ENNIS BUSINESS FORMS INC, PRE 14A, 1999-05-06

ENNIS BUSINESS FORMS INC
PRE 14A, 1999-05-06
MANIFOLD BUSINESS FORMS

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12

ENNIS BUSINESS FORMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE>
ENNIS BUSINESS FORMS, INC.
1510 N. HAMPTON, SUITE 300
DESOTO, TEXAS 75115
TELEPHONE (972) 228-7801

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 17, 1999

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

To the Shareholders:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Ennis
Business Forms, Inc., a Texas corporation (the "Company"), will be held in The
DeSoto City Hall, 211 East Pleasant Run Road, DeSoto, Texas 75115 at 10:00 a.m.,
Central Daylight Time, on Thursday, June 17, 1999 for the following purposes:

1. To elect three directors for terms ending in 2002;

2. To ratify the selection of KPMG LLP as independent auditors of the
Company for the fiscal year ending February 29, 2000;

3. To consider an amendment to the Articles of Incorporation to eliminate
cumulative voting; and

4. To transact such other business as may properly come before the meeting.

Only shareholders of record at the close of business on April 15, 1999 are
entitled to notice of, and to vote at, the meeting or any adjournment or
adjournments thereof. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting, for purposes of
determining the presence or absence of a quorum for the transaction of business.
Neither abstentions nor broker non-votes are counted as voted either for or
against a proposal.

If you do not expect to be present at the meeting, please date and sign the
enclosed form of Proxy and return it promptly in the enclosed envelope. No
postage need be affixed if mailed in the United States.

A copy of the Company's Annual Report for the fiscal year ended February 28,
1999, which contains financial statements and other information of interest to
shareholders, is being mailed to you herewith.

By Order of the Board of Directors,

Harve Cathey
SECRETARY

DeSoto, Texas
May , 1999
<PAGE>
ENNIS BUSINESS FORMS, INC.
1510 N. HAMPTON, SUITE 300
DESOTO, TEXAS 75115
TELEPHONE (972) 228-7801

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

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 17, 1999
10:00 A.M. CDT
THE DESOTO CITY HALL
211 EAST PLEASANT RUN ROAD
DESOTO, TEXAS 75115

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

FIRST MAILED TO SHAREHOLDERS ON MAY , 1999

The holders of the Company's Common Stock of record at the close of business
on April 15, 1999 are entitled to vote at the Annual Meeting of Shareholders,
which will be held on June 17, 1999. A form of Proxy is enclosed for use at such
meeting if you are unable to attend in person. The persons named therein as
proxies were selected by the Board of Directors of the Company. THE PROXY IS
SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY AND IS REVOCABLE AT ANY TIME
BEFORE IT IS EXERCISED. THE PROXY MAY BE REVOKED BY WRITTEN INSTRUCTION
ADDRESSED TO THE SECRETARY OF THE COMPANY, OR IF A SHAREHOLDER ATTENDS THE
MEETING AND WISHES TO VOTE HIS SHARES IN PERSON HE MAY SO DIRECT THE PROXY
JUDGES EITHER IN WRITING OR ORALLY.

The cost of preparing, assembling and mailing the Notice of Annual Meeting,
Proxy Statement and form of Proxy and the cost, which is estimated to be
nominal, of further solicitation hereinafter referred to, is to be borne by the
Company. In addition to the use of the mails, it may be necessary to conduct
some solicitation by telephone, facsimile machine or personal interview. Any
such solicitation will be done by the directors, officers and regular employees
of the Company; and, in addition, banks, brokerage houses and other custodians,
nominees or fiduciaries will be requested to forward proxy soliciting material
to their principals to obtain authorization for the execution of proxies on
their behalf. The Company will not pay such persons any compensation for
soliciting proxies, but such persons will be reimbursed by the Company for their
out-of-pocket expenses incurred in connection therewith.

OUTSTANDING VOTING SECURITIES OF THE COMPANY

At the close of business on April 15, 1999, the Company had issued and
outstanding 16,253,444 shares of Common Stock, each share being entitled to one
vote except in the election of directors. No other class of stock was then or is
now outstanding.
<PAGE>
PRINCIPAL SHAREHOLDERS

The following persons own more than five percent of the outstanding voting
securities of the Company:

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ----------------- ------------------------------------------------------------- ---------------------- -----------
<S> <C> <C> <C>
Common Stock..... David L. Babson and Company Incorporated
One Memorial Drive
Cambridge, Massachusetts 02142-1300 1,225,000 shares 7.5%

Common Stock..... Royce & Associates, Inc.
1414 Avenue of the Americas
New York, New York 10019 1,137,300 shares 7.0%
</TABLE>

The following table lists, as of the close of business on April 15, 1999,
the Company's stock beneficially owned by each director, each of the most highly
compensated executive officers, and all directors and executive officers as a
group:

