15
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended NOVEMBER 30, 1997
Commission File Number 1-5807
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 N. Sherman Street, Ennis, TX 75119
(Address of principal executive offices) (Zip Code)
(972) 872-3100
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter prior that the
registrant was required to file such report), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as the latest practicable date.
Class Outstanding at November 30, 1997
Common stock, par value $2.50 per share 16,437,685
ENNIS BUSINESS FORMS, INC.
INDEX
Part I. Financial Information
Condensed Consolidated Balance Sheets --
November 30, 1997 and February 28, 1997 2
Condensed Consolidated Statements of Earnings --
Three and Nine Months Ended November 30,
1997 and 1996 3
Condensed Consolidated Statements of Cash
Flows --Nine Months Ended November 30,
1997 and 1996 4
Notes to Condensed Consolidated Financial
Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Part II. Other Information 7
PART I. FINANCIAL INFORMATION
ENNIS BUSINESS FORMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
November 30, February 28,
1997 1997
Assets
Current assets
Cash and equivalents $19,758 18,494
Accounts receivable, net 17,965 18,600
Inventories 7,423 10,500
Other current assets 5,542 5,033
Total current assets 50,688 52,627
Property, plant and equipment, net 37,653 33,560
Cost of purchased businesses in excess of amounts
allocated to tangible net assets 4,620 5,942
Other assets and deferred charges 1,878 2,828
Total assets $94,839 94,957
Liabilities and Stockholders' Equity
Current liabilities
Current installments of long-term debt $ 180 85
Accounts payable 5,544 5,234
Accrued expenses 7,046 4,988
Federal and state income taxes payable 730 --
Total current liabilities 13,500 10,307
Long-term debt, less current installments 231 195
Deferred credits, principally Federal income taxes 1,029 2,869
Stockholders' equity
Common stock, at par value 53,125 53,125
Additional capital 1,040 1,040
Retained earnings 117,795 119,318
Cumulative foreign currency translation adjustments (53) (76)
171,907 173,407
Less:
Treasury stock 91,828 91,821
Total stockholders' equity 80,079 81,586
Total liabilities and stockholders' equity $94,839 94,957
See accompanying notes to condensed consolidated financial statements.
ENNIS BUSINESS FORMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
November 30, November 30,
1997 1996 1997 1996
Net sales $ 40,311 40,210 $116,516 115,849
Costs and expenses:
Cost of sales 27,822 27,986 81,404 78,559
Selling, general and
administrative expenses 7,770 7,488 22,981 20,867
Loss on disposal of Heath
Printers, Inc. 3,067 -- 3,067 --
Interest expense 17 15 54 61
38,676 35,489 107,506 99,487
Earnings from operations 1,635 4,721 9,010 16,362
Investment and other income 301 290 852 1,168
Earnings before income taxes 1,936 5,011 9,862 17,530
Provision for income taxes 805 1,894 3,741 6,596
Net earnings $ 1,131 3,117 $ 6,121 10,934
Weighted average number of common
shares outstanding 16,437,828 16,438,636 16,438,071 16,438,919
Per share amounts:
Net earnings $ .07 .19 $ .37 .67
Cash dividends $ .155 .155 $.465 .46
See accompanying notes to condensed consolidated financial statements.
ENNIS BUSINESS FORMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Nine Months Ended
November 30,
1997 1996
Cash flows from operating activities:
Net earnings $ 6,121 10,934
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,685 3,638
Loss on disposal of Heath Printers, Inc. 3,067 --
Changes in assets and liabilities 5,911 (3,773)
Other (2,105) (848)
Net cash provided by operating activities 17,679 9,951
Cash flows from investing activities:
Capital expenditures (8,916) (8,887)
Purchases of operating assets -- (7,342)
Other 21 11
Net cash used in investing activities (8,895) (16,218)
Cash flows from financing activities:
Purchase of treasury stock (7) (11)
Proceeds from capital lease financing 289 --
Reduction of long-term debt (158) (80)
Dividends (7,644) (7,562)
Net cash used in financing activities (7,520) (7,653)
Net changes in cash and equivalents 1,264 (13,920)
Cash and equivalents at beginning of period 18,494 38,606
Cash and equivalents at end of period $ 19,758 24,686
See accompanying notes to condensed consolidated financial statements.
