Each certificate issued in respect of Shares of Restricted Stock
awarded under this 1998 Plan shall be registered in the name of the
Participant and, at the discretion of the Committee, each such
certificate may be deposited in a bank designated by the Committee.
Each such certificate shall bear the following (or a similar)
legend:
8
<PAGE>
"The transferability of this certificate and the Shares represented
hereby are subject to the terms and conditions (including forfeiture)
contained in the ENNIS BUSINESS FORMS, INC., 1998 Option and
Restricted Stock Plan and an agreement entered into between the
registered owner and ENNIS BUSINESS FORMS, INC. A copy of such plan
and agreement is on file in the office of the Secretary of ENNIS
BUSINESS FORMS, INC., 107 North Sherman Street, Ennis, Texas 75119.
(e) At the end of the Restricted Period for Restricted Stock, such
Restricted Stock will be transferred free of all restrictions to a
Participant (or his or her legal representative, beneficiary or
heir).
9
<PAGE>
PROXY PROXY
ENNIS BUSINESS FORMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Keith S. Walters, Nelson Ward and Victor
DiTommaso, or any one or more of them as Proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote,
as designated on the reverse side, all the shares of common stock of Ennis
Business Forms, Inc. held of record by the undersigned at the close of
business on April 20, 1998 at the Annual Meeting of shareholders to be held
June 18, 1998 or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE)
- -------------------------------------------------------------------------------
<PAGE>
ENNIS BUSINESS FORMS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS FOR TERM ENDING IN 2001-- For All
NOMINEES: Harold W. Hartley, Pat G. Sorrells and For Withhold (Except Nominee(s)
James C. Taylor. All All written below)
/ / / / / /
------------------------------------------------
2. Proposal to approve the selection of KPMG Peat For Against Abstain
Marwick LLP as independent auditors for the fiscal / / / / / /
year ending February 28, 1999.
3. Proposal to adopt and approve the For Against Abstain
Ennis Business Forms, Inc. 1998 / / / / / /
Option and Restricted Stock Plan.
4. In their discretion, the Proxies are For Against Abstain
authorized to vote upon such other / / / / / /
business as may properly come before
the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction
is made, this proxy will be voted for Proposals 1, 2 and 3 and
in the Proxies' discretion on matters arising under 4. This
proxy confers discretionary authority upon the Proxies to
cumulate votes for the election of the nominees for which
proxy authority is given if (a) cumulative voting is then in
effect, (b) additional persons are nominated and (c) such
Proxies determine that such action is necessary to elect as
many of management's nominees as possible.
Please sign exactly as name appears at left. When shares are held
by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, etc., please give
full title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated: ___________________________________, 1998
Signature _________________________________________________________
Signature if held jointly _________________________________________
</TABLE>
- -------------------------------------------------------------------------------
PLEASE FOLD AND DETACH HERE AND READ THE REVERSE SIDE
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