<TABLE>
<CAPTION>
COMMON STOCK BENEFICIAL OWNERSHIP
--------------------------------------------------
NUMBER OF SHARES
--------------------------------------------------
OBTAINABLE PERCENT OF
DIRECTLY INDIRECTLY THROUGH STOCK OUTSTANDING
NAME/GROUP OWNED OWNED OPTION EXERCISE TOTAL SHARES
- -------------------------------------------------- --------- ----------- --------------- --------- ---------------
<S> <C> <C> <C> <C> <C>
Joe R. Bouldin.................................... 0 9,000 9,000 *
James B. Gardner.................................. 10,125 1,000(2) 11,125 *
Ronald M. Graham.................................. 0 0 *
Harold W. Hartley................................. 3,375 24,975(1) 28,350 *
Robert L. Mitchell................................ 59,581 59,581 *
Thomas R. Price................................... 21,500 20,000(2) 41,500 *
Ewell L. Tankersley............................... 5,625 500(2) 6,125 *
James C. Taylor................................... 2,000 2,000 *
Keith S. Walters.................................. 0 0 *
All Directors and Executive Officers as a group
(12)............................................ 120,206 25,750 192,431 1.2%
</TABLE>

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

(1) Shares held in trust of which Mr. Hartley is one of two trustees with shared
voting power.

(2) Indirect shares attributable to Mr. Gardner, Mr. Price and Mr. Tankersley
are held in trust for the benefit of the named Directors. Each has voting
power over the shares.

* Indicates less than 1%.

Except as set forth above, management of the Company is not aware of any
other person or group of persons that owns in excess of 5% of the outstanding
Common Stock. Management is not aware of any change in control of the Company
that has taken place since the beginning of the last fiscal year and is not
aware of any contractual arrangements or pledges of securities the operation of
the terms of which may at a subsequent date result in a change in control of the
Company.

2
<PAGE>
ELECTION OF DIRECTORS (PROPOSAL 1)

Provided a quorum is present, a plurality of the votes cast in person or by
proxy by the holders of shares entitled to vote is required to elect directors.
With respect to the election of directors, shareholders have cumulative voting
rights, which means that each shareholder entitled to vote (a) has the number of
votes equal to the number of shares held by such shareholder multiplied by the
number of directors to be elected and (b) may cast all such votes for one
nominee or distribute such shareholder's votes among the nominees as the
shareholder chooses. The right to cumulate votes may not be exercised until a
shareholder has given written notice of the shareholder's intention to vote
cumulatively to the corporate secretary on or before the day preceding the
election. If any shareholder gives such written notice, then all shareholders
entitled to vote may cumulate their votes. Upon such written notice, the persons
named in the accompanying form of Proxy may cumulate their votes if additional
persons are nominated at the Annual Meeting for the election of directors. As a
result, the Board of Directors is soliciting discretionary authority to cumulate
votes.

The proxies named in the accompanying form of Proxy have been designated by
the Board of Directors, and they intend to vote for the election of the persons
named below to the Board of Directors. One of the nominees has previously been
elected by the shareholders. Should any of the nominees become unavailable for
any reason, the shares represented by proxy will be voted for an alternate
nominee who will be designated by management of the Company. Management has no
reason to believe that any of the nominees will be unavailable for election or
service as a director.

The following table sets forth certain information concerning each nominee
and continuing director. Except as set forth therein, none of the nominees or
continuing directors is an officer or director of any other publicly-owned
corporation or entity.

NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 2002

<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF NOMINEE OR SERVICE AS A
CONTINUING DIRECTOR BACKGROUND AND STOCK BENEFICIALLY OWNED AGE DIRECTOR BEGAN
- --------------------------- -------------------------------------------------------------- --- -----------------
<S> <C> <C> <C>
Keith S. Walters........... Chairman of the Board, CEO and President of the Company. Mr. 49 1997
Walters joined the Company in August 1997 as Vice
President-Commercial Printing Operations and was appointed
Vice Chairman of the Board and Chief Executive Officer in
November 1997. Prior to joining the Company, Mr. Walters was
with Atlas/Soundolier, a division of American Trading and
Production Company, for 8 years, most recently as Vice
President of Manufacturing. Prior to that time, Mr. Walters
was with the Automotive Division of United Technologies
Corporation for 15 years, primarily in manufacturing and
operations.

James B. Gardner........... Managing Director of Service 64 1970
Asset Management Company, a financial services firm, since
May 1994. Mr. Gardner served as President and Chief
Executive Officer, Pacific Southwest Bank, F.S.B. from
November 1991 to May 1994 and served as Chairman of the
Board and President of Elm Interests, Inc., from August 1990
to November 1991. Mr. Gardner has also been a director of
Century Telephone Enterprises, Inc. since
</TABLE>

3
<PAGE>
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF NOMINEE OR SERVICE AS A
CONTINUING DIRECTOR BACKGROUND AND STOCK BENEFICIALLY OWNED AGE DIRECTOR BEGAN
- --------------------------- -------------------------------------------------------------- --- -----------------
1981 and serves as a director of NAB Asset Corporation.
Beneficial owner of 11,125 shares.
<S> <C> <C> <C>

Joe R. Bouldin............. Director of the Company's Central Business Unit 48 1998
Mr. Bouldin is Director of the company's Central Business
Unit and has held this position since August, 1999. Mr.
Bouldin was elected Director of the Company in July 1998.
Mr. Bouldin has been continuously employed by the Company
since 1975 in various management positions. Beneficial owner
of 2,134 shares (shares held by Trustee of Ennis Business
Forms, Inc. Employee Stock Ownership Plan).
</TABLE>

CONTINUING DIRECTORS FOR THREE-YEAR TERMS EXPIRING IN 2000

Thomas R. Price............ Owner and President of Price Industries, Inc., Ennis, Texas. 60 1989
Mr. Price has been engaged in his present occupation since
1975 and is a director of Price Bros. Co., Dayton, Ohio.
Beneficial owner of 41,500 shares.