ENNIS BUSINESS FORMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The information included herein reflects all adjustments (none of which
were other than normal recurring accruals) which, in the opinion of the
Company, are necessary to a fair statement of the financial position as
of November 30, 1997 and February 28, 1997, and the results of
operations and cash flows for the three months and nine months ended
November 30, 1997 and 1996.
2. Earnings per common share amounts are based on the weighted average
number of shares outstanding during the period. Common stock
equivalents (options see Note 3) have not been included in determining
earnings per common share amounts because their inclusion, either for
purposes of computing primary or fully diluted earnings per share,
would not produce sufficient incremental shares (using the treasury
stock method) to reduce the per share amounts shown.
3. As of November 30, 1997, the Company has reserved 378,958 shares of
common stock under incentive stock options plans.
4. The Company uses the Last-In, First-Out (LIFO) method of pricing the
raw material content of most of its business forms inventories, and the
First-In, First-Out (FIFO) method is used to value the remainder. The
following table summarizes the components of inventory at the different
stages of production (in thousands of dollars):
November 30, February 28,
1997 1997
Raw material $ 4,392 6,394
Work-in-process 888 1,127
Finished goods 2,143 2,979
$ 7,423 10,500
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At November 30, 1997, the Company's financial position continues to be
strong. Working capital decreased from $42,320,000 at February 28, 1997 to
$37,188,000 at November 30, 1997. The decrease is due to lower
inventories, increased accrued expenses and capital expenditures. The
Company's cash flow from operations continues to be adequate to sustain
operations, meet debt repayment requirements and fund capital additions.
No liquidity problems are anticipated.
Results of Operations
For the three months and nine months ended November 30, 1997, net
sales increased .3% and .6% respectively from the corresponding periods of
last year. The gross profit margin increased 2.2% and decreased 5.8% for
the three months and nine months ended November 30, 1997 from the
corresponding periods of last year. The gross profit margin increased for
the current quarter from the same period in the prior year due to higher
sales prices. Selling, general and administrative expenses for the three
and nine months ended November 30, 1997 increased 3.8% and 10.1%,
respectively, compared to the corresponding periods in the prior year. The
increases are primarily due to higher marketing and promotion costs,
increased customer telephone call activity, increased personnel costs and
expanded information and communications systems, all associated with the
ongoing efforts to grow sales. Investment and other income for the periods
ended November 30, 1997 compared to the same periods in the prior year
increased 3.8% for the quarter and decreased 27.0% for the nine months due
to higher funds available for investment early in the prior year. Net
earnings declined 63.7% and 44%, respectively, for the three months and
nine months ended November 30, 1997 from the corresponding periods of last
year. Earnings per share declined $.12 and $.30, respectively, for the
three months and nine months ended November 30, 1997 from the corresponding
periods of last year. The per share earnings were based upon three months
and nine months weighted average shares outstanding of 16,437,828 and
16,438,071, respectively at November 30, 1997, and 16,438,636 and
16,438,919 weighted average shares outstanding at November 30, 1996. The
$.12 per share decline in earnings from the quarter ended November 30, 1997
compared to the corresponding period in the prior year was due to a
$1,994,000 non cash charge resulting from the Company's decision to sell
its commercial printing subsidiary, Heath Printers, Inc. The charge
represents what the Company estimates it can reasonably expect (net of
income tax benefit) to realize from a sale as compared to its carrying
value. Excluding the special charge from Heath, quarterly earnings
increased 17.9% from the immediately preceding quarter and increased
fractionally from the corresponding period in the prior year. The increase
in earnings from the second quarter to the third quarter (excluding the
special charge) was primarily the result of higher quarter to quarter
sales. Aside from cotton tags (which have been in decline for several
years), we continue to expect 3% to 4% unit sales growth in our traditional
products. The effective rate of Federal and state income tax expense is
substantially the same each year.
