As filed with the Securities and Exchange Commission on July 10, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ENNIS BUSINESS FORMS, INC.
(Exact name of registrant as specified in its charter)
Texas 75-0256410
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
107 North Sherman 75119
Ennis, Texas (Zip Code)
(Address of Executive Offices)
Ennis Business Forms, Inc. 1998 Option and Restricted Stock Plan
(Full Title of the Plan)
Nelson Ward
President, Chief Operating Officer and Chief Financial Officer
Ennis Business Forms, Inc.
107 North Sherman
Ennis, Texas 75119
(972) 872-3100
(Name, address and telephone number, including area code, of agent for service)
With Copies To:
Russell F. Coleman, Esq.
Locke Purnell Rain Harrell
(A Professional Corporation)
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201-6776
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title Of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Per Offering Registration
Registered Registered Share (1) Price (1) Fee
Common Stock, 820,000 shares $11.78125 $9,660,625 $2,850
$2.50 Par Value
(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended, solely for purposes of calculating the registration fee, based
on the average of the high and low prices reported on the New York Stock
Exchange on July 9, 1998.
In addition, pursuant to Rule 416 under the Securities Act of 1933,
as amended, this Registration Statement also covers shares of Common Stock
of the Company issuable to prevent dilution resulting from stock splits,
stock dividends or similar transactions.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information specified by Item 1 and Item 2 of Part I of Form S-8
is omitted from this filing in accordance with the provisions of Rule 428
under the Securities Act of 1933, as amended (the "Securities Act"), and
the introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents set forth below are incorporated by reference in this
Registration Statement. All documents subsequently filed by Ennis Business
Forms, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to the
extent a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1998; and
(2) All other reports filed with the Securities and Exchange
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
since the end of the fiscal year covered by the Annual Report
referred to in (1) above.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
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Item 6. Indemnification of Directors and Officers.
Article 2.02-1 of the Texas Business Corporation Act permits a
corporation to indemnify certain persons, including officers and directors
and former officers and directors, and to purchase insurance with respect
to liability arising out of their capacity or status as officers and
directors.
Article Nine of the Company's Restated Articles of Incorporation
provides as follows:
The Corporation may indemnify any person (and the heirs,
executors and administrators of such persons) who is, or was, a
director, officer or former director, officer, employee or agent
of the Corporation, or any person who may have served at its
request as a director, officer, employee or agent of another
corporation, foreign or domestic, or any partnership,
proprietorship, trust, association or enterprise, whether a
profit or non-profit business in which it owned shares of capital
stock or other interest or of which it is a creditor, against
expenses actually and necessarily incurred by him in connection
with the defense of any claim, action, suit or proceeding whether
brought by or in the right of the Corporation and whether civil,
criminal, administrative or investigative in nature, or in
connection with any appeal relating thereto, in which he is made
a party or threatened to be made a party by reason of being or
having been such director, officer, employee or agent except in
relation to matters as to which he shall be adjudged in such
action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty, but such indemnification
shall not be deemed exclusive of any other rights to which such
person may be entitled under any bylaw, agreement, vote of
shareholders or otherwise.
The Corporation shall have the power to purchase and maintain
insurance on behalf of any such person, or any person who is a
director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any capacity arising
out of his status as such whether or not the Corporation would
have the power to indemnify him against such liabilities under
the provisions of the Texas Business Corporation Act.
In addition, Article IX of the Company's Bylaws, as amended,
provides that the Company shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact
that he is or was serving as a director or officer of the Company
or serving as such at the request of the Company as a director or
officer of another corporation in which it owns shares of capital
stock or of which it is a creditor, against all expenses
including attorneys' fees, judgments, fines and other amounts
actually and reasonably incurred by him in connection with such
action, suit or proceeding; provided, that he acted in good faith
and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company and, with respect to any
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criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful; and further provided that there shall
be no indemnification in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that a court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnify for such expenses which such
court shall deem proper. The termination of any action, suit or
proceeding by settlement or its equivalent not amounting to a
judgment thereof shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
Any indemnification under the provisions hereof shall be made by
the corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is
proper in the circumstances because he has met the applicable
standard of conduct of good faith set forth above. Such
determination shall be made (1) by the board of directors of
Ennis Business Forms, Inc. by a majority vote of a quorum
consisting of directors who were not parties to such action, suit
or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or
(3) by the stockholders.
Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding as
authorized by the board of directors, in the specific case upon
receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by
the corporation as authorized in Article IX of the Company's
Bylaws.
The indemnification provided for in Article IX of the Company's
Bylaws shall not be deemed exclusive of any other rights to which
those indemnified may be entitled, under any by-law, agreement,
vote of shareholders, or otherwise.