Ewell L. Tankersley........ Ranching and Investments. 66 1988
Since his retirement from KPMG LLP (formerly KPMG Peat
Marwick LLP) in June 1985, Mr. Tankersley has engaged in the
business of ranching, private investing, and, until early
1992, in the private consulting business. Mr. Tankersley
served as an audit partner with KPMG Peat Marwick LLP from
1966 until his retirement in 1985. Beneficial owner of 6,125
shares.
</TABLE>

CONTINUING DIRECTORS FOR THREE-YEAR TERMS EXPIRING IN 2001

4
<PAGE>
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF NOMINEE OR SERVICE AS A
CONTINUING DIRECTOR BACKGROUND AND STOCK BENEFICIALLY OWNED AGE DIRECTOR BEGAN
- --------------------------- -------------------------------------------------------------- --- -----------------
consultant to Tenneco Financial Services, Inc. From February
1981 to June 1984 Mr. Hartley served as Executive
Vice-President of Tenneco Financial Services, Inc.
Beneficial owner of 28,350 shares.
<S> <C> <C> <C>

Kenneth G. Pritchett....... President of Ken Pritchett Properties 61 1999
Ken Pritchett Properties, Inc. is a Commercial and
Residential Development Corporation in the Dallas/ Ft. Worth
Metropolitan area since 1968, specializing in shopping
center and exclusive residential development. Mr. Pritchett
is on the Board of Trustees, and Chairman of the Planning
Committee for Charlton Methodist Hospitals. He is a Life
Director for the National Home Builders, and the Texas Home
Builders Association. He serves on the Executive Committee
for the Metropolitan Homebuilders Association. (Note 1)

James C. Taylor............ Principal, The Anderson Group Inc. 57 1998
Bloomfield Hills, Michigan, a private investment firm
engaged in the acquisition and management of businesses in a
variety of industries. Since joining The Anderson Group Inc.
in 1989, Mr. Taylor has served as the President and Chief
Executive Officer of three businesses affiliated with The
Anderson Group Inc.: Burwood Products Company, a wall decor
and clock manufacturer (February 1995 to the present); The
Bargeman Company, a supplier of proprietary products to the
recreational vehicle and utility trailer industries (January
1992 to December 1994); and Advance Stamping Company, a
supplier of metal stampings to the automotive, electrical
and hardware industries (January 1989 to September 1991).
Prior to 1989, Mr. Taylor was with United Technologies
Corporation for 19 years, primarily in manufacturing
operations, including 7 years as a Group Vice President.
owner of 2,000 shares.
</TABLE>

Note 1--On April 21, 1999, Mr. Pritchett was elected by its Board of Directors
to fill the unexpired term of Mr. Pat G. Sorrells. Mr. Ronald M. Graham, who was
elected to the Board in July 1998 when Mr. Sorrells resigned, was serving as
Director on a temporary basis while the Nominating Committee completed a search
for an outside director candidate. Mr. Graham resigned to create the vacancy for
Mr. Pritchett.

5
<PAGE>
BOARD COMPENSATION

Non-employee directors receive an annual retainer of $15,000 plus $1,500 for
each board meeting attended and $1,000 for each committee meeting attended other
than in conjunction with a board meeting. In addition, each committee chairman
receives an annual retainer of $4,000. Travel and accommodation expenses of
directors incurred with respect to board and committee meetings are also
reimbursed by the Company. Also, in October 1998, the Board adopted a policy to
grant each outside director an option to purchase 5,000 shares at the time of
election and 2,000 shares annually while service as a director continues. These
are non-qualified options as provided under the 1998 Option and Restricted Stock
Plan. Members of the Board of Directors who are officers of the Company or its
subsidiaries do not receive any fees for serving on the Board of Directors or
its committees. Pursuant to this policy, Mr. Gardner, Mr. Hartley, Mr. Mitchell,
Mr. Price, Mr. Tankersley and Mr. Taylor were granted options of 5,000 shares
each on October 1998.

MEETINGS OF BOARD AND COMMITTEES

The Company's Board held ten meetings during the fiscal year ended February
28, 1999. The Board's Audit, and Executive Compensation and Stock Option
committees each held three meetings. No committee members missed a meeting.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE. This committee meets with the independent certified public
accountants twice a year to review the annual audit plan and the results of
their audit examination. The committee reviews the effectiveness of the
Company's internal control policies and procedures, the activities of the
Company's internal audit function and considers any issues raised by the
independent certified public accountants. The committee currently consists of
Mr. Mitchell (Chairman), Mr. Hartley and Mr. Tankersley.