Management's results of operations contains forward-looking statements
that reflect the Company's current view with respect to future revenues and
earnings. These statements are subject to numerous uncertainties,
including (but not limited to) the rate at which the business forms market
is contracting, the application of technology to the production of
business forms, demand for the Company's products in the context of a
contracting market, variability in the prices of paper and other raw
materials, and competitive conditions in the business forms market.
Because of such uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of January
9, 1998.
PART II. OTHER INFORMATION
Item 6. Exhibits
Exhibit:
(3) (ii) Amended Bylaws
Exhibit:
(27) Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ENNIS BUSINESS FORMS, INC.
Date January 9, 1998 /s/Victor V. DiTommaso
Victor V. DiTommaso
Vice President - Finance, Secretary & Treasurer
Principal Financial and Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ENNIS BUSINESS FORMS, INC.
Date January 9, 1998
Victor V. DiTommaso
Vice President - Finance, Secretary & Treasurer
Principal Financial and Accounting Officer
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ENNIS BUSINESS FORMS, INC.
BYLAWS
As Amended Through October 15, 1997
ARTICLE I
OFFICES
Section 1. The principal office and the registered office shall be
in the City of Ennis, County of Ellis, State of Texas.
Section 2. The corporation may also have offices at such other
places both win and without the State of Texas as the board of directors
may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Meetings of stockholders may be held at such place and
time, within or without the State of Texas, as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of the stockholders commencing with the
year 1976 shall be held on the third Thursday of June if it is not a legal
holiday, and if a legal holiday then on the next secular day following at
such time and hour as may be named in the notice of the meeting fixed by
the directors, at which time they shall elect by a majority vote, a board
of directors and transact such other business as may properly be brought
before the meeting.
Section 3. Written notice of the annual meeting shall be given
each stockholder entitled to vote thereat at least ten days before the date
of the meeting.
Section 4. The officer or agent who has charge of the stock
transfer books of the corporation shall prepare and make, at least ten days
before every meeting of stockholders, a complete list of the stockholders
entitled to vote at said meeting, arranged in alphabetical order with the
residence of and the number of voting shares held by each. Such list shall
be open at the registered office of the Company for a period of ten days
prior to the meeting, to the examination of any stockholder, and shall be
produced and kept at the time and place of the meeting during the whole
time thereof, and subject to the inspection of any stockholder who may be
present.
Section 5. Special meetings of the stockholders, for any purchase
or purposes, unless otherwise prescribed by statute or by the articles of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing by a majority of the board
of directors, or at the request in writing of stockholders owning at least
one-tenth in amount of the entire capital stock of the corporation issued
and outstanding and entitled to vote. Such request shall state the purpose
or purposes of the proposed meeting.
Section 6. Written notice of a special meeting of stockholders,
stating the time, place and subject thereof, shall be given to each
stockholder entitled to vote thereat, not less than ten nor more than fifty
days before the date fixed for the meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by statute or by
the articles of incorporation. If, however, such quorum shall not be
present or represented at the meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 9. When a quorum is present at any meeting, the voting of
the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before
such meeting, unless the question is one upon which by express provision of
the statute or of the articles of incorporation, a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 10. Each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share
of the capital stock having voting power held by such stockholder, but no
proxy shall be voted on after eleven months from its date, unless the proxy
provides for a longer period, and, except where the transfer books of the
corporation have been closed or a date has been fixed as a record date for
the determination of its stockholders entitled to vote, no share of stock
shall be voted on at any election for directors which has been transferred
on the books of the corporation within twenty days next preceding such
election of directors.
Section 11. Whenever the vote of stockholders at a meeting thereof
is required or permitted to be taken in connection with any corporate
action by any provisions of the statutes or of the articles of
incorporation, the meeting and vote of stockholders may be dispensed with,
if all the stockholders who have been entitled to vote upon the action if
such meeting were held shall consent in writing to such corporate action
being taken. At all corporate meetings the manner of voting shall be by
ballot, by voice vote, or by a showing of hands, at the discretion of the
chairman of the meeting.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the
whole board shall be nine. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 2 of this
Article, and each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors by amendment of
these by-laws may be filled by a majority of the directors then in office,
though less than a quorum, and the directors so chosen shall hold office
until the next annual election and until their successors are duly elected
and shall qualify, unless sooner displaced.