In addition to the power of indemnification set forth above, the
board of directors is authorized, on behalf of the corporation,
to purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status
as such; and where such insurance has been purchased and
maintained by the corporation but the liability incurred exceeds
the applicable limits of coverage thereof, the corporation may
reimburse such persons the difference between the liability
incurred and the insurance proceeds
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received; provided, that the indemnification provisions above
have been complied with.
The Company has purchased directors' and officers' liability
insurance. Subject to conditions, limitations and exclusions in the
policy, the insurance covers amounts required to be paid for a claim or
claims made against directors and officers for any act, error, omission,
misstatement, misleading statement or breach of duty by directors and
officers in their capacity as directors and officers of the Company.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
5.1 Opinion of Locke Purnell Rain Harrell (A Professional
Corporation).
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Locke Purnell Rain Harrell (A Professional
Corporation) (included in opinion filed as Exhibit 5.1).
24.1 Power of Attorney (included on the signature pages of this
Registration Statement).
99.1 Ennis Business Forms, Inc. 1998 Option and Restricted Stock
Plan.
Item 9. Undertakings.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement
(or the most recent post-effective amendment therof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%
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change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Ennis, State of
Texas, on this 10th day of July, 1998.
ENNIS BUSINESS FORMS, INC.
By: /s/ Keith S. Walters
Keith S. Walters, Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints each of Nelson Ward
and Ron Graham, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done on and about the premises as fully
and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any
of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
/s/ Keith S. Walters Chairman of the July 10, 1998
Keith S. Walters Board, Chief
Executive Officer
and Director
(Principal
Executive Officer)
/s/ Nelson Ward President, Chief July 10, 1998
Nelson Ward Operating Officer,
Chief Financial
Officer and
Director
(Principal
Financial and
Accounting
Officer)
/s/ Ron Graham Vice President - July 10, 1998
Ron Graham Human Resources
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/s/ Dave Erickson Vice President - July 10, 1998
Dave Erickson Dealer Relations
/s/ James B. Gardner Director July 10, 1998
James B. Gardner
Director
Harold W. Hartley
/s/ Robert L. Mitchell Director July 10, 1998
Robert L. Mitchell
/s/ Thomas R. Price Director July 10, 1998
Thomas R. Price
Director
Pat G. Sorrells
Director
Ewell L.Tankersley
Director
James C. Taylor
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INDEX TO EXHIBITS
Exhibit Exhibit
Number
5.1 Opinion of Locke Purnell Rain Harrell (A Professional
Corporation).
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Locke Purnell Rain Harrell (A Professional
Corporation) (included in opinion filed as Exhibit
5.1).
24.1 Power of Attorney (included on the signature page of
this Registration Statement).
99.1 Ennis Business Forms, Inc. 1998 Option and Restricted
Stock Plan.
EXHIBIT 5.1
July 10, 1998
Ennis Business Forms, Inc.
107 North Sherman
Ennis, Texas 75119
Re: Registration of 820,000 shares of Common Stock, par value $2.50
per share, pursuant to a Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Ennis Business Forms, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement on Form S-8 (the "Registration Statement"), of
820,000 shares of Common Stock, par value $2.50 per share, of the Company
(the "Common Stock") to be offered pursuant to the Ennis Business Forms,
Inc. 1998 Option and Restricted Stock Plan (the "1998 Plan").
Based upon our examination of such documents and the investigation of
such matters of law as we have deemed relevant or necessary in rendering
this opinion, we hereby advise you that we are of the opinion that:
1. The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Texas.
2. Assuming, with respect to shares of Common Stock issued after the
date hereof, (i) the receipt of proper consideration for the issuance
thereof in excess of par value thereof, (ii) the availability of a
sufficient number of shares of Common Stock authorized by the Company's
Articles of Incorporation then in effect, (iii) compliance with the terms
of any agreement entered into in connection with any options or restricted
stock under the 1998 Plan, and (iv) no change occurs in the applicable law
or the pertinent facts, the shares of Common Stock purchasable upon the
exercise of any option granted under or issued upon the awarding of any
restricted stock under, the 1998 Plan will upon issuance be duly authorized
and validly issued, fully paid and non-assessable shares of Common Stock.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement filed by the Company with the Securities and
Exchange Commission for the registration under the Securities Act, of
820,000 shares of Common Stock of the Company covered by the 1998 Plan. By
so consenting, we do not thereby admit that our firm's consent is required
by Section 7 of the Securities Act.
Very truly yours,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /s/ Russell F. Coleman
Russell F. Coleman
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS'
The Board of Directors
Ennis Business Forms, Inc.:
We consent to the use of our report incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
Dallas, Texas
July 10, 1998
EXHIBIT 99.1
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.
"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.
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 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.
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:
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:
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%
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 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 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:
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 the Non-Qualified Stock Option: Option is vested:
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%
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 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.
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:
Number of years of Service as an
employee, consultant or non-employee
director of the Company or a Subsidiary Extent to which
following the grant of Restricted Stock: the restrictions lapse:
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%
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:
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).