EXECUTIVE COMPENSATION AND STOCK OPTION COMMITTEE. See Executive
Compensation for a discussion of the purpose of the Committee and the names of
the directors who serve on this Committee.

NOMINATING COMMITTEE. This committee considers and makes recommendations to
the Board of Directors regarding any nominee submitted for election to the
Board, whether submitted by management, by other members of the Board of
Directors or by shareholders. Although no nominee has ever been submitted by
shareholders, in the event any shareholder wishes to nominate a candidate for
director, the Board of Directors, through this committee, would consider such a
nomination upon receipt of a written nomination, including the business history
of the candidate, mailed to the attention of the Board of Directors or upon an
oral presentation of the candidate's qualifications to the Board of Directors or
the committee. The committee currently consists of Mr. Hartley (Chairman), Mr.
Mitchell and Mr. Taylor.

EXECUTIVE COMMITTEE. At a meeting of the Board of Directors on April 22,
1998, the Board established an Executive Committee. The committee is authorized
to exercise all the powers of the Board of Directors in the management of the
business and affairs of the Company, except in instances in which action of the
full Board of Directors is required by the Articles of Incorporation of the
Company or by applicable law. The committee currently consists of Mr. Gardner
(Chairman), Mr. Walters and Mr. Tankersley.

6
<PAGE>
REPORT ON EXECUTIVE COMPENSATION

The Compensation and Stock Option Committee of the Board of Directors of the
Company (the "Committee"), which is composed entirely of the three non-employee
directors listed below, has furnished the following report on executive
compensation. The Committee report documents the components of the Company's
executive officer compensation programs and describes the compensation
philosophy on which 1999 compensation determinations were made by the Committee
with respect to the executive officers of the Company, including the Chief
Executive Officer and the two other executive officers that are named in the
compensation tables who are currently employed by the Company (the "Named
Executives"). The decisions of the Committee with respect to the compensation of
the executive officers are submitted to and subject to ratification by the Board
of Directors prior to implementation.

COMPENSATION PHILOSOPHY

The executive compensation program of the Company is reviewed annually by
the Committee and it is the philosophy of the Company that executive
compensation is directly linked to continuous improvements in corporate
performance. Specifically, the following objectives have been adopted by the
Committee as guidelines for compensation decisions:

- Provide a competitive total executive compensation package that enables
the Company to attract and retain key executives and maintain a
competitive position in the executive marketplace with employers of
comparable size and in similar lines of business.

- Enhance the compensation potential of executives by integrating pay
programs with the Company's annual and long-term business objectives and
strategy, and focus executives on the fulfillment of these objectives.

- Provide variable compensation opportunities that are linked with the
performance of the Company, emphasizing net earnings, return on capital
and revenue growth.

The Committee engaged a recognized independent compensation consultant, in
fiscal year 1999 to serve as the Committee's independent consultant and to
undertake a third-party evaluation of current compensation arrangements in light
of competitive market conditions.

CASH COMPENSATION

Cash compensation includes base salary and the Company's annual incentive
plan awards. The base salary of each of the Company's executive officers is
determined by an evaluation of the responsibilities of that position and by
comparison to the range of salaries paid in the competitive market in which the
Company competes for comparable executive ability and experience. The
performance of each Named Executive officer is reviewed annually by the
Committee and the Chief Executive Officer in the case of the other executive
officers, taking into account the Company's operating and financial results for
that year, the contribution of each executive officer to such results, the
achievement of goals established for each such executive officer at the
beginning of each year, and competitive salary levels for persons in those
positions in the markets in which the Company competes. To assist in its
deliberations, the Committee accesses comparable salary and incentive
compensation information for a number of representative companies in the
industry for comparison purposes. Following its review of the performance of the
Company's Named Executive officers, the Committee reports its recommendations
for salary increases and incentive awards to the Board of Directors. In fiscal
year 1999, annual base salary increases and incentive compensation awards were
approved by the Committee and reported to the Board of Directors for all of the
Named Executives, and incentive compensation awards were approved by the
Committee for all of the executives (other than the Named Executives). The
Committee believes the recommended salary increases and incentive awards were
warranted, are properly aligned to the

7
<PAGE>
Board's compensation philosophy, and consistent with the performance of such
executives during fiscal year 1999 based on the Committee's evaluation of each
individual's overall contribution to accomplishing the Company's fiscal year
1999 corporate goals and of each individual's achievement of individual goals
during the year.