Section 3. The business of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the
articles of incorporation or by these bylaws directed or required to be
exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Texas.
Section 5. The first meeting of each newly elected board of
directors shall be held immediately following the meeting of stockholders
at which such directors were elected, or be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event such meeting is
not held immediately following the annual meeting, or at the time and place
so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board of directors may be
called by the chairman of the board or by the president, and shall be
called by the president or secretary upon the written request of two
directors. Written notice of special meetings of the board of directors
shall be given to each director at least three days before the date of the
meeting.
Section 8. At all meetings of the Board a majority of the
directors shall constitute a quorum for the transaction of business and the
act of a majority of the directors present at any meeting at which there is
a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the articles of
incorporation. If a quorum shall not be present at any meeting of the
board of directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting,
until a quorum shall be present.
COMMITTEE OF DIRECTORS
Section 9. The board of directors may, by resolution passed by a
majority of the whole board, designate an executive committee to consist of
three or more directors, any two of which, to the extent provided in the
resolution, shall have and may exercise the powers of the board of
directors in the management of the business and affairs of the corporation
and may authorize the seal of the corporation to be affixed to all papers
which may require it.
Section 10. The committee shall keep regular minutes of their
proceedings and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 11. The directors may be paid their expenses, if any, of
attendance at such meeting of the board of directors and may be paid a
fixed sum for attendance at each meeting of the board of directors or a
stated salary as director. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Notice to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or stockholders
at their addresses appearing on the books of the corporation. Notice by
mail shall be deemed to be given at the time when the same shall be mailed.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the articles of incorporation or by these
bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be a Chief Executive
Officer, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The board of directors may also choose a Chairman of the Board
(from among its members), one or more Vice-Chairmen of the Board (each also
from among its members), one or more Executive Vice Presidents, one or more
Assistant Secretaries and Assistant Treasurers and such other officers and
agents as it shall deem necessary, each of whom shall hold office for such
term, and shall perform such duties and exercise such powers, as shall be
prescribed by the board of directors from time to time. Two or more
offices may be held by the same person except the offices of President and
Secretary.
Section 2. The board of directors at its first meeting after each
annual meeting of shareholders shall choose a Chief Executive Officer, a
President, one or more Vice Presidents, a Secretary and a Treasurer. The
Chief Executive Officer shall be selected from among the Chairman of the
Board, if any, the Vice-Chairmen of the Board, if any, and the President.
A Chief Executive Officer who also serves as President need not be a member
of the board of directors. None of the Vice Presidents, the Secretary or
the Treasurer need be a member of the board of directors.
Section 3. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 4. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer chosen, elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the board of directors. Any vacancy
occurring in any office of the corporation by death, resignation, removal
or otherwise shall be filled by resolution of the board of directors.
THE CHAIRMAN OF THE BOARD
Section 5. The Chairman of the Board, if any, shall preside at all
meetings of the shareholders and of the board of directors. In addition,
the Chairman of the Board shall perform such other duties and exercise such
other powers as are prescribed by the board of directors from time to time.
The Chairman of the Board shall be an ex-officio member of all standing
committees of the board of directors. In the absence of the Chairman of
the Board, one of the Vice-Chairmen of the Board, or in the absence of the
Vice-Chairmen of the Board, the Chief Executive Officer, may perform the
duties and exercise the powers of the Chairman of the Board.
VICE-CHAIRMEN OF THE BOARD
Section 6. The Vice-Chairmen of the Board, if any, shall perform such
duties and exercise such powers as are prescribed by the board of directors
from time to time. Each Vice-Chairman of the Board shall be an ex-officio
member of all standing committees of the board of directors. In the
absence of the Vice-Chairmen of the Board, the Chief Executive Officer, or
in the absence of the Chief Executive Officer, the President, may perform
the duties and exercise the powers of the Vice-Chairmen of the Board.