LONG-TERM INCENTIVES

The Committee believes that it is essential to align the interests of the
Company executives and other management personnel responsible for the growth of
the Company with the interests of the Company's stockholders. The Committee
believes the long-term alignment of its executives to shareholders is best
accomplished through the provision of stock-based incentives. Therefore,
pursuant to the recommendation of the members of the Committee, the Company's
Board of Directors and stockholders approved the 1998 Option and Restricted
Stock Plan at the June 18, 1998 Shareholders Meeting that provides for granting
stock options and restricted stock awards. The purpose of this Plan is to foster
and promote the long-term financial success of the Company by providing a means
through which the Company and its subsidiaries can attract and retain key
executive and managerial employees, consultants and non-employee directors who
can contribute materially to that success. The Committee will continue to review
long-term incentives and make recommendations, where appropriate, to the
Company's Board of Directors, from time to time, to assure the Company's
executive officers and other key employees are appropriately motivated and
rewarded based on the long-term financial progress of the Company.

In determining the compensation of Mr. Keith Walters, the Chairman and Chief
Executive Officer, the Committee (with Mr. Walters not participating) with the
assistance of the Committee's independent compensation consultant considered the
Company's operating and financial results for fiscal year and his promotion to
Chairman, evaluated his individual performance and contribution to those
results, and considered the compensation range for other chief executive
officers of companies in the industry. Based on that review and assessment, the
Committee recommended and the Company's Board of Directors acknowledged that his
base annual salary was adjusted to $275,000 (83% of the market value or midpoint
for his position in the Company's salary administration system), effective July
30, 1998. A performance bonus of $134,750 was approved for Mr. Walters based on
predetermined performance criteria on revenue growth, return on capital employed
and net income. In addition, Mr. Walters was granted 100,000 stock options in
fiscal year 1999.

SUMMARY

As demonstrated in each of the plans above, compensation in all its forms is
linked directly to objective performance criteria of the Company, business units
where applicable, and the individual executive's performance. By doing so, the
Committee has created an environment which encourages long-term decisions which
will benefit the Company, its shareholders, customers, and employees and at the
same time allows the executives, managers, and key contributors within the
Company to share in the success of those decisions and actions. Furthermore, the
Committee believes that the total compensation program for executive officers of
the Company will be competitive with the compensation programs provided by other
corporations with which the Company competes.

SECTION 162(M) OF THE INTERNAL REVENUE CODE

Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
disallows a corporation's deduction for remuneration paid to its chief executive
officer and its named executive officers in excess of $1 million per person.
Performance-based compensation and certain other compensation, as defined, is
not subject to the deduction limitation of this regulation. The Company's Chief
Executive Officer nor any of its four other highest compensated officers has
received remuneration in excess of such limitation in fiscal year 1999 or is it
currently anticipated that any Named Executive

8
<PAGE>
could earn annual compensation in excess of the one million dollar definition
under existing plans. The Company continually reviews its compensation plans to
avoid potential adverse effects of this legislation. The Committee will consider
recommending such steps as may be required to qualify either annual or long-term
incentive compensation for deductibility if that appears appropriate at some
time in the future.

EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS

The Company has entered into employment agreements with the executive
officers of the Company. The agreements provide that for a continuing three-year
employment period plus two 1-year extensions. Each of such employment agreements
provides that if the officer terminates his employment for good reason or during
the two-year period following a change of control of the Company, the Company
will (a) make a lump sum payment to him of salary earned through the date of
termination, (b) make a lump sum severance payment to him of the amount
determined by multiplying his base amount times a multiple per his agreement,
(c) accelerate vesting of all long-term incentives, to include but not limited
to stock options, restricted stock, any other long-term incentive grants, and
(d) continue to provide certain welfare plan and other benefits for a period of
one year or as long as such plan or benefits allow or until the executive is
employed under the benefit plans of another company.

For purposes of the employment agreements, "good reason" includes (i) a
change in the officer's position, authority, duties or responsibilities, (ii)
changes in the office or location at which he is based without his consent (such
consent not to be unreasonably withheld), (iii) certain breaches of the
agreement and (iv) a reduction in base annual salary.

ANNUAL INCENTIVE PLAN

Under the Company's Annual Incentive Plan (the "AIP"), additional
compensation may be paid to participating employees, including executive
officers, based on individual contributions and overall performance of the
Company and its key operating business units during the fiscal year. The AIP is
administered by the Executive Compensation and Stock Option Committee of the
Board of Directors. The AIP is open to key employees selected by the Committee.
The Company targets bonuses based on a percentage of base salary, depending on
the position level of the participant and performance levels achieved relative
to pre-determined strategic goals for the fiscal year. Upon a change of control
of the Company, a prorated bonus at target or higher levels shall become
immediately payable under the AIP. Bonuses are payable in cash.

1998 OPTION AND RESTRICTED STOCK PLAN

The Ennis Business Forms, Inc. 1998 Option and Restricted Stock Option Plan
(1998 Plan) was approved by the shareholders in Jun 1998. The purpose of the
1998 Plan is to promote the long-term success of the Company and its
subsidiaries by providing a means through which the Company and its subsidiaries
can attract and retain key executive and managerial employees, consultants and
non-employee directors who can contribute materially to that success. This
purpose will be accomplished under the 1998 Plan by the award of Incentive Stock
Options and Non-Qualified Options (collectively referred to as "Options") to
purchase shares of Common Stock, par value $2.50 per share, of the Company
("Shares") as well as the award of restricted shares of the Common Stock, par
value $2.50 per share, of the Company ("Restricted Shares").