THE CHIEF EXECUTIVE OFFICER
Section 7. The Chief Executive Officer shall perform such duties and
exercise such powers as are prescribed by the board of directors from time
to time. As provided in Section 2 above of this Article V, only the
Chairman of the Board, the Vice-Chairmen of the Board and the President are
eligible to serve as the Chief Executive Officer. The Chief Executive
Officer with the Chairman of the Board and the Vice-Chairmen of the Board
shall be an ex-officio member of all standing committees of the board of
directors. In the Chief Executive Officer's absence the President may
perform the duties and exercise the powers of the Chief Executive Officer.
THE PRESIDENT
Section 8. The President shall perform such duties and exercise such
powers as are prescribed by the board of directors from time to time.
Unless otherwise determined by the board of directors, the President shall
have the power and authority to execute and deliver bonds, mortgages and
other contracts of the corporation in the ordinary course of the
corporation's business and also to execute and deliver on behalf of the
corporation any and all other documents authorized by the board of
directors. Unless otherwise determined by the board of directors, one of
the Vice Presidents shall, in the absence of the President, perform the
duties and exercise the powers of the President. The President need not be
a member of the board of directors; however, if he is a director he shall
be an ex-officio member of all standing committees of the board of
directors.
VICE PRESIDENTS
Section 9. The various Vice Presidents shall perform such duties and
exercise such powers as the board of directors shall prescribe from time to
time.
THE SECRETARY AND
ASSISTANT SECRETARIES
Section 10. The Secretary shall attend all meetings of the board of
directors and all meetings of shareholders and record all proceedings of
such meetings in a book to be kept for that purpose. The Secretary shall
also perform like duties for the standing committees of the corporation,
when required. The Secretary shall give, or cause to be given, notice of
all meetings of the shareholders and special meetings of the board of
directors, and shall perform such other duties, and shall exercise such
other powers, as may be prescribed by the board of directors from time to
time. The Secretary shall keep in safe custody the seal of the corporation
and, when authorized by the board of directors, affix the same to any
instrument requiring it and, when so affixed, it shall be attested by the
signature of the Secretary or by the signature of the Treasurer or an
Assistant Secretary, which signature may be facsimile.
Section 11. The Assistant Secretaries in the order of their
seniority, unless otherwise determined by the board of directors, shall, in
the absence or disability of the Secretary, perform the duties and exercise
the powers of the Secretary. The Assistant Secretaries shall also perform
such other duties and exercise such other powers as the board of directors
may prescribe from time to time.
THE TREASURER AND
ASSISTANT TREASURERS
Section 12. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the corporation. The Treasurer
shall deposit all moneys and other valuable effects in the name and to the
credit of the corporation in such depositories as may be designated by the
board of directors.
Section 13. The Treasurer shall disburse the funds of the corporation
as may be ordered by the board of directors, taking proper vouchers for
such disbursements, and shall render to the board of directors, or to such
officers as they require, an account of all the Treasurer's transactions
and of the financial condition of the corporation. The Treasurer shall
also perform such other duties and exercise such other powers as the board
of directors may prescribe from time to time.
Section 14. If required by the board of directors, the Treasurer
shall give the corporation a bond (which shall be renewed every six years)
in such sum and with such surety or sureties as shall be satisfactory to
the board of directors for the faithful performance of the duties of office
and for the restoration of the corporation, in case of the Treasurer's
death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in the
Treasurer's possession or under the Treasurer's control belonging to the
corporation.
Section 15. The Assistant Treasurers in the order of their seniority,
unless otherwise determined by the board of directors, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. The Assistant Treasurers shall perform such other
duties and exercise such other powers as the board of directors may
prescribe from time to time.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the
corporation by, the president or vice president and the treasurer or an
assistant treasurer, or the secretary or an assistant secretary of the
corporation, certifying the number of shares owned by him in the
corporation. If the corporation shall be authorized to issue more than one
class of stock, the designations, preferences and relative, participating,
optional or other special rights of each class and the qualifications,
limitations or restrictions of such preferences and/or rights shall be
referred to in the certificate in accordance with the provisions of the
Texas Business Corporation Act.