The Committee believes the actions taken regarding executive compensation
were appropriate in view of individual and corporate performance.

Ewell L. Tankersley--Chairman James B. Gardner James C. Taylor

9
<PAGE>
SUMMARY COMPENSATION TABLE *

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS
ANNUAL COMPENSATION (B) LONG-TERM
------------------------------------------- COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION(A) YEAR SALARY BONUS OTHER AWARDS COMPENSATION(C)
- ---------------------------------------- --------- ---------- --------- --------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Keith S. Walters(e) .................... 1999 $ 233,461 134,750 100,000
Chairman of the Board, 1998 $ 79,423 20,000
President and Chief
Executive Officer

Ronald M. Graham ....................... 1999 $ 79,464 30,800 16,000
Vice President--Human
Resources

David P. Erickson ...................... 1999 $ 86,154 36,400 16,000
Vice President--Dealer
Relations

Kenneth A. McCrady(d) .................. 1999 $ 56,251 12,871
Chairman of the Board 1998 $ 162,019 12,767
1997 $ 180,000

Nelson Ward(f) ......................... 1999 $ 79,617 20,000 5,092
President and Chief 1998 $ 126,731 5,133
Operating Officer 1997 $ 103,423
</TABLE>

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

* There were no Restricted Stock Awards, SARs or LTIP Payouts during the three
most recent fiscal years.

(a) This table includes the Chief Executive Officer and all other executive
officers whose compensation exceeded $100,000 for the most recent fiscal
year.

(b) All amounts are for fiscal years ended February 28 or 29.

(c) Amounts under "All Other Compensation" represent dividend pass-through
payments from the Company's Employee Stock Ownership Plan. The Employee
Stock Ownership Plan was approved by the shareholders on May 29, 1975.
Approximately 1,450 directors, officers and employees of the Company and its
subsidiaries are eligible to participate. Contributions may be made in the
Company's Common Stock or in cash which must be invested by the Trustee in
Common Stock of the Company within 30 days of the contribution. There were
no contributions to the Plan for any officer or director during the three
most recent fiscal years.

(d) Mr. McCrady served as Chairman of the Board and Chief Executive Officer
until November 1997, when Mr. Walters was elected Vice Chairman of the Board
and Chief Executive Officer. Mr. McCrady continued to serve as Chairman of
the Board until his retirement in June 1998.

(e) Mr. Walters joined the Company in August 1997 as Vice President-Commercial
Printing Operations and served in that position until being named Vice
Chairman of the Board and Chief Executive Officer in November 1997. In June
1998, Mr. Walters was elected Chairman of the Board and Chief Executive
Officer, and in July 1998 to the additional office of President.

(f) Mr. Ward retired as President and Chief Operating Officer in July 1998.

10
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED PRICE
NUMBER OF % OF TOTAL APPRECIATION FOR OPTION
SECURITIES OPTIONS/SARS EXERCISE OR TERM
UNDERLYING SARS GRANTED TO BASE PRICE ------------------------
GRANTED(1) FISCAL YEAR PER SHARE EXPIRATION 5% 10%
---------------- ------------- ------------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
David Erickson............... 16,000 6.7% 10.06 10/08/08 $ 101,280 $ 256,480
Ronald M. Graham............. 16,000 6.7% 10.06 10/08/08 $ 101,280 $ 256,480
Keith S. Walters............. 100,000 41.7% 10.06 10/08/08 $ 632,000 $ 1,623,000
</TABLE>

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

(1) Total number of options granted to employees during fiscal 1999 was 238,750.

(2) Options become exercisable in increments of 25% per year (cumulative)
beginning October 8, 2000.

No stock options were granted to Mr. McCrady or Mr. Ward during the last fiscal
year.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
BY FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTION/SARS AT FISCAL YEAR
END
----------------------------
NAME EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
Keith S. Walters.............................................................. -- 120,000
Ronald M. Graham.............................................................. -- 16,000
David P. Erickson............................................................. -- 16,000
</TABLE>

No shares were acquired upon the exercise of a stock options during the last
fiscal year, and there were no unexercised in-the-money options at the fiscal
year end.

PENSION PLAN TABLE (1)

<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
REMUNERATION 15 20 25 30 35
- ----------------------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$125,000................................................... $ 19,392 $ 25,856 $ 32,321 $ 38,785 $ 45,249
150,000.................................................... 24,080 32,106 40,133 48,160 56,186
175,000.................................................... 28,767 38,356 47,946 57,535 67,124
200,000.................................................... 33,455 44,606 55,758 66,910 78,061
</TABLE>

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

(1) The Company has a noncontributory retirement plan that covers substantially
all of the employees of the Company and certain of its subsidiaries. The
plan provides for retirement benefits on a formula based on the average pay
of the highest five consecutive compensation years during active employment,
integration of certain Social Security benefits, length of service and a
normal retirement age of sixty-five. All forms of remuneration, including
overtime, shift differentials and bonuses, are covered by the plan. However,
due to restrictions imposed by the Revenue Reconciliation Act of 1993,
effective March 1, 1997, the maximum annual compensation covered by the plan
is limited to $160,000. Future years' maximum can be increased for
inflation. The table above sets forth approximate annual retirement benefits
that would be received under the plan, computed on the basis of the
specified average annual earnings and years of service. The table presents
annual benefit amounts for remuneration above the current $160,000 since (a)
the $160,000 maximum can increase with inflation and (b) prior to 1994 the
maximum annual compensation limitation was more than $160,000.

11
<PAGE>
The number of full years of continuous service in the plan as of February
28, 1999 for Mr. Walters, Erickson and Graham were all less than one year. In
June 1998, Mr. McCrady retired from the Company and received a lump sum benefit
of $802,673. In July 1998, Mr. Ward retired from the Company and received
$211,662 in lump sum early retirement benefits.

FIVE-YEAR PERFORMANCE COMPARISON (1)

The graph below provides an indicator of cumulative total shareholder
returns for the Company compared with the S&P 500 Stock Index and a Peer Group
(2).

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
S&P 500 ENNIS BUSINESS FORMS, INC. PEER GROUP
<S> <C> <C> <C>
Feb. 1994 100 100 100
Feb. 1995 107 93 101
Feb. 1996 145 79 132
Feb. 1997 182 82 169
Feb. 1998 246 84 153
Feb. 1999 295 75 122
</TABLE>
<TABLE>
<CAPTION>
2/28/94 2/28/95 2/29/96 2/28/97 2/28/98
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
S&P 500..................................................... 100 107 145 182 246
Ennis Business Forms, Inc................................... 100 93 79 82 84
Peer Group.................................................. 100 101 132 169 153

<CAPTION>
2/28/99
-----------
<S> <C>
S&P 500..................................................... 295
Ennis Business Forms, Inc................................... 75
Peer Group.................................................. 122
</TABLE>

Assumes $100 invested on February 28, 1994 in Ennis Business Forms, Inc.
Common Stock, the S&P 500 Index and Peer Group common stock.

Total shareholder returns assume reinvestment of dividends.

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

(1) The data to prepare this performance comparison was obtained from Standard &
Poor's Compustat Services, Inc.

(2) The Peer Group consists of the following publicly-held business forms
manufacturers: Moore Corporation Ltd., The Standard Register Company,
Wallace Computer Services, Inc., American Business Products, Inc., New
England Business Services, Inc., The Reynolds & Reynolds Company and Ennis
Business Forms, Inc. Duplex Products, Inc. was acquired in 1996 by The
Reynolds & Reynolds Company but remains a part of the Peer Group for prior
years.

12
<PAGE>
CERTAIN TRANSACTIONS

During fiscal year 1999, James C. Taylor, a director of the Company,
provided certain consulting service to the Company's wholly-owned subsidiary,
Connolly tool & Machine Co. with respect to certain internal organizational and
management matters, for which Mr. Taylor was paid $7,000 and reimbursed for
reasonable related expenses. Management believes that the terms of Mr. Taylor's
engagement were no less favorable to the Company than could have been obtained
from a comparably qualified unrelated third party.

SELECTION OF AUDITORS (PROPOSAL 2)

The selection of independent auditors is to be ratified at the meeting and
it is intended that persons named in the accompanying form of Proxy will vote
for KPMG LLP, Certified Public Accountants, who have served continuously as
auditors of the Company since fiscal 1959. The members of the Audit Committee of
the Board of Directors, Messrs. Hartley, Mitchell, and Tankersley, join with the
remaining members of the Board of Directors in recommending the ratification of
the selection of KPMG LLP as the Company's independent auditors for the fiscal
year ending February 29, 2000. Representatives of the firm will be present at
the Annual Meeting of shareholders to answer questions and to make any
statements they wish to make regarding the Company's financial statements.
Ratification of the selection of auditors requires the affirmative vote of the
holders of a majority of the shares voting at the Annual Meeting.

PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO ELIMINATE
CUMULATIVE VOTING (PROPOSAL 3)

Unless expressly prohibited by a corporation's articles of incorporation,
the Texas Business Corporation Act permits a stockholder to cumulate his votes
at any election for directors by giving one nominee as many votes as the number
of directors to be elected multiplied by his shares equals, or by distributing
such votes on the same principle among any number of such nominees. All
stockholders may cumulate their votes if any stockholder gives notice of his
intention to cumulate his votes in accordance with the Texas Business
Corporation Act. A potential effect of cumulative voting is an increase in
minority participation on a board of directors. In many instances a relatively
small faction may obtain representation on the board.

The Company's Articles of Incorporation do not presently prohibit cumulative
voting. Accordingly, the Company's stockholders may, upon compliance with the
notice requirement set forth in the Texas Business Corporation Act, cumulate
their votes at any election for directors. If this proposal is approved by the
Company's stockholders, cumulative voting at elections for directors will be
prohibited. Stockholders will only have the right to vote the number of their
respective shares for as many persons as there are directors to be elected.
Directors will be elected by plurality vote.