Section 2. Where a certificate is signed by a transfer agent or a
registrar, the signature of any such president, vice president, treasurer,
assistant treasurer, secretary or assistant secretary may be facsimile. In
case any officer or officers who have signed, or whose facsimile signature
or signatures have been used on, any such certificate or certificates shall
cease to be such officer or officers of the corporation, whether because of
death, resignation or otherwise, before such certificate or certificates
have been delivered by the corporation, such certificate or certificates
may nevertheless be adopted by the corporation and be issued and delivered
as though the person or persons who signed such certificate or certificates
or whose facsimile signature or signatures have been used thereon had not
ceased to be such officer or officers of the corporation.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or his legal representative, to advertise the same in such
manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have
been lost or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or accompanied
by proper evidence of succession , assignment or authority to transfer, it
shall be the duty of the corporation to issue a new certificate and record
the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 5. The board of directors may close the stock transfer
books of the corporation for a period not exceeding fifty nor less than ten
days preceding the date of any meeting of stockholders or the date for
payment of any dividend or the date for the allotment of rights or the date
when any change or conversion or exchange of capital stock shall go into
effect or for a period of not exceeding fifty days in connection with
obtaining the consent of stockholders for any purpose. In lieu of closing
the stock transfer books as aforesaid, the board of directors may fix in
advance a date, not exceeding fifty nor less than ten days preceding the
date of any meeting of stockholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or
a date in connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at,
any such meeting, and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange
of capital stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be entitled to such notice
of, and to vote at, such meeting and any adjournment thereof, or to receive
payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation
after any such record date fixed as aforesaid.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares
to receive dividends, and to vote as such owner, and to hold liable for
calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Texas.
RIGHT TO INSPECTION
Section 7. Any person who shall have been a shareholder of record
for at least six months immediately preceding his demand, or who shall be
the holder of record of at least five per cent (5%) of all the outstanding
shares of the corporation, upon written demand stating the purpose thereof,
shall have the right to examine, in person or by agent or attorney, at any
reasonable time or times during business hours, for any proper purpose, the
corporation's books and records of account, minutes and records of
shareholders, and shall be entitled to make extracts therefrom.
STOCK OPTIONS AND AGREEMENTS
Section 8. Any stockholder of this corporation may enter into
agreements giving to any other stockholder or stockholders or any third
party an option to purchase any of his stock in the corporation; and such
shares of stock shall thereupon be subject to such agreement and
transferable only upon proof of compliance therewith; provided, however,
that a copy of such agreement be filed with the corporation and reference
thereto placed upon the certificates representing said shares of stock.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the articles of incorporation, if any, may be
declared by the board of directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property, or in shares
of the capital stock, subject to the provisions of the articles of
incorporation.
Section 2. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think
conducive to the interest of the corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual
meeting, and when called for by vote of the stockholders at any special
meeting of the stockholders, a full and clear statement of the business and
condition of the corporation.
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time
designate.
FISCAL YEAR
Section 5. The corporation shall do business on a fiscal year
basis, from March 1 to February 28 each year.
SEAL
Section 6. The corporate seal shall have inscribed thereon the
name of the corporation and the words "Corporate Seal". The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
Section 1. These bylaws may be altered or repealed at any regular
meeting of the stockholders or of the board of directors or at any special
meeting of the stockholders or of the board of directors if note of such
alteration or repeal be contained in the notice of such meeting.
ARTICLE IX
INDEMNIFICATION OF DIRECTORS, OFFICERS, AND EMPLOYEES
Section 1. The corporation 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 corporation or serving as such at
the request of the corporation 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 bet
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful;
and further provided that here 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.
Section 2. 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 he director or officer is proper in
the circumstances because he has met the applicable standard of conduct of
good faith set forth in Section 1. 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 wee 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.
Section 3. 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 this Article.
Section 4. The indemnification provided for in this Article shall
not be deemed exclusive of any other rights to which those indemnified may
be entitled, under any by-law, agreement, vote of stockholders, or
otherwise.
Section 5. 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 received; provided, that the
indemnification provisions above have been complied with.