If approved by the stockholders, the Company's Articles of Incorporation
will be amended to add the following:

"CUMULATIVE VOTING. Cumulative voting by the stockholders of the
corporation at any election for directors is expressly denied."

The Board of Directors has approved and recommends that the stockholders
approve a proposal to amend the Company's Articles of Incorporation to prohibit
cumulative voting for the following reasons: (i) the potential introduction of a
partisan on the Board is inconsistent with the notion that the Board should
represent all interests in the corporation; (ii) a partisan director could cause
disharmony which could reduce the efficiency of the Board; (iii) a partisan
director could criticize management unreasonably so as to make management less
willing to take risky, but desirable, action; (iv) a

13
<PAGE>
partisan director might leak confidential information; and (v) in practice,
cumulative voting is frequently used to further narrow partisan goals,
particularly to give an insurgent group a toehold in a corporation in an effort
to obtain control. Although no shareholder of the Company has ever exercised the
right to vote cumulatively, management believes it is in the Company's best
interest to eliminate cumulative voting. Arguments in support of cumulative
voting include: (i) cumulative voting is democratic in that it may permit
persons with large but minority holdings to have a voice in the management of
corporation; and (ii) the representation of as many viewpoints as possible on a
corporation's board is desirable.

The affirmative vote of the holders of two-thirds of the Company's
outstanding Common Stock is required for the approval of this amendment to the
Company's Article of Incorporation.

The Board of Directors recommends a vote FOR this proposal.

MISCELLANEOUS

Management is not aware of any other matters that may be presented for
action at the meeting. If any other matters should be presented at the meeting
for which a vote may properly be taken, then the enclosed form of Proxy will be
voted in such manner as the persons named in the Proxy shall in their discretion
determine.

The Company will upon written request furnish to any shareholder, without
charge, a copy of its Annual Report on Form 10-K for the fiscal year ended
February 28, 1999 filed with the Securities and Exchange Commission. Such
written request should be directed to Harve Cathey, Secretary, Ennis Business
Forms, Inc., 1510 N. Hampton, Suite 300, DeSoto, Texas 75115.

If you do not expect to attend the meeting, please date, sign and return the
Proxy at your earliest convenience. No postage is required for mailing in the
United States. A prompt return of your Proxy will be appreciated as it will save
the expense of further mailing.

SHAREHOLDER PROPOSALS

In order for proposals of shareholders to be considered for inclusion in the
proxy statement and form of Proxy for the 1999 Annual Meeting of Shareholders,
such proposals must be received by the Secretary of the Company not less than
120 days in advance of May 21, 1999.

By Order of the Board of Directors

Harve Cathey
SECRETARY

DeSoto, Texas
May 14, 1999

14
<PAGE>

PROXY PROXY

ENNIS BUSINESS FORMS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Keith S. Walters, Ronald M. Graham and
Harve Cathey, or any one or more of them, as Proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote,
as designated on the reverse side, all the shares of common stock of Ennis
Business Forms, Inc. held of record by the undersigned at the close of
business on April 15, 1999 at the Annual Meeting of Shareholders to be held
June 17, 1999 or any adjournment thereof.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE)

<PAGE>

ENNIS BUSINESS FORMS, INC.

PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /

1. ELECTION OF DIRECTORS FOR TERM ENDING IN 2002--
NOMINEES: Joe R. Bouldin, James B. Gardner and Keith S. Walters.

For All
For Withhold (Except Nominee(s)
All All written below)

/ / / / / /

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

2. Proposal to approve the selection of KPMG LLP as independent auditors for
the fiscal year ending February 29, 2000.

For Against Abstain
/ / / / / /

3. Proposal to amend Articles of Incorporation to eliminate cumulative
voting.

For Against Abstain
/ / / / / /

4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

For Against Abstain
/ / / / / /

THIS PROXY WHEN PROPERLY EXECUTED WILL
BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3 AND IN
THE PROXIES' DISCRETION ON MATTERS
ARISING UNDER 4. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY UPON THE PROXIES
TO CUMULATE VOTES FOR THE ELECTION
OF THE NOMINEES FOR WHICH PROXY AUTHORITY
IS GIVEN IF (a) CUMULATIVE VOTING
IS THEN IN EFFECT, (b) ADDITIONAL PERSONS
ARE NOMINATED AND (c) SUCH PROXIES
DETERMINE THAT SUCH ACTION IS NECESSARY
TO ELECT AS MANY OF MANAGEMENT'S NOMINEES
AS POSSIBLE.

PLEASE SIGN EXACTLY AS NAME APPEARS AT
LEFT. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING
AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, ETC., PLEASE GIVE
FULL TITLE AS SUCH. IF A CORPORATION,
PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER.
IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.

DATED: ___________________________, 1999

SIGNATURE ______________________________

SIGNATURE IF HELD JOINTLY_______________

- PLEASE FOLD AND DETACH HERE AND READ THE REVERSE SIDE -

YOUR VOTE IS IMPORTANT!

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.